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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
August 14, 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 5 Pages
Exhibit Index on Page 5
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ITEM 5. OTHER EVENTS.
On August 14, 1998, Lincoln National Corporation (the "Company") sold a
total of 8,000,000 FELINE PRIDES(SM) securities and 1,000,000 Preferred
Securities of a subsidiary trust, Lincoln National Capital IV, for gross
proceeds of $200 million. The FELINE PRIDES consist of (1) 7,000,000 Income
PRIDES(SM), which are units comprised of a trust Preferred Security and a stock
purchase contract under which the holders will purchase common stock from the
Company in August, 2001 and (2) 1,000,000 Growth PRIDES(SM) which are units
consisting of a fractional interest in a U.S. treasury security and a stock
purchase contract under which the holders will purchase common stock from the
Company in August, 2001. The distribution rate on the Income PRIDES is 7.75%
per annum, and the distribution rate on the Growth PRIDES is 1.85% per annum.
Under the stock purchase contracts, investors will be required to purchase
shares of common stock of the Company for an effective price ranging between a
minimum of $92.875 per share and a maximum of $111.45 per share, depending upon
the price of the Company's common stock upon settlement of the purchase
contracts in August, 2001. The Preferred Securities bear a coupon rate of
6.40%. The offering was underwritten by Merrill Lynch & Co., BT Alex. Brown and
CIBC Oppenheimer. On August 21, 1998, the underwriters purchased an additional
1,200,000 Income PRIDES for gross proceeds of approximately $30 million upon the
exercise of the underwriters' over-allotment option.
Such securities has been registered under the Securities Act of 1933, as
amended, pursuant to a Registration Statement on Form S-3, as amended (Nos.
333-49201 and 333-49201-02)(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
such offering of FELINE PRIDES and Preferred Securities pursuant to the
Registration Statement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit
Number Description
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1.1 Underwriting Agreement dated August 10, 1998.
1.2 Pricing Agreement dated August 10, 1998 among the Company and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, BT Alex. Brown
and CIBC Oppenheimer.
4.1 Amended and Restated Trust Agreement dated as of August 14, 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 6.40% Trust Originated Preferred Security, Series D
certificate.
4.3 First Supplemental Indenture, dated as of August 14, 1998,
between the Company and The First National Bank of Chicago, as
Trustee.
Page 2 of 5
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4.4 Form of 7.75% Junior Subordinated Deferrable Interest Debentures,
Series D.
4.5 Guarantee Agreement dated August 14, 1998, between the Company,
as Guarantor, and The First National Bank of Chicago, as
Guarantee Trustee.
4.6 Purchase Contract Agreement, dated as of August 14, 1998, between
the Company and The First National Bank of Chicago, as Purchase
Contract Agent.
4.7 Form of Income PRIDES certificate.
4.8 Form of Growth PRIDES certificate.
4.9 Pledge Agreement, dated as of August 14, 1998, among the Company,
The Chase Manhattan Bank, as Collateral Agent, Custodial Agent
and Securities Intermediary, and between the Company and The
First National Bank of Chicago, as Purchase Contract Agent.
4.10 Remarketing Agreement, dated as of August 14, 1998, among the
Company, The First National Bank of Chicago, and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
8.1 Opinion of Sonneschein Nath & Rosenthal with respect to certain tax
matters.
Page 3 of 5 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 L. Steinkamp
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Name: John L. Steinkamp
Title: Vice-President
Date: August 27, 1998
Page 4 of 5 Pages
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EXHIBIT INDEX
Exhibit
Number Description
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1.1 Underwriting Agreement dated August 10, 1998.
1.2 Pricing Agreement dated August 10, 1998 among the Company and Merrill
Lynch, Pierce, Fenner & Smith Incorporated, BT Alex. Brown and CIBC
Oppenheimer.
4.1 Amended and Restated Trust Agreement dated as of August 14, 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 6.40% Trust Originated Preferred Security, Series D
certificate.
4.3 First Supplemental Indenture, dated as of August 14, 1998, between
the Company and The First National Bank of Chicago, as Trustee.
4.4 Form of 7.75% Junior Subordinated Deferrable Interest Debentures,
Series D.
4.5 Guarantee Agreement dated August 14, 1998, between the Company, as
Guarantor, and The First National Bank of Chicago, as Guarantee
Trustee.
4.6 Purchase Contract Agreement, dated as of August 14, 1998, between
the Company and The First National Bank of Chicago, as Purchase
Contract Agent.
4.7 Form of Income PRIDES certificate.
4.8 Form of Growth PRIDES certificate.
4.9 Pledge Agreement, dated as of August 14, 1998, among the Company, The
Chase Manhattan Bank, as Collateral Agent, Custodial Agent and
Securities Intermediary, and between the Company and The First
National Bank of Chicago, as Purchase Contract Agent.
4.10 Remarketing Agreement, dated as of August 14, 1998, among the
Company, The First National Bank of Chicago, and Merrill Lynch,
Pierce, Fenner & Smith Incorporated.
8.1 Opinion of Sonnenschein Nath & Rosenthal with respect to certain tax
matters.
Page 5 of 5 Pages
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EXHIBIT 1.1
LINCOLN NATIONAL CORPORATION
Stock Purchase Units
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LINCOLN NATIONAL CAPITAL IV
Preferred Securities
(liquidation amount $25 per preferred security)
guaranteed to the extent set forth in the Guarantee Agreement by
LINCOLN NATIONAL CORPORATION
UNDERWRITING AGREEMENT
August 10, 1998
Lincoln National Corporation, an Indiana corporation (the "Company"),
and Lincoln National Capital IV, a statutory business trust formed under the
laws of the State of Delaware (the "Trust" and collectively with the Company,
the "Offerors"), shall issue and sell to the firms (such firms constituting the
"Underwriters" with respect to the Pricing Agreement attached as Annex I hereto
(the "Pricing Agreement") and the securities specified therein) the respective
numbers of stock purchase units (referred to as "FELINE PRIDES(sm)") and
separate Preferred Securities (the "Separate Preferred Securities") identified
in Schedule I to the Pricing Agreement, which Separate Preferred Securities
represent undivided beneficial interests in the assets of the Trust, guaranteed
by the Company to the extent set forth in the Guarantee Agreement (as defined
below and identified in such Pricing Agreement) (the FELINE PRIDES and the
separate Preferred Securities being referred to collectively as the "Firm
Designated Securities"). The FELINE PRIDES will initially consist of (A)
7,000,000 units (referred to as "Income PRIDES") with a stated amount (the
"Stated Amount"), per Income PRIDES, of $25 and (B) 1,000,000 units (referred to
as "Growth PRIDES") with a Stated Amount, per Growth PRIDES, of $25. Each Income
PRIDES will initially consist of a unit comprised of (a) a stock purchase
contract (a "Purchase Contract") under which (i) the holder will purchase from
the Company on August 16, 2001 (the "Purchase Contract Settlement Date"), for an
amount of cash equal to the Stated Amount, a number of shares of common stock,
no par value per share ("Common Stock"), of the Company equal to the Settlement
Rate (as defined in the Purchase Contract Agreement (as defined below)), and
(ii) the Company will pay the holder unsecured contract adjustment payments
("Contract Adjustment Payments") at the rate of 1.35% of the Stated Amount per
annum, and (b) beneficial ownership of a preferred security representing an
undivided beneficial
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(SM) "FELINE PRIDES(SM)," "Income PRIDES(SM)" and "Growth PRIDES(SM)" are
service marks of Merrill Lynch & Co., Inc.
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interest in the assets of the Trust, guaranteed by the Company to the extent set
forth in the Guarantee Agreement (the "Underlying Preferred Securities" and,
together with the Separate Preferred Securities, the "Preferred Securities").
Each Growth PRIDES will initially consist of a unit comprised of (a) a Purchase
Contract under which (i) the holder will purchase from the Company on the
Purchase Contract Settlement Date, for an amount in cash equal to the Stated
Amount, the number of shares of Common Stock of the Company equal to the
Settlement Rate, and (ii) the Company will pay the holder Contract Adjustment
Payments, at the rate of 1.85% of the Stated Amount per annum, and (b) a 1/40
undivided beneficial interest in a zero-coupon U.S. Treasury Security (CUSIP No.
912820BB2) in a principal amount at maturity equal to $1,000 payable on
August 15, 2001 (the "Treasury Securities"). If specified in the Pricing
Agreement, the Offerors may grant to the Underwriters the right to purchase, at
their election, an additional number of Income PRIDES, Growth PRIDES and
Separate Preferred 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."
In accordance with the terms of the Purchase Contract Agreement (as
defined below), to be dated as of August 14, 1998, between the Company and The
First National Bank of Chicago, as Purchase Contract Agent (the "Purchase
Contract Agent"), the Underlying Preferred Securities constituting a part of the
Income PRIDES, and the Treasury Securities constituting a part of the Growth
PRIDES (the "Pledged Treasury Securities" and together with the Underlying
Preferred Securities, the "Pledged Securities") will be pledged by the Purchase
Contract Agent, on behalf of the holders of the Designated Securities, to The
Chase Manhattan Bank, as Collateral Agent (the "Collateral Agent"), pursuant to
the Pledge Agreement, to be dated as of August 14, 1998 (the "Pledge
Agreement"), among the Company, the Purchase Contract Agent and the Collateral
Agent, to secure the holders' obligation to purchase Common Stock under the
Purchase Contracts. The rights and obligations of a holder of Income PRIDES in
respect of Underlying Preferred Securities, subject to the pledge thereof, and
Purchase Contracts will be evidenced by Security Certificates (the "Security
Certificates") to be issued pursuant to the Purchase Contract Agreement. The
rights and obligations of a holder of Growth PRIDES in respect of Treasury
Securities, subject to the pledge thereof, and Purchase Contracts will be
evidenced by Security Certificates to be issued pursuant to the Purchase
Contract Agreement. The rights and obligations of a holder of Separate Preferred
Securities will be evidenced by Security Certificates to be issued pursuant to
the Trust Agreement (as defined below).
The Preferred Securities will be guaranteed by the Company (the
"Guarantee") with respect to distributions and payments upon liquidation,
redemption and otherwise pursuant to the Guarantee Agreement, dated as of August
14, 1998 (the "Guarantee Agreement"), executed and delivered by the Company and
The First National Bank of Chicago (the "Guarantee Trustee"), for the benefit of
the holders from time to time of the Preferred Securities, and certain back-up
undertakings of the Company. All of the net proceeds from the sale of the
Preferred Securities will be combined with the entire net proceeds from the sale
by the Trust to the Company of its
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common securities (the "Common Securities" and together with the Preferred
Securities, the "Trust Securities") and will be used by the Trust to purchase
$206,186,000 aggregate principal amount of 6.40% Junior Subordinated Deferrable
Interest Debentures, Series D, due August 15, 2003 (the "Subordinated
Debentures") of the Company. The Trust Securities will be issued pursuant to the
amended and restated trust agreement of the Trust (the "Trust Agreement"), dated
as of August 14, 1998, among the Company, as depositor, John L. Steinkamp and
Janet Chrzan, as administrative trustees (the "Administrative Trustees"), and
the First National Bank of Chicago, as the property trustee (the "Property
Trustee"), and First Chicago Delaware Inc., as the Delaware trustee (the
"Delaware Trustee" and, together with the Property Trustee and the
Administrative Trustees, the "Trustees"), and the holders from time to time of
undivided beneficial interests in the assets of the Trust. The Subordinated
Debentures will be issued pursuant to the Junior Subordinated Indenture, dated
as of May 1, 1996 (the "Junior Subordinated Indenture"), between the Company and
The First National Bank of Chicago, as Trustee (the "Subordinated Indenture
Trustee"), as supplemented by the First Supplemental Indenture, dated August 14,
1998 (the Junior Subordinated Indenture, as so supplemented and amended, being
referred to as the "Indenture").
Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Designated Securities. This Underwriting Agreement
(the "Underwriting Agreement") shall not be construed as an obligation of the
Offerors to sell any of the Designated Securities or as an obligation of any of
the Underwriters to purchase any of the Designated Securities. The obligation of
each of the Offerors to issue and sell any of the Designated Securities and the
obligation of any of the Underwriters to purchase any of the Designated
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated 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 for 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 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 Indenture or Trust Agreement or the registration statement
and prospectus with respect thereto) the terms of such Designated 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.
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Pursuant to a remarketing agreement (the "Remarketing Agreement") among
the Company, the Trust, the Purchase Contract Agent and a nationally recognized
investment banking firm chosen by the Company, the Preferred Securities (and, in
certain circumstances, the Subordinated Debentures) may be remarketed, subject
to certain terms and conditions set forth in the Pricing Agreement.
The Company and the Trust have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (nos.
333-49201 and 333-49201-02) and post-effective amendment no. 1 thereto covering
the registration of the securities of the Company and the Trust, including the
Designated Securities and the Purchase Contracts and the Preferred Securities
included in, and shares of Common Stock underlying, the FELINE PRIDES, under the
Securities Act of 1933, as amended (the "Act"), including the related
preliminary prospectus or prospectuses, and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations"), and the Company has filed such
post-effective amendments thereto as may be required prior to the execution of
the Pricing Agreement.
Such registration statement, as so amended, has been declared effective
by the Commission. Such registration statement, as so amended, including the
exhibits and schedules thereto, if any, and the information, if any, deemed to
be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the
"Rule 430A Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule
434 Information") is referred to herein as the "Registration Statement"; and
the final prospectus and the prospectus supplement relating to the offering of
the Designated Securities, in the forms first furnished to the Underwriters by
the Company for use in connection with the offering of the Designated
Securities, are collectively referred to herein as the "Prospectus"; provided,
however, that all references to the "Registration Statement" and the
"Prospectus" shall be deemed to include all documents incorporated therein by
reference pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), prior to the execution of the applicable Pricing Agreement;
provided, further, that if the Offerors file a registration statement with the
Commission pursuant to Section 462(b) of the 1933 Act Regulations (the "Rule
462(b) Registration Statement"), then after such filing, all references to the
"Registration Statement" shall be deemed to include the Rule 462(b)
Registration Statement; and provided, further, that if the Offerors elect to
rely upon Rule 434 of the 1933 Act Regulations, then all references to the
"Prospectus" shall be deemed to include the final or preliminary prospectus and
the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as the
case may be, in the form first furnished to the Underwriters by the Company in
reliance upon Rule 434 of the 1933 Act Regulations, and all references in this
Agreement to the date of the Prospectus shall mean the date of the Term Sheet.
A "preliminary prospectus" shall be deemed to refer to any prospectus used
before the registration statement became effective and any prospectus that
omitted, as applicable, the Rule 430A Information, the Rule 434 Information or
other information to be included upon pricing in a form of prospectus filed
with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that
was used after such
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effectiveness and prior to the execution and delivery of the applicable Pricing
Agreement. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus or the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the electronically
transmitted copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in the Registration Statement, any
preliminary prospectus or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to the Registration Statement,
any preliminary prospectus or the Prospectus shall be deemed to mean and include
the filing of any document under the Exchange Act, which is incorporated or
deemed to be incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Designated Securities as soon as the Underwriters deem advisable
after the Pricing Agreement has been executed and delivered.
SECTION 1. Representations and Warranties. The Offerors, jointly and
severally, represent and warrant to, and agree with, each of the Underwriters
that:
a. The Company and the Trust meet the requirements for use of
Form S-3 under the Act, and have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on such Form (the file
number of which is set forth in Schedule II to the applicable Pricing
Agreement), which has become effective for the registration under the Act of
the Designated Securities. At the respective times the Registration Statement,
any Rule 462(b) Registration Statement and any post-effective amendments
thereto became effective, the Registration Statement, any Rule 462
Registration Statement and any amendments or supplements thereto complied and
will comply in all material respects with the requirements of the Act and the
1933 Act Regulations and the Trust Indenture Act of 1939, as amended ("Trust
Indenture Act") and the rules and regulations of the Commission under the
Trust Indenture Act (the "1939 Act Regulations") and did not and will not
contain an untrue statement or a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Registration Statement, as amended at the date of this
Agreement, meets the requirements set forth in Rule 415(a)(1)(x) under the Act
and complies in all other material respects with said Rule. The Company and
the Trust have filed and will file with the Commission pursuant to Rule 424
under the Act a supplement or supplements to the form of prospectus included
in such Registration Statement relating to the Designated Securities and the
plan of distribution thereof and have previously advised the Underwriters of
all further
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information (financial and other) with respect to the Company to be set forth
therein. Any such supplemented form of prospectus, in the form in which it shall
be filed with the Commission pursuant to Rule 424 (including the preliminary
prospectus as so supplemented) is hereinafter included in the term "Prospectus"
defined above. Any reference herein to the Registration Statement, the
preliminary prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the date of this Agreement,
or the issue date of the preliminary prospectus or Prospectus, as the case may
be; and any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, the preliminary prospectus or
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the date of this Agreement, or the issue date of
the preliminary prospectus or Prospectus, as the case may be, deemed to be
incorporated therein by reference.
b. As of the date hereof, when the Prospectus is first filed or
transmitted for filing pursuant to Rule 424 under the Act, when, prior to the
Time of Delivery (as hereinafter defined), any amendment to the Registration
Statement becomes effective (including the filing of any document incorporated
by reference in the Registration Statement), when any supplement to the
Prospectus is filed with the Commission and at the Time of Delivery, (i) the
Registration Statement, as amended as of any such time, and the Prospectus, as
amended or supplemented as of any such time, and, in the case of Designated
Securities issued pursuant to an Indenture, the Indenture will comply in all
material respects with the applicable requirements of the Act, the Trust
Indenture Act and the Exchange Act and the respective rules thereunder and (ii)
neither the Registration Statement, as amended as of any such time, nor the
Prospectus, as amended or supplemented as of such time, will contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; provided, however, that the Company makes no representations or
warranties as to (i) that part of the Registration Statement which shall
constitute the Statement of Eligibility and Qualification (Form T-1) under the
Trust Indenture Act of the Trustee (the "Form T-1") or (ii) the information
contained in or omitted from the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity with
information relating to such Underwriters or the underwriting arrangements
furnished in writing to the Company by any Underwriter specifically for use in
the Registration Statement and the Prospectus. As of the date hereof, there is
no stop order preventing or suspending the use of the Registration Statement and
Prospectus.
c. Each document incorporated or deemed to be incorporated by reference
in the Registration Statement and the Prospectus, as amended at the time the
Registration Statement become or becomes effective, complied in all material
respects, with the Exchange Act, and at the time of filing or as of the time of
any subsequent amendment, did 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, in the light of the circumstances under which they
were
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made, not misleading; and any additional documents deemed to be incorporated by
reference in the Registration Statement or the Prospectus will, if and when such
documents are filed with the Commission, or when amended, as appropriate, comply
in all material respects to the requirements of the Exchange Act and the 1934
Act Regulations 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
Offerors by an Underwriter expressly for use in the Registration Statement or
the Prospectus.
d. The financial statements of the Company and its consolidated
subsidiaries included or incorporated by reference in the Registration Statement
fairly present the financial condition and results of operations of the Company
and its consolidated subsidiaries as of the dates indicated and the results of
operations and changes in financial position for the periods therein specified.
Such financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules, if any, included or incorporated
by reference in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. Since the
respective dates as of which information is given in the Registration Statement
and the preliminary prospectus and except as otherwise described in the
Registration Statement and the preliminary prospectus, there has not been any
material change in the capital stock (other than issuances of common stock upon
the exercise of outstanding employee stock options or pursuant to existing
employee compensation plans) or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or other),
earnings, business or properties of the Company and its consolidated
subsidiaries, whether or not arising from transactions in the ordinary course of
business, except as set forth or contemplated in the Prospectus.
e. The Company and each subsidiary of the Company which meets the
definition of a significant subsidiary as defined in Regulation S-X of the
Commission (each a "Significant Subsidiary") has been duly incorporated and is
validly existing as a corporation under the laws of the jurisdiction of its
incorporation (except where the failure to be qualified would not have a
Material Adverse Effect, as defined below), with power and authority (corporate
and other) to own, lease and operate its properties and to conduct its business
as described in the preliminary prospectus and to enter into and perform its
obligations under, or as contemplated under, this Agreement, the Pricing
Agreement, the Remarketing Agreement, the Purchase Contract Agreement, the
Purchase Contracts, the Indenture, the Subordinated Indentures, the Pledge
Agreement, the Guarantee Agreement and each other agreement required hereunder
and thereunder. The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, except
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where the failure to be so qualified would not have a Material Adverse Effect
(as defined herein). For purposes of this Agreement, "Material Adverse Effect"
shall mean, a material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company and
its subsidiaries, considered as one enterprise, whether or not arising in the
ordinary course of business.
f. The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable; all of the outstanding beneficial interests in the 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. Except as
otherwise stated in the Registration Statement and the Prospectus, all of the
issued and outstanding shares of capital stock of each subsidiary of the Company
have been authorized and validly issued, are fully paid and non-assessable and
all such shares are owned by the Company, directly or through its subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
g. The Designated Securities have been duly authorized, and, when the
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 executed, authenticated, issued,
delivered and will be fully paid and nonassessable and will constitute valid and
legally binding obligations of the respective Offeror. The Designated Securities
will conform in all material respects to the descriptions thereof contained in
the Prospectus and issuance of the Designated Securities is not subject to
preemptive or other similar rights.
h. The issue and sale of the Designated Securities, the Common
Securities and the Debentures and the compliance by the Offerors with all of the
provisions of the Designated Securities, the Purchase Contracts, the Trust
Agreement, the Purchase Contract Agreement, the Indenture, this Agreement, any
Pricing Agreement, the Common Securities, the Subordinated Debentures, the
Guarantee Agreement, the Pledge Agreement and the Remarketing Agreement, the
issuance of the Common Stock pursuant to the Purchase Contracts 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 material agreement or instrument to which the
Company or any subsidiary or the Trust is a party or by which the Company or any
subsidiary or the Trust is bound or to which any of the property or assets of
the Company or any subsidiary or the Trust is subject, except for such
conflicts, breaches, violations, defaults or liens, charges or encumbrances as
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company and its subsidiaries or on the Trust, nor will such action result in
any violation of the provisions of the articles of incorporation or bylaws of
the Company or any Significant Subsidiary or the Trust Agreement, or any
applicable law, statute, rule, regulation,
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<PAGE> 9
judgment, order writ or decree of any court or governmental agency or body,
domestic or foreign, having jurisdiction over the Company, any subsidiary or any
of its respective properties or the Trust or any of their respective assets,
properties or operations; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required for the issuance and sale of the Designated Securities or
the performance by the Company or the Trust of their respective obligations set
forth in this Agreement, the applicable Pricing Agreement, the Remarketing
Agreement, the Purchase Contract Agreement, the Purchase Contracts, the Pledge
Agreement, the Indenture, the Subordinated Debentures, the Guarantee Agreement,
the Trust Agreement and the Trust Securities, except such as have been, or will
have been made or obtained prior to the Time of Delivery under federal
securities laws or under state or foreign securities laws or Blue Sky laws.
i. The Trust has been created and is validly existing in good standing
as a business trust under the Delaware Business Trust Act (the "Delaware Act")
with the power and authority to own property and to conduct its business as
described in the Registration Statement and the Prospectus and to enter into and
perform its obligations under this Agreement, the Pricing Agreement, the
Remarketing Agreement, the Preferred Securities, the Common Securities and the
Trust Agreement; the Trust is qualified to transact business as a foreign
company and is in good standing in each jurisdiction in which such qualification
is necessary, except where the failure to so qualify or be in good standing
would not have a Material Adverse Effect on the Trust; the Trust is not a party
to or otherwise bound by any agreement other than those described in the
Prospectus; and the Trust is and will, under current law, be classified for
United States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation.
j. Each of the Administrative Trustees of the Trust is an employee of
the Company and has been authorized by the Company to execute and deliver the
Trust Agreement.
k. The Purchase Contract Agreement has been authorized by the Company
and, at the Time of Delivery, when validly executed and delivered by the Company
and assuming due authorization, execution and delivery of the Purchase Contract
Agreement by the Purchase Contract Agent, will constitute a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally, or by general equitable
principles (whether considered in a proceeding in equity or at law) (the
"Bankruptcy Exceptions"), and will conform in all material respects to the
description thereof contained in the Prospectus.
l. The Pledge Agreement has been authorized by the Company and, at the
Time of Delivery, when validly executed and delivered by the Company and
assuming due authorization, execution and delivery of the Pledge Agreement by
the Collateral Agent and the
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<PAGE> 10
Purchase Contract Agent, will constitute a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms
except to the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, and will conform in all material respects to the description thereof
contained in the Prospectus.
m. The Trust Securities have been duly authorized under the Trust
Agreement and, when issued and authenticated in accordance with the provisions
of the Trust Agreement and delivered against payment therefor as set forth in
the Trust Agreement and the Pricing Agreement, will have been duly executed by
the Trust, will be validly issued, fully paid and non-assessable undivided
beneficial interests in the assets in the Trust and will be entitled to the
benefits of the Trust Agreement; the issuance of the Trust Securities is not and
will not be subject to preemptive or other similar rights; and holders of Trust
Securities 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.
n. The Trust Agreement has been duly authorized by the Company and, at
the Time of Delivery, will have been executed and delivered by the Company and
the Trustees and, assuming due authorization, execution and delivery of the
Trust Agreement by the Property Trustee and the Delaware Trustee, the Trust
Agreement will, at the Time of Delivery, be a legal, valid and binding
obligation of the Company, enforceable in accordance with its terms, except to
the extent that enforcement thereof may be limited by the Bankruptcy Exceptions,
and will conform in all material respects to the description thereof contained
in the Prospectus.
o. The Guarantee Agreement and the Guarantee have been duly authorized
by the Company and, at the Time of Delivery, the Guarantee Agreement will have
been duly executed and delivered by the Company and, assuming due authorization,
execution and delivery of the Guarantee Agreement by the Guarantee Trustee, will
constitute a legal, valid and binding agreement of the Company, enforceable in
accordance with its terms except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions and will conform in all material respects
to the description thereof contained in the Prospectus.
p. The Indenture has been duly authorized by the Company and, at the
Time of Delivery, will have been executed and delivered by the Company and,
assuming due authorization, execution and delivery of the Indenture by the Debt
Trustee, will constitute a legal, valid and binding agreement of the Company,
enforceable in accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions and will conform in all
material respects to the description thereof contained in the Prospectus.
q. The Subordinated Debentures have been duly authorized by the Company
and, when authenticated by the Subordinated Indenture Trustee in the manner
provided for in the Indenture and delivered to the Trust against payment
therefor as described in the Prospectus, will have been duly executed and
delivered by the Company and will constitute legal, valid and
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<PAGE> 11
binding obligations of the Company, enforceable in accordance with their terms
except to the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, will conform in all material respects to the description thereof
contained in the Prospectus and will be entitled to the benefits of the
Indenture.
r. The Common Stock, when issued and delivered in accordance with the
provisions of the Purchase Contract Agreement and the Pledge Agreement, will be
authorized, validly issued and fully paid and non-assessable and will conform in
all material respects to the description thereof contained in the Prospectus;
and the issuance of such Shares will not be subject to preemptive or other
similar rights.
s. Other than as set forth in the Prospectus or in the documents
incorporated by reference therein, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries or the Trust
is a party or of which any property of the Company or any of its subsidiaries or
the Trust is the subject which would individually or in the aggregate be
reasonably likely to have a Material Adverse Effect on the Company and its
subsidiaries, or on the Trust, or which might be reasonably expected to have a
material adverse effect on the ability of the Offerors to perform their
respective obligations under this Agreement, the Pricing Agreement, the
Remarketing Agreement, the Purchase Contracts, the Purchase Contract Agreement,
the Pledge Agreement, the Guarantee Agreement, the Subordinated Debentures, the
Indenture or the Trust Agreement or to consummate the transactions contemplated
herein or therein; and, to the best of the Company's knowledge, no such
proceedings are threatened by governmental authorities or others. The aggregate
of all pending legal or governmental proceedings to which the Trust, the Company
or any subsidiary of the Company is a party or of which any of their respective
properties or operations is the subject which are not described in the
Registration Statement and the Prospectus or in the documents incorporated by
reference therein, including ordinary routine litigation incidental to their
respective businesses, are not expected to result in a Material Adverse Effect
on the Company and its subsidiaries or on the Trust.
t. Except as described in the Prospectus, there is no action, suit or
proceeding pending, nor to the knowledge of the Company, 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 Company and its subsidiaries taken as a whole or which is
required to be disclosed in the Registration Statement.
u. To the best of the Company's knowledge and belief, the Company 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 and local government authority applicable to the Company and its
subsidiaries.
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<PAGE> 12
v. This Agreement, the Remarketing Agreement and the Pricing Agreement
have been authorized, executed and delivered by each of the Offerors.
w. None of the Trust, the Company or any of the subsidiaries of the
Company is, and upon the issuance and sale of the Designated Securities as
herein contemplated and the application of the net proceeds therefrom as
described in the Prospectus will not 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").
x. The accountants who certified the financial statements of the
Company and its subsidiaries included in or incorporated by reference in the
Prospectus are independent public accountants as required by the Act and the
1933 Act Regulations.
y. Holders of Preferred Securities 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.
SECTION 2. Purchase and Sale. Subject to the terms and conditions set
forth in the Prospectus as amended or supplemented, and in reliance upon the
representations and warranties herein set forth, the Offerors agree to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Offerors, at the purchase price set forth in Schedule II to
the applicable Pricing Agreement, the principal amount or number of shares of
the Firm Designated Securities set forth opposite such Underwriter's name in
Schedule I to the applicable Pricing Agreement.
The Offerors may specify in the Pricing Agreement applicable to any
Designated Securities that the Offerors thereby grant 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 Underwriters to the Offerors, 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 Underwriters but in no
event earlier than the First Time of Delivery (as defined in Section 3 hereof)
or, unless the Underwriters and the Offerors 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
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<PAGE> 13
Optional Designated Securities which each of the Offerors has been advised by
the Underwriters have been attributed to such Underwriter, provided that, if
each of the Offerors 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 Underwriters 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.
SECTION 3. Delivery and Payment. 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 Underwriters may request upon at least
forty-eight hours' prior notice to the Company or the Trust, shall be delivered
by or on behalf of the Offerors 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 Company
or the 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 Underwriters and the Company or the
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."
The Underlying Preferred Securities and Treasury Securities underlying
the FELINE PRIDES will be pledged with the Collateral Agent to secure the
holders' obligations to purchase Common Stock under the Purchase Contracts. Such
pledge shall be effected by the transfer to the Collateral Agent of the
Underlying Preferred Securities and the Treasury Securities to be pledged at the
Time of Delivery and appropriate Second Time of Delivery, if any, in accordance
with the Pledge Agreement.
SECTION 4. Agreements. The Offerors agree with the several Underwriters
as follows:
(a) The Offerors shall prepare the Prospectus as amended and
supplemented in relation to the applicable Designated Securities in a form
approved by the Underwriters; shall 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) and shall promptly advise
the Underwriters when such filing has been made; shall make no further
amendment or any supplement to the Registration Statement or
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<PAGE> 14
Prospectus as amended or supplemented after the date of the Pricing Agreement
relating to such Designated Securities and prior to the Time of Delivery for
such Designated Securities which shall be disapproved by the Underwriters for
such Designated Securities promptly after reasonable notice thereof; shall
advise the Underwriters promptly of any such amendment or supplement after such
Time of Delivery and furnish the Underwriters with copies thereof; shall file
promptly all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act for so long as the delivery of a Prospectus is
required in connection with the offering or sale of such Designated Securities,
and during such same period, shall advise the Underwriters, 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 Designated Securities, of
the suspension of the qualification of the Income PRIDES, the Growth PRIDES, the
Separate Preferred Securities or the Common Stock 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 the Prospectus or for additional information;
and, in the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the Designated
Securities or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal.
(b) The Company will make generally available to its securityholders as
soon as practicable, but not later than 18 months after the close of the period
covered thereby, an earnings statement of the Company and its subsidiaries (in
form complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering a twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the "effective date" (as defined in said
Rule 158) of the Registration Statement.
(c) The Company shall furnish the Underwriters with copies of the
Prospectus as amended or supplemented in such quantities as the Underwriters may
from time to time reasonably request, and, if the delivery of a prospectus is
required at any time under the Act or the Exchange Act in connection with the
offering or sale of the Designated Securities or the Common Stock. 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, the Company shall notify the Underwriters and, upon the request
of the Underwriters, shall file such document and shall prepare and furnish
without charge to each Underwriter and to any dealer in
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<PAGE> 15
securities as many copies as the Underwriters 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) The Offerors will promptly from time to time take such action as
the Underwriters may reasonably request to qualify of the Designated Securities,
the Subordinated Debentures, the Guarantees and the Common Stock for offering
and sale under the laws of such jurisdictions as the Underwriters may reasonably
designate, will maintain such qualifications in effect so long as required for
the distribution of the Designated Securities, the Subordinated Debentures, the
Guarantees or the Common Stock and will arrange for the determination of the
legality of the Designated Securities, the Subordinated Debentures, the
Guarantees or the Common Stock for purchase by institutional investors; provided
that in connection therewith neither the Company nor the Trust shall be required
to qualify as a foreign corporation or to execute a general consent to service
of process in any jurisdiction or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise subject.
(e) During the 90-day period beginning from the date of the Pricing
Agreement for such Designated Securities, neither the Company nor the Trust
shall for a period of 90 days after the date of the Prospectus, without the
prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated,
directly or indirectly, sell, offer to sell, grant any option for the sale of,
or otherwise dispose of, or enter into any agreement to sell, any Income PRIDES,
Growth PRIDES, Purchase Contracts, Preferred Securities or Common Stock or any
securities of the Company or any affiliate of the Company similar to the Income
PRIDES, Growth PRIDES, Purchase Contracts, Preferred Securities or Common Stock
or any security convertible into or exchangeable or exercisable for Income
PRIDES, Growth PRIDES, Purchase Contracts, Preferred Securities or Common Stock
or any such similar securities, other than (i) to the Underwriters pursuant to
the Underwriting Agreement, (ii) the Subordinated Debentures to be sold to the
Trust and the Common Securities to be sold to the Company, (iii) shares of
Common Stock or options for shares of Common Stock issued pursuant to or sold in
connection with any employee benefit, dividend reinvestment, stock option or
stock purchase plan of the Company and its subsidiaries, (iv) any securities
issued pursuant to a merger or acquisition and (v) the Growth PRIDES or Income
PRIDES to be created or recreated upon substitution of Pledged Securities, or
shares of Common Stock issuable upon early settlement of the Income PRIDES or
Growth PRIDES.
(f) The Company, during a period of three years from the Time of
Delivery, shall make generally available to the Underwriters copies of all
reports and other communications (financial or other) mailed to stockholders,
and shall deliver to the Underwriters promptly after they are available, copies
of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed.
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<PAGE> 16
(g) The Company will keep available at all times, free of preemptive or
other similar rights and liens and adverse claims, sufficient shares of Common
Stock to satisfy any obligations to issue Common Stock upon settlement of the
Purchase Contracts and shall take all actions necessary to keep effective the
Registration Statement with respect to the Common Stock.
(h) The Offerors covenant and agree with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Trust's and the Company's counsel and
accountants in connection with the registration of the Designated Securities,
the Indenture, the Guarantees, the Subordinated Debentures, the Purchase
Contracts and the Common Stock under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement 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, the Pledge Agreement, the Remarketing
Agreement, the Trust Agreement, the Indenture, the Guarantee Agreement and the
Purchase Contract Agreement, any Blue Sky or similar investment surveys or
memoranda and any other documents in connection with the offering, purchase,
sale and delivery of the Designated Securities; (iii) all reasonable expenses in
connection with the qualification of the Designated Securities, the Guarantees,
the Subordinated Debentures, the Purchase Contracts and the Common Stock for
offering and sale under state securities laws as provided in Section 4(d)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Designated Securities, the Subordinated Debentures or the Guarantees;
(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
Designated Securities and the issuance of the Guarantees, the Subordinated
Debentures, the Purchase Contracts and the Common Stock; (vi) the cost of
preparing the Designated Securities, the Subordinated Debentures, the Purchase
Contracts and the Common Stock; (vii) the fees and expenses of any Trustee,
Subordinated Indenture Trustee, Delaware Trustee and Guarantee Trustee, and any
agent of any trustee and the fees and disbursements of counsel for any trustee
in connection with the Trust Agreement, the Indenture, the Guarantees and the
Designated Securities; (viii) the fees and expenses of the Purchase Contract
Agent, the Collateral Agent, the Custodial Agent and the Exchange Agent;
(ix) the cost of qualifying the Designated Securities with The Depository Trust
Company; (x) all fees and expenses in connection with the listing of the Income
PRIDES, the Growth PRIDES and the Separate Preferred Securities on the New York
Stock Exchange and the cost of registering the Income PRIDES and the Growth
PRIDES under Section 12 of the Exchange Act; and (xi) 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 and
Section 9, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on
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<PAGE> 17
resale of any of the Designated Securities by them, and any advertising expenses
connected with any offers they may make.
(i) The Offerors will use their best efforts to list, subject to notice
of issuance, the Income PRIDES and the Growth PRIDES on the New York Stock
Exchange and to cause the Income PRIDES and the Growth PRIDES to be registered
under the Exchange Act.
SECTION 5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase and pay for any Designated
Securities under the Pricing Agreement relating to such Designated Securities
shall be subject, in the discretion of the Underwriters, to the condition that
all representations and warranties and other statements of the Trust and the
Company in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of the respective Time of Delivery for
such Designated Securities, true and correct, the condition that the Trust and
the Company 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 Underwriters' reasonable satisfaction.
(b) Jack D. Hunter, Esq., Executive Vice President and General Counsel
for the Company, shall have furnished to the Underwriters his written opinion,
dated the respective Time of Delivery for such Designated Securities, in form
and substance satisfactory to the Underwriters, to the effect that:
(i) The Company 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) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus (except for subsequent
issuances, if any, pursuant to incentive compensation plan, employee
benefit plan or dividend reinvestment and stock purchase plan
transactions), and the shares of issued and outstanding capital stock
of the Company have been authorized and validly issued and are fully
paid and non-assessable.
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<PAGE> 18
(iii) The Trust is not required to be qualified and in good
standing as a foreign company in Indiana, except to the extent that the
failure to so qualify or be in good standing would not have a Material
Adverse Effect on the Trust; and the Trust is not a party to or
otherwise bound by any agreement other than those described in the
Prospectus.
(iv) The Trust Agreement has been duly authorized, executed and
delivered by the Company and the Administrative Trustees and is a
legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as enforcement thereof
may be limited by the Bankruptcy Exceptions.
(v) The shares of Common Stock subject to the Purchase Contract
Agreement have been validly authorized and, when issued and delivered
by the Company in accordance with the provisions of the Purchase
Contract Agreement, the Purchase Contracts and the Pledge Agreement,
will be fully paid and non-assessable; the issuance of such Common
Stock will not be subject to preemptive or other similar rights arising
by law or, to the best of such counsel's knowledge, otherwise.
(vi) The issuance of the Designated Securities is not subject to
preemptive or other similar rights arising by law or, to the best of
such counsel's knowledge, otherwise.
(vii) This Agreement, the Remarketing Agreement and the Pricing
Agreement have been duly authorized, executed and delivered by each of
the Company and the Trust and constitute valid and binding agreements
of the Company and the Trust, enforceable against the Company and the
Trust in accordance with their respective terms except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions.
(viii) The Purchase Contract Agreement has been duly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Purchase Contract Agent, constitutes a
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
(ix) The Pledge Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Collateral Agent and the Purchase Contract Agent,
constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except to
the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions.
(x) The Guarantee Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization execution,
and delivery by
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<PAGE> 19
the Guarantee Trustee, constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by
Bankruptcy Exceptions.
(xi) The Indenture has been duly authorized, executed and delivered
by the Company and, assuming due authorization, execution, and delivery
thereof by the Subordinated Debenture Trustee, is a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions.
(xii) The Subordinated Debentures are in the form contemplated by
the Indenture, have been duly authorized, executed and delivered by the
Company and, when authenticated by the Subordinated Debenture Trustee
in the manner provided for in the Indenture and delivered against
payment therefor by the Trust, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(xiii) The entry into the Purchase Contracts underlying the FELINE
PRIDES; the offer of the Designated Securities as contemplated herein
and in the Prospectus; the issuance and sale of the Common Stock by the
Company pursuant to the Purchase Contracts, the execution, delivery and
performance of this Agreement, the Pricing Agreement, the Remarketing
Agreement, the Purchase Contracts, the Purchase Contract Agreement, the
Pledge Agreement, the Trust Agreement, the FELINE PRIDES, the Preferred
Securities, the Common Securities, the Indenture, the Subordinated
Debentures, the Guarantee Agreement and the Guarantees; the
consummation of the transactions contemplated herein, therein and in
the Registration Statement; and compliance by the Offerors with their
obligations hereunder and thereunder will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company, any subsidiary of the Company or the Trust pursuant to any
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which the Company or any subsidiary or the
Trust is a party or by which the Company, any subsidiary or the Trust
is bound or to which any of the property or assets of the Company or
any subsidiary or the Trust is subject, (except for such conflicts,
breaches, violations, defaults or liens, charges or encumbrances as
would not, individually or in the aggregate, result in a Material
Adverse Effect on the Company and its subsidiaries or on the Trust),
nor will such action result in any violation of the provisions of the
articles of incorporation or by-laws of the Company or any Significant
Subsidiary or the Trust Agreement or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any court or
governmental agency or body, domestic or
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foreign, having jurisdiction over the Company, any subsidiary or the
Trust or any of their respective assets, properties or operations.
(xiv) All conditions precedent provided for in the Purchase
Contract Agreement relating to the authentication and delivery of the
Income PRIDES and Growth PRIDES have been complied with and the Company
is duly entitled to the authentication and delivery of the Income
PRIDES and Growth PRIDES in accordance with the terms of the Purchase
Contract Agreement. The certificates evidencing the Income PRIDES and
the Growth PRIDES are in the respective forms contemplated by the
Purchase Contract Agreement and comply with all applicable statutory
requirements and with the requirements of the NYSE, the certificates
evidencing the Preferred Securities and Common Securities are in the
respective forms contemplated by the Declaration, and the certificates
evidencing the Subordinated Debentures are in the form contemplated by
the Indenture.
(xv) There are no actions, suits or proceedings before or by any
court or governmental agency or body, domestic or foreign (including,
without limitation, any insurance regulatory agency or body), now
pending or threatened, which are required to be disclosed in the
Registration Statement or the Prospectus, other than those disclosed
therein, and all pending legal or governmental proceedings to which the
Company, any of its subsidiaries or the Trust is a party or to which
any of their property is subject which are not described in the
Registration Statement and the Prospectus, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material.
(xvi) To the best of such counsel's knowledge and information,
there are no contracts, indentures, mortgages, agreements, notes,
leases or other instruments required to be described or referred to or
incorporated by reference in the Registration Statement or to be filed
as exhibits thereto other than those described or referred to or
incorporated by reference therein or filed as exhibits thereto; the
descriptions thereof or references thereto are true and correct in all
material respects, and no default exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, agreement, note, lease
or other instrument so described, referred to, filed or incorporated by
reference.
(xvii) No authorization, approval, consent, order, registration or
qualification of or with any federal or Indiana court or any Indiana
governmental authority or agency (including, without limitation, any
insurance regulatory agency or body) is required for the issuance and
sale of the Designated Securities by the Company or the Trust or the
performance by the Trust and the Company of their respective
obligations in this Agreement, the applicable Pricing Agreement, the
Remarketing Agreement, the Purchase Contract Agreement, the Purchase
Contracts, the Pledge Agreement, the Indenture, the Subordinated
Debentures, the Guarantee Agreement, the Guarantee, the Trust Agreement
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and the Designated Securities, except such as has been made or obtained
prior to the Time of Delivery under the federal securities laws or
under state or foreign securities or Blue Sky laws.
Such counsel shall also furnish you with a letter to the effect that,
as counsel to the Company, he has no reason to believe that, as of its effective
date, the Registration Statement or any further amendment thereto made by the
Company or the 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 Company or the 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 Company or the 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.
(c) Sonnenschein Nath & Rosenthal, special counsel for the Trust and
the Company, shall have furnished to the Underwriters their written opinion,
dated the respective Time of Delivery for such Designated Securities, in form
and substance satisfactory to the Underwriters, to the effect that:
(i) The Registration Statement is effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b); no
stop order suspending the effectiveness of the Registration Statement
has been issued under the Act or proceedings therefor initiated, or to
the best of such counsel's knowledge, have been threatened by the
Commission.
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(ii) The Registration Statement, as of its effective date, and the
Prospectus and each amendment or supplement thereto, as of their
respective issue dates (other than the financial statements and the
notes thereto, the financial schedules and any other financial data
included or incorporated by reference therein, as to which such counsel
need express no belief), complied as to form in all material respects
with the requirements of the Act, the 1933 Act Regulations, the Trust
Indenture Act and the regulations thereunder.
(iii) The statements in the Prospectus under the captions "The
Company," "The Trust," "Use of Proceeds," "Description of the FELINE
PRIDES," "Description of the Purchase Contracts," "Certain Provisions
of the Purchase Contract Agreement and the Pledge Agreement," "Certain
Terms of the Preferred Securities," "Description of the Guarantee,"
"Certain Terms of the Subordinated Debentures," "Effect of Obligations
under the Subordinated Debentures and the Guarantee," "ERISA
Considerations," "Lincoln National Corporation," "The Lincoln Trusts,"
"Description of Senior Debt Securities," "Description of Junior
Subordinated Debt Securities," "Description of Preferred Stock and
Common Stock," "Description of Preferred Securities," "Description of
Guarantees," "Description of Stock Purchase Contracts and Stock
Purchase Units," and "Relationship Among the Preferred Securities, the
Corresponding Junior Subordinated Debt Securities and the Guarantees,"
to the extent that they involve matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, have been
reviewed by such counsel and are correct in all material respects.
(iv) Each Purchase Contract underlying the FELINE PRIDES being
delivered at the Time of Delivery and at any Second Time of Delivery is
a valid and legally binding agreement of the Company enforceable
against the Company in accordance with its terms, except as may be
limited by the Bankruptcy Exceptions; provided, however, that based on
a review of the Bankruptcy Code and applicable case law, upon the
occurrence of a Termination Event (as defined in the Purchase Contract
Agreement), Section 365(e)(1) of the Bankruptcy Code (11 U.S.C.
Sections 101-1330, as amended) should not substantively limit the
provisions of Sections 3.15 and 5.8 of the Purchase Contract Agreement
and Section 4.3 of the Pledge Agreement that require termination of the
Purchase Contracts and release of the Collateral Agent's security
interest in the Underlying Preferred Securities, the Treasury Portfolio
or the Treasury Securities; provided, however, that procedural
restrictions respecting relief from the automatic stay under Section
362 of the Code may affect the timing of the exercise of such rights
and remedies.
(v) The provisions of the Pledge Agreement are effective to create
in favor of the Collateral Agent for the benefit of the Company, a
valid and perfected security interest under the Uniform Commercial Code
as in effect on the date of such opinion in the State of New York in
the Pledged Preferred Securities, Pledged Subordinated Debentures,
Applicable Ownership Interests (as specified in clause (A) of the
definition
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thereof in the Pledge Agreement) of the Treasury Portfolio and the
Pledged Treasury Securities from time to time credited to the
Collateral Account.
(vi) No authorization, approval, consent, order, registration or
qualification of or with any court or federal or New York State
governmental authority or agency is required for the entry into the
Purchase Contracts underlying the FELINE PRIDES, the issuance and sale
of the Designated Securities by the Offerors to the Underwriters, the
issuance of the Subordinated Debentures to the Trust, or the issuance
and sale of the Common Stock by the Company pursuant to such Purchase
Contracts, or the performance by the Company and the Trust of their
respective obligations under this Agreement, the Pricing Agreement, the
Purchase Contracts, the Remarketing Agreement, the Purchase Contract
Agreement, the Pledge Agreement, the Indenture, the Subordinated
Debentures, the Guarantee Agreement, the Trust Agreement and the
Designated Securities, except such as has been obtained and made under
the federal securities laws or such as may be required under state or
foreign securities or Blue Sky laws.
(vii) The issuance and sale of the Income PRIDES and Growth PRIDES
in accordance with this Agreement do not contravene the Commodity
Exchange Act or the regulations of the Commodity Futures Trading
Commission.
(viii) Neither the Trust nor the Company is, nor upon the issuance
and sale of the Designated Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus, will be, an "investment company" or an entity "controlled"
by an "investment company" required to be registered under the
Investment Company Act.
(ix) The Income PRIDES and Growth PRIDES have been duly authorized,
executed and delivered by the Company (assuming due execution by the
Purchase Contract Agent as attorney-in-fact of the holders thereof and
due authentication by the Purchase Contract Agent), and upon payment
therefor as set forth herein, will be duly and validly issued and
outstanding, and will constitute valid and binding obligations of the
Company entitled to the benefits of the Purchase Contract Agreement and
enforceable against the Company in accordance with their respective
terms, except to the extent that enforcement thereof may be limited by
the Bankruptcy Exceptions. The Common Stock and the FELINE PRIDES are
each registered under the Exchange Act, and the Income PRIDES and the
Growth PRIDES issuable at the Time of Delivery and the Common Stock
issuable by the Company pursuant to the Purchase Contracts have been
authorized for listing on the New York Stock Exchange, upon official
notice of issuance.
(x) (A) The Common Securities have been duly authorized under the
Trust Agreement and upon delivery by the Trust to the Company against
payment therefor as set forth in the Trust Agreement, will be duly and
validly issued, fully paid and non-
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assessable beneficial interests in the assets of the Trust; and at each
Time of Delivery, all of the issued and outstanding Common Securities
of the Trust will be directly owned by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equitable right. (B) The Preferred Securities have been duly authorized
under the Trust Agreement and, when issued and authenticated in
accordance with the provisions of the Trust Agreement and delivered
against payment therefor as set forth in the Pricing Agreement, will
have been duly executed by the Trust, will be validly issued, fully
paid and non-assessable undivided beneficial interests in the assets in
the Trust and will be entitled to the benefits of the Trust Agreement.
(xi) The issuance of the Designated Securities is not, and issuance
of the Common Stock pursuant to the Purchase Contracts will not be,
subject to preemptive or other similar rights arising by law (assuming
no changes in such law after the date of such opinion) or, to the best
of such counsel's knowledge as of the date of such opinion, otherwise.
(xii) This Agreement, the Remarketing Agreement and the Pricing
Agreement have been duly authorized, executed and delivered by each of
the Company and the Trust and constitute valid and binding agreements
of the Company and the Trust, enforceable against the Company and the
Trust in accordance with their respective terms except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions.
(xiii) The Trust Agreement has been duly authorized, executed and
delivered by the Company and the Administrative Trustees and is a
legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as enforcement thereof
may be limited by the Bankruptcy Exceptions; and the Trust Agreement
has been duly qualified under the Trust Indenture Act.
(xiv) The Purchase Contract Agreement has been duly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Purchase Contract Agent, constitutes a
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
(xv) The Pledge Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Collateral Agent and the Purchase Contract Agent,
constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except to
the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions.
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(xvi) The Guarantee Agreement has been duly authorized, executed
and delivered by the Company and duly qualified under the Trust
Indenture Act and, assuming due authorization, execution, and delivery
by the Guarantee Trustee, constitutes a valid and binding agreement of
the Company, enforceable against the Company in accordance with its
terms, except to the extent that enforcement thereof may be limited by
Bankruptcy Exceptions.
(xvii) The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act and, assuming authorization, execution, and delivery thereof by the
Subordinated Debenture Trustee, is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions.
(xviii) The Subordinated Debentures are in the form contemplated by
the Indenture, have been duly authorized, executed and delivered by the
Company and, when authenticated by the Subordinated Debenture Trustee
in the manner provided for in the Indenture and delivered against
payment therefor by the Trust, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
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 Company or the 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 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
Company or the 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 Company or the 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
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supplement thereto made by the Company or the 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; 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). Such letter shall also state
that each of the documents incorporated by reference in the Registration
Statement or the Prospectus at the time they were filed or last amended (other
than the financial statements and the notes thereto, the financial schedules,
and any other financial data included or incorporated by reference therein, as
to which such counsel need express no belief), complied as to form in all
material respects with the requirements of the Exchange Act and the 1934 Act
Regulations, as applicable; and such counsel has no reason to believe that any
of such documents, when such documents 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 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 not misleading.
(d) Richards, Layton & Finger, special Delaware Counsel to the Trust
and the Company, shall have furnished to the Underwriters, the Company and the
Trust their written opinion, dated the respective Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware 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 Trust as a business
trust have been made.
(ii) Under the Delaware Business Trust Act and the Trust Agreement,
the 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 Company and the Trustees, enforceable against the
Company and the Trustees, in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
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<PAGE> 27
(iv) Under the Delaware Business Trust Act and the Trust Agreement,
the 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 Trust of the Pricing Agreement
(incorporating this Underwriting Agreement) and the performance by the
Trust of its obligations thereunder, have been duly authorized by all
necessary action on the part of the Trust.
(vi) The Preferred 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 Trust and are entitled to the benefits
provided by the Trust Agreement; the holders of the Preferred
Securities (whether as part of the FELINE PRIDES or independently), as
beneficial owners of the Trust, will be entitled to the same limitation
of personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of
Delaware; provided that such counsel may note that holders of the
Preferred Securities 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
certificates evidencing the Preferred Securities and the issuance of
replacement of such 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 Trust.
(viii) Under the Delaware Business Trust Act and the Trust
Agreement, the issuance of the Preferred Securities and the Common
Securities is not subject to preemptive rights.
(ix) The issuance and sale by the Trust of the Preferred Securities
and the Common Securities, the execution and delivery of the Pricing
Agreement (incorporating this Underwriting Agreement) and performance
by the Trust of this Underwriting Agreement and the Pricing Agreement,
the consummation by the Trust of the transactions contemplated thereby
and compliance by the Trust with its obligations thereunder will not
violate (a) any of the provisions of the Certificate of Trust of the
Trust or the Trust Agreement, or (b) any applicable Delaware law or
administrative regulation.
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(x) Assuming that the 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 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 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
Trust, and the Trust will not be liable for any income tax imposed by
the State of Delaware.
(e) Pepper Hamilton LLP, counsel to The First National Bank of Chicago,
as Property Trustee under the Trust Agreement and Guarantee Trustee under the
Guarantee Agreement, and to First Chicago Delaware Inc., as Delaware Trustee,
shall have furnished to the Underwriters their written opinion, dated the
respective Time of Delivery for such Designated Securities, in form and
substance satisfactory to the Underwriters, to the effect that:
(i) The Property Trustee is a national banking association with
trust powers, duly organized, validly existing and in good standing
under the laws of the United States with all necessary corporate power
and authority to execute, deliver, and to carry out and perform its
obligations under the terms of, the Trust Agreement and the Guarantee
Agreement.
(ii) The Delaware Trustee is a Delaware corporation, duly
organized, validly existing and in good standing, with full corporate
power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Trust Agreement.
(iii) The execution, delivery and performance by each of the
Property Trustee and the Delaware Trustee of the Trust Agreement, and
the execution, delivery and performance by Guarantee Trustee of the
Guarantee Agreement, have been duly authorized by all necessary
corporate action on the part of the Property Trustee and the Delaware
Trustee, respectively, in the case of the Trust Agreement, and by the
Guarantee Trustee, in the case of the Guarantee Agreement. The Trust
Agreement and the
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Guarantee Agreement have been duly executed and delivered by the
Property Trustee and the Delaware Trustee, respectively, in the case of
the Trust Agreement, and by the Guarantee Trustee, in the case of the
Guarantee Agreement, and constitute the legal, valid and binding
obligation of the Property Trustee and the Delaware Trustee, in the
case of the Trust Agreement, and of the Guarantee Trustee, in the case
of the Guarantee Agreement, enforceable against the Property Trustee
and the Delaware Trustee in the case of the Trust Agreement, and
against the Guarantee Trustee, in the case of the Guarantee Agreement,
in accordance with their terms except to the extent enforcement thereof
may be limited by the Bankruptcy Exceptions.
(iv) The execution, delivery and performance by each of the
Property Trustee and the Delaware Trustee of the Trust Agreement, and
the execution, delivery and performance by the Guarantee Trustee of the
Guarantee Agreement, do not conflict with, or constitute a breach of,
the Property Trustee's, the Delaware Trustee's or the Guarantee
Trustee's respective charter or bylaws.
(v) No consent, approval or authorization of, or registration with
or notice to, any Delaware or federal banking authority is required for
the execution, delivery or performance by the Property Trustee and the
Guarantee Trustee of the Trust Agreement and the Guarantee Agreement.
(f) The Law Department of The First National Bank of Chicago, as
Purchase Contract Agent, shall have furnished to the Underwriters its written
opinion, in form and substance satisfactory to the Underwriters, to the effect
that:
(i) The First National Bank of Chicago is duly incorporated and is
validly existing as a banking corporation with trust powers under the
laws of the United States with all necessary power and authority to
execute, deliver and perform its obligations under the Purchase
Contract Agreement and the Pledge Agreement.
(ii) The execution, delivery and performance by the Purchase
Contract Agent of the Purchase Contract Agreement and the Pledge
Agreement, and the authentication and delivery of the Securities have
been duly authorized by all necessary corporate action on the part of
the Purchase Contract Agent. The Purchase Contract Agreement and the
Pledge Agreement have been duly executed and delivered by the Purchase
Contract Agent, and constitute the legal, valid and binding obligations
of the Purchase Contract Agent, enforceable against the Purchase
Contract Agent in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
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(iii) The execution, delivery and performance of the Purchase
Contract Agreement and the Pledge Agreement by the Purchase Contract
Agent does not conflict with or constitute a breach of the charter or
by-laws of the Purchase Contract Agent.
(iv) No consent, approval or authorization of, or registration with
or notice to, any Illinois or federal governmental authority or agency
is required for the execution, delivery or performance by the Purchase
Contract Agent of the Purchase Contract Agreement and the Pledge
Agreement.
(g) Sonnenschein Nath & Rosenthal, tax counsel to the Offerors, shall
have furnished to the Underwriters their written opinion, generally to the
effect that based upon current law and the assumptions stated or referred to
therein, under current U.S. federal income tax law:
(i) the Trust will be classified as a grantor trust and not as an
association taxable as a corporation;
(ii) the Subordinated Debentures will be classified as indebtedness
of the Company and
(iii) the discussion in the Prospectus under the caption "Certain
Federal Income Tax Consequences" is a fair and accurate summary of the
matters addressed therein, based upon current law and the assumptions
stated or referred to therein.
(h) LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the
Underwriters, shall have furnished their written opinion, in form and substance
satisfactory to the Underwriters, with respect to the issuance and sale of the
Designated Securities, and such other related matters as the Underwriters may
reasonably require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters. In giving its opinion, such counsel may rely as to certain matters of
Indiana law upon the opinion of Jack D. Hunter, counsel for the Offerors, which
shall be delivered in accordance with Section 5(b) hereof and, as to certain
matters of Delaware law, upon the opinion of Richards, Layton & Finger, PA,
special Delaware counsel for the Offerors, which shall be delivered in
accordance with Section 5(d) hereof.
(i) Between the date of this Agreement and prior to the Time of
Delivery, no material adverse change shall have occurred in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Trust or the Company and its subsidiaries, considered as one
enterprise, whether or not in the ordinary course of business.
(j) At the First Time of Delivery, the Underwriters shall have received
a certificate of the President or a Vice-President of the Company and of the
Chief Financial Officer or Chief Accounting Officer of the Company, and a
certificate of an Administrative Trustee of the Trust,
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in each case dated as of the Time of Delivery, to the effect that (i) there has
been no material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Trust or of the
Company and its subsidiaries considered as one enterprise, whether or not in the
ordinary course of business, (ii) the representations and warranties in Section
1 hereof are true and correct as though expressly made at and as of such Time of
Delivery, (iii) the Company and the Trust have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied at or prior
to such Time of Delivery, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been initiated or threatened by the Commission.
(k) At the time of the execution of this Agreement, the Underwriters
shall have received from Ernst & Young LLP, a letter dated such date in form and
substance satisfactory to the Underwriters to the effect set forth in Annex II.
(l) At the First Time of Delivery, the Underwriters shall have received
from Ernst & Young LLP, a letter, dated as of the Time of Delivery, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (j) of this Section, except that the specified date referred to
shall be a date not more than five days prior to the Time of Delivery.
(m) At the First Time of Delivery, (i) there shall not have occurred
any decrease in the rating assigned to the Designated Securities or any other
securities of the Company or of the financial condition of the Company by any
"nationally recognized statistical rating organization," as defined for purposes
of Rule 436(g)(2) under the 1933 Act Regulations, and (ii) no such organization
shall have publicly announced that it has under surveillance or review its
rating of the Designated Securities or any other securities of the Company.
(n) At the First Time of Delivery, the Income PRIDES, the Growth PRIDES
and the Common Stock shall have duly listed, subject to notice of issuance, on
the New York Stock Exchange.
(o) In the event that the Underwriters exercise the options provided in
Section 2(b) hereof to purchase all or any portion of the Optional Designated
Securities, the representations and warranties of the Offerors contained herein
and the statements in any certificates furnished by the Offerors hereunder shall
be true and correct as of, and as if made on, each such Time of Delivery, and at
the relevant Time of Delivery, the Underwriters shall have received:
(i) A certificate, dated such Second Time of Delivery, of the
President or a Vice-President of the Company and the Chief Financial
Officer or Chief Accounting Officer of the Company and a certificate of
an Administrative Trustee of the Trust confirming that the certificate
delivered at the Time of Delivery pursuant to Section 5(j) hereof is
true and correct as of, and as if made on, such Second Time of
Delivery.
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<PAGE> 32
(ii) The favorable opinion of Jack D. Hunter, Esq., Executive Vice
President and General Counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, dated such Time of
Delivery, relating to the Optional Designated Securities and otherwise
to the same effect as the opinion required by Section 5(b) hereof.
(iii) The favorable opinion of Sonnenschein Nath & Rosenthal,
special counsel for the Offerors, in form and substance satisfactory to
counsel for the Underwriters, dated such Time of Delivery, relating to
the Optional Designated Securities and otherwise to the same effect as
the opinion required by Sections 5(c) hereof.
(iv) The favorable opinion of Richards, Layton & Finger, PA,
special Delaware counsel for the Offerors, in form and substance
satisfactory to counsel for the Underwriters, dated such Time of
Delivery, relating to the Optional Designated Securities and otherwise
to the same effect as the opinion required by Section 5(d) hereof.
(v) The favorable opinion of Pepper Hamilton LLP, counsel to The
First National Bank of Chicago and First Chicago Delaware Inc. in form
and substance satisfactory to counsel for the Underwriter, dated such
Time of Delivery, relating to the Optional Designated Securities and
otherwise to the same effect as the opinion required by Section 5(e)
hereof.
(vi) The favorable opinion of the Law Department of The First
National Bank of Chicago, as Purchase Contract Agent, in form and
substance satisfactory to counsel for the Underwriters, dated such Time
of Delivery, relating to the Optional Designated Securities and
otherwise to the same effect as the opinion required by Section 5(f)
hereof.
(vii) The favorable opinion of Sonnenschein Nath & Rosenthal, tax
counsel for the Offerors, in form and substance satisfactory to counsel
for the Underwriters, dated such Time of Delivery relating to the
Optional Designated Securities and otherwise to the same effect as the
opinion required by Section 5(g) hereof.
(viii) The favorable opinion of LeBoeuf, Lamb, Greene & MacRae,
L.L.P., counsel for the Underwriters, dated such Time of Delivery,
relating to the Optional Designated Securities and otherwise to the
same effect as the opinion required by Section 5(h) hereof.
(ix) A letter from Ernst & Young LLP in form and substance
satisfactory to the Underwriters and dated such Time of Delivery,
substantially the same in form and substance as the letter furnished to
the Underwriters pursuant to Section 5(k) hereof, except that the
"specified date" in the letter furnished pursuant to this Section shall
be a date not more than five days prior to such Time of Delivery.
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<PAGE> 33
(x) Furthermore, at such Time of Delivery, (i) there shall not have
occurred any decrease in the rating assigned to the Designated
Securities or any other securities of the Company or of the financial
condition of the Company by any "nationally recognized statistical
rating organization," as defined for purposes of Rule 436(g)(2) under
the 1933 Act Regulations, and (ii) no such organization shall have
publicly announced that it has under surveillance or review its rating
of the Designated Securities or any other securities of the Company or
of the financial condition of the Company.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, in the case
of any condition to the purchase of Optional Designated Securities at a Time of
Delivery which is after the First Time of Delivery, the obligations of the
Underwriters to purchase the relevant Optional Securities may be terminated by
the Underwriters by notice to the Company at any time at or prior to the First
Time of Delivery, or such subsequent Time of Delivery, as the case may be, and
such termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall
survive any such termination and remain in full force and effect.
SECTION 6. Indemnification and Contribution.
(a) The Trust and the Company 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 Trust nor the Company 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 Trust or the Company by
any Underwriter of Designated Securities through the Underwriters expressly for
use in the Prospectus as amended or supplemented relating to such Designated
Securities and; provided, further, that neither the Trust nor the Company 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
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<PAGE> 34
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 Designated 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 Trust or
the Company 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 Trust and the
Company against any losses, claims, damages or liabilities to which the Trust or
the Company 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, 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 Designated Securities, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the Trust
or the Company by such Underwriter through the Underwriters expressly for use
therein; and will reimburse the Trust or the Company for any legal or other
expenses reasonably incurred by the Trust or the Company 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
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<PAGE> 35
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 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 Trust and the Company 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 Trust and the Company
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
Trust and the Company 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
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<PAGE> 36
deducting expenses) received by the Trust less the total underwriting
compensation paid by the Company 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 Trust and the Company 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 Trust, the Company 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 are several in proportion to
their respective underwriting obligations with respect to such Designated
Securities and not joint.
(e) The obligations of the Trust and the Company under this Section 6
shall be in addition to any liability which the Trust and the Company 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 6 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
Company, to each administrative trustee of the Trust and to each person, if any,
who controls the Trust or the Company within the meaning of the Act.
SECTION 7. Default by an Underwriter.
(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 Underwriters 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
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<PAGE> 37
Underwriter the Underwriters do not arrange for the purchase of such Firm
Designated Securities or such Optional Designated Securities, as the case may
be, then the Trust and the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to the Underwriters to purchase such Designated Securities on such
terms. In the event that, within the respective prescribed period, the
Underwriters notify the Trust and the Company that they have so arranged for the
purchase of such Designated Securities, or the Trust and the Company notify the
Underwriters that they have so arranged for the purchase of such Designated
Securities, the Underwriters or the Trust and the Company 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 Trust and the
Company agree to file promptly any amendments or supplements to the Registration
Statement or the Prospectus which in the opinion of the Underwriters 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 Underwriters and the
Trust and the Company 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 Trust and the Company 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 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 Trust and the Company 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 Trust and the Company shall not exercise the right described in
subsection (b) above to require non-defaulting
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<PAGE> 38
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 Trust or
the Company, except for the expenses to be borne by the Trust, the Company and
the Underwriters as provided in Section 4 hereof and the indemnity and
contribution agreements in Section 6 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
SECTION 8. Representations and Indemnities to Survive. The respective
indemnities, agreements, representations, warranties and other statements of the
Trust, the Company 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 Trust, the Company, or any
officer or director or controlling person of the Trust or the Company, and shall
survive delivery of and payment for the Designated Securities.
SECTION 9. Termination. (a) If any Pricing Agreement or Over-allotment
Option shall be terminated pursuant to Section 7 hereof, neither the Trust nor
the Company 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 4 and Section 6 hereof; but, if
for any other reason, Designated Securities are not delivered by or on behalf of
the Trust or the Company as provided herein, the Trust and the Company will
reimburse the Underwriters for all out-of-pocket expenses approved in writing by
the Underwriters, 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 Trust and the Company shall then
be under no further liability to any Underwriter with respect to such Designated
Securities except as provided in Section 4 and Section 6 hereof.
(b) This Agreement shall be subject to termination in the absolute
discretion of the Underwriters, by notice given to the Company prior to delivery
of and payment for the Designated Securities, if prior to such time (i) trading
in the Company's Common Stock or any preferred stock or Preferred Securities
shall have been suspended or materially limited by the Commission or the New
York Stock Exchange or trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a general moratorium on commercial banking
activities shall have been declared either by Federal or New York State
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or the declaration by the United States of a national emergency or
war that, in the judgment of the Underwriters, makes it impracticable or
inadvisable to market the Designated Securities in the manner contemplated.
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<PAGE> 39
SECTION 10. Notices. 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 addresses of the
Underwriters as set forth in the Pricing Agreement; and if to the Trust or the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Trust or the Company 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 Trust and the Company by
the Underwriters upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
SECTION 11. Parties. This Agreement and each Pricing Agreement shall be
binding upon, and inure solely to the benefit of, the Underwriters, the Trust
and the Company and, to the extent provided in Section 4 and Section 8 hereof,
the officers and directors of the Trust or the Company and each person who
controls the Trust, the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Designated Securities from any
Underwriter shall be deemed a successor or assignee by reason merely of such
purchase.
SECTION 12. GOVERNING LAW. THIS AGREEMENT AND EACH PRICING AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
SECTION 13. Miscellaneous. 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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<PAGE> 40
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon acceptance hereof by you,
this agreement shall constitute a binding agreement between each of the
Underwriters, the Trust and the Company. It is understood that your acceptance
of this agreement is or will be pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on the part of the
Underwriters as to the authority of the signers thereof.
Very truly yours,
LINCOLN NATIONAL CORPORATION
By: /s/ John L. Steinkamp
---------------------------------
Name: John L. Steinkamp
Title: Vice President
LINCOLN NATIONAL CAPITAL IV
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
By: /s/ John P. Tullsen Jr.
--------------------------------
Name: John P. Tullsen Jr.
Title: Vice President
BT Alex. Brown Incorporated
By: /s/ Thomas W. Johnson
--------------------------------
Name: Thomas W. Johnson
Title: Managing Director
CIBC Oppenheimer Corp.
By: /s/ Rhonda B. Rosen
--------------------------------
Name: Rhonda B. Rosen
Title: Managing Director
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<PAGE> 41
ANNEX I
PRICING AGREEMENT
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
BT ALEX. BROWN INCORPORATED
CIBC OPPENHEIMER CORP.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center - North Tower
250 Vesey Street
New York, NY 10281-1209
Dear Sirs:
Lincoln National Capital IV, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), and Lincoln National
Corporation, an Indiana corporation (the "Company"), propose, subject to the
terms and conditions stated herein and in the Underwriting Agreement, dated
August 10, 1998 (the "Underwriting Agreement"), between the Company and the
Trust 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.
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<PAGE> 42
Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Underwriters of the Designated
Securities and their addresses 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, (a) the Company and the
Trust agree to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company and
the 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 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 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 Company and the 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 Underwriters to the Trust and the Company given within a period of 30
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 Underwriters, but in no event earlier than the First Time of Delivery or,
unless the Underwriters, the Company and the Trust otherwise agree in writing,
no earlier than two or later than ten business days after the date of such
notice.
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<PAGE> 43
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 Trust and the Company. It is understood that your acceptance
of this letter on behalf of each of the Underwriters is or will be pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination upon request, but
without warranty on the part of the Underwriters as to the authority of the
signers thereof.
Very truly yours,
LINCOLN NATIONAL CORPORATION
By:___________________________________
Name:
Title:
LINCOLN NATIONAL CAPITAL IV
By: Lincoln National Corporation, as Depositor
By:_________________________________
Name:
Title:
Accepted as of the date hereof:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By: ___________________________
Name:
Title:
BT Alex. Brown Incorporated
By: ___________________________
Name:
Title:
CIBC Oppenheimer Corp.
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<PAGE> 44
By:
Name:
Title:
SCHEDULE I
<TABLE>
<CAPTION>
Number of Firm
Separate
Number of Firm Number of Firm Preferred
Income PRIDES Growth PRIDES Securities
Underwriters to be Purchased to be Purchased to be Purchased
------------ --------------- --------------- ---------------
<S> <C> <C> <C>
Merrill Lynch, Pierce Fenner & Smith
Incorporated...............................
BT Alex. Brown Incorporated...................
CIBC Oppenheimer Corp.........................
--------- --------- ---------
Total......................................
========= ========= =========
Maximum
Number of
Optional
Income PRIDES
Underwriters to be Purchased
------------ ---------------
Merrill Lynch, Pierce Fenner & Smith
Incorporated...............................
BT Alex. Brown Incorporated...................
CIBC Oppenheimer Corp.........................
---------
Total......................................
=========
</TABLE>
-1-
<PAGE> 45
SCHEDULE II
Offerors:
Lincoln National Corporation
Lincoln National Capital IV
Title of Designated Securities:
FELINE PRIDES, consisting of Income PRIDES and Growth PRIDES, Stated
Amount $__ per Security
____% Preferred Securities, Series D
Aggregate Principal Amount:
Aggregate principal amount of Firm Designated Securities:
__________ Income PRIDES with an aggregate Stated Amount of $_____________;
__________ Growth PRIDES with an aggregate Stated Amount of $_____________;
__________ Separate Preferred Securities with an aggregate liquidation
value of $__________.
Maximum aggregate principal amount of Optional Designated Securities:
_____________________________________
Price to Public:
$______ per Income PRIDES
$______ per Growth PRIDES
$______ per Preferred Security
Underwriters' Compensation:
$______ per Income PRIDES (Gross Spread)
$______ per Growth PRIDES (Gross Spread)
$______ per Preferred Security (Gross Spread)
Purchase Price by Underwriters (reflecting Underwriters' Compensation):
$______ per Income PRIDES
$______ per Growth PRIDES
$______ per Preferred 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.
-1-
<PAGE> 46
PURCHASE CONTRACT AGREEMENT:
Purchase Contract Agreement dated as of August __, 1998, between the
Purchase Contract Agent and the Company
TRUST AGREEMENT:
Amended and Restated Trust Agreement dated as of August __, 1998, between
the Company and the Trustees named therein
INDENTURE:
Junior Subordinated Indenture dated as of May 1, 1996, between the Company
and The First National Bank of Chicago as Subordinated Debenture Trustee
(the "Indenture"), as supplemented by the First Supplemental Indenture
dated as of August __, 1998
GUARATEE:
Guarantee Agreement, dated as of August __, 1998, between the Company and
Guarantee Trustee with respect to the Preferred Securities
PLEDGE AGREEMENT:
Pledge Agreement dated as of August __, 1998 between The Chase Manhattan
Bank, as Collateral Agent, and the Company with respect to Underlying
Preferred Securities and the Treasury Securities underlying the Growth
PRIDES
REMARKETING DATE FOR PREFERRED SECURITIES:
August __, 2001
MATURITY:
Purchase Contracts underlying Income PRIDES and Growth PRIDES: August __,
2001
Underlying Preferred Securities comprising part of the Income PRIDES:
August __, 2003
Treasury Securities comprising part of the Growth PRIDES:
August __, 2001
Subordinated Debentures underlying Preferred Securities:
August __, 2003
INTEREST/DISTRIBUTION RATE:
Income PRIDES: ____% per annum (____% Disribution from Preferred Security
and ____% Contract Adjustment Payments)
Growth PRIDES: ____% per annum - Contact Adjustment Payments
Preferred Securities: ____% per annum - Distributions
INTEREST PAYMENT DATES:
February 16, May 16, August 16 and November 16, commencing November 16,
1998
INTEREST DEFERRAL:
Not to exceed August __, 2003 (maturity date for Subordinated Debentures)
-2-
<PAGE> 47
REDEMPTION PROVISIONS:
The redemption provisions set forth in Section 4.2 of the Trust Agreement
shall apply to the Preferred Securities and the underlying Subordinated
Debentures and the Common Securities.
-3-
<PAGE> 48
SINKING FUND PROVISIONS:
No sinking fund provisions.
FIRST TIME OF DELIVERY:
9:00 a.m., New York City time, August __, 1998
OVER-ALLOTMENT OPTION:
Exercisable for 30 days, for ______________ Income PRIDES
CLOSING LOCATION:
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019-5389
NAMES AND ADDRESSES OF UNDERWRITERS:
Merrill Lynch, Pierce Fenner & Smith Incorporated
World Financial Center - North Tower
250 Vesey Street
New York, NY 10281
Attention: Robin Mass, Esq.
Facsimile: (212) 449-5828
BT Alex. Brown Incorporated
One South Street
Baltimore, MD 21202
Attention: Barry Ritholz, Esq.
Facsimile: (410) 895-3619
CIBC Oppenheimer Corp.
One World Financial Center
200 Liberty Street - 38th Floor
New York, NY 10281
Attention: Rhonda B. Rosen
Facsimile: (212) 667-8148
-4-
<PAGE> 49
ANNEX II
Accountants' Letter
Pursuant to Section 5(j) of the Underwriting Agreement, the
Company's independent certified public accountants shall furnish letters to the
effect that:
(i) they are independent certified public accountants
with respect to the Company 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 (as defined below), 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 Company 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 Company'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 Company 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
-1-
<PAGE> 50
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 Company for the five most recent
fiscal years included in the Prospectus or incorporated by
reference from Item 6 of the Company's Annual Report on Form
10-K for the most recent fiscal year, 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 Company's Annual Reports on Form 10-K for
such fiscal years;
(v) on the basis of limited procedures, not
constituting an audit 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 Company and its subsidiaries, inspection of the minute
books of the Company 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 Company 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 Company'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 any material modifications should be made for them to
be 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 Company's Annual Report
on Form 10-K for the most recent fiscal year;
(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 Company's Annual Report on Form 10-K for the most recent fiscal
year;
-2-
<PAGE> 51
(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
Company's Annual Report on Form 10-K for the most recent fiscal year;
(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
Company and its subsidiaries or any other items specified by the
Representatives, or any decreases in total investments, total assets,
consolidated common shareholders' equity of the Company and its consolidated
subsidiaries 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;
(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 audit 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
-3-
<PAGE> 52
Company and its subsidiaries, which appear in the Prospectus,
or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives or in
the Company's Annual Report on Form 10-K for the most recent
fiscal year and in the Company's quarterly reports on Form
10-Q 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 Company 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 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> 1
EXHIBIT 1.2
PRICING AGREEMENT
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
BT ALEX. BROWN INCORPORATED
CIBC OPPENHEIMER CORP.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center - North Tower
250 Vesey Street
New York, NY 10281-1209
August 10, 1998
Dear Sirs:
Lincoln National Capital IV, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), and Lincoln National
Corporation, an Indiana corporation (the "Company"), propose, subject to the
terms and conditions stated herein and in the Underwriting Agreement, dated
August 10, 1998 (the "Underwriting Agreement"), between the Company and the
Trust 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.
Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Underwriters of
the Designated Securities and their addresses are set forth at the end of
Schedule II hereto.
<PAGE> 2
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, (a) the Company and
the Trust agree to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company and
the 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 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 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 Company and the 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 Underwriters to the Trust and the Company
given within a period of 30 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 Underwriters, but in no event earlier than
the First Time of Delivery or, unless the Underwriters, the Company and the
Trust otherwise agree in writing, no earlier than two or later than ten business
days after the date of such notice.
-2-
<PAGE> 3
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 Trust and the Company. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company for examination upon
request, but without warranty on the part of the Underwriters as to the
authority of the signers thereof.
Very truly yours,
LINCOLN NATIONAL CORPORATION
By: /s/ John L. Steinkamp
---------------------------------
Name: John L. Steinkamp
Title: Vice President
LINCOLN NATIONAL CAPITAL IV
By: Lincoln National Corporation, as Depositor
By: /s/ John L. Steinkamp
---------------------------------
Name: John L. Steinkamp
Title: Administrative Trustee
Accepted as of the date hereof:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By: /s/ John P. Tullsen Jr.
--------------------------------
Name: John P. Tullsen Jr.
Title: Vice President
BT Alex. Brown Incorporated
By: /s/ Thomas W. Johnson
--------------------------------
Name: Thomas W. Johnson
Title: Managing Director
CIBC Oppenheimer Corp.
By: /s/ Rhonda B. Rosen
--------------------------------
Name: Rhonda B. Rosen
Title: Managing Director
-3-
<PAGE> 4
SCHEDULE I
<TABLE>
<CAPTION>
Number of Firm
Number of Firm Number of Firm Preferred
Income PRIDES Growth PRIDES Securities
Underwriters to be Purchased to be Purchased to be Purchased
------------ --------------- --------------- ---------------
<S> <C> <C> <C>
Merrill Lynch, Pierce Fenner & Smith 4,200,000 600,000 600,000
Incorporated...............................
BT Alex. Brown Incorporated................... 1,400,000 200,000 200,000
CIBC Oppenheimer Corp......................... 1,400,000 200,000 200,000
--------- --------- ---------
Total...................................... 7,000,000 1,000,000 1,000,000
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Maximum
Number of
Optional
Income PRIDES
Underwriters to be Purchased
------------ ---------------
<S> <C>
Merrill Lynch, Pierce Fenner & Smith 720,000
Incorporated...............................
BT Alex. Brown Incorporated................... 240,000
CIBC Oppenheimer Corp......................... 240,000
---------
Total...................................... 1,200,000
=========
</TABLE>
-1-
<PAGE> 5
SCHEDULE II
OFFERORS:
Lincoln National Corporation
Lincoln National Capital IV
TITLE OF DESIGNATED SECURITIES:
FELINE PRIDES, consisting of Income PRIDES and Growth PRIDES, Stated
Amount $25 per Security
6.40% Preferred Securities, Series D
AGGREGATE PRINCIPAL AMOUNT:
Aggregate principal amount of Firm Designated Securities:
7,000,000 Income PRIDES with an aggregate Stated Amount of $175,000,000;
1,000,000 Growth PRIDES with an aggregate Stated Amount of $25,000,000;
1,000,000 Preferred Securities with an aggregate liquidation value of
$25,000,000.
Maximum aggregate principal amount of Optional Designated Securities:
1,200,000 Income PRIDES ($30 million)
PRICE TO PUBLIC:
$25.00 per Income PRIDES
$21.34 per Growth PRIDES
$25.00 per Preferred Security
UNDERWRITERS' COMPENSATION:
$0.75 per Income PRIDES (Gross Spread)
$0.1875 per Growth PRIDES (Gross Spread)
$0.5625 per Preferred Security (Gross Spread)
PURCHASE PRICE BY UNDERWRITERS (REFLECTING UNDERWRITERS' COMPENSATION):
$24.25 per Income PRIDES
$20.7775 per Growth PRIDES
$24.8125 per Preferred 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.
PURCHASE CONTRACT AGREEMENT:
-1-
<PAGE> 6
Purchase Contract Agreement dated as of August 14, 1998, between the
Purchase Contract Agent and the Company
TRUST AGREEMENT:
Amended and Restated Trust Agreement dated as of August 14, 1998, between
the Company and the Trustees named therein
INDENTURE:
Junior Subordinated Indenture dated as of May 1, 1996, between the Company
and The First National Bank of Chicago as Subordinated Debenture Trustee
(the "Indenture"), as supplemented by the First Supplemental Indenture
dated as of August 14, 1998
GUARANTEE:
Guarantee Agreement, dated as of August 14, 1998, between the Company and
Guarantee Trustee with respect to the Preferred Securities
PLEDGE AGREEMENT:
Pledge Agreement dated as of August 14, 1998 between The Chase Manhattan
Bank, as Collateral Agent, and the Company with respect to Preferred
Securities underlying the Income PRIDES and Treasury Securities underlying
the Growth PRIDES
REMARKETING DATE FOR PREFERRED SECURITIES:
August 13, 2001
MATURITY:
Purchase Contracts underlying Income PRIDES and Growth PRIDES: August 16,
2001
Preferred Securities comprising part of the Income PRIDES: August 15, 2003
Treasury Securities comprising part of the Growth PRIDES: August 15, 2001
Subordinated Debentures underlying Preferred Securities: August 15, 2003
INTEREST/DISTRIBUTION RATE:
Income PRIDES: 7.75% per annum (6.40% Distribution from Preferred Security
and 1.35% Contract Adjustment Payments)
Growth PRIDES: 1.85% per annum - Contact Adjustment Payments
Preferred Securities: 6.40% per annum - Distributions
INTEREST PAYMENT DATES:
February 16, May 16, August 16 and November 16, commencing November 16,
1998
INTEREST DEFERRAL:
Not to exceed August 15, 2003 (maturity date for Subordinated Debentures)
REDEMPTION PROVISIONS:
The redemption provisions set forth in Section 4.2 of the Trust Agreement
-2-
<PAGE> 7
shall apply to the Preferred Securities and the underlying Subordinated
Debentures and the Common Securities.
-3-
<PAGE> 8
SINKING FUND PROVISIONS:
No sinking fund provisions.
FIRST TIME OF DELIVERY:
9:00 a.m., New York City time, August 14, 1998
OVER-ALLOTMENT OPTION:
Exercisable for 30 days, for 1,200,000 Income PRIDES
CLOSING LOCATION:
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019-5389
NAMES AND ADDRESSES OF UNDERWRITERS:
Merrill Lynch, Pierce Fenner & Smith Incorporated
World Financial Center - North Tower
250 Vesey Street
New York, NY 10281
Attention: Robin Mass, Esq.
Facsimile: (212) 449-5828
BT Alex. Brown Incorporated
One South Street
Baltimore, MD 21202
Attention: Barry Ritholz, Esq.
Facsimile: (410) 895-3619
CIBC Oppenheimer Corp.
One World Financial Center
200 Liberty Street - 38th Floor
New York, NY 10281
Attention: Rhonda B. Rosen
Facsimile: (212) 667-8148
-4-
<PAGE> 1
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 AUGUST 14, 1998
LINCOLN NATIONAL CAPITAL IV
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I Defined Terms......................................................... 1
ARTICLE II Establishment of the Trust........................................... 14
Section 2.1 Name....................................................... 14
Section 2.2 Office of the Delaware Trustee; Principal
Place of Business......................................... 14
Section 2.3 Initial Contribution of Trust Property;
Organizational Expense.................................... 14
Section 2.4 Issuance of the Preferred Securities....................... 14
Section 2.5 Issuance of the Common Securities;
Subscription and Purchase of Debentures................... 15
Section 2.6 Declaration of Trust....................................... 15
Section 2.7 Authorization to Enter into Certain
Transactions.............................................. 16
Section 2.8 Assets of Trust............................................ 20
Section 2.9 Title to Trust Property.................................... 20
ARTICLE III Payment Account..................................................... 20
Section 3.1 Payment Account............................................ 20
ARTICLE IV Certain Terms of the Trust Securities................................ 21
Section 4.1 Distributions.............................................. 21
Section 4.2 Redemption, Investment Company Event, Tax Event Redemption. 23
Section 4.3 Subordination of Common Securities......................... 26
Section 4.4 Payment Procedures......................................... 27
Section 4.5 Tax Returns and Reports.................................... 27
Section 4.6 Payment of Taxes, Duties, Etc. of the
Trust..................................................... 27
Section 4.7 Payments under Indenture................................... 28
Section 4.8 Repayment at Option of Holders............................. 28
Section 4.9 Remarketing................................................ 29
ARTICLE V Trust Securities Certificates......................................... 31
Section 5.1 Initial Ownership.......................................... 31
Section 5.2 The Trust Securities Certificates.......................... 32
Section 5.3 Execution and Delivery of Trust Securities
Certificates. ............................................ 32
Section 5.4 Registration of Transfer and Exchange of Preferred
Securities Certificates................................... 32
Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates................................... 33
Section 5.6 Persons Deemed Securityholders............................. 33
Section 5.7 Access to List of Securityholders' Names
and Addresses............................................. 34
Section 5.8 Maintenance of Office or Agency............................ 34
Section 5.9 Appointment of Paying Agent................................ 34
Section 5.10 Ownership of Common Securities by Depositor................ 35
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
Section 5.11 Book-Entry Preferred Securities Certificates;
Common Securities Certificate............................. 35
Section 5.12 Notices to Clearing Agency................................. 36
Section 5.13 Definitive Preferred Securities Certificates............... 36
Section 5.14 Rights of Securityholders.................................. 37
ARTICLE VI Acts of Securityholders; Meetings; Voting............................ 38
Section 6.1 Limitations on Voting Rights............................... 38
Section 6.2 Notice of Meetings......................................... 39
Section 6.3 Meetings of Preferred Securityholders...................... 39
Section 6.4 Voting Rights.............................................. 39
Section 6.5 Proxies, etc............................................... 40
Section 6.6 Securityholder Action by Written Consent................... 40
Section 6.7 Record Date for Voting and Other Purposes.................. 40
Section 6.8 Acts of Securityholders.................................... 40
Section 6.9 Inspection of Records...................................... 42
ARTICLE VII Representations and Warranties...................................... 42
Section 7.1 Representations and Warranties of the Bank, the Property
Trustee and the Delaware Trustee.......................... 42
Section 7.2 Representations and Warranties of Depositor................ 43
ARTICLE VIII The Trustees....................................................... 43
Section 8.1 Certain Duties and Responsibilities........................ 43
Section 8.2 Certain Notices............................................ 45
Section 8.3 Certain Rights of Property Trustee......................... 45
Section 8.4 Not Responsible for Recitals or Issuance
of Securities............................................. 47
Section 8.5 May Hold Securities........................................ 47
Section 8.6 Compensation; Indemnity; Fees.............................. 48
Section 8.7 Corporate Property Trustee Required;
Eligibility of Trustees................................... 48
Section 8.8 Conflicting Interests...................................... 49
Section 8.9 Co-Trustees and Separate Trustee........................... 49
Section 8.10 Resignation and Removal; Appointment
of Successor.............................................. 51
Section 8.11 Acceptance of Appointment by Successor..................... 52
Section 8.12 Merger, Conversion, Consolidation or
Succession to Business.................................... 53
Section 8.13 Preferential Collection of Claims Against
Depositor or Trust........................................ 53
Section 8.14 Reports by Property Trustee................................ 53
Section 8.15 Reports to the Property Trustee............................ 54
Section 8.16 Evidence of Compliance with Conditions
Precedent................................................. 54
Section 8.17 Number of Trustees......................................... 55
Section 8.18 Delegation of Power........................................ 55
ARTICLE IX Termination, Liquidation and Merger.................................. 55
Section 9.1 Termination Upon Expiration Date........................... 55
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
Section 9.2 Early Termination......................................... 56
Section 9.3 Termination............................................... 56
Section 9.4 Liquidation............................................... 56
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements
of the Trust............................................. 58
ARTICLE X Miscellaneous Provisions.............................................. 59
Section 10.1 Limitation of Rights of Securityholders................... 59
Section 10.2 Amendment................................................. 59
Section 10.3 Separability.............................................. 60
Section 10.4 Governing Law............................................. 60
Section 10.5 Payments Due on Non-Business Day.......................... 60
Section 10.6 Successors................................................ 61
Section 10.7 Headings.................................................. 61
Section 10.8 Reports, Notices and Demands.............................. 61
Section 10.9 Agreement Not to Petition................................. 62
Section 10.10 Trust Indenture Act; Conflict with Trust
Indenture Act............................................ 62
Section 10.11 Acceptance of Terms of Trust Agreement,
Guarantee and Indenture.................................. 62
</TABLE>
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<PAGE> 5
LINCOLN NATIONAL CAPITAL IV
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> 6
AMENDED AND RESTATED TRUST AGREEMENT, dated as of August 14, 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," and, in its separate corporate capacity and not in its capacity as
Property Trustee, the "Bank"), (iii) First Chicago Delaware, Inc., as Delaware
trustee (in such capacity, "Delaware Trustee,") and (iv) Janet Whitney-Chrzan,
an individual, and John L. Steinkamp, 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 (v) 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 April
20, 1998 (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 April 20, 1998, 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;
(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;
<PAGE> 7
(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 Sums" has the meaning specified in Section 10.7
of the Indenture.
"Administrative Trustee" means each of Janet Whitney-Chrzan, and John
L. Steinkamp, 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.
"Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to the Purchase Contract Settlement Date, the
aggregate principal amount of the Debentures corresponding to the aggregate
stated liquidation amount of the Preferred Securities which are components of
Income PRIDES on the Tax Event Redemption Date or (ii) if the Tax Event
Redemption occurs on or after the Purchase Contract Settlement Date, the
aggregate principal amount of the Debentures corresponding to the aggregate
stated liquidation amount of the Preferred Securities outstanding on such Tax
Event Redemption Date.
"Authorized Newspaper" means a daily newspaper, in the English
language, customarily published on each day that is a Business Day in the city
of New York, and of general circulation in the city of New York. It is currently
anticipated that the Authorized Newspaper for purposes of announcing the Reset
Announcement Date will be The Wall Street Journal.
"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
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<PAGE> 8
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
(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 Depositor to which authority to act on behalf of
the Board of Directors has been delegated, and to be in full force and effect on
the date of such certification, and delivered to the 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 DTC, 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. DTC will be the initial Clearing Agency.
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<PAGE> 9
"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.
"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
6.40% Junior Subordinated Deferrable Interest Debentures, Series D, 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.
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<PAGE> 10
"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 first paragraph of this Trust Agreement solely in its capacity
as Delaware Trustee of the Trust 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.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"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.
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<PAGE> 11
"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.
"Failed Remarketing" has the meaning specified in Section
5.4(b) of the Purchase Contract Agreement.
"FELINE PRIDES" (SM) means (a) 7,000,000 (8,200,000 if the
Underwriters' over-allotment option pursuant to the Underwriting Agreement and
the Pricing Agreement is exercised in full) units referred to as Income
PRIDESSM with a stated amount, per Income PRIDES, of $25 and (b) 1,000,000
units referred to as Growth PRIDESSM with a face amount, per Growth PRIDES, of
$25.
"First Time of Delivery" has the meaning specified in the
Underwriting Agreement.
"Growth PRIDES" has the meaning specified in Section 1.1 of
the Purchase Contract Agreement.
"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.
"Income PRIDES" has the meaning specified in Section 1.1 of
the Purchase Contract Agreement.
"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.
-6-
<PAGE> 12
"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).
"Ministerial Action" means the taking of an action, such as filing a
form or making an election, or pursuing some other similar reasonable measure
that will have no adverse effect on the Trust, the Depositor or the Holders of
the Trust Securities and will involve no material cost.
"1940 Act" means the Investment Company Act of 1940, as
amended.
"Officers' Certificate" means a certificate signed by the 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, 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.
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<PAGE> 13
"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, 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).
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<PAGE> 14
"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 suggested 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.
"Pledge Agreement" means the Pledge Agreement dated as of August 14,
1998 among the Depositor, The Chase Manhattan Bank, as collateral agent (the
"Collateral Agent") and Custodial Agent (the "Custodial Agent") and securities
intermediary (the "Securities Intermediary"), and The First National Bank of
Chicago, as purchase contract agent (the "Purchase Contract Agent").
"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.
"Primary Treasury Dealer" means a primary U.S. government
securities dealer in the city of New York.
"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.
"Purchase Contract Agreement" means the Purchase Contract Agreement
dated as of August 14, 1998 between The First National Bank of Chicago, as
Purchase Contract Agent, and the Depositor.
"Purchase Contract Settlement Date" means August 16, 2001.
"Put Option" has the meaning specified in Section 4.8.
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<PAGE> 15
"Quotation Agent" means (i) Merrill Lynch Government Securities, Inc.
and its respective successors, provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Depositor shall substitute therefor
another Primary Treasury Dealer or (ii) any other Primary Treasury Dealer
selected by the Depositor.
"Redemption Amount" means for each Debenture, the product of (i) the
principal amount of such Debenture and (ii) a fraction whose numerator is the
Treasury Portfolio Purchase Price and whose denominator is the Applicable
Principal Amount.
"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" shall have the meaning specified in
Section 4.2(a).
"Relevant Trustee" shall have the meaning specified in
Section 8.10.
"Remarketing" means a remarketing of Preferred Securities by the
Remarketing Agent pursuant to Section 4.9.
"Remarketing Agent" means a nationally recognized investment banking
firm chosen by the Depositor to effect the remarketing contemplated by Section
4.9. It is currently anticipated that the Remarketing Agent will be Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
"Remarketing Agreement" means the Remarketing Agreement
among the Depositor, the Trust and The First National Bank of
Chicago as Purchase Contract Agent.
"Remarketing Date" shall have the meaning set forth in the
Remarketing Agreement.
"Remarketing Underwriting Agreement" means the agreement to be dated as
of the third Business Day immediately preceding the Purchase Contract Settlement
Date (or such other date permitted by applicable law) among the Company, the
Trust, The First National Bank of Chicago, and the Remarketing Agent.
"Reset Agent" means a nationally recognized investment banking firm
chosen by the Depositor to determine the Reset Rate. It is currently anticipated
that Merrill Lynch, Pierce, Fenner & Smith Incorporated will act in such
capacity.
"Reset Announcement Date" means the tenth Business Day
immediately preceding the Purchase Contract Settlement Date.
"Reset Rate" means the distribution rate per annum (to be determined by
the Reset Agent), equal to the sum of (x) the Reset Spread and (y) the rate of
interest on the Two-Year
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<PAGE> 16
Benchmark Treasury in effect on the third Business Day immediately preceding the
Purchase Contract Settlement Date that the Preferred Securities should bear in
order for the Preferred Securities to have an approximate market value of 100.5%
of their aggregate stated liquidation amount on the third Business Day
immediately preceding the Purchase Contract Settlement Date; provided, that the
Depositor may limit such Reset Spread to be no higher than 200 basis points
(2.00%), and, provided further, that the Reset Rate may not exceed the maximum
rate permitted by applicable law.
"Reset Spread" means a spread amount to be determined by the Reset
Agent on the tenth Business Day immediately preceding the Purchase Contract
Settlement Date.
"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.
"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
Debentures, and 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.
"Tax Event Redemption" means, if a Tax Event shall occur and be
continuing, the redemption of the Debentures, at the option of the Depositor, in
whole but not in part, on not less than 30 days nor more than 60 days notice.
"Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.
"Time of Delivery" means, collectively, the First Time of Delivery and
the Second Time of Delivery.
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<PAGE> 17
"Treasury Portfolio" means, with respect to the Applicable Principal
Amount of Debentures (a) if the Tax Event Redemption Date occurs prior to the
Purchase Contract Settlement Date, a portfolio of zero-coupon U.S. Treasury
Securities consisting of (i) principal or interest strips of U.S. Treasury
Securities which mature on or prior to August 15, 2001 in an aggregate amount
equal to the Applicable Principal Amount and (ii) with respect to each scheduled
interest payment date on the Debentures that occurs after the Tax Event
Redemption Date, principal or interest strips of U.S. Treasury Securities which
mature on or prior to such date in an aggregate amount equal to the aggregate
interest payment that would be due on the Applicable Principal Amount of the
Debentures on such date, and (b) if the Tax Event Redemption Date occurs after
the Purchase Contract Settlement Date, a portfolio of zero-coupon U.S. Treasury
Securities consisting of (i) principal or interest strips of U.S. Treasury
Securities which mature on or prior to August 15, 2003 in an aggregate amount
equal to the Applicable Principal Amount and (ii) with respect to each scheduled
interest payment date on the Debentures that occurs after the Tax Event
Redemption Date, principal or interest strips of such U.S. Treasury Securities
which mature on or prior to such date in an aggregate amount equal to the
aggregate interest payment that would be due on the Applicable Principal Amount
of the Debentures on such date.
"Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by the Primary Treasury Dealer to the Quotation Agent on the third
Business Day immediately preceding the Tax Event Redemption Date for the
purchase of the Treasury Portfolio for settlement on the Tax Event Redemption
Date.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Treasury Securities" has the meaning set forth in Section 1
of the Purchase Contract Agreement.
"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
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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.
"Two-Year Benchmark Treasury" means a direct obligation of the United
States (which may be an obligation traded on a when-issued basis only) having a
maturity comparable to the remaining term to maturity of the Preferred
Securities, as agreed upon by the Depositor and the Reset Agent. The rate for
the Two-Year Benchmark Treasury will be the bid side rate displayed at 10:00
A.M., New York City time, on the third Business Day immediately preceding the
Purchase Contract Settlement Date in the Telerate system (or if the Telerate
system is (a) no longer available on the third Business Day immediately
preceding the Purchase Contract Settlement Date or (b) in the opinion of the
Reset Agent (after consultation with the Depositor) no longer an appropriate
system from which to obtain such rate, in either case such other nationally
recognized quotation system as, in the opinion of the Reset Agent (after
consultation with the Depositor), is appropriate). If such rate is not so
displayed, the rate for the Two-Year Benchmark Treasury shall be, as calculated
by the Reset Agent, the yield to maturity for the Two-Year Benchmark Treasury,
expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis, and computed by taking the arithmetic
mean of the secondary market bid rates, as of 10:30 A.M., New York City time, on
the third Business Day immediately preceding the Purchase Contract Settlement
Date of three leading United States government securities dealers selected by
the Reset Agent (after consultation with the Depositor) (which may include the
Reset Agent or an Affiliate thereof).
"Underwriting Agreement" means the Underwriting Agreement, dated as of
August 10, 1998, among the Trust, the Depositor and the Underwriters named
therein.
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ARTICLE II
ESTABLISHMENT OF THE TRUST
SECTION 2.1 NAME.
The Trust continued hereby shall be known as "Lincoln National Capital
IV," 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.
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
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 from the Depositor in connection with
the Original Trust Agreement of the sum of $25, 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 August 10, 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
accordance with instructions by such Underwriters, 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 $25.00, which amount the Administrative Trustee shall promptly
deliver in accordance with instructions provided by such Underwriters. If there
is a Second Time of Delivery, 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 up to Preferred Securities having an aggregate Liquidation
Amount of up to $30,000,000, against receipt of such aggregate purchase price of
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such Preferred Securities of $30,000,000, which amount such Administrative
Trustees shall promptly deliver in accordance with instructions provided by such
Underwriters, on the date specified pursuant to the Underwriting Agreement.
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 5.2 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. If there is a
Second Time of Delivery, an Administrative Trustee, on behalf of the Trust,
shall execute in accordance with Section 5.2 and deliver to the Depositor Common
Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of up to Common Securities having an aggregate Liquidation
Amount of up to $927,850 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 of up to $927,850,
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.
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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;
(C) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the Trust the
Remarketing Agreement and the Remarketing Underwriting
Agreement providing for the sale of the Preferred Securities
comprising a portion of the Income PRIDES;
(D) to assist 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;
(E) to execute and assist with the filing of any
documents prepared by the Depositor or to take any actions
determined by the Depositor to be necessary in order to
qualify or register all or part of the FELINE PRIDES in any
State in which the Depositor has determined to qualify or
register such FELINE PRIDES for sale;
(F) to assist 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;
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(G) 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;
(H) if applicable, to solicit holders of Preferred
Securities which form a part of the Income PRIDES to timely
instruct the Purchase Contract Preferred Agent in order to
enable the Purchase Contract Agent to vote such Preferred
Securities;
(I) the appointment of a Paying Agent,
authenticating agent and Securities Registrar in accordance
with this Trust Agreement;
(J) registering transfer of the Trust Securities
in accordance with this Trust Agreement;
(K) 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;
(L) 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
(M) 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;
(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;
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(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 to 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;
(K) to engage in such ministerial activities as
shall be necessary, appropriate, convenient or incidental to
effect the repayment of the Preferred Securities and the Common
Securities to the extent the Debentures mature or are redeemed
or the Put Option is exercised; and
(L) 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 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
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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, sale and, if necessary, the
remarketing 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) if necessary, to determine the States in which to take
appropriate action to qualify or register for sale all or part of the
FELINE PRIDES and to do any and all such acts, other than actions which
must be taken by or on behalf of the Trust, to advise the Trust of
actions it must take and to prepare for execution and filing any
documents to be executed and filed by the Trust, in each case as the
Depositor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(iv) 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;
(v) the preparation for filing by the Company and execution
on behalf of the Company 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 FELINE PRIDES;
(vi) 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;
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(vii) to negotiate the terms of the Remarketing Agreement,
the Remarketing Underwriting Agreement, the Underwriting Agreement and
the Pricing Agreement providing for the sale of the FELINE PRIDES and
the Preferred Securities; and
(viii) the taking of any other actions deemed by the Depositor
to be 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 the 1940 Act 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.
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(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.
ARTICLE IV
CERTAIN TERMS OF THE TRUST SECURITIES
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 August 14, 1998, and
shall be payable quarterly in arrears on February 16, May 16, August 16 and
November 16 of each year, commencing on November 16, 1998, except as otherwise
described below. The Depositor has the right under the Indenture to defer
payments of interest by extending the interest payment period from time to time
on the Debentures for a period not extending, in the aggregate, beyond the
maturity date of the Debentures (each an "Extension Period"). During such
Extension Period no interest shall be due and payable on the Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accumulate at the rate of
6.40% until August 15, 2001, and at the Reset Rate thereafter, compounded
quarterly during any such Extension Period (to the extent permitted by
applicable law). Payments of accrued Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date after
the end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Depositor may commence a new
Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not exceed beyond the maturity date
of the Debentures. 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 initially payable at a rate of 6.40% per annum (the
"Coupon Rate") of the Liquidation Amount of the Trust Securities until August
15, 2001, and at the Reset Rate thereafter. Distributions in arrears for more
than one quarter will accumulate and compound quarterly at the rate of 6.40%
until August 15, 2001, and at the Reset Rate thereafter (to the extent permitted
by applicable law). The term "Distributions" as used herein includes such cash
distributions and any such accumulated distributions that are payable unless
otherwise stated. A Distribution is payable
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only to the extent that payments are made in respect of the Debentures held by
the Property Trustee and to the extent the Property Trustee has funds available
therefor. 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.
(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 will be payable to the
Holders thereof as they appear on the books and records of the Trust at the
close of business on the Business Day immediately preceding each of the relevant
payment dates for the Trust Securities. Subject to any applicable laws and
regulations and the provisions of this Trust Agreement, each such payment in
respect of the Preferred Securities will be made as described under the heading
"Description of the Preferred Securities -- Book Entry Only Issuance -- The
Depository Trust Company" in the Prospectus Supplement dated August 10, 1998
(the "Prospectus Supplement") relating to the FELINE PRIDES offered by the
Depositor and the Trust pursuant to the Registration Statement on Form S-3 (File
Nos. 333-49201 and 333-49201-02) of the Depositor and certain of its Affiliates.
The relevant record dates for the Common Securities shall be the same record
dates as for the Preferred Securities. If the Preferred Securities shall not
continue to remain in book-entry only form or are not in book-entry only form at
issuance, the relevant record dates for the Preferred Securities shall conform
to the rules of any securities exchange on which such securities are listed and,
if none, as shall be selected by the Administrative Trustees, which dates shall
be at least more than one, but less than 60 Business Days before the relevant
payment dates, which payment dates shall correspond to the interest payment
dates on the Debentures. Distributions payable on any Trust Securities that are
not punctually paid on any Distribution payment date, as a result of the
Depositor having failed to make a payment under the Debentures, will cease to be
payable to the Person in whose name such Trust Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Trust Securities are registered on the special
record date or other specified date determined in accordance with the Indenture.
If any date on which Distributions are payable on the Trust Securities is not a
Business Day, then payment of the Distribution payable on such date will be made
on the next succeeding day that is a Business Day (and without any interests or
other payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. So long as the Holder of any Preferred Securities is
the Collateral Agent, the payment of Distributions on such Preferred Securities
held by the Collateral Agent will be made at such place and to such account as
may be designated by the Collateral Agent.
(e) The Coupon Rate on the Trust Securities (as well as the
interest rate on the Debentures) will be reset on the third Business Day
immediately preceding the Purchase Contract
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Settlement Date to the Reset Rate (which Reset Rate will be in effect on and
after the Purchase Contract Settlement Date). On the Reset Announcement Date,
the Reset Spread and the Two-Year Benchmark Treasury to be used to determine the
Reset Rate will be announced by the Depositor. On the Business Day immediately
following the Reset Announcement Date, the Holders of Trust Securities will be
notified of such Reset Spread and Two-Year Benchmark Treasury by the Depositor.
Such notice shall be sufficiently given to Holders of Trust Securities if
published in an Authorized Newspaper.
(f) Not later than seven calendar days nor more than 15 calendar
days prior to the Reset Announcement Date, the Depositor will notify DTC or its
nominee (or any successor Clearing Agency or its nominee) by first-class mail,
postage prepaid, to notify the Owners or Clearing Agency Participants holding
Preferred Securities, Income PRIDES or Growth PRIDES, of such Reset Announcement
Date and the procedures to be followed by such Holders of Income PRIDES who
intend to settle their obligation under the Purchase Contract with separate
cash.
(g) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata among the Holders of the Trust Securities. A reference
herein to any payment, distribution or treatment as being "Pro Rata" shall mean
pro rata to each Holder of Trust Securities according to the aggregate
liquidation amount of the Trust Securities held by the relevant Holder in
relation to the aggregate liquidation amount of all Trust Securities outstanding
unless, in relation to a payment, an Event of Default under the Indenture has
occurred and is continuing, in which case any funds available to make such
payment shall be paid first to each Holder of the Preferred Securities pro rata
according to the aggregate liquidation amount of Preferred Securities held by
the relevant Holder relative to the aggregate liquidation amount of all
Preferred Securities outstanding, and only after satisfaction of all amounts
owed to the Holders of the Preferred Securities, to each Holder of Common
Securities pro rata according to the aggregate liquidation amount of Common
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Common Securities outstanding.
SECTION 4.2 REDEMPTION, INVESTMENT COMPANY EVENT, TAX EVENT REDEMPTION.
(a) On each Debenture Redemption Date and on the stated maturity of
the Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at a redemption price (the "Redemption Price") per Trust Security
equal to 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.
(b) If an Investment Company Event shall occur and be continuing
the Administrative Trustees shall dissolve the Trust and, after satisfaction of
liabilities to creditors, cause Debentures held by the Property Trustee, having
an aggregate principal amount equal to the aggregate stated liquidation amount
of, with an interest rate the rate of 6.40%, if on or prior to August 15, 2001,
and the Reset Rate thereafter, and accrued and unpaid interest equal to accrued
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and unpaid Distributions on, and having the same record date for payment as the
Trust Securities, to be distributed to the Holders of the Trust Securities in
liquidation of such Holders' interests in the Trust on a Pro Rata basis, within
90 days following the occurrence of such Investment Company Event (the "90 Day
Period"); provided, however, that, if at the time there is available to the
Trust the opportunity to eliminate, within the 90 Day Period, the Investment
Company Event by taking some Ministerial Action, the Administrative Trustees
will pursue such Ministerial Action in lieu of dissolution.
(c) If a Tax Event shall occur and be continuing, the Debentures
are, at the option of the Depositor, redeemable pursuant to a Tax Event
Redemption. If the Depositor redeems the Debentures upon the occurrence and
continuance of a Tax Event, the proceeds from such redemption shall
simultaneously be applied by the Property Trustee to redeem the Trust Securities
(on a pro rata basis) having an aggregate stated liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed at a Redemption Price
per Trust Security equal to the Redemption Amount plus any accrued and unpaid
distributions to the date of redemption. If, following the occurrence of a Tax
Event, the Depositor exercises its option to redeem the Debentures prior to
August 16, 2001, the Depositor shall appoint the Quotation Agent to assemble the
Treasury Portfolio in consultation with the Company. The Property Trustee will
distribute to the record Holder of the Trust Securities the Redemption Price
payable in liquidation of such Holder's interests in the Trust.
On and from the date fixed by the Administrative Trustees for a Tax
Event Redemption or any distribution of Debentures and dissolution of the Trust:
(i) the Trust Securities will no longer be deemed to be outstanding and (ii) DTC
or its nominee (or any successor Clearing Agency or its nominee) or the record
Holder of the Preferred Securities, will receive a registered global certificate
or certificates representing the Debentures to be delivered upon such
distribution and any certificates representing Trust Securities, except for
certificates representing Preferred Securities held by DTC or its nominee (or
any successor Clearing Agency or its nominee), will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of $25, with an interest rate
of 6.40% if on or prior to August 15, 2001, and at the Reset Rate thereafter,
and accrued and unpaid interest equal to accrued and unpaid Distributions on
such Trust Securities until such certificates are presented to the Depositor or
its agent for transfer or reissue.
(d) 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;
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(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.
(e) 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.
(f) If the Property Trustee gives a notice of redemption (which
notice shall be irrevocable) in respect of any Trust Securities, then, by 12:00
noon, New York City time, on the Redemption Date, subject to Section 4.2(e), the
Property Trustee will, so long as the Trust Securities are in book-entry-only
form, irrevocably deposit with the Clearing Agency for the Trust 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 Trust Securities are no longer in
book-entry-only form, the Property Trustee, subject to Section 4.2(e), 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 Trust 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
immediately prior to the close of business on the date of such deposit, all
rights of Securityholders holding Trust Securities so called for redemption will
cease, except the right of such Securityholders to receive the Redemption Price
and any Distribution payable on or prior to the Redemption Date, but without
interest, and such Securities will cease to be outstanding. In the event that
any date on which any Redemption Price is payable is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), 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
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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.
(g) 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.
(h) 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.
SECTION 4.3 SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions 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 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 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 on, or the Redemption Price of,
Preferred Securities then due and payable.
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(b) In the case of the occurrence of any Event of Default resulting
from 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 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.
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.
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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.
SECTION 4.8 REPAYMENT AT OPTION OF HOLDERS.
(a) If a Failed Remarketing (as described in Section 5.4(b) of the
Purchase Contract Agreement and incorporated herein by reference) has occurred,
each holder of Trust Securities who holds such Trust Securities on the day
immediately following the Purchase Contract Settlement Date shall have the right
on the Business Day to require the Trust to distribute its Pro Rata share of the
Debentures to the Exchange Agent and to require the Exchange Agent to put such
Debentures to the Company (the "Put Option") on behalf of such holders on
September 1, 2001, upon at least three Business Days' prior notice (the "Put
Option Exercise Date"), at a repayment price of $25 per Trust Security plus an
amount equal to the accrued and unpaid Distributions (including deferred
distributions if any) thereon to the date of payment (the "Put Option Repayment
Price").
(b) The Exchange Agent shall obtain funds to pay the Put Option
Repayment Price of Trust Securities being repaid under the Put Option through
presentation by it to the Depositor in an aggregate principal amount equal to
the aggregate stated liquidation amount of such Trust Securities for repayment
on the Put Option Exercise Date at the Debenture Repayment Price.
(c) In order for the Trust Securities to be repaid on the Put
Option Exercise Date, the Trust must receive on or prior to 4:00 p.m. on the
third Business Day immediately preceding the Put Option Exercise Date, at the
Corporate Trust Office of the Property Trustee (which will in turn notify the
Exchange Agent), the Trust Securities to be repaid with the form entitled
"Option to Elect Repayment" on the reverse thereof or otherwise accompanying
such Preferred Security duly completed. Any such notice received by the Trust
shall be irrevocable. All questions as to the validity, eligibility (including
time of receipt) and acceptance of the Trust Securities for repayment shall be
determined by the Trust, whose determination shall be final and binding.
(d) Payment of the Put Option Repayment Price to Holders of Trust
Securities shall be made at the Corporate Trust Office of the Exchange Agent,
provided that the Depositor has paid the Exchange Agent a sufficient amount of
cash in connection with the related repayment of the Debenture no later than
1:00 p.m., New York City time, on the Put Option Exercise Date by check or wire
transfer in immediately available funds at such place and to such account as may
be designated by such Holders. If the Exchange Agent holds immediately available
funds sufficient to pay the Put Option Repayment Price of such Trust Securities,
then, immediately prior to the close of business on the Put Option Exercise
Date, such Trust Securities will cease to be outstanding and distributions
thereon will cease to accrue, whether or not Trust Securities are delivered to
the Property Trustee, and all other rights of the Holder in respect of the Trust
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Securities, including the Holder's right to require the Trust to repay such
Trust Securities, shall terminate and lapse (other than the right to receive the
Put Option Repayment Price but without interest on such Put Option Repayment
Price). Neither the Administrative Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Trust Securities for
which repayment has been elected. If payment of the Put Option Repayment Price
in respect of Trust Securities is (i) improperly withheld or refused and not
paid either by the Exchange Agent or by the Depositor as guarantor pursuant to
the Securities Guarantee, or (ii) not paid by the Exchange Agent as the result
of an Event of Default with respect to the Debentures presented for repayment as
described in Section 6.6(b), Distributions on such Trust Securities will
continue to accrue, from the original Put Option Exercise Date to the actual
date of payment, in which case the actual payment date will be considered the
Put Option Exercise Date for purposes of calculating the Put Option Repayment
Price.
(e) The Depositor will request, not later than seven nor more than
15 calendar days prior to August 13, 2001 (the date on which some or all of the
Preferred Securities could be remarketed in the manner described in Section
5.4(b) of the Purchase Contract Agreement and incorporated herein by reference)
that DTC notify the Preferred Securities Owner as well as the Income PRIDES and
Growth PRIDES holders of such remarketing and of the procedures that must be
followed if a Preferred Securities Owner wishes to exercise such holder's rights
with respect to the Put Option.
SECTION 4.9 REMARKETING.
(a) The Depositor will request, not later than 15 nor more than 30
calendar days prior to the Remarketing Date, that the Clearing Agency notify the
Holders of Preferred Securities and the Holders of Income PRIDES and Growth
PRIDES of the Remarketing and of the procedures that must be followed if a
Holder of Preferred Securities wishes to exercise such Holder's rights with
respect to the Put Option if there is a Failed Remarketing.
(b) Not later than 5:00 P.M., New York City time, on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, each
Holder of the Preferred Securities may elect to have Preferred Securities held
by such Holder remarketed. Under Section 5.4 of the Purchase Contract Agreement,
Holders of Income PRIDES that do not give notice of intention to make a Cash
Settlement of their related Purchase Contracts shall be deemed to have consented
to the disposition of the Preferred Securities comprising a component of such
Income PRIDES. Holders of Preferred Securities that are not a component of
Income PRIDES shall give notice of their election to have such Preferred
Securities remarketed to the Custodial Agent pursuant to the Pledge Agreement.
Any such notice shall be irrevocable after 5:00 P.M., New York City time, on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date
and may not be conditioned upon the level at which the Reset Rate is
established. Promptly after 5:30 P.M., New York City time, on such fifth
Business Day, the Property Trustee, based on the notices received by it prior to
such time (including notices from the Purchase Contract Agent as to Purchase
Contracts for which cash settlement has been
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elected), shall notify the Trust, the Depositor and the Remarketing Agent of the
number of Preferred Securities to be tendered for purchase.
(c) If any Holder of Income PRIDES does not give a notice of its
intention to make a Cash Settlement or gives a notice of election to tender
Preferred Securities as described in Section 4.9(b), the Preferred Securities of
such Holder shall be deemed tendered, notwithstanding any failure by such Holder
to deliver or properly deliver such Preferred Securities to the Remarketing
Agent for purchase.
(d) The right of each Holder to have Preferred Securities tendered
for purchase shall be limited to the extent that (i) the Remarketing Agent
conducts a remarketing pursuant to the terms of the Remarketing Agreement, (ii)
Preferred Securities tendered have not been called for redemption, (iii) the
Remarketing Agent is able to find a purchaser or purchasers for tendered
Preferred Securities and (iv) such purchaser or purchasers deliver the purchase
price therefor to the Remarketing Agent.
(e) On the Remarketing Date, the Remarketing Agent shall use
commercially reasonable efforts to remarket at a price equal to approximately
100.5% of the aggregate liquidation amount thereof, Preferred Securities
tendered or deemed tendered for purchase.
(f) If none of the Holders elects to have Preferred Securities
held by them remarketed, the Reset Rate shall be the rate determined by the
Remarketing Agent, subject to the terms of the Remarketing Agreement, as the
rate that would have been established had a remarketing been held on the
Remarketing Date.
(g) If the Remarketing Agent has determined that it will be able to
remarket all Preferred Securities tendered or deemed tendered prior to 4:00
P.M., New York City time, on the Remarketing Date, the Remarketing Agent shall
determine the Reset Rate, which shall be the rate per annum (rounded to the
nearest one-thousandth (0.001) of one percent per annum) which the Remarketing
Agent determines, subject to the terms of the Remarketing Agreement, to be the
lowest rate per annum that will enable it to remarket all Preferred Securities
tendered or deemed tendered for remarketing.
(h) If, by 4:00 P.M., New York City time, on the Remarketing Date,
the Remarketing Agent is unable to remarket all Preferred Securities tendered or
deemed tendered for purchase, a failed remarketing ("Failed Remarketing") shall
be deemed to have occurred and the Remarketing Agent shall so advise by
telephone the Collateral Agent, Depositor, Property Trustee, Delaware Trustee
and Clearing Agency.
(i) By approximately 4:30 P.M., New York City time, on the
Remarketing Date, provided that there has not been a Failed Remarketing, the
Remarketing Agent shall advise, by telephone (i) the Collateral Agent,
Depositor, Property Trustee, Delaware Trustee and Clearing Agency of the Reset
Rate determined in the Remarketing and the number of Preferred Securities sold
in the remarketing, (ii) each purchaser (or the Clearing Agency Participant
thereof) of the
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Reset Rate and the number of Preferred Securities such purchaser is to purchase
and (iii) each purchaser to give instructions to its Clearing Agency Participant
to pay the purchase price on the Purchase Contract Settlement Date in same day
funds against delivery of the Preferred Securities purchased through the
facilities of the Clearing Agency.
(j) In accordance with the Clearing Agency's normal procedures, on
the Purchase Contract Settlement Date, the transactions described above with
respect to each Preferred Security tendered for purchase and sold in the
remarketing shall be executed through the Clearing Agency, and the accounts of
the respective Clearing Agency Participants shall be debited and credited and
such Preferred Securities delivered by book entry as necessary to effect
purchases and sales of such Preferred Securities. The Clearing Agency shall make
payment in accordance with its normal procedures.
(k) If any Holder selling Preferred Securities in the remarketing
fails to deliver such Preferred Securities, the Clearing Agency Participant of
such selling Holder and of any other person that was to have purchased Preferred
Securities in the remarketing may deliver to any such other person a number of
Preferred Securities that is less than the number of Preferred Securities that
otherwise was to be purchased by such person. In such event, the number of
Preferred Securities to be so delivered shall be determined by such Clearing
Agency Participant, and delivery of such lesser number of Preferred Securities
shall constitute good delivery.
(l) The Remarketing Agent is not obligated to purchase any
Preferred Securities that would otherwise remain unsold in a remarketing.
Neither the Trust, any Trustee, the Depositor nor the Remarketing Agent shall be
obligated in any case to provide funds to make payment upon tender of Preferred
Securities for remarketing.
(m) The tender and settlement procedures set forth in this Section,
including provisions for payment by purchasers of Preferred Securities in the
remarketing, shall be subject to modification, notwithstanding any provision to
the contrary set forth herein, to the extent required by the Clearing Agency or
if the book-entry system is no longer available for the Preferred Securities at
the time of the remarketing, to facilitate the tendering and remarketing of
Preferred Securities in certificated form. In addition, the Remarketing Agent
may, notwithstanding any provision to the contrary set forth herein, modify the
settlement procedures set forth herein in order to facilitate the settlement
process.
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.
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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 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 chief executive officer,
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.
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The Securities Registrar shall not be required to register the transfer
of any Preferred Securities that have been called for redemption. At the option
of a Holder, Preferred Securities Certificates may be exchanged for other
Preferred Securities Certificates in authorized denominations of the same class
and of a like aggregate Liquidation Amount upon surrender of the Preferred
Securities Certificates to be exchanged at the office or agency maintained
pursuant to Section 5.8.
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
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purposes whatsoever, and neither the Trustees nor the Securities Registrar shall
be bound by any notice to the contrary.
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
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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 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 DTC, 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. However, notwithstanding anything to the contrary contained
herein, the Preferred Securities Certificates which are a component of the
FELINE PRIDES shall be issued in definitive registered form in the name of the
Purchase Contract Agent under the Purchase Contract Agreement. Except for
Definitive Preferred Securities Certificates as specified herein, 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;
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(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
(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
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Certificates representing the Book Entry Preferred Securities Certificates by
the Clearing Agency, accompanied by 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.
Notwithstanding the foregoing, if and to the extent that any of the Preferred
Securities evidenced by the Definitive Preferred Securities Certificates
referred to in this paragraph are still pledged pursuant to the Pledge
Agreement, such Certificates shall be delivered to the Collateral Agent to be
held by the Collateral Agent as collateral pledged pursuant to the Pledge
Agreement.
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
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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.
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
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Preferred Securities as a class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of the Holders of at least a majority in Liquidation Amount of the
Outstanding Preferred Securities. No amendment to this Trust Agreement may be
made if, as a result of such amendment, the Trust would 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.
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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 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
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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.
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.
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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.
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;
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(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 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; and
(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
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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 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
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property for its own account, subject to the protections and
limitations on liability afforded to the Property Trustee under this
Trust Agreement and the Trust Indenture Act;
(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 ninety (90) 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 to
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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;
(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
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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.
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.
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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 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.
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(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, 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
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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 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.
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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 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
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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 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
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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.
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:
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(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 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.
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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 if the Property Trustee meets the applicable
requirements.
(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 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, 2005 (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
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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.
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
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(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 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,
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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 Property Trustee,
Delaware Trustee or 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 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.
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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 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
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<PAGE> 65
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, this Trust Agreement may not be amended in a manner which imposes any
additional obligation on the Depositor, the Property Trustee or the Delaware
Trustee without the consent of the Depositor, the Property Trustee or the
Delaware Trustee, as the case may be.
(f) In the event that any amendment to this Trust Agreement is
made, the Administrative Trustees shall promptly provide to the Depositor a copy
of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
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.
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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 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 IV." 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.
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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.
(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
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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.
[This space intentionally left blank]
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<PAGE> 69
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 Trust
By: /s/ JOHN R. PRENDIVILLE
------------------------------------------
Name: John R. Prendiville
Title: Vice President
/s/ JANET C. CHRZAN
---------------------------------------------
Janet Chrzan,
as Administrative Trustee
/s/ JOHN L. STEINKAMP
---------------------------------------------
John L. Steinkamp,
as Administrative Trustee
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<PAGE> 70
EXHIBIT A
PAGE 1
State of Delaware
Office of the Secretary of State
-------------------------
I EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
BUSINESS TRUST REGISTRATION OF "LINCOLN NATIONAL CAPITAL IV", FILED IN THIS
OFFICE ON THE TWENTIETH DAY OF APRIL, A.D. 1998, AT 8:30 O'CLOCK A.M.
[SEAL]
/s/ Edward J. Freel
-----------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 04-20-98
DATE:
<PAGE> 71
CERTIFICATE OF TRUST
OF
LINCOLN NATIONAL CAPITAL IV
This Certificate of Trust of Lincoln National Capital IV (the
"Trust"), dated April 20, 1998, 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 IV.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are First
Chicago Delaware, Inc., 300 King Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective as
of April 20, 1998.
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/ John R. Prendiville
------------------------------
Name: John R. Prendiville
Title: Vice President
FIRST CHICAGO DELAWARE INC., as
Trustee
By:/s/ John R. Prendiville
------------------------------
Name: John R. Prendiville
Title: Vice President
Janet Whitney, as Trustee
By:/s/ Janet Whitney
------------------------------
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 08:30 AM 04/20/1998
<PAGE> 72
EXHIBIT B
[DTC LOGO]
BOOK-ENTRY-ONLY CORPORATE EQUITY ISSUES
LETTER OF REPRESENTATIONS
[To be Completed by Issuer and Agent]
Lincoln National Capital IV
-----------------------------------
[Name of Issuer]
The First National Bank of Chicago
-----------------------------------
[Name of Agent]
August 14, 1998
-----------
[Date]
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: 6.40% Preferred Securities
---------------------------------------------------------
(Cusip No. 534041207) of Lincoln National Capital IV
---------------------------------------------------------
---------------------------------------------------------
[Issue Description, including CUSIP number]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Securities") Issuer is selling the
Securities to certain underwriters (collectively the "Initial Purchaser")
pursuant to a Underwriting Agreement dated August 10, 1998 (the "Document").
Initial Purchaser will take delivery of the Securities through The Depository
Trust Company ("DTC"). The First National Bank of Chicago is acting as
transfer agent, paying agent, and registrar with respect to the Securities (the
"Agent").
To induce DTC to accept the Securities as eligible for deposit at DTC, and
to act in accordance with its Rules with respect to the Securities, Issuer and
Agent make the following representations to DTC:
1. Prior to closing on the Securities on August 14, 1998, there shall be
deposited with DTC one Security certificate registered in the name of DTC's
nominee, Cede & Co., for each of the Securities with the offering value set
forth on Schedule A hereto, the total of which represents 100% of the offering
value of such Securities. If, however, the offering value of any Security
exceeds $200 million, one certificate will be issued with respect to each $200
million of offering value and an additional certificate will be issued with
respect to any remaining offering value. Each Security certificate shall bear
the following legend:
<PAGE> 73
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof. Cede & Co., has an interest herein.
If the Securities will be held by Agent, as custodian for DTC, such Security
certificate shall remain in Agent's custody pursuant to the provisions of the
FAST Balance Certificate Agreement currently in effect between Agent and DTC.
2. Issuer: (a) understands that DTC has no obligation to, and will not,
communicate to its Participants or to any person having an interest in the
Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificate(s) by virtue of submission of such certificate(s) to DTC.
3. In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Agent shall establish a record date for
such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall send notice of such record date to DTC not less
than 15 calendar days in advance of such record date. Notices to DTC pursuant
to this Paragraph by telecopy shall be sent to DTC's Reorganization Department
at (212) 709-6896 or (212) 709-6897, and receipt of such notices shall be
confirmed by telephoning (212) 709-6870. Notices to DTC pursuant to this
Paragraph by mail or by any other means shall be sent to DTC's Reorganization
Department as indicated in Paragraph 7.
4. In the event of a stock split, recapitalization, conversion, or any
similar transaction resulting in the cancellation of all or any part of the
Securities represented thereby, the Agent shall send DTC a notice of such event
as soon as practicable, but in no event less than five business days prior to
the effective date of such transaction.
5. In the event of a full or partial redemption, Issuer or Agent shall
send a notice to DTC specifying: (a) the amount of the redemption or refunding;
(b) in the case of a refunding, the maturity date(s) established under the
refunding; and (c) the date such notice is to be distributed to Security
holders or published (the "Publication Date"). Such notice shall be sent to DTC
by a secure means (e.g. legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date. Issuer
or Agent shall forward such notice either in a separate secure transmission for
each CUSIP number or in a secure transmission for multiple CUSIP numbers (if
applicable) which includes a manifest or list of each CUSIP number submitted in
that transmission. (The party sending such notice shall have a method to verify
subsequently the use of such means and the timeliness of such notice.) The
Publication Date shall be not less than 30 days nor more than 60 days prior to
the redemption date or, in the case of an advance refunding, the date that the
proceeds are deposited in escrow. Notices to DTC pursuant to this Paragraph by
telecopy shall be sent to DTC's Call Notification Department at (516) 227-4039
or (516) 227-4039 or (516) 227-4190. If the party sending the notice does not
receive a telecopy receipt from DTC confirming that the notice has been
received, such party shall telephone (516) 227-4070. Notices to DTC pursuant to
this Paragraph by mail or by any other means shall be sent to:
Manager: Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
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<PAGE> 74
6. In the event of an offering or issuance of rights with respect to the
Securities outstanding, Agent shall send DTC's Dividend and Reorganization
Departments a notice specifying; (a) the amount of and conditions, if any,
applicable to such rights offering or issuances; (b) any applicable expiration
or deadline date, or any date by which any action on the part of holders of such
Securities is required; and (c) the Publication Date of such notice.
The Publication Date will be as soon as practicable after the announcement
by the Company of any such offering or issuance of rights with respect to the
Securities represented thereby. DTC requires that the Publication Date be not
less than 30 days nor more than 60 days prior to the related payment date,
distribution date, or issuance date, respectively.
Notices to DTC pursuant to this Paragraph by telecopy shall be sent to
DTC's Dividend Department at (212) 709-1623, and receipt of such notices shall
be confirmed by telephoning (212) 709-1262. Notices to DTC pursuant to the
above by mail or any other means shall be sent to:
Supervisor; Stock Dividends
Dividend Department
7 Hanover Square; 24th Floor
New York, NY 10004-2695
Notices to DTC pursuant to this Paragraph by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-1093, and receipt of such fax shall
be confirmed by telephoning (212) 709-1063. Notices to DTC pursuant to the
above by mail or any other means shall be sent to:
Supervisor; Rights Offerings
Reorganization Department
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
7. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), noticed by Issuer or Agent
to Security holders specifying the terms of the tender and the Publication Date
of such notice shall be sent to DTC by a secure means in the manner set forth in
Paragraph 5. Notices to DTC pursuant to this Paragraph and notices of other
corporate actions by telecopy shall be sent to DTC's Reorganization Department
at (212) 709-1093 or (212) 709-1094, and receipt of such notices shall be
confirmed by telephoning (212) 709-6664. Notices to DTC pursuant to the above
by mail or by any other means shall be sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
8. All notices and payment advises sent to DTC shall contain the CUSIP
number of the Securities (listed on Schedule A hereto) and the accompanying
description of such Securities, which, as of the date of this letter, is "6.40%
Preferred Securities."
9. Issuer or Agent shall provide written notice of dividend payment
information to a standard dividend announcement service subscribed to by DTC as
soon as the information is available. In the event that no such service exists,
Issuer or Agent shall provide such notice directly to DTC electronically, as
previously arranged by Issuer or Agent and DTC, as soon as the payment
information is available. If electronic transmission has not been arranged,
absent any other arrangements between Issuer or Agent and DTC, such information
should be sent by telecopy to DTC's Dividend Department at (212) 709-1723 or
(212) 709-1686, and receipt of such notices shall be confirmed by telephoning
(212) 709-1270. Notices to DTC pursuant to the above by mail or by any other
means shall be sent to:
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<PAGE> 75
MANAGER: ANNOUNCEMENTS
DIVIDEND DEPARTMENT
THE DEPOSITORY TRUST COMPANY
7 HANOVER SQUARE; 22ND FLOOR
NEW YORK, NY 10004-2595
After establishing the amount of payment to be made on the Securities in
question; Issuer or Agent will notify DTC's Dividend Department of the payment
and payment date preferably five, but not less than two, business days prior to
the effective date for such transaction.
10. Issuer or Agent shall provide CUSIP-level detail for dividend
payments to DTC no later than noon (Eastern Time) on the payment date.
11. Dividend payments and cash distributions shall be received by Cede
& Co. as nominee of DTC, or its registered assigns, in same-day funds no later
than 2:30 p.m. (Eastern Time) on each payment date. Absent any other
arrangements between Issuer or Agent and DTC, such funds shall be wired as
follows:
The Chase Manhattan Bank
ABA # 021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Dividend Deposit Account # 066-026776
12. Redemption payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns, in same-day funds no later than 2:30 p.m.
(Eastern Time) on payment date. Absent any other arrangements between Agent and
DTC, such funds shall be wired as follows.
The Chase Manhattan Bank
ABA # 021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Redemption Deposit Account # 066-027306
13. Reorganization payments resulting from corporate actions (such as
tender offers or mergers) shall be received by Cede & Co., as nominee of DTC,
or its registered assigns, in same-day funds no later than 2:30 p.m. (Eastern
Time) on payment date. Absent any other arrangements between Agent and DTC,
such funds shall be wired as follows:
The Chase Manhattan Bank
ABA # 021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Reorganization Deposit Account # 066-027608
14. DTC may direct Issuer or Agent to use any other number or address
as the number or address to which notices or payments of dividends,
distributions, or redemption proceeds may be sent.
15. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or Agent's
invitation) necessitating a reduction in the aggregate principal amount of
Securities outstanding or an advance refunding of part of the Securities
outstanding. DTC, in its discretion: (a) may request Issuer or Agent to issue
and authenticate a new Security certificate; or (b) may make an appropriate
notation on the Security certificate indicating the date and amount of such
reduction in the number of Securities outstanding, except in the case of final
redemption, in which case the certificate will be presented to Issuer or Agent
prior to payment, if required.
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<PAGE> 76
16. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities. Issuer or Agent
shall notify DTC of the availability of certificates. In such event, Issuer or
Agent shall transfer and exchange certificates in appropriate amounts, as
required by DTC and others.
17. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to
Issuer or Agent (at which time DTC will confirm with Issuer or Agent the
aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Agent shall cooperate fully with DTC
by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
18. Nothing herein shall be deemed to require Agent to advance funds on
behalf of Issuer.
19. This Letter of Representations may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all such counterparts together shall constitute but one and the same
instrument.
20. This Letter of Representations is governed by, and shall be
construed in accordance with, the laws of the State of New York without giving
effect to principles of conflicts of law.
21. The following riders, attached hereto, are hereby incorporated into
this Letter of Representations:
-----------------------------------------------------------------
-----------------------------------------------------------------
NOTES:
A. If there is an Agent (as defined in
this Letter of Representations), Agent
as well as Issuer must sign this
Letter. If there is no Agent, in
signing this Letter Issuer itself
undertakes to perform all of the Very truly yours,
obligations set forth herein.
B. Schedule B contains statements that
DTC believes accurately describe DTC,
the method of effecting book-entry
transfers of securities distributed Lincoln National Capital IV
through DTC and certain reinstatements. -----------------------------------
(Issuer)
By: Janet Chrzan
--------------------------------
(Authorized Officer's Signature)
The First National Bank of Chicago -
not in individual capacity but solely
as Property for Lincoln National
Capital IV
------------------------------
(Agent)
By: [SIG]
------------------------------
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: Richard B. Hesson
--------------------------
CC: Underwriter
Underwirter's Counsel
-5-
<PAGE> 77
SCHEDULE A
Lincoln National Capital IV
---------------------------
6.40% Preferred Securities
---------------------------
(Describe Issue)
CUSIP Number Share Total Offering ($) Value
- ------------ ----------- ------------------
534041207 1,000,000 $25,000,000
<PAGE> 78
SCHEDULE B
SAMPLE OFFERING DOCUMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(PREPARED BY DTC--BRACKETED MATERIAL MAY BE APPLICABLE ONLY TO CERTAIN ISSUES)
1. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities
will be issued as fully-registered securities registered in the name of Cede
& Co. (DTC's partnership nominee). One fully-registered Security certificate
will be issued for [each issue of] the Securities, [each] in the aggregate
principal amount of such issue, and will be deposited with DTC. [If, however,
the aggregate principal amount of [any] issue exceeds $200 million, one
certificate will be issued with respect to each $200 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount of such issue.]
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds securities that its participants
("Participants")deposit with DTC. DTC also facilitates the settlement
among Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").
The Rules applicable to DTC and its Participants are on file with the
Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser of each
Security ("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Securities are to be accomplished by entries made on
the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests
in Securities, except in the event that use of the book-entry system for the
Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
[6. Redemption notices shall be sent to DTC. If less than all of the
Securities within an issue are being redeemed. DTC's practice is to determine
by lot the amount of the interest of each Direct Participant in such issue to be
redeemed.]
-i-
<PAGE> 79
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer
as soon as possible after the record date. The Omnibus Proxy assigns Cede &
Co.'s consenting or voting rights to those Direct Participants to whose accounts
the Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and dividend payments on the
Securities will be made to Cede & Co., as nominee of DTC. DTC's practice is to
credit Direct Participant's accounts, upon DTC's receipt of funds and
corresponding detail information from Issuer or Agent on payable date in
accordance with their respective holdings shown on DTC's records. Payment by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, Agent, or Issuer, subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment of redemption proceeds, distributions, and dividends to Cede & Co. is
the responsibility of Issuer or Agent, disbursement of such payments to Direct
Participants shall be the responsibility of Cede & Co., and disbursement of
such payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
9. A Beneficial Owner shall give notice to elect to have its Securities
purchased or tendered, through its Participant, to [Tender/Remarketing] Agent,
and shall effect delivery of such Securities by causing the Direct Participant
to transfer the Participant's interest in the Securities, on DTC's records, to
[Tender/Remarketing] Agent. The requirement for physical delivery of
Securities in connection with an optional tender or a mandatory purchase will
be deemed satisfied when the ownership rights in the Securities are transferred
by Direct Participants on DTC's records and followed by a book-entry credit of
tendered securities to [Tender/Remarketing] Agent's DTC account.]
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonably notice to
Issuer or Agent. Under such circumstances, in the event that a successor
securities depository is not obtained. Security certificates are required to
be printed and delivered.
11. Issuer may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Issuer believes to be reliable, but
Issuer takes no responsibility for the accuracy thereof.
-ii-
<PAGE> 80
[DTC LOGO]
RIDER AMENDING DTC LETTER OR REPRESENTATIONS - BEO EQUITY ISSUES
As of March 9, 1998, DTC's Reorganization Department relocated and prior to
that, DTC's Dividend Department relocated to the 55 Water Street location.
Following are the new addresses and related telephone and facsimile numbers
referenced in the Letter of Representations.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 3 OF THE LETTER OF REPRESENTATIONS:
Old Telecopier Numbers Current Telecopier Numbers
(212) 709-6896 and (212)709-6897 (212) 855-5181 and (212)855-5182
The confirmation number (212) 709-6870 is now (212) 855-5205
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 5 OF THE LETTER OF REPRESENTATIONS:
Old Telecopier Numbers Current Telecopier Numbers
(516) 227-4039* (516) 227-4164
*all other numbers remain the same
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 6 OF THE LETTER OR REPRESENTATIONS:
Old Telecopier Numbers Current Telecopier Numbers
Stock Dividends
(212) 709-1623 (212) 855-4545
The confirmation number (212) 709-1282 is now (212) 855-4517
Rights Offerings
(212) 709-1093 (212) 855-5259
The confirmation number (212) 709-1063 is now (212) 855-5260.
The new addresses are:
Supervisor; Stock Dividends Supervisor; Rights Offering
Dividend Department Reorganization Department
The Depository Trust Company - and - The Depository Trust Company
55 Water Street 25th Floor 55 Water Street 50th Floor
New York, NY 10041-0099 New York, NY 10041-0099
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 7 OF THE LETTER OF REPRESENTATIONS:
Old Telecopier Numbers Current Telecopier Numbers
(212) 709-1093 and (212) 709-1094 (212) 855-5258 and (212) 855-5259
The confirmation number (212)709-6884 is now (212) 855-5260.
<PAGE> 81
The new address is Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
55 Water Street 50th Floor
New York, NY 10041-0099
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 9 OF THE LETTER OF REPRESENTATIONS:
Old Telecopier Numbers Current Telecopier Numbers
(212) 709-1723 and (212) 709-1686 (212) 855-4555 and (212) 855-4556
The confirmation number (212) 709-1270 is now (212) 855-4550.
The new address is Manager; Announcements
Dividend Department
55 Water Street 25th Floor
The Depository Trust Company
New York, NY 10041-0099
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 10 OF THE LETTER OF REPRESENTATIONS:
Such information shall be conveyed by automated notification. If the
circumstance prevent the funds paid to Cede & Co., as nominee of DTC, by 2:30
p.m. ET from equaling the dollar amount associated with detail payments by
12:00 noon ET Issuer or Agent must provide CUSIP-level reconciliation to DTC no
later than 2:30 p.m. ET. Reconciliation can be provided by automated means or
written format.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 11 OF THE LETTER OF REPRESENTATIONS:
To facilitate the payment standards, Issuer is required to remit free funds to
Agent by 1:00 p.m. ET on each payment date, or at such earlier time as required
by Agent to guarantee timely credit to the Dividend Deposit Account of Cede &
Co.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 12 OF THE LETTER OF REPRESENTATIONS:
To facilitate the payment standards, Issuer is required to remit free funds to
Agent by 1:00 p.m. ET on each payment date, or at such earlier time as required
by Agent to guarantee timely credit to the Redemption Deposit Account of Cede &
Co. Issuer or Agent shall deliver Cusip-level detail regarding such payments to
DTC no later than 2:30 p.m. ET on each payment date.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 13 OF THE LETTER OF REPRESENTATIONS:
To facilitate the payment standards, Issuer is required to remit free funds to
Agent by 1:00 p.m. ET on each payment date, or at such earlier time as required
by Agent to guarantee timely credit to the Reorganization Deposit Account of
Cede & Co. Issuer or Agent shall deliver Cusip-level detail regarding such
payments to DTC no later than 2:30 p.m. ET on each payment date.
<PAGE> 82
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-1 _____________
Certificate Evidencing Common Securities
of
Lincoln National Capital IV
__% Common Securities
(liquidation amount $25 per Common Security)
Lincoln National Capital IV, 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 _____ ( )
common securities of the Trust representing undivided beneficial interests in
the assets of the Trust and designated the _____% Common Securities (liquidation
amount $25 per Common Security) (the "Common Securities"). In accordance with
Section 5.10 of the Trust Agreement (as defined below) the Common Securities are
not transferable and any attempted transfer hereof shall be void. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this certificate and
the Common Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Trust Agreement
of the Trust, dated as of August __, 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. Capitalized terms used herein but not
defined shall have the meanings given them in the Trust Agreement. 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> 83
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ______ day of August, 1998.
LINCOLN NATIONAL CAPITAL IV
By:_________________________
Name:
Administrative Trustee
<PAGE> 84
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of __% until ___________, 2001, and at the Reset Rate thereafter (the
"Coupon Rate"), of the stated liquidation amount of $25 per Common Security,
such rate being the rate of interest payable on the Debentures to be held by the
Property Trustee. Distributions in arrears for more than one quarter will
accumulate and compound quarterly at the rate of __% until ___________, 2001,
and at the Reset Rate thereafter (to the extent permitted by applicable law).
The term "Distributions" as used herein includes such cash distributions and any
such accumulated distributions unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds
available therefor. 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.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on February 16, May 16, August 16 and
November 16 of each year, commencing on November 16, 1998, to Holders of record
one Business Day prior to such payment dates, which payment dates shall
correspond to the interest payment dates on the Debentures. The Depositor has
the right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding, in the aggregate, beyond the maturity date of the Debentures (each an
"Extension Period") and, as a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, quarterly Distributions will continue
to accumulate at the rate of __% until _____________, 2001, and at the Reset
Rate thereafter, compounded quarterly during any such Extension Period (to the
extent permitted by applicable law). Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Depositor may
commence a new Extension Period; provided, that such Extension Period together
with all such previous and further extensions thereof may not exceed beyond the
maturity date of the Debentures.
The Common Securities shall be redeemable as provided in the Trust
Agreement.
<PAGE> 85
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of August 14, 1998, between Lincoln National
Corporation, an Indiana corporation ("Lincoln"), and Lincoln National Capital
IV, 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 6.40%
Preferred Securities, Series D (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 August 14, 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 Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any holder
<PAGE> 86
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 1.4. 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> 87
SECTION 1.6. Subrogation.
Lincoln shall be subrogated to all (if any) rights of the Trust in respect
of any amounts paid to the 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 same against
receipt thereof 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 IV
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> 88
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:
Title:
LINCOLN NATIONAL CORPORATION IV
By:______________________________
Name:
Title:
-4-
<PAGE> 89
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 IV 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 _____________
CUSIP No. __________
Certificate Evidencing Preferred Securities
of
Lincoln National Capital IV
___% Trust Originated Preferred Securities,
Series D
(liquidation amount $25 per Preferred Security)
Lincoln National Capital IV, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Cede & Co. (the "Holder") is the registered owner of ______ preferred
securities of the Trust representing an undivided beneficial interest in the
assets of the Trust and designated the Lincoln National Capital IV _____% Trust
Originated Preferred Securities, Series D (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
<PAGE> 90
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 August __, 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. Capitalized terms used
herein but not defined shall have the meanings given them in the Trust
Agreement. 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 August __,
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> 91
IN WITNESS WHEREOF, one of the Administrative Trustees of the
Trust has executed this certificate this ____ day of August, 1998.
LINCOLN NATIONAL CAPITAL IV
By: ________________________
Name:
Administrative Trustee
<PAGE> 92
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at an
initial rate per annum of __% until __________, 2001, and at the Reset Rate
thereafter (the "Coupon Rate"), of the stated liquidation amount of $25 per
Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will accumulate and compound quarterly at the rate of __% until
____________, 2001, and at the Reset Rate thereafter (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such accumulated distributions unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds available therefor. 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.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on February 16, May 16, August 16 and
November 16 of each year, commencing on November 16, 1998, to Holders of record,
if in book-entry only form, one Business Day prior to such payment dates, which
payment dates shall correspond to the interest payment dates on the Debentures.
In the event that the Preferred Securities are not in book-entry form, the
relevant record dates for the Preferred Securities shall conform to the rules of
any securities exchange on which such securities are listed and, if none, as
shall be selected by the Administrative Trustees, which dates will be more than
one Business Day but less than 60 Business Days prior to the relevant payment
dates. The Depositor has the right under the Indenture to defer payments of
interest by extending the interest payment period from time to time on the
Debentures for a period not exceeding, in the aggregate, beyond the maturity
date of the Debentures (each an "Extension Period") and, as a consequence of
such deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accumulate at the rate of ____% until
____________, 2001, and at the Reset Rate thereafter, compounded quarterly
during any such Extension Period (to the extent permitted by applicable law).
Payments of accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the first record date after the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Depositor may commence a new Extension Period;
provided, that such Extension Period together with all such previous and further
extensions thereof may not exceed beyond the maturity date of the Debenture.
The Preferred Securities shall be redeemable as provided in the Trust
Agreement.
<PAGE> 93
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Trust to
repay $_____ stated liquidation amount of the within Preferred Security,
pursuant to its terms, on the "Put Option Exercise Date," together with
distributions thereon accrued but unpaid to the date of repayment, to the
undersigned at:________________________________________________________________
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Trust Agreement, a
new Preferred Security or Preferred Securities representing the remaining stated
liquidation amount of this
Preferred Security.
For this Option to Elect Repayment to be effective, the within Preferred
Security with this Option to Elect Repayment duly completed must be received by
the Trust at the Corporate Trust Office of the Property Trustee at The First
National Bank of Chicago, One First National Plaza, Suite 0126, Chicago, IL
60670-0126, Attention: Corporate Trust Administration.
Dated: Signature:_________________________
Signature Guarantee:_______________
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Preferred Security in every
particular without alternation or enlargement or any change whatsoever.
<PAGE> 94
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
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
<PAGE> 1
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 IV 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 1,000,000
CUSIP No. 534041207
Certificate Evidencing Preferred Securities
of
Lincoln National Capital IV
6.40% Trust Originated Preferred Securities,
Series D
(liquidation amount $25 per Preferred Security)
Lincoln National Capital IV, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that Cede &
Co. (the "Holder") is the registered owner of 1,000,000 preferred securities of
the Trust representing an undivided beneficial interest in the assets of the
Trust and designated the Lincoln National Capital IV 6.40% Trust Originated
Preferred Securities, Series D (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
rand Restated Trust Agreement of the Trust, dated as of August 14, 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.
Capitalized terms used herein but not defined shall have the meanings given
them in the Trust Agreement. 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 August 14, 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.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 2
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this 14th day of August, 1998.
LINCOLN NATIONAL CAPITAL IV
By: _______________________
Name: John L. Steinkamp
Administrative Trustee
-2-
<PAGE> 3
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at an
initial rate per annum of 6.40% until August 15, 2001, and at the Reset Rate
thereafter (the "Coupon Rate"), of the stated liquidation amount of $25 per
Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will accumulate and compound quarterly at the rate of
6.40% until August 15, 2001, and at the Reset Rate thereafter (to the extent
permitted by applicable law). The term "Distributions" as used herein includes
such cash distributions and any such accumulated distributions unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. 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.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on February 16, May 16, August 16 and
November 16 of each year, commencing on November 16, 1998, to Holders of
record, if in book-entry only form, one Business Day prior to such payment
dates, which payment dates shall correspond to the interest payment dates on
the Debentures. In the event that the Preferred Securities are not in
book-entry form, the relevant record dates for the Preferred Securities shall
conform to the rules of any securities exchange on which such securities are
listed and, if none, as shall be selected by the Administrative Trustees, which
dates will be more than one Business Day but less than 60 Business Days prior
to the relevant payment dates. The Depositor has the right under the Indenture
to defer payments of interest by extending the interest payment period from
time to time on the Debentures for a period not exceeding, in the aggregate,
beyond the maturity date of the Debentures (each an "Extension Period") and, as
a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accumulate at the rate
of 6.40% until August 15, 2001, and at the Reset Rate thereafter, compounded
quarterly during any such Extension Period (to the extent permitted by
applicable law). Payments of accrued Distributions will be payable to Holders
as they appear on the books and records of the Trust on the first record date
after the end of the Extension Period. Upon the termination of any Extension
Period and the payment of all amounts then due, the Depositor may commence a
new Extension Period; provided, that such Extension Period together with all
such previous and further extensions thereof may not exceed beyond the maturity
date of the Debenture.
The Preferred Securities shall be redeemable as provided in the Trust
Agreement.
-3-
<PAGE> 4
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Trust to
repay $___ stated liquidation amount of the within Preferred Security, pursuant
to its terms, on the "Put Option Exercise Date," together with distributions
thereon accrued but unpaid to the date of repayment, to the undersigned at:
______________________________________________________________________
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Trust Agreement,
a new Preferred Security or Preferred Securities representing the remaining
stated liquidation amount of this Preferred Security.
For this Option to Elect Repayment to be effective, the within Preferred
Security with this Option to Elect Repayment duly completed must be received by
the Trust at the Corporate Trust Office of the Property Trustee at The First
National Bank of Chicago, One First National Plaza, Suite 0126, Chicago, IL
60670-0126, Attention: Corporate Trust Administration.
Dated: Signature:
Signature Guarantee:
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Preferred Security in every
particular without alternation or enlargement or any change whatsoever.
-4-
<PAGE> 5
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
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
-5-
<PAGE> 6
Certificate Number Number of Preferred Securities
P-2 7,000,000
CUSIP No. 534041207
Certificate Evidencing Preferred Securities
of
Lincoln National Capital IV
6.40% Trust Originated Preferred Securities,
Series D
(liquidation amount $25 per Preferred Security)
Lincoln National Capital IV, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that The
Chase Manhattan Bank, as Collateral Agent (the "Holder"), is the registered
owner of 7,000,000 preferred securities of the Trust representing an undivided
beneficial interest in the assets of the Trust and designated the Lincoln
National Capital IV 6.40% Trust Originated Preferred Securities, Series D
(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 August 14, 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. Capitalized terms used
herein but not defined shall have the meanings given them in the Trust
Agreement. 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 August 14,
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.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 7
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this 14th day of August, 1998.
LINCOLN NATIONAL CAPITAL IV
By: _______________________
Name: John L. Steinkamp
Administrative Trustee
-2-
<PAGE> 8
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at an
initial rate per annum of 6.40% until August 15, 2001, and at the Reset Rate
thereafter (the "Coupon Rate"), of the stated liquidation amount of $25 per
Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will accumulate and compound quarterly at the rate of
6.40% until August 15, 2001, and at the Reset Rate thereafter (to the extent
permitted by applicable law). The term "Distributions" as used herein includes
such cash distributions and any such accumulated distributions unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. 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.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on February 16, May 16, August 16 and
November 16 of each year, commencing on November 16, 1998, to Holders of
record, if in book-entry only form, one Business Day prior to such payment
dates, which payment dates shall correspond to the interest payment dates on
the Debentures. In the event that the Preferred Securities are not in
book-entry form, the relevant record dates for the Preferred Securities shall
conform to the rules of any securities exchange on which such securities are
listed and, if none, as shall be selected by the Administrative Trustees, which
dates will be more than one Business Day but less than 60 Business Days prior
to the relevant payment dates. The Depositor has the right under the Indenture
to defer payments of interest by extending the interest payment period from
time to time on the Debentures for a period not exceeding, in the aggregate,
beyond the maturity date of the Debentures (each an "Extension Period") and, as
a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accumulate at the rate
of 6.40% until August 15, 2001, and at the Reset Rate thereafter, compounded
quarterly during any such Extension Period (to the extent permitted by
applicable law). Payments of accrued Distributions will be payable to Holders
as they appear on the books and records of the Trust on the first record date
after the end of the Extension Period. Upon the termination of any Extension
Period and the payment of all amounts then due, the Depositor may commence a
new Extension Period; provided, that such Extension Period together with all
such previous and further extensions thereof may not exceed beyond the maturity
date of the Debenture.
The Preferred Securities shall be redeemable as provided in the Trust
Agreement.
-3-
<PAGE> 9
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Trust to
repay $___ stated liquidation amount of the within Preferred Security, pursuant
to its terms, on the "Put Option Exercise Date," together with distributions
thereon accrued but unpaid to the date of repayment, to the undersigned at:
______________________________________________________________________
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Trust Agreement,
a new Preferred Security or Preferred Securities representing the remaining
stated liquidation amount of this Preferred Security.
For this Option to Elect Repayment to be effective, the within Preferred
Security with this Option to Elect Repayment duly completed must be received by
the Trust at the Corporate Trust Office of the Property Trustee at The First
National Bank of Chicago, One First National Plaza, Suite 0126, Chicago, IL
60670-0126, Attention: Corporate Trust Administration.
Dated: Signature:
Signature Guarantee:
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Preferred Security in every
particular without alternation or enlargement or any change whatsoever.
-4-
<PAGE> 10
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
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
-5-
<PAGE> 11
Certificate Number Number of Preferred Securities
P-3 1,200,000
CUSIP No. 534041207
Certificate Evidencing Preferred Securities
of
Lincoln National Capital IV
6.40% Trust Originated Preferred Securities,
Series D
(liquidation amount $25 per Preferred Security)
Lincoln National Capital IV, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that The
Chase Manhattan Bank, as Collateral Agent (the "Holder"), is the registered
owner of 1,200,000 preferred securities of the Trust representing an undivided
beneficial interest in the assets of the Trust and designated the Lincoln
National Capital IV 6.40% Trust Originated Preferred Securities, Series D
(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 August 14, 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. Capitalized terms used
herein but not defined shall have the meanings given them in the Trust
Agreement. 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 August 14,
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.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 12
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this 21st day of August, 1998.
LINCOLN NATIONAL CAPITAL IV
By: _______________________
Name: John L. Steinkamp
Administrative Trustee
-2-
<PAGE> 13
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at an
initial rate per annum of 6.40% until August 15, 2001, and at the Reset Rate
thereafter (the "Coupon Rate"), of the stated liquidation amount of $25 per
Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will accumulate and compound quarterly at the rate of
6.40% until August 15, 2001, and at the Reset Rate thereafter (to the extent
permitted by applicable law). The term "Distributions" as used herein includes
such cash distributions and any such accumulated distributions unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. 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.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on February 16, May 16, August 16 and
November 16 of each year, commencing on November 16, 1998, to Holders of
record, if in book-entry only form, one Business Day prior to such payment
dates, which payment dates shall correspond to the interest payment dates on
the Debentures. In the event that the Preferred Securities are not in
book-entry form, the relevant record dates for the Preferred Securities shall
conform to the rules of any securities exchange on which such securities are
listed and, if none, as shall be selected by the Administrative Trustees, which
dates will be more than one Business Day but less than 60 Business Days prior
to the relevant payment dates. The Depositor has the right under the Indenture
to defer payments of interest by extending the interest payment period from
time to time on the Debentures for a period not exceeding, in the aggregate,
beyond the maturity date of the Debentures (each an "Extension Period") and, as
a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accumulate at the rate
of 6.40% until August 15, 2001, and at the Reset Rate thereafter, compounded
quarterly during any such Extension Period (to the extent permitted by
applicable law). Payments of accrued Distributions will be payable to Holders
as they appear on the books and records of the Trust on the first record date
after the end of the Extension Period. Upon the termination of any Extension
Period and the payment of all amounts then due, the Depositor may commence a
new Extension Period; provided, that such Extension Period together with all
such previous and further extensions thereof may not exceed beyond the maturity
date of the Debenture.
The Preferred Securities shall be redeemable as provided in the Trust
Agreement.
-3-
<PAGE> 14
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Trust to
repay $___ stated liquidation amount of the within Preferred Security, pursuant
to its terms, on the "Put Option Exercise Date," together with distributions
thereon accrued but unpaid to the date of repayment, to the undersigned at:
________________________________________________________________________________
(Please print or type Name and Address
of the Undersigned) and to issue to the undersigned, pursuant to the terms of
the Trust Agreement, a new Preferred Security or Preferred Securities
representing the remaining stated liquidation amount of this Preferred
Security.
For this Option to Elect Repayment to be effective, the within Preferred
Security with this Option to Elect Repayment duly completed must be received by
the Trust at the Corporate Trust Office of the Property Trustee at The First
National Bank of Chicago, One First National Plaza, Suite 0126, Chicago, IL
60670-0126, Attention: Corporate Trust Administration.
Dated:_______________________ Signature:_________________________________
Signature Guarantee:______________________
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Preferred Security in every
particular without alternation or enlargement or any change whatsoever.
-4-
<PAGE> 15
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
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
-5-
<PAGE> 1
EXHIBIT 4.3
- --------------------------------------------------------------------------------
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF AUGUST 14, 1998
BETWEEN
LINCOLN NATIONAL CORPORATION
AS ISSUER
AND
THE FIRST NATIONAL BANK OF CHICAGO
AS TRUSTEE
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I DEFINITIONS........................................................ 2
SECTION 1.1 Definition of Terms....................................... 2
ARTICLE II GENERAL TERMS AND CONDITIONS OF THE
DEBENTURES......................................................... 3
SECTION 2.1 Designation and Principal Amount.......................... 3
SECTION 2.2 Maturity.................................................. 4
SECTION 2.3 Form and Payment.......................................... 4
SECTION 2.4 Global Debenture.......................................... 4
SECTION 2.5 Interest.................................................. 5
ARTICLE III REDEMPTION OF THE DEBENTURES....................................... 7
SECTION 3.1 Tax Event Redemption...................................... 7
SECTION 3.2 Redemption Procedure for Debentures....................... 7
SECTION 3.3 No Sinking Fund........................................... 7
SECTION 3.4 Option to Put Debentures upon a Failed Remarketing........ 8
SECTION 3.5 Repurchase Procedure for Debentures....................... 8
ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD............................... 9
SECTION 4.1 Extension of Interest Payment Period...................... 9
SECTION 4.2 Notice of Extension....................................... 10
ARTICLE V EXPENSES........................................................... 10
SECTION 5.1 Payment of Expenses....................................... 10
SECTION 5.2 Payment Upon Resignation or Removal....................... 11
ARTICLE VI NOTICE............................................................. 11
SECTION 6.1 Notice by the Company..................................... 11
ARTICLE VII FORM OF DEBENTURE.................................................. 12
SECTION 7.1 Form of Debenture......................................... 12
ARTICLE VIII ORIGINAL ISSUE OF DEBENTURES....................................... 20
SECTION 8.1 Original Issue of Debentures.............................. 20
ARTICLE IX MISCELLANEOUS...................................................... 21
SECTION 9.1 Ratification of Indenture................................. 21
SECTION 9.2 Trustee Not Responsible for Recitals...................... 21
SECTION 9.3 Governing Law............................................. 21
SECTION 9.4 Separability.............................................. 21
SECTION 9.5 Counterparts.............................................. 21
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
SECTION 9.6 Guarantee Agreement and Trust Agreement................... 21
ARTICLE X REMARKETING........................................................ 22
SECTION 10.1 Effectiveness of this Article............................. 22
SECTION 10.2 Remarketing Procedures.................................... 22
</TABLE>
-ii-
<PAGE> 4
FIRST SUPPLEMENTAL INDENTURE, dated as of August 14, 1998 (the "First
Supplemental Indenture"), between Lincoln National Corporation, a corporation
duly organized and existing under the laws of the State of Indiana, (the
"Company"), and The First National Bank of Chicago, as trustee (the "Trustee").
WHEREAS, the Company executed and delivered the Junior Subordinated
Indenture dated as of May 1, 1996 (the "Base Indenture"), to the Trustee to
provide for the future issuance of the Company's junior subordinated debentures,
notes or other evidence of indebtedness (the "Securities"), to be issued from
time to time in one or more series as might be determined by the Company under
the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company
desires to provide for the establishment of a new series of its Securities to be
known as its 6.40% Junior Subordinated Deferrable Interest Debentures, Series D
(the "Debentures") with specific terms and provisions, the form and substance of
such Debentures and the terms, provisions and conditions thereof to be set forth
as provided in the Base Indenture and this First Supplemental Indenture
(together, the "Indenture");
WHEREAS, Lincoln National Capital IV, a Delaware statutory business
trust (the "Trust"), has offered to the public its 6.40% Preferred Securities
(the "Preferred Securities"), representing, undivided beneficial ownership
interests in the assets of the Trust, and proposes to invest the proceeds from
such offering, together with the proceeds of the issuance and sale by the Trust
to the Company of its 6.40% Common Securities (the "Common Securities" and
together with the Preferred Securities, the "Trust Securities"), in the
Debentures; and
WHEREAS, the Company has requested that the Trustee execute and deliver
this First Supplemental Indenture and all requirements necessary to make this
First Supplemental Indenture a valid instrument in accordance with its terms,
and to make the Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company and all acts and
things necessary have been done and performed to make this First Supplemental
Indenture enforceable in accordance with its terms, and the execution and
delivery of this First Supplemental Indenture has been duly authorized in all
respects:
NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
<PAGE> 5
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITION OF TERMS.
Unless the context otherwise requires:
(a) a term defined in the Base Indenture has the same meaning when
used in this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture
has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not
affect interpretation;
(e) the following terms have the meanings given to them in the
Trust Agreement: (i) Administrative Trustee; (ii) Applicable Principal Amount;
(iii) Authorized Newspaper; (iv) Business Day; (v) Clearing Agency; (vi)
Delaware Trustee; (vii) DTC; (viii) FELINE PRIDES; (ix) Growth PRIDES; (x)
Income PRIDES; (xi) Investment Company Event; (xii) Preferred Security
Certificate; (xiii) Pricing Agreement; (xiv) Property Trustee; (xv) Purchase
Contract Agreement; (xvi) Put Option (xvii) Quotation Agent; (xviii) Redemption
Amount, (xix) Reset Agent; (xx) Reset Announcement Date; (xxi) Reset Rate
(xxii) Reset Spread;(xxiii) Tax Event; (xxiv) Tax Event Redemption Date; (xxv)
Treasury Portfolio Purchase Price; (xxvi) Treasury Portfolio; (xxvii) Treasury
Securities and (xxviii) Two-Year Benchmark Treasury.
(f) the following terms have the meanings given to them in this
Section 1.1(f):
"Compounded Interest" shall have the meaning set forth in Section 4.1.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Custodial Agent" means The Chase Manhattan Bank, as Custodial Agent.
"Debenture Repayment Price" shall have the meaning set forth in Section
3.4.
"Deferred Interest" shall have the meaning set forth in Section 4.1
hereof.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Tax Event, an Investment Company Event or otherwise, the Trust
is to be dissolved in accordance with the Trust Agreement, and, except in the
case of a Tax Event Redemption, the Debentures held by the Property Trustee are
to be distributed to the holders of the Trust Securities issued by the Trust pro
rata in accordance with the Trust Agreement.
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"Exchange Agent" means the Property Trustee.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
"Failed Remarketing" shall have the meaning set forth in Section 5.4(b)
of the Purchase Contract Agreement.
"Global Debentures" shall have the meaning set forth in Section 2.4.
"Non Book-Entry Preferred Securities" shall have the meaning set forth
in Section 2.4.
"Pledge Agreement" means the Pledge Agreement dated as of August 14,
1998, among the Company, the Trust, The Chase Manhattan Bank, as collateral
agent, custodial agent and securities intermediary and The First National Bank
of Chicago, as purchase contract agent.
"Purchase Contract" shall have the meaning set forth in the Purchase
Contract Agreement, dated as of August 14, 1998, between the Company and The
First National Bank of Chicago, as purchase contract agent.
"Purchase Contract Settlement Date" means August 16, 2001.
"Remarketing Agent" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated and/or any successor thereto or replacement Remarketing Agent under
the Remarketing Agreement.
"Remarketing Agreement" means the Remarketing Agreement, dated as of
August 14, 1998, among the Company, the Trust, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as remarketing agent and The First National Bank of Chicago,
as purchase contract agent.
"Remarketing Date" shall have the meaning set forth in the Remarketing
Agreement.
"Rights Plan" means the Amended and Restated Rights Agreement dated
November 14, 1996 between the Company and The First National Bank of Boston.
"Trust Agreement" means the Amended and Restated Trust Agreement of
Lincoln National Capital IV, a Delaware statutory business trust, dated as of
August 14, 1998.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1 DESIGNATION AND PRINCIPAL AMOUNT.
There is hereby authorized a series of Securities designated the 6.40%
Debentures due August 15, 2003 (the "Debentures"), limited in aggregate
principal amount to $206,186,000 ($237,113,850 if the Underwriters'
over-allotment option pursuant to the Underwriting Agreement and the Pricing
Agreement is exercised in full), which amount shall be as set forth
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in any written order of the Company for the authentication and delivery of
Debentures pursuant to Section 3.3 of the Base Indenture.
SECTION 2.2 MATURITY.
The Maturity Date will be August 15, 2003.
SECTION 2.3 FORM AND PAYMENT.
Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without interest coupons, bearing identical
terms. Principal and interest on the Debentures issued in certificated form will
be payable, the transfer of such Debentures will be registrable and such
Debentures will be exchangeable for Debentures bearing identical terms and
provisions at the office or agency of the Property Trustee; provided, however,
that payment of interest may be made at the option of the Company by check
mailed to the Holder at such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the Holder of any Debentures is the
Property Trustee, the payment of the principal of and interest (including
Compounded Interest and expenses and taxes of the Trust set forth in Section 4.1
hereof, if any) on such Debentures held by the Property Trustee will be made at
such place and to such account as may be designated by the Property Trustee.
SECTION 2.4 GLOBAL DEBENTURE.
(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be presented
to the Trustee by the Property Trustee in exchange for a global
Debenture in an aggregate principal amount equal to the aggregate
principal amount of all outstanding Debentures (a "Global Debenture"),
to be registered in the name of the Clearing Agency, or its nominee,
and delivered by the Property Trustee to the Clearing Agency for
crediting to the accounts of its participants pursuant to the
instructions of the Administrative Trustees. The Company upon any such
presentation shall execute a Global Debenture in such aggregate
principal amount and deliver the same to the Trustee for authentication
and delivery in accordance with the Indenture. Payments on the
Debentures issued as a Global Debenture will be made to the Clearing
Agency; and
(ii) if any Preferred Securities are held in non
book-entry certificated form, the Debentures in certificated form may
be presented to the Trustee by the Property Trustee and any Preferred
Security Certificate which represents Preferred Securities other than
Preferred Securities held by the Clearing Agency or its nominee ("Non
Book-Entry Preferred Securities") will be deemed to represent
beneficial interests in the Debentures presented to the Trustee by the
Property Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Preferred Securities
until such Preferred Security Certificates are presented to the
Security Registrar for transfer or reissuance at which time such
Preferred Security
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<PAGE> 8
Certificates will be cancelled and a Debenture, registered in the name
of the holder of the Preferred Security Certificate or the transferee
of the holder of such Preferred Security Certificate, as the case may
be, with an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Security Certificate cancelled,
will be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Indenture to such
holder. On issue of such Debentures, Debentures with an equivalent
aggregate principal amount that were presented by the Property Trustee
to the Trustee will be deemed to have been cancelled.
(b) Unless and until it is exchanged for the Debentures in
registered form, a Global Debenture may be transferred, in whole but not in
part, only to another nominee of the Clearing Agency, or to a successor Clearing
Agency selected or approved by the Company or to a nominee of such successor
Clearing Agency.
(c) If at any time the Clearing Agency notifies the Company that it
is unwilling or unable to continue as a Clearing Agency or if at any time the
Clearing Agency for such series shall no longer be registered or in good
standing under the Securities Exchange Act of 1934, as amended, or other
applicable statute or regulation, and a successor Clearing Agency for such
series is not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such condition, as the case may be, the Company
will execute, and, subject to Article III of the Indenture, the Trustee, upon
written notice from the Company, will authenticate and deliver the Debentures in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global
Debenture in exchange for such Global Debenture. In addition, the Company may at
any time determine that the Debentures shall no longer be represented by a
Global Debenture. In such event the Company will execute, and subject to Section
3.3 of the Base Indenture, the Trustee, upon receipt of an Officer's Certificate
evidencing such determination by the Company, will authenticate and deliver the
Debentures in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Debenture in exchange for such Global Debenture. Upon the
exchange of the Global Debenture for such Debentures in definitive registered
form without coupons, in authorized denominations, the Global Debenture shall be
cancelled by the Trustee. Such Debentures in definitive registered form issued
in exchange for the Global Debenture shall be registered in such names and in
such authorized denominations as the Clearing Agency, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Securities to the Clearing Agency for
delivery to the Persons in whose names such Securities are so registered.
SECTION 2.5 INTEREST.
(a) Each Debenture will bear interest initially at the rate of
6.40% per annum (the "Coupon Rate") from the original date of issuance until
August 15, 2001, and at the Reset Rate thereafter until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate until August 15, 2001 and at the
Reset Rate thereafter,
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compounded quarterly, payable (subject to the provisions of Article IV herein)
quarterly in arrears on February 16, May 16, August 16 and November 16 of each
year (each, an "Interest Payment Date") commencing on November 16, 1998, to the
Person in whose name such Debenture or any predecessor Debenture is registered,
at the close of business on the Regular Record Date for such interest
installment, which, in respect of (i) Debentures of which the Property Trustee
is the Holder and the Preferred Securities are in book-entry only form or (ii) a
Global Debenture, shall be the close of business on the Business Day next
preceding that Interest Payment Date. Notwithstanding the foregoing sentence, if
(i) the Debentures are held by the Property Trustee and the Preferred Securities
are no longer in book-entry only form or (ii) the Debentures are not represented
by a Global Debenture, the Company may select a Regular Record Date for such
interest installment which shall be more than one Business Day but less than 60
Business Days prior to an Interest Payment Date.
(b) The Coupon Rate on the Debentures will be reset on the third
Business Day immediately preceding the Purchase Contract Settlement Date to the
Reset Rate (which Reset Rate will become effective on and after the Purchase
Contract Settlement Date). On the tenth Business Day immediately preceding the
Purchase Contract Settlement Date, the Reset Announcement Date, the Reset Spread
and the relevant Two-Year Benchmark Treasury will be announced by the Company.
On the Business Day immediately following such Reset Announcement Date, the
Holders of Debentures will be notified of such Reset Spread and Two-Year
Benchmark Treasury by the Company. Such notice shall be sufficiently given to
such Holders of Debentures if published in an Authorized Newspaper.
(c) 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 Debenture is not a Business Day, then
a payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is 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.
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1 TAX EVENT REDEMPTION.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem the Debentures in whole (but not in part) at any time at a
Redemption Price per Debenture equal to the Redemption Amount plus accrued and
unpaid interest thereon, including Compounded Interest, if any, to the date of
such redemption (the "Tax Event Redemption Date"). If, following the occurrence
of a Tax Event, the Company exercises its option to redeem the Debentures, then
the proceeds of such redemption, if distributed to the Property Trustee as the
sole Holder of such Debentures, will be applied by the Property Trustee to
redeem Trust
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<PAGE> 10
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so redeemed, at a Redemption Price per Trust
Security equal to the Redemption Amount plus accrued and unpaid distributions
thereon to the date of such redemption. If, following the occurrence of a Tax
Event prior to the Purchase Contract Settlement Date, the Company exercises its
option to redeem the Debentures, the Company shall appoint the Quotation Agent
to assemble the Treasury Portfolio in consultation with the Company. Notice of
any redemption will be mailed at least 30 days but not more than 60 days before
the Tax Event Redemption Date to each registered Holder of the Debentures to be
prepaid at its registered address. Unless the Company defaults in payment of the
Redemption Price, on and after the redemption date interest shall cease to
accrue on such Debentures.
SECTION 3.2 REDEMPTION PROCEDURE FOR DEBENTURES.
Payment of the Redemption Price to each Holder of Debentures shall be
made by the Company, no later than 12:00 noon, New York City time, on the Tax
Event Redemption Date, by check or wire transfer in immediately available funds
at such place and to such account as may be designated by each such Holder of
Debentures, including the Property Trustee or the Collateral Agent, as the case
may be. If the Trustee holds immediately available funds sufficient to pay the
Redemption Price of the Debentures (or, if the Company is acting as Paying Agent
or the Property Trustee has received the Redemption Price), then, on such Tax
Event Redemption Date, such Debentures will cease to be outstanding and interest
thereon will cease to accrue, whether or not such Debentures have been received
by the Company, and all other rights of the Holder in respect of the Debentures
shall terminate and lapse (other than the right to receive the Redemption Price
upon delivery of such Debentures but without interest on such Redemption Price).
SECTION 3.3 NO SINKING FUND.
The Debentures are not entitled to the benefit of any sinking fund.
SECTION 3.4 OPTION TO PUT DEBENTURES UPON A FAILED REMARKETING.
If a Failed Remarketing (as described in Section 5.4(b) of the Purchase
Contract Agreement and incorporated herein by reference) has occurred, each
holder of Trust Securities who holds such Trust Securities on the day
immediately following the Purchase Contract Settlement Date, shall have the
right, upon at least three Business Days' prior notice, to require the Trust to
distribute their pro rata share of Debentures to the Exchange Agent and to
require the Exchange Agent to put such Debentures to the Company (the "Put
Option"), on behalf of such holders on September 1, 2001 (the "Put Option
Exercise Date") at a repayment price of $25 per Preferred Security plus an
amount equal to the accrued and unpaid Distributions (including deferred
distributions, if any) thereon to the date of payment (the "Debenture Repayment
Price").
SECTION 3.5 REPURCHASE PROCEDURE FOR DEBENTURES.
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(a) In order for the Debentures to be repurchased on the Put Option
Exercise Date, the Company must receive on or prior to 5:00 p.m. New York City
time on the third Business Day immediately preceding the Put Option Exercise
Date, at the then principal executive offices of the Company, the Debentures to
be repurchased with the form entitled "Option to Elect Repayment" on the reverse
of or otherwise accompanying such Debentures duly completed. Any such notice
received by the Company shall be irrevocable. All questions as to the validity,
eligibility (including time of receipt) and acceptance of the Debentures for
repayment shall be determined by the Company, whose determination shall be final
and binding.
(b) Payment of the Debenture Repayment Price to the Exchange Agent
shall be made through the Trustee, subject to the Trustee's receipt of payment
from the Company in accordance with the terms of the Indenture either through
the Trustee or the Company acting as Paying Agent, no later than 12:00 noon, New
York City time, on the Put Option Exercise Date, and to such account as may be
designated by the Exchange Agent. If the Trustee holds immediately available
funds sufficient to pay the Debenture Repayment Price of the Debentures
presented for repayment (or, if the Company is acting as Paying Agent and the
Property Trustee has received the Debenture Repayment Price), then, immediately
prior to the close of business on the Business Day immediately preceding the Put
Option Exercise Date, such Debentures will cease to be outstanding and interest
thereon will cease to accrue, whether or not such Debentures have been received
by the Company, and all other rights of the Holder in respect of the Debentures,
including the Holder's right to require the Company to repay such Debentures,
shall terminate and lapse (other than the right to receive the Debenture
Repayment Price upon delivery of such Debentures but without interest on such
Debenture Repayment Price). Neither the Trustee nor the Company will be required
to register or cease to be registered the transfer of any Debenture for which
repayment has been elected.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 EXTENSION OF INTEREST PAYMENT PERIOD.
So long as no Event of Default has occurred or is continuing under the
Indenture, the Company shall have the right at any time during the term of the
Debentures, from time to time, to defer the payment of interest on such
Debentures for a period not extending, in the aggregate, beyond the maturity
date of the Debentures (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 the Debentures or
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any subsidiary of the Company if such
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<PAGE> 12
guarantee ranks pari passu with or junior in interest to the Debentures (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 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 extend beyond
the Maturity of the Debentures. At the end of an Extension Period, the Company
shall pay all interest then accrued and unpaid (together with the interest
thereon at the rate of 6.40% until August 15, 2001 and at the Reset Rate
thereafter to the extent that payment of such interest is enforceable under
applicable law). No interest shall be due and payable during an Extension Period
except at the end thereof.
SECTION 4.2 NOTICE OF EXTENSION.
(a) If the Property Trustee is the only registered Holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Administrative Trustees, the
Property Trustee and the Trustee of its selection of such Extended Interest
Payment Period one Business Day before the earlier of (i) the next succeeding
date on which Distributions on the Trust Securities issued by the Trust are
payable, or (ii) the date the Trust is required to give notice of the record
date, or the date such Distributions are payable, to The New York Stock
Exchange, Inc. (the "NYSE") or other applicable self-regulatory organization or
to holders of the Preferred Securities issued by the Trust.
(b) If the Property Trustee is not the only Holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give the Holders of the Debentures and the Trustee written
notice of its selection of such Extended Interest Payment Period at least 10
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to the NYSE or other applicable
self-regulatory organization or to Holders of the Debentures.
ARTICLE V
EXPENSES
SECTION 5.1 PAYMENT OF EXPENSES.
In connection with the offering, sale and issuance of the Debentures to
the Property Trustee and in connection with the sale of the Trust Securities by
the Trust, the Company, in its capacity as borrower with respect to the
Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters payable
pursuant to the Underwriting
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Agreement and the Pricing Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section 6.7 of the Base
Indenture;
(b) pay all costs and expenses of the Trust including, but not
limited to, costs and expenses relating to the organization of the Trust, the
offering, sale and issuance of the Trust Securities (including commissions to
the underwriters in connection therewith), the fees and expenses of the Property
Trustee and the Delaware Trustee, the costs and expenses relating to the
operation of the Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the acquisition, financing, and disposition of Trust assets) to which the Trust
might become subject;
(c) be primarily liable for any indemnification obligations arising
with respect to the Trust Agreement; and
(d) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
SECTION 5.2 PAYMENT UPON RESIGNATION OR REMOVAL.
Upon termination of this First Supplemental Indenture or the Base
Indenture or the removal or resignation of the Trustee, the Company shall pay to
the Trustee all amounts accrued to the date of such termination, removal or
resignation. Upon termination of the Trust Agreement or the removal or
resignation of the Delaware Trustee or the Property Trustee, as the case may be,
the Company shall pay to the Delaware Trustee or the Property Trustee, as the
case may be, all amounts accrued to the date of such termination, removal or
resignation.
ARTICLE VI
NOTICE
SECTION 6.1 NOTICE BY THE COMPANY.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Debentures
pursuant to the provisions of this Article VI. Notwithstanding any of the
provisions of the Base Indenture and this First Supplemental Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Debentures pursuant to the provisions of the Base Indenture;
provided, however, that if the Trustee shall not have received the notice
provided for in this Article VI at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or
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interest on any Debenture), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purposes for which they were received, and
shall not be affected by any notice to the contrary that may be received by it
within two Business Days prior to such date.
ARTICLE VII
FORM OF DEBENTURE
SECTION 7.1 FORM OF DEBENTURE.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms:
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL SECURITY, INSERT - THIS DEBENTURE
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE OR THE
CLEARING AGENCY. THIS DEBENTURE IS EXCHANGEABLE FOR DEBENTURES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
DEBENTURE (OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE BY THE CLEARING
AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE CLEARING
AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING AGENCY) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.]
[UNLESS THIS DEBENTURE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY DEBENTURE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
LINCOLN NATIONAL CORPORATION
____% Junior Subordinated Deferrable Interest Debentures, Series D
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No. D-1 $__________
CUSIP No. ____________
LINCOLN NATIONAL CORPORATION, a corporation organized and existing
under the laws of Indiana (hereinafter called the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to The First National Bank of Chicago, as
Property Trustee of Lincoln National Capital IV, or registered assigns, the
principal sum of ____________________________ dollars ($____________) on
____________, 2003. The Company further promises to pay interest on said
principal sum from __________, 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 February 16, May 16, August 16 and November 16 of each year,
commencing on November 16, 1998, initially at the rate of ___% per annum until
_______, 2001, and at the Reset Rate thereafter 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 ___% until _________, 2001, and at the Reset Rate
thereafter, compounded quarterly. The interest rate will be reset on the third
business day preceding __________, 2001 to the Reset Rate (as determined by the
Reset Agent). 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 Debenture is not a Business Day, then
a payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is 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 IV 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 Debenture (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 in
the case of a Global Security shall be the close of business on the business day
next preceding such Interest Payment Date; provided, however, if pursuant to the
terms of the Indenture the Debentures are no longer represented by a Global
Security, the Company may select such regular record date for such interest
installment which shall be more than one Business Day but less than 60 Business
Days prior to an 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
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<PAGE> 16
whose name this Debenture (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 Debentures 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 Debentures 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.
So long as no Event of Default has occurred or is continuing under the
Indenture, the Company shall have the right at any time during the term of this
Debenture, from time to time, to defer the payment of interest on such Debenture
for a period not extending, in the aggregate, beyond the maturity date of this
Debenture (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 Debenture 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 Debentures (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 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 extend beyond the Maturity of this
Debenture. At the end of an Extension Period, the Company shall pay all interest
then accrued and unpaid (together with the interest thereon at the rate of ___%
until ________, 2001 and at the Reset Rate thereafter to the extent that payment
of such interest is enforceable under applicable law). No interest shall be due
and payable during an Extension Period except at the end thereof.
Payment of the principal of (and premium, if any) and interest on this
Debenture 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. Notwithstanding the foregoing, so long as the Holder of this Debenture
is the Property Trustee or the Collateral Agent, the
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<PAGE> 17
payment of the principal of (and premium, if any) and interest on this Debenture
will be made at such place and to such account as may be designated in writing
by the Property Trustee or the Collateral Agent.
The indebtedness evidenced by this Debenture 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 Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his 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 Debenture
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
Debenture shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
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<PAGE> 18
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: August ___, 1998
LINCOLN NATIONAL CORPORATION
By:_________________________
Name:
Title:
Attest:
_____________________________
Name:
Title:
This is one of the Debentures referred to in the within mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:______________________________
Authorized Officer
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<PAGE> 19
[REVERSE OF DEBENTURE]
This Debenture is one of a duly authorized issue of securities of the
Company (herein called the "Debentures"), issued and to be issued in one or more
series under a Junior Subordinated Indenture, dated as of May 1, 1996 (herein
called the "Base 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), as supplemented by a First Supplemental
Indenture, dated August ___, 1998), (the Base Indenture as so supplemented, 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 Debentures, and of the terms upon which the Debentures are, and
are to be, authenticated and delivered. This Debenture is one of the series
designated on the face hereof, limited in aggregate principal amount to
$____________.
All terms used in this Debenture that are defined in the Indenture or
in the Amended and Restated Trust Agreement, dated as of August ___, 1998 (the
"Trust Agreement"), for Lincoln National Capital IV 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.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem Debentures in whole (but not in part) at any time at a Redemption
Price per Debenture equal to the Redemption Amount plus accrued and unpaid
interest thereon, including Compounded Interest (each as defined herein), if
any, to the Tax Event Redemption Date. The Redemption Price shall be paid to
each Holder of the Debenture by the Company, no later than 12:00 noon, New York
City time, on the Tax Event Redemption Date, by check or wire transfer in
immediately available funds, at such place and to such account as may be
designated by each such Holder.
The Debentures are not entitled to the benefit of any sinking fund.
If a Failed Remarketing (as described in Section 5.4(b) of the Purchase
Contract Agreement and incorporated herein by reference) has occurred, each
holder of Trust Securities who holds such Trust Securities on the day
immediately following the Purchase Contract Settlement Date, shall have the
right on the Business Day immediately following __________, 2001, upon at least
three Business Days' prior notice, to require the Trust to distribute their pro
rata share of Debentures to the Exchange Agent and to require the Exchange Agent
to put such Debentures to the Company (the "Put Option"), on behalf of such
holders on __________, 2001 (the "Put Option Exercise Date") at a repayment
price of $25 per Preferred Security plus an amount equal to the accrued and
unpaid Distributions (including deferred distributions, if any) thereon to the
date of payment (the "Debenture Repayment Price").
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<PAGE> 20
In order for the Debentures to be so repurchased, the Company must
receive, on or prior to 5:00 p.m. New York City Time on the third Business Day
immediately preceding the Put Option Exercise Date, at the then principal
executive offices of the Company, the Debentures to be repurchased with the form
entitled "Option to Elect Repayment" on the reverse of or otherwise accompanying
such Debentures duly completed. Any such notice received by the Trustee shall be
irrevocable. All questions as to the validity, eligibility (including time of
receipt) and acceptance of the Debentures for repayment shall be determined by
the Company, whose determination shall be final and binding. The payment of the
Debenture Repayment Price in respect of such Debentures shall be made, either
through the Trustee or the Company acting as Paying Agent, no later than 12:00
noon, New York City time, on the Put Option Exercise Date.
If an Event of Default with respect to Debentures of this series shall
occur and be continuing, the principal of the Debentures 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 Debenture 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 Debenture shall be conclusive and binding upon such Holder and
upon all future Holders of this Debenture and of any Debenture 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 Debenture.
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 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
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<PAGE> 21
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 Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Debenture at the 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 Debenture is registrable in the Securities
Register, upon surrender of this Debenture 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 Debentures of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Debenture 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 Debenture is registered as the owner
hereof for all purposes, whether or not this Debenture be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Debentures 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,
Debentures of this series are exchangeable for a like aggregate principal amount
of Debentures of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
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<PAGE> 22
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States federal, state and
local tax purposes it is intended that this Debenture constitute indebtedness.
THE INDENTURE AND THIS DEBENTURE 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.
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company
to repay $_____ principal amount of the within Debenture, pursuant to its terms,
on the "Put Option Exercise Date," together with any interest thereon accrued
but unpaid to the date of repayment, to the undersigned at:
(Please print or type name and address of the undersigned)
and to issue to the undersigned, pursuant to the terms of the Debenture, a new
Debenture or Debentures representing the remaining aggregate principal amount of
this Debenture.
For this Option to Elect Repayment to be effective, this Debenture with the
Option to Elect Repayment duly completed must be received by the Company at its
principal executive office, Attn: Secretary, no later than 5:00 p.m. on
__________, 2001.
Dated: Signature:_______________________
Signature Guarantee:_____________
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Debenture without alternation or
enlargement or any change whatsoever.
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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<PAGE> 23
----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Debenture to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
agent to transfer this Debenture on the books of the Trust. The agent may
substitute another to act for him or her.
Date:_________________
Signature:______________________
Signature Guarantee:____________
(Sign exactly as your name appears on the other side of this Debenture)
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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<PAGE> 24
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES
SECTION 8.1 ORIGINAL ISSUE OF DEBENTURES.
Debentures in the aggregate principal amount not to exceed $206,186,000
($237,113,850 if the Underwriters' over-allotment option pursuant to the
Underwriting Agreement and the Pricing Agreement is exercised in full) may, upon
execution of this First Supplemental Indenture, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the written order of the
Company, signed by its Chief Executive Officer, its President, or any Vice
President and its Treasurer or an Assistant Treasurer, without any further
action by the Company.
The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of the year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 RATIFICATION OF INDENTURE.
The Base Indenture as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed, and this First
Supplemental Indenture shall be deemed part of the Base Indenture in the manner
and to the extent herein and therein provided.
SECTION 9.2 TRUSTEE NOT RESPONSIBLE FOR RECITALS.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
SECTION 9.3 GOVERNING LAW.
This First Supplemental Indenture and each Debenture shall be deemed to
be a contract made under the laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of said State.
SECTION 9.4 SEPARABILITY.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Debentures shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this First
Supplemental Indenture or of the Debentures, but this First Supplemental
Indenture and the
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<PAGE> 25
Debentures shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
SECTION 9.5 COUNTERPARTS.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
SECTION 9.6 GUARANTEE AGREEMENT AND TRUST AGREEMENT.
The Guarantee Agreement and the Trust Agreement shall be deemed to be
specifically described in this First Supplemental Indenture for purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE X
REMARKETING
SECTION 10.1 EFFECTIVENESS OF THIS ARTICLE.
This Article Ten shall only become effective upon a Dissolution Event
which occurs prior to the Remarketing of the Preferred Securities pursuant to
this Agreement. Until such Dissolution Event, this Article Ten shall have no
effect.
SECTION 10.2 REMARKETING PROCEDURES.
(a) The Company will request, not later than 15 nor more than 30
calendar days prior to the Remarketing Date that the Clearing Agency notify the
Holders of the Debentures and the holders of Income PRIDES and Growth PRIDES of
the Remarketing and of the procedures that must be followed if a Holder of
Debentures wishes to exercise such Holder's rights with respect to the Put
Option if there is a Failed Remarketing.
(b) Not later than 5:00 P.M., New York City time, on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, each
Holder of the Debentures may elect to have Debentures held by such Holder
remarketed. Under Section 5.4 of the Purchase Contract Agreement, Holders of
Income PRIDES that do not give notice of intention to make a Cash Settlement of
their related Purchase Contracts shall be deemed to have consented to the
disposition of the Debentures comprising a component of such Income PRIDES.
Holders of Debentures that are not a component of Income PRIDES shall give
notice of their election to have such Debentures remarketed to the Custodial
Agent pursuant to the Pledge Agreement. Any such notice shall be irrevocable
after 5:00 P.M., New York City time, on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date and may not be conditioned upon
the level at which the Reset Rate is established. Promptly after 5:30 P.M., New
York City time, on such fifth Business Day, the Property Trustee, based on the
notices received by it prior
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<PAGE> 26
to such time (including notices from the Purchase Contract Agent as to Purchase
Contracts for which Cash Settlement has been elected), shall notify the Trust,
the Company and the Remarketing Agent of the number of Debentures to be tendered
for purchase.
(c) If any Holder of Income PRIDES does not give a notice of its
intention to make a Cash Settlement or gives a notice of election to tender
Debentures as described in Section 10.2(b), the Debentures of such Holder shall
be deemed tendered, notwithstanding any failure by such Holder to deliver or
properly deliver such Debentures to the Remarketing Agent for purchase.
(d) The right of each Holder to have Debentures tendered for
purchase shall be limited to the extent that (i) the Remarketing Agent conducts
a remarketing pursuant to the terms of the Remarketing Agreement, (ii)
Debentures tendered have not been called for redemption, (iii) the Remarketing
Agent is able to find a purchaser or purchasers for tendered Debentures and (iv)
such purchaser or purchasers deliver the purchase price therefor to the
Remarketing Agent.
(e) On the Remarketing Date, the Remarketing Agent shall use
commercially reasonable efforts to remarket at a price equal to approximately
100.5% of the aggregate principal amount thereof, Debentures tendered or deemed
tendered for purchase.
(f) If none of the Holders elect to have Debentures held by them
remarketed, the Reset Rate shall be the rate determined by the Remarketing
Agent, subject to the terms of the Remarketing Agreement, as the rate that would
have been established had a remarketing been held on the Remarketing Date.
(g) If the Remarketing Agent has determined that it will be able to
remarket all Debentures tendered or deemed tendered prior to 4:00 P.M., New York
City time, on the Remarketing Date, the Remarketing Agent shall determine the
Reset Rate, which shall be the rate per annum (rounded to the nearest
one-thousandth (0.001) of one percent per annum) which the Remarketing Agent
determines, subject to the terms of the Remarketing Agreement, to be the lowest
rate per annum that will enable it to remarket all Debentures tendered or deemed
tendered for remarketing.
(h) If, by 4:00 P.M., New York City time, on the Remarketing Date,
the Remarketing Agent is unable to remarket all Debentures tendered or deemed
tendered for purchase, a failed remarketing ("Failed Remarketing") shall be
deemed to have occurred and the Remarketing Agent shall so advise by telephone
the Collateral Agent, Company, Property Trustee, Delaware Trustee and Clearing
Agency.
(i) By approximately 4:30 P.M., New York City time, on the
Remarketing Date, provided that there has not been a Failed Remarketing, the
Remarketing Agent shall advise, by telephone (i) the Collateral Agent, Company,
Property Trustee, Delaware Trustee and Clearing Agency of the Reset Rate
determined in the Remarketing and the number of Debentures sold in the
remarketing, (ii) each purchaser (or the Clearing Agency Participant thereof) of
the Reset
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<PAGE> 27
Rate and the number of Debentures such purchaser is to purchase and (iii) each
purchaser to give instructions to its Clearing Agency Participant to pay the
purchase price on the Purchase Contract Settlement Date in same day funds
against delivery of the Debentures purchased through the facilities of the
Clearing Agency.
(j) In accordance with the Clearing Agency's normal procedures, on
the Purchase Contract Settlement Date, the transactions described above with
respect to each Debenture tendered for purchase and sold in the remarketing
shall be executed through the Clearing Agency, and the accounts of the
respective Clearing Agency Participants shall be debited and credited and such
Debentures delivered by book entry as necessary to effect purchases and sales of
such Debentures. The Clearing Agency shall make payment in accordance with its
normal procedures.
(k) If any Holder selling Debentures in the remarketing fails to
deliver such Debentures, the Clearing Agency Participant of such selling Holder
and of any other person that was to have purchased Debentures in the remarketing
may deliver to any such other person a number of Debentures that is less than
the number of Debentures that otherwise was to be purchased by such person. In
such event, the number of Debentures to be so delivered shall be determined by
such Clearing Agency Participant, and delivery of such lesser number of
Debentures shall constitute good delivery.
(l) The Remarketing Agent is not obligated to purchase any
Debentures that would otherwise remain unsold in a remarketing. Neither the
Trust, any Trustee, the Company nor the Remarketing Agent shall be obligated in
any case to provide funds to make payment upon tender of Debentures for
remarketing.
(m) The tender and settlement procedures set in this Section 10.2,
including provisions for payment by purchasers of Debentures in the remarketing,
shall be subject to modification, notwithstanding any provision to the contrary
set forth herein, to the extent required by the Clearing Agency or if the
book-entry system is no longer available for the Debentures at the time of the
remarketing, to facilitate the tendering and remarketing of Debentures in
certificated form. In addition, the Remarketing Agent may, notwithstanding any
provision to the contrary set forth herein, modify the settlement procedures set
forth herein in order to facilitate the settlement process.
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<PAGE> 28
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed by their respective officers
thereunto duly authorized, on the date or dates indicated in the acknowledgments
and as of the day and year first above written.
LINCOLN NATIONAL CORPORATION, as
Issuer
By /s/ RICHARD C. VAUGHAN
--------------------------------
Name: Richard C. Vaughan
Title: Executive Vice President and
Chief Financial Officer
By /s/ JANET C. CHRZAN
--------------------------------
Name: Janet Chrzan
Title: Vice President and Treasurer
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By /s/ JOHN R. PRENDIVILLE
--------------------------------
Name: John R. Prendiville
Title: Vice President
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<PAGE> 1
EXHIBIT 4.4
THIS DEBENTURE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR
A NOMINEE OR THE CLEARING AGENCY. THIS DEBENTURE IS EXCHANGEABLE FOR DEBENTURES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF
THIS DEBENTURE (OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE BY THE
CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
Unless this debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment and any
debenture issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.
LINCOLN NATIONAL CORPORATION
6.40% Junior Subordinated Deferrable Interest Debentures, Series D
No. D-1 $206,186,000
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 IV, or registered
assigns, the principal sum of two hundred six million, one hundred eighty-six
thousand dollars ($206,186,000) on August 15, 2003. The Company further
promises to pay interest on said principal sum from August 14, 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 February 16, May 16, August 16 and
November 16 of each year, commencing on November 16, 1998, initially at the
rate of 6.40% per annum until August 15, 2001, and at the Reset Rate thereafter
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
6.40% until August 15, 2001, and at the Reset Rate thereafter, compounded
quarterly. The interest rate will be reset on the third business day preceding
August 16, 2001 to the Reset Rate (as determined by the Reset Agent). 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 Debenture is not a Business Day, then a payment of
the interest payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is 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 IV 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
<PAGE> 2
paid to the Person in whose name this Debenture (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 in the case of a
Global Security shall be the close of business on the business day next
preceding such Interest Payment Date; provided, however, if pursuant to the
terms of the Indenture the Debentures are no longer represented by a Global
Security, the Company may select such regular record date for such interest
installment which shall be more than one Business Day but less than 60 Business
Days prior to an 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 Debenture (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
Debentures 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 Debentures 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.
So long as no Event of Default has occurred or is continuing under the
Indenture, the Company shall have the right at any time during the term of this
Debenture, from time to time, to defer the payment of interest on such Debenture
for a period not extending, in the aggregate, beyond the maturity date of this
Debenture (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 Debenture 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 Debentures (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 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 extend beyond the Maturity of this
Debenture. At the end of an Extension Period, the Company shall pay all interest
then accrued and unpaid (together with the interest thereon at the rate of 6.40%
until August 15, 2001 and at the Reset Rate thereafter to the extent that
payment of such interest is enforceable under applicable law). No interest shall
be due and payable during an Extension Period except at the end thereof.
Payment of the principal of (and premium, if any) and interest on this
Debenture 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. Notwithstanding the foregoing, so long as the Holder of this Debenture
is the Property Trustee or the Collateral Agent, the payment of the principal of
(and premium, if any) and interest on this Debenture will be made
-2-
<PAGE> 3
at such place and to such account as may be designated in writing by the
Property Trustee or the Collateral Agent.
The indebtedness evidenced by this Debenture 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 Debenture is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his 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 Debenture
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
Debenture shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: August 14, 1998
LINCOLN NATIONAL CORPORATION
By:
-----------------------------
Name: Richard C. Vaughan
Title: Executive Vice President
and Chief Financial Officer
Attest:
- -----------------------------
Name:
Title:
This is one of the Debentures referred to in the within mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:
---------------------
Authorized Officer
-3-
<PAGE> 4
[REVERSE OF DEBENTURE]
This Debenture is one of a duly authorized issue of securities of the
Company (herein called the "Debentures"), issued and to be issued in one or more
series under a Junior Subordinated Indenture, dated as of May 1, 1996 (herein
called the "Base 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), as supplemented by a First Supplemental
Indenture, dated August 14, 1998), (the Base Indenture as so supplemented, 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 Debentures, and of the terms upon which the Debentures are, and
are to be, authenticated and delivered. This Debenture is one of the series
designated on the face hereof, limited in aggregate principal amount to
$206,186,000.
All terms used in this Debenture that are defined in the Indenture or
in the Amended and Restated Trust Agreement, dated as of August 14, 1998 (the
"Trust Agreement"), for Lincoln National Capital IV 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.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem Debentures in whole (but not in part) at any time at a Redemption
Price per Debenture equal to the Redemption Amount plus accrued and unpaid
interest thereon, including Compounded Interest (each as defined herein), if
any, to the Tax Event Redemption Date. The Redemption Price shall be paid to
each Holder of the Debenture by the Company, no later than 12:00 noon, New York
City time, on the Tax Event Redemption Date, by check or wire transfer in
immediately available funds, at such place and to such account as may be
designated by each such Holder.
The Debentures are not entitled to the benefit of any sinking fund.
If a Failed Remarketing (as described in Section 5.4(b) of the Purchase
Contract Agreement and incorporated herein by reference) has occurred, each
holder of Debentures who holds such Debentures on the day immediately following
the Purchase Contract Settlement Date, shall, upon at least three Business Days'
prior notice, have the right (the "Put Option") to require the Trust to
distribute their pro rata share of Debentures to the Exchange Agent and to
require the Exchange Agent to put such Debentures, on behalf of such holders on
September 1, 2001 (the "Put Option Exercise Date") at a repayment price of $25
per Debenture plus an amount equal to the accrued and unpaid Distributions
(including deferred distributions, if any) thereon to the date of payment (the
"Debenture Repayment Price").
In order for the Debentures to be so repurchased, the Company must
receive, on or prior to 5:00 p.m. New York City Time on the third Business Day
immediately preceding the Put Option Exercise Date, at the then principal
executive offices of the Company, the Debentures to be repurchased with the
form entitled "Option to Elect Repayment" on the reverse of or otherwise
accompanying such Debentures duly completed. Any such notice received by the
Trustee shall be irrevocable. All questions as to the validity, eligibility
(including time of receipt) and acceptance of the Debentures for repayment
shall be determined by the Company, whose determination shall be final and
binding. The payment of the Debenture Repayment Price in respect of such
Debentures shall be made, either through the Trustee or the Company acting as
Paying Agent, no later than 12:00 noon, New York City time, on the Put Option
Exercise Date.
If an Event of Default with respect to Debentures of this series shall
occur and be continuing, the principal of the Debentures of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
-4-
<PAGE> 5
The Indenture contains provisions for satisfaction, discharge and
defeasance at any time of the entire indebtedness of this Debenture 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 Debenture shall be conclusive and binding upon such Holder and
upon all future Holders of this Debenture and of any Debenture 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 Debenture.
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 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
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of
(and premium, if any) and interest on this Debenture at the 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 Debenture is registrable in the
Securities Register, upon surrender of this Debenture 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 Debentures of this series, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees. No service charge shall be made for
any such registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Debenture 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 Debenture is registered as the owner
hereof for all purposes, whether or not this Debenture be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
-5-
<PAGE> 6
The Debentures 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,
Debentures of this series are exchangeable for a like aggregate
principal amount of Debentures of such series of a different authorized
denomination, as requested by the Holder surrendering the same.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States federal, state and
local tax purposes it is intended that this
Debenture constitute indebtedness.
THE INDENTURE AND THIS DEBENTURE 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.
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company
to repay $______ principal amount of the within Debenture, pursuant to its
terms, on the "Put Option Exercise Date," together with any interest thereon
accrued but unpaid to the date of repayment, to the undersigned at:
(Please print or type name and address of the undersigned)
and to issue to the undersigned, pursuant to the terms of the Debenture, a new
Debenture or Debentures representing the remaining aggregate principal amount of
this Debenture.
For this Option to Elect Repayment to be effective, this Debenture with the
Option to Elect Repayment duly completed must be received by the Company at its
principal executive office, Attn: Secretary, no later than 5:00 p.m. on
August 28, 2001.
Dated: Signature:
Signature Guarantee:
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Debenture without alternation or
enlargement or any change whatsoever.
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
-6-
<PAGE> 7
THIS DEBENTURE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR
A NOMINEE OR THE CLEARING AGENCY. THIS DEBENTURE IS EXCHANGEABLE FOR DEBENTURES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF
THIS DEBENTURE (OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE BY THE
CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
Unless this debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment and any
debenture issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
LINCOLN NATIONAL CORPORATION
6.40% Junior Subordinated Deferrable Interest Debentures, Series D
No. D-2 $30,927,850
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 IV, or registered
assigns, the principal sum of thirty million nine hundred twenty-seven thousand
eight hundred fifty dollars ($30,927,850) on August 15, 2003. The Company
further promises to pay interest on said principal sum from August 14, 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 February 16, May 16,
August 16 and November 16 of each year, commencing on November 16, 1998,
initially at the rate of 6.40% per annum until August 15, 2001, and at the
Reset Rate thereafter 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 6.40% until August 15, 2001, and at the Reset Rate thereafter,
compounded quarterly. The interest rate will be reset on the third business day
preceding August 16, 2001 to the Reset Rate (as determined by the Reset Agent).
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 Debenture is not a Business Day, then a payment of
the interest payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is 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 IV is closed for business. The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as
<PAGE> 8
provided in the Indenture, be paid to the Person in whose name this Debenture
(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 in the case of a Global Security shall be the close of
business on the business day next preceding such Interest Payment Date;
provided, however, if pursuant to the terms of the Indenture the Debentures are
no longer represented by a Global Security, the Company may select such regular
record date for such interest installment which shall be more than one Business
Day but less than 60 Business Days prior to an 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 Debenture (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 Debentures 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 Debentures 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.
So long as no Event of Default has occurred or is continuing under the
Indenture, the Company shall have the right at any time during the term of this
Debenture, from time to time, to defer the payment of interest on such Debenture
for a period not extending, in the aggregate, beyond the maturity date of this
Debenture (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 Debenture 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 Debentures (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 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 extend beyond the Maturity of this
Debenture. At the end of an Extension Period, the Company shall pay all interest
then accrued and unpaid (together with the interest thereon at the rate of 6.40%
until August 15, 2001 and at the Reset Rate thereafter to the extent that
payment of such interest is enforceable under applicable law). No interest shall
be due and payable during an Extension Period except at the end thereof.
Payment of the principal of (and premium, if any) and interest on this
Debenture 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. Notwithstanding the foregoing, so long as the Holder of this Debenture
is the Property Trustee or the Collateral Agent, the payment of the principal of
(and premium, if any) and interest on this Debenture will be made
-2-
<PAGE> 9
at such place and to such account as may be designated in writing by the
Property Trustee or the Collateral Agent.
The indebtedness evidenced by this Debenture 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 Debenture is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his 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 Debenture
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
Debenture shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: August 21, 1998
LINCOLN NATIONAL CORPORATION
By:
-----------------------------
Name: Richard C. Vaughan
Title: Executive Vice President
and Chief Financial Officer
Attest:
- -----------------------------
Name: John L. Steinkamp
Title: Vice President
This is one of the Debentures referred to in the within mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:
---------------------
Authorized Officer
-3-
<PAGE> 10
[REVERSE OF DEBENTURE]
This Debenture is one of a duly authorized issue of securities of the
Company (herein called the "Debentures"), issued and to be issued in one or more
series under a Junior Subordinated Indenture, dated as of May 1, 1996 (herein
called the "Base 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), as supplemented by a First Supplemental
Indenture, dated August 14, 1998), (the Base Indenture as so supplemented, 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 Debentures, and of the terms upon which the Debentures are, and
are to be, authenticated and delivered. This Debenture is one of the series
designated on the face hereof, limited in aggregate principal amount to
$237,113,850.
All terms used in this Debenture that are defined in the Indenture or
in the Amended and Restated Trust Agreement, dated as of August 14, 1998 (the
"Trust Agreement"), for Lincoln National Capital IV 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.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem Debentures in whole (but not in part) at any time at a Redemption
Price per Debenture equal to the Redemption Amount plus accrued and unpaid
interest thereon, including Compounded Interest (each as defined herein), if
any, to the Tax Event Redemption Date. The Redemption Price shall be paid to
each Holder of the Debenture by the Company, no later than 12:00 noon, New York
City time, on the Tax Event Redemption Date, by check or wire transfer in
immediately available funds, at such place and to such account as may be
designated by each such Holder.
The Debentures are not entitled to the benefit of any sinking fund.
If a Failed Remarketing (as described in Section 5.4(b) of the Purchase
Contract Agreement and incorporated herein by reference) has occurred, each
holder of Debentures who holds such Debentures on the day immediately following
the Purchase Contract Settlement Date, shall, upon at least three Business Days'
prior notice, have the right (the "Put Option") to require the Trust to
distribute their pro rata share of Debentures to the Exchange Agent and to
require the Exchange Agent to put such Debentures, on behalf of such holders on
September 1, 2001 (the "Put Option Exercise Date") at a repayment price of $25
per Debenture plus an amount equal to the accrued and unpaid Distributions
(including deferred distributions, if any) thereon to the date of payment (the
"Debenture Repayment Price").
In order for the Debentures to be so repurchased, the Company must
receive, on or prior to 5:00 p.m. New York City Time on the third Business Day
immediately preceding the Put Option Exercise Date, at the then principal
executive offices of the Company, the Debentures to be repurchased with the
form entitled "Option to Elect Repayment" on the reverse of or otherwise
accompanying such Debentures duly completed. Any such notice received by the
Trustee shall be irrevocable. All questions as to the validity, eligibility
(including time of receipt) and acceptance of the Debentures for repayment
shall be determined by the Company, whose determination shall be final and
binding. The payment of the Debenture Repayment Price in respect of such
Debentures shall be made, either through the Trustee or the Company acting as
Paying Agent, no later than 12:00 noon, New York City time, on the Put Option
Exercise Date.
If an Event of Default with respect to Debentures of this series shall
occur and be continuing, the principal of the Debentures of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
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<PAGE> 11
The Indenture contains provisions for satisfaction, discharge and
defeasance at any time of the entire indebtedness of this Debenture 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 Debenture shall be conclusive and binding upon such Holder and
upon all future Holders of this Debenture and of any Debenture 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 Debenture.
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 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
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Debenture at the 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 Debenture is registrable in the
Securities Register, upon surrender of this Debenture 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 Debentures of this series, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees. No service charge shall be made for
any such registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Debenture 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 Debenture is registered as the owner
hereof for all purposes, whether or not this Debenture be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
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<PAGE> 12
The Debentures 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,
Debentures of this series are exchangeable for a like aggregate principal
amount of Debentures of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States federal, state and
local tax purposes it is intended that this
Debenture constitute indebtedness.
THE INDENTURE AND THIS DEBENTURE 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.
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company
to repay $______ principal amount of the within Debenture, pursuant to its
terms, on the "Put Option Exercise Date," together with any interest thereon
accrued but unpaid to the date of repayment, to the undersigned at:
________________________________________________________________________________
(Please print or type name and address of the undersigned)
and to issue to the undersigned, pursuant to the terms of the Debenture, a new
Debenture or Debentures representing the remaining aggregate principal amount
of this Debenture.
For this Option to Elect Repayment to be effective, this Debenture with the
Option to Elect Repayment duly completed must be received by the Company at its
principal executive office, Attn: Secretary, no later than 5:00 p.m. on
August 28, 2001.
Dated: Signature:
______________ _______________________________
Signature Guarantee:
_____________________
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Debenture without alternation or
enlargement or any change whatsoever.
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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<PAGE> 1
EXHIBIT 4.5
- --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
BETWEEN
LINCOLN NATIONAL CORPORATION
(AS GUARANTOR)
AND
THE FIRST NATIONAL BANK OF CHICAGO
(AS TRUSTEE)
DATED AS OF
AUGUST 14, 1998
- --------------------------------------------------------------------------------
<PAGE> 2
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.
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<PAGE> 3
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.....................................................10
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..........................................13
Section 5.6. Subrogation...................................................13
Section 5.7. Independent Obligations.......................................13
ARTICLE VI. COVENANTS AND SUBORDINATION......................................13
Section 6.1. Subordination.................................................13
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<PAGE> 4
Section 6.2. Pari Passu Guarantees.........................................13
ARTICLE VII. TERMINATION.....................................................14
Section 7.1. Termination...................................................14
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.......................................................16
Section 8.5. Interpretation................................................16
Section 8.6. Governing Law.................................................17
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<PAGE> 5
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of August 14, 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
association, 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 IV, a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of August 14, 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 ($230,000,000 if the Underwriters' over-allotment
option pursuant to the Underwriting Agreement and the Pricing Agreement is
exercised in full) aggregate liquidation preference of its 6.40% Preferred
Securities, Series D (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,
<PAGE> 6
provided, however, that an Affiliate of the Guarantor shall not be deemed to
include the Issuer. 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.
"Holder" means any holder, as registered on the books and records of the
Issuer, of any
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<PAGE> 7
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 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 means, with respect
to a particular corporate trust matter, any other officer to whom such matter
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<PAGE> 8
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, Lincoln National Capital II and Lincoln National
Capital III.
"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
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<PAGE> 9
time such list is furnished, in each case to the extent such information is in
the possession or 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 after May 15 of each year commencing with 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.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of
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<PAGE> 10
Default known to the Guarantee Trustee, transmit by mail, first class postage
prepaid, to the Holders, notices of all such Events of Default, 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, 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.
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(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 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.
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(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 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
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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) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders, and the signature of the
Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be
required to inquire as to the authority of the Guarantee Trustee
to so act or as to its compliance with any of the terms and
provisions of this Guarantee Agreement, both of which shall be
conclusively evidenced by the Guarantee Trustee's or its agent's
taking such action.
(ix) 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 of a Majority in
liquidation preference of the Preferred Securities, (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
this Guarantee
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Agreement or the resignation or removal of the Guarantee Trustee.
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 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 this 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, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sums payable that results from the extension of any interest payment period on
the Debentures as so provided in the Indenture);
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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) if the Guarantee Trustee fails to enforce this Guarantee
Agreement after a Holder has made a written request for the Guarantee Trustee to
do so, any Holder may, to the extent permitted by law, 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. Notwithstanding the
foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder may
directly institute a proceeding against the Guarantor for enforcement of this
Guarantee Agreement for such payment. The Guarantor waives any right or remedy
to require that any action on this Guarantee Agreement be brought first against
the Issuer or any other Person or entity before proceeding directly against the
Guarantor.
SECTION 5.5. GUARANTEE OF PAYMENT
This Guarantee Agreement creates a guarantee of payment and not of
collection.
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SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
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 if, at the time of any
such payment, any 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, Lincoln National Capital II and
Lincoln National Capital III.
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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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
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(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
(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 IV
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.
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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;
(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.
[This space intentionally left blank]
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THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
Lincoln National Corporation
By: /s/ Janet C. Chrzan
----------------------------------
Name: Janet C. Chrzan
Title: Vice President and Treasurer
The First National Bank of Chicago, as
Guarantee Trustee
By: /s/ John R. Prendiville
--------------------------------
Name: John R. Prendiville
Title: Vice President
<PAGE> 1
EXHIBIT 4.6
- --------------------------------------------------------------------------------
LINCOLN NATIONAL CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS PURCHASE CONTRACT AGENT
------------------
PURCHASE CONTRACT AGREEMENT
------------------
DATED AS OF AUGUST 14, 1998
- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
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RECITALS ....................................................................................................... 1
ARTICLE I....................................................................................................... 1
Definitions and Other Provisions of General Applications........................................................ 1
Section 1.1. Definitions................................................................................... 1
Section 1.2. Compliance Certificates and Opinions.......................................................... 9
Section 1.3. Form of Documents Delivered to Agent.......................................................... 10
Section 1.4. Acts of Holders; Record Dates................................................................. 10
Section 1.5. Notices....................................................................................... 11
Section 1.6. Notice to Holders; Waiver..................................................................... 12
Section 1.7. Effect of Headings and Table of Contents...................................................... 13
Section 1.8. Successors and Assigns........................................................................ 13
Section 1.9. Separability Clause........................................................................... 13
Section 1.10. Benefits of Agreement......................................................................... 13
Section 1.11. Governing Law................................................................................. 14
Section 1.12. Legal Holidays................................................................................ 14
Section 1.13. Counterparts.................................................................................. 14
Section 1.14. Inspection of Agreement....................................................................... 14
ARTICLE II...................................................................................................... 14
Certificate Forms............................................................................................... 14
Section 2.1. Forms of Certificates Generally............................................................... 14
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Section 2.2. Form of Agent's Certificate of Authentication................................................. 15
ARTICLE III..................................................................................................... 16
Section 3.1. Title and Terms; Denominations................................................................ 16
Section 3.2. Rights and Obligations Evidenced by the Certificates. ........................................ 16
Section 3.3. Execution, Authentication, Delivery and Dating. .............................................. 17
Section 3.4. Temporary Certificates........................................................................ 17
Section 3.5. Registration; Registration of Transfer and Exchange. ......................................... 18
Section 3.6. Book-Entry Interests.......................................................................... 19
Section 3.7. Notices to Holders............................................................................ 20
Section 3.8. Appointment of Successor Clearing Agency...................................................... 20
Section 3.9. Definitive Certificates....................................................................... 20
Section 3.10. Mutilated, Destroyed, Lost and Stolen......................................................... 20
Section 3.11. Persons Deemed Owners......................................................................... 22
Section 3.12. Cancellation.................................................................................. 22
Section 3.13. Establishment or Reestablishment of Growth PRIDES............................................. 23
Section 3.14. Establishment or Reestablishment of Income PRIDES............................................. 24
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event. ................................. 25
Section 3.16. No Consent to Assumption...................................................................... 26
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(CONTINUED)
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ARTICLE IV...................................................................................................... 26
The Preferred Securities........................................................................................ 26
Section 4.1. Payment of Distribution; Rights to Distributions Preserved; Distribution
Rate Reset; Notice............................................................................ 26
Section 4.2. Notice and Voting............................................................................. 28
Section 4.3. Distribution of Debentures; Tax Event Redemption. ............................................ 28
ARTICLE V....................................................................................................... 29
The Purchase Contracts.......................................................................................... 29
Section 5.1. Purchase of Shares of Common Stock............................................................ 29
Section 5.2. Contract Adjustment Payments.................................................................. 31
Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments. .................................. 32
Section 5.4. Payment of Purchase Price..................................................................... 33
Section 5.5. Issuance of Shares of Common Stock............................................................ 37
Section 5.6. Adjustment of Settlement Rate................................................................. 38
Section 5.7. Notice of Adjustments and Certain Other Events. .............................................. 43
Section 5.8. Termination Event; Notice..................................................................... 43
Section 5.9. Early Settlement.............................................................................. 44
Section 5.10. No Fractional Shares.......................................................................... 46
Section 5.11. Charges and Taxes............................................................................. 46
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(CONTINUED)
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ARTICLE VI...................................................................................................... 47
Remedies ....................................................................................................... 47
Section 6.1. Unconditional Right of Holders to Receive Contract Adjustment Payments
and to Purchase Common Stock.................................................................. 47
Section 6.2. Restoration of Rights and Remedies............................................................ 47
Section 6.3. Rights and Remedies Cumulative................................................................ 47
Section 6.4. Delay or Omission Not Waiver.................................................................. 47
Section 6.5. Undertaking for Costs......................................................................... 48
Section 6.6. Waiver of Stay or Extension Laws.............................................................. 48
ARTICLE VII..................................................................................................... 48
The Agent....................................................................................................... 48
Section 7.1. Certain Duties and Responsibilities........................................................... 48
Section 7.2. Notice of Default............................................................................. 49
Section 7.3. Certain Rights of Agent....................................................................... 49
Section 7.4. Not Responsible for Recitals or Issuance of Securities. ...................................... 50
Section 7.5. May Hold Securities........................................................................... 50
Section 7.6. Money Held in Custody......................................................................... 51
Section 7.7. Compensation and Reimbursement................................................................ 51
Section 7.8. Corporate Agent Required; Eligibility......................................................... 51
Section 7.9. Resignation and Removal; Appointment of Successor............................................. 52
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Section 7.10. Acceptance of Appointment by Successor........................................................ 53
Section 7.11. Merger, Conversion, Consolidation or Succession to Business. ................................. 53
Section 7.12. Preservation of Information; Communications to Holders. ...................................... 54
Section 7.13. No Obligations of Agent....................................................................... 54
Section 7.14. Tax Compliance................................................................................ 54
ARTICLE VIII.................................................................................................... 55
Supplemental Agreements......................................................................................... 55
Section 8.1. Supplemental Agreements Without Consent of Holders. .......................................... 55
Section 8.2. Supplemental Agreements with Consent of Holders. ............................................. 55
Section 8.3. Execution of Supplemental Agreements.......................................................... 56
Section 8.4. Effect of Supplemental Agreements............................................................. 57
Section 8.5. Reference to Supplemental Agreements.......................................................... 57
ARTICLE IX...................................................................................................... 57
Consolidation, Merger, Sale or Conveyance ...................................................................... 57
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey Property Except
Under Certain Conditions...................................................................... 57
Section 9.2. Rights and Duties of Successor Corporation.................................................... 57
Section 9.3. Opinion of Counsel Given to Agent............................................................. 58
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ARTICLE X....................................................................................................... 58
Covenants....................................................................................................... 58
Section 10.1. Performance Under Purchase Contracts.......................................................... 58
Section 10.2. Maintenance of Office or Agency............................................................... 58
Section 10.3. Company to Reserve Common Stock............................................................... 59
Section 10.4. Covenants as to Common Stock.................................................................. 59
EXHIBIT A....................................................................................................... 61
Form of Face of Income PRIDES Certificate ...................................................................... 61
EXHIBIT B....................................................................................................... 78
Form of Face of Growth PRIDES Certificate ...................................................................... 78
EXHIBIT C....................................................................................................... 92
Instruction to Collateral Agent................................................................................. 92
EXHIBIT D
Instruction to Purchase Contract Agent ......................................................................... 94
EXHIBIT E
Notice to Settle By Separate Cash............................................................................... 95
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PURCHASE CONTRACT AGREEMENT, dated as of August 14, 1998 between
Lincoln National Corporation, an Indiana corporation (the "Company"), and The
First National Bank of Chicago, a national banking association, acting as
purchase contract agent for the Holders of Securities from time to time (the
"Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATIONS
SECTION 1.1. DEFINITIONS.
For all purposes of this 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; and
nouns and pronouns of the masculine gender include the feminine and neuter
genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(d) the following terms have the meanings given to them in the
Trust Agreement: (i) Applicable Ownership Interest; (ii) Applicable Principal
Amount; (iii) Authorized Newspaper; (iv) Bankruptcy Event; (v) Indenture, (vi)
Investment Company Event; (vii) Liquidation
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Distribution; (viii) Guarantee; (ix) Primary Treasury Dealer; (x) Quotation
Agent; (xi) Redemption Amount; (xii) Redemption Price; (xiii) Reset Agent; (xiv)
Reset Announcement Date; (xv) Reset Rate; (xvi) Reset Spread; (xvii) Tax Event;
(xviii) Tax Event Redemption; (xix) Tax Event Redemption Date; (xx) Two-Year
Benchmark Treasury; (xxi) Treasury Portfolio; and (xxii) Treasury Portfolio
Purchase Price; and
(e) the following terms have the meanings given to them in this
Section 1.1(e).
"Act" when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Affiliate"has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter "Agent" shall mean such
Person.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 5.1.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Clearing Agency or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification and delivered
to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
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"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in New York City (in the State of New York)
are permitted or required by any applicable law to close.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth PRIDES
Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a nominee of
that organization, shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means The Chase Manhattan Bank, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have become
such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" has the meaning specified in Section 3.13.
"Common Stock" means the Common Stock, no par value, of the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
"Contract Adjustment Payments" means the amount payable by the Company
in respect of each Purchase Contract relating to Income PRIDES and Growth
PRIDES, respectively, equal to 1.35% and 1.85%, respectively, per annum of the
Stated Amount, computed on the basis of a 360 day year of twelve 30 day months,
plus any Deferred Contract Adjustment Payments accrued pursuant to Section 5.2.
"Corporate Trust Office" means the principal corporate trust office of
the Agent at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at One First
National Plaza, Suite 0126, Chicago, IL 60670-0126, Attention:
Corporate Trust Services Division.
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"Coupon Rate" means the percentage rate per annum at which each
Debenture will bear interest initially.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Debentures" means the series of debentures of the Company designated
the 6.40% Junior Subordinated Debentures due August 15, 2003, to be issued under
the Junior Subordinated Indenture as of May 1, 1996.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC until another Clearing Agency
becomes its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Failed Remarketing" has the meaning specified in Section 5.4(b).
"Global Preferred Security Certificate" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of Preferred
Securities specified on such certificate and which is registered in the name of
a Clearing Agency or a nominee thereof.
"Global Certificate" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Depositary or a nominee
thereof.
"Growth PRIDES" means the collective rights and obligations of a holder
of a Growth PRIDES Certificate in respect of such Treasury Securities, subject
in each case to the Pledge thereof, and the related Purchase Contract.
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"Growth PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth PRIDES specified
on such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Holder" when used with respect to a Security, means the Person in
whose name the Security evidenced by an Income PRIDES Certificate and/or a
Growth PRIDES Certificate is registered in the related Income PRIDES Register
and/or the Growth PRIDES Register, as the case may be.
"Income PRIDES" means the collective rights and obligations of a Holder
of an Income PRIDES Certificate in respect of a Preferred Security or an
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, subject in each case to the Pledge thereof, and the related Purchase
Contract.
"Income PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Income PRIDES specified
on such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Indenture Trustee" means The First National Bank of Chicago, a
national banking association, as trustee under the Indenture, or any successor
thereto.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chief Executive Officer, its President
or a Vice President and by its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary, and delivered to the Agent.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate of the Company signed on
its behalf by the Chief Executive Officer, the President, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of the Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an Affiliate and
who shall be reasonably acceptable to the Agent.
"Outstanding Securities," with respect to any Income PRIDES or Growth
PRIDES, means, as of the date of determination, all Income PRIDES or Growth
PRIDES evidenced by Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
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(i) If a Termination Event has occurred, (A) Growth PRIDES and (B)
Income PRIDES for which the Stated Amount of the related Preferred Security or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, or a
Liquidation Distribution in respect of such Preferred Security, as the case may
be, has been theretofore deposited with the Agent in trust for the Holders of
such Income PRIDES;
(ii) Income PRIDES and Growth PRIDES evidenced by Certificates
theretofore cancelled by the Agent or delivered to the Agent for cancellation or
deemed cancelled pursuant to the provisions of this Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced by Certificates in
exchange for or in lieu of which other Certificates have been authenticated,
executed on behalf of the Holder and delivered pursuant to this Agreement, other
than any such Certificate in respect of which there shall have been presented to
the Agent proof satisfactory to it that such Certificate is held by a bona fide
purchaser in whose hands the Income PRIDES or Growth PRIDES evidenced by such
Certificate are valid obligations of the Company; provided, however, that in
determining whether the Holders of the requisite number of the Income PRIDES or
Growth PRIDES have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Income PRIDES or Growth PRIDES owned by the Company
or any Affiliate of the Company shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Agent shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Income PRIDES or Growth PRIDES which a Responsible Officer of
the Agent knows to be so owned shall be so disregarded. Income PRIDES or Growth
PRIDES so owned which have been pledged in good faith may be regarded as
Outstanding Securities if the pledgee establishes to the satisfaction of the
Agent the pledgee's right so to act with respect to such Income PRIDES or Growth
PRIDES and that the pledgee is not the Company or any Affiliate of the Company.
"Payment Date" means each February 16, May 16, August 16 and November
16, commencing November 16, 1998.
"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.
"Permitted Investments" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Pledge" means the pledge under the Pledge Agreement of the Preferred
Securities, the Treasury Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, in each case constituting a part of the
Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent and the Agent, on its own
behalf and as
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attorney-in-fact for the Holders from time to time of the Securities, as the
same may hereafter be amended.
"Predecessor Certificate" means a Predecessor Income PRIDES Certificate
or a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth PRIDES
Certificate means every previous Growth PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Growth PRIDES evidenced thereby; and, for the purposes of this definition, any
Growth PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Growth PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Growth PRIDES
Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income PRIDES
Certificate means every previous Income PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Income PRIDES evidenced thereby; and, for the purposes of this definition, any
Income PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Income PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Income PRIDES
Certificate.
"Preferred Securities" means the 6.40% Preferred Securities, Series D,
of the Trust, each having a stated liquidation amount of $25, representing
undivided beneficial interests in the assets of the Trust.
"Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Property Trustee" means The First National Bank of Chicago, as
property trustee under the Trust Agreement, or any successor thereto that is a
financial institution unaffiliated with the Company.
"Purchase Contract," when used with respect to any Security, means the
contract forming a part of such Security and obligating the Company to (i) sell
and the Holder of such Security to purchase Common Stock and (ii) pay the Holder
Contract Adjustment Payments, if any, on the terms and subject to the conditions
set forth in Article Five hereof.
"Purchase Contract Settlement Date" means August 16, 2001.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
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"Record Date" for the distribution and Contract Adjustment Payments, if
any, payable on any Payment Date means, as to any Global Certificate, the
Business Day next preceding such Payment Date, and as to any other Certificate,
a day selected by the Company which shall be more than one Business Day but less
than 60 Business Days prior to such Payment Date.
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
"Registrar" means the Income PRIDES Registrar and the Growth PRIDES
Registrar.
"Remarketing Agent" has the meaning specified in Section 5.4.
"Remarketing Agreement" means the Remarketing Agreement dated August
14, 1998 by and among the Company, the Trust, the Remarketing Agent and the
Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in Section 5.4.
"Remarketing Underwriting Agreement" has the meaning specified in the
Remarketing Agreement.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"Responsible Officer," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"Rights Plan" shall have the meaning specified in the Indenture.
"Security" means an Income PRIDE or a Growth PRIDE.
"Senior Indebtedness" has the meaning set forth in the Indenture.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $25.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Company.
"Threshold Appreciation Price" has the meaning specified in Section
5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 5.1.
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"Treasury Security" means zero-coupon U.S. Treasury Securities (CUSIP
Number 912820 BB 2) which are the principal strip of the U.S. Treasury
Securities which mature on August 15, 2001.
"Trust" means Lincoln National Capital IV, a statutory business trust
formed under the laws of the State of Delaware, or any successor thereto by
merger or consolidation.
"Trust Agreement" means the Amended and Restated Trust Agreement of
Lincoln National Capital IV, dated August 14, 1998, among the Company, as the
sponsor, the trustees named therein and the holders from time to time of
individual beneficial interests in the assets of the Trust.
"Underwriting Agreement" means the Underwriting Agreement dated August
10, 1998 among the Company, the Trust, and the Underwriters named therein.
"Vice President" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
SECTION 1.2. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with and, if
reasonably requested by the Agent, an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Agreement shall include:
(1) a statement that each Person signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such Person, he
or she or it has made such examination or investigation as is necessary to
enable such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
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(4) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 1.3. FORM OF DOCUMENTS DELIVERED TO AGENT.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless the Company knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, the
Company stating that the information with respect to such factual matters is in
the possession of the Company unless the Person giving such certificate or
Opinion of Counsel knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such matters
are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Agent and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and (subject to Section 7.1) conclusive in favor of the Agent and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
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(c) The ownership of Securities shall be proved by the Income PRIDES
Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate 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 Agent or the
Company in reliance thereon, whether or not notation of such action is made upon
such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Income PRIDES and the Outstanding Growth PRIDES, as
the case may be, on such record date, and no other Holders, shall be entitled to
take the relevant action with respect to the Income PRIDES or the Growth PRIDES,
as the case may be, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing in this paragraph shall be
construed to prevent the Company from setting a new record date for any action
for which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no action
by any Person be cancelled and of no effect), and nothing in this paragraph
shall be construed to render ineffective any action taken by Holders of the
requisite number of Outstanding Securities on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Company,
at its own expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the Agent in
writing and to each Holder of Securities in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the Company
may designate any date as the "Expiration Date" and from time to time may change
the Expiration Date to any earlier or later day; provided that no such change
shall be effective unless notice of the proposed new Expiration Date is given to
the Agent in writing, and to each Holder of Securities in the manner set forth
in Section 1.6, on or prior to the existing Expiration Date. If an Expiration
Date is not designated with respect to any record date set pursuant to this
Section, the Company shall be deemed to have initially designated the 180th day
after such record date as the Expiration Date with respect thereto, subject to
its right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.
SECTION 1.5. NOTICES.
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Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and personally delivered
or mailed, first-class postage prepaid, to the Agent at The First National Bank
of Chicago, One First National Plaza, Suite 0126, Chicago, IL 60670-0126,
Attention: Corporate Trust Services Division, or at any other address previously
furnished in writing by the Agent to the Holders and the Company; or
(2) the Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and personally delivered
or mailed, first-class postage prepaid, to the Company at Lincoln National
Corporation, 200 East Berry Street, Fort Wayne, IN 46802-2706, Attention:
Treasurer, or at any other address previously furnished in writing to the Agent
by the Company; or
(3) the Collateral Agent by the Agent, the Company or any
Holder shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, addressed to the Collateral
Agent at The Chase Manhattan Bank, 450 West 33rd Street, 15th Floor, New York,
NY 10001, Attention: Global Trust Services, or at any other address previously
furnished in writing by the Collateral Agent to the Agent, the Company and the
Holders; or
(4) the Property Trustee by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or mailed,
first-class postage prepaid, addressed to the Property Trustee at The First
National Bank of Chicago, One First National Plaza, Suite 0126, Chicago, IL
60670-0126, Attention: Corporate Trust Services Division, or at any other
address previously furnished in writing by the Property Trustee to the Company;
or
(5) the Indenture Trustee by the Company or any Holder shall
be sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and personally delivered
or mailed, first-class postage prepaid, addressed to the Indenture Trustee at
The First National Bank of Chicago, One First National Plaza, Suite 0126,
Chicago, IL 60670-0126, Attention: Corporate Trust Services Division, or at any
other address previously furnished in writing by the Indenture Trustee to the
Company.
SECTION 1.6. NOTICE TO HOLDERS; WAIVER.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed,
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first-class postage prepaid, to each Holder affected by such event, at its
address as it appears in the applicable Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Agreement provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Agent, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.
SECTION 1.7. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.8. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.9. SEPARABILITY CLAUSE.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
SECTION 1.10. BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and, to the extent provided hereby, the Holders, any benefits or any
legal or equitable right, remedy or claim under this Agreement. The Holders from
time to time shall be beneficiaries of this Agreement and shall be bound by all
of the terms and conditions hereof and of the Securities evidenced by their
Certificates by their acceptance of delivery of such Certificates.
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SECTION 1.11. GOVERNING LAW.
THIS AGREEMENT AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 1.12. LEGAL HOLIDAYS.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Income PRIDES
Certificates or the Growth PRIDES Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such payments
shall be made on the next succeeding Business Day with the same force and effect
as if made on such Payment Date, provided that no interest shall accrue or be
payable by the Company or any Holder for the period from and after any such
Payment Date, except that, if such next succeeding Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such Payment
Date.
In any case where any Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Income PRIDES Certificates or the Growth PRIDES Certificates), the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
SECTION 1.13. COUNTERPARTS.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
SECTION 1.14. INSPECTION OF AGREEMENT.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder.
ARTICLE II
CERTIFICATE FORMS
SECTION 2.1. FORMS OF CERTIFICATES GENERALLY.
The Income PRIDES Certificates (including the form of Purchase Contract
forming part of the Income PRIDES evidenced thereby) shall be in substantially
the form set forth in Exhibit A hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the
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<PAGE> 22
rules of any securities exchange on which the Income PRIDES are listed or any
depositary therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Income PRIDES Certificates, as evidenced
by their execution of the Income PRIDES Certificates.
The definitive Income PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Income PRIDES evidenced by such Income PRIDES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
The Growth PRIDES Certificates (including the form of Purchase
Contracts forming part of the Growth PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Growth PRIDES may be listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Growth PRIDES Certificates, as evidenced by their
execution of the Growth PRIDES Certificates.
The definitive Growth PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Growth PRIDES evidenced by such Growth PRIDES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED
IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS
CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE
REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY
BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING
AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
SECTION 2.2. FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION.
The form of the Agent's certificate of authentication of the Income
PRIDES shall be in substantially the form set forth on the form of the Income
PRIDES Certificates.
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The form of the Agent's certificate of authentication of the Growth
PRIDES shall be in substantially the form set forth on the form of the Growth
PRIDES Certificates.
ARTICLE III
THE SECURITIES
SECTION 3.1. TITLE AND TERMS; DENOMINATIONS.
The aggregate number of Income PRIDES and Growth PRIDES evidenced by
Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to 8,000,000 (9,200,000 if the Underwriters' over-allotment
option pursuant to the Underwriting Agreement and the Pricing Agreement is
exercised in full) except for Certificates authenticated, executed and delivered
upon registration of transfer of, in exchange for, or in lieu of, other
Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Income PRIDES or Growth PRIDES and any integral
multiple thereof.
SECTION 3.2. RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES.
Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing the owner
ship by the Holder thereof of a beneficial interest in a Preferred Security or
the Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
subject to the Pledge of such Preferred Security or the Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, by such Holder pursuant
to the Pledge Agreement, and the rights and obligations of the Holder thereof
and the Company under one Purchase Contract. The Agent as attorney-in-fact for,
and on behalf of, the Holder of each Income PRIDES shall pledge, pursuant to the
Pledge Agreement, the Preferred Security or the Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, forming a part of such Income
PRIDES, to the Collateral Agent and grant to the Collateral Agent a security
interest in the right, title, and interest of such Holder in such Preferred
Security or the Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, for the benefit of the Company, to secure the obligation of the
Holder under each Purchase Contract to purchase the Common Stock of the Company.
Each Growth PRIDES Certificate shall evidence the number of Growth
PRIDES specified therein, with each such Growth PRIDES representing the
ownership by the Holder thereof of a 1/40 undivided beneficial interest in a
Treasury Security with a principal amount equal to $1,000 subject to the Pledge
of such Treasury Security by such Holder pursuant to the Pledge Agreement, and
the rights and obligations of the Holder thereof and the Company under one
Purchase Contract.
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<PAGE> 24
SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Certificates, and the
Agent in accordance with such Issuer Order shall authenticate, execute on behalf
of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chief Executive Officer, its President or one of its Vice Presidents and its
Treasurer or one of its Assistant Treasurers, or its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder.
SECTION 3.4. TEMPORARY CERTIFICATES.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the form set forth in Exhibit
A or Exhibit B hereto, as the case may be, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Income PRIDES or Growth PRIDES are listed, or
as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
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If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, one or more definitive Certificates of like tenor and denominations
and evidencing a like number of Income PRIDES or Growth PRIDES, as the case may
be, as the temporary Certificate or Certificates so surrendered. Until so
exchanged, the temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Income PRIDES or Growth
PRIDES, as the case may be, evidenced thereby as definitive Certificates.
SECTION 3.5. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
The Agent shall keep at the Corporate Trust Office a Register (the
"Income PRIDES Register") in which, subject to such reasonable regulations as it
may prescribe, the Agent shall provide for the registration of Income PRIDES
Certificates and of transfers of Income PRIDES Certificates (the Agent, in such
capacity, the "Income PRIDES Registrar") and a Register (the "Growth PRIDES
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of the Growth PRIDES Certificates
and transfers of Growth PRIDES Certificates (the Agent, in such capacity, the
"Growth PRIDES Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denominations, like
tenor, and evidencing a like number of Income PRIDES or Growth PRIDES, as the
case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of the
Holder, and deliver the Certificates which the Holder making the exchange is
entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Income
PRIDES or Growth PRIDES, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the Income
PRIDES or Growth PRIDES, as the case may be, evidenced by the Certificate
surrendered upon such registration of transfer or exchange.
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Every Certificate presented or surrendered for registration of transfer
or for exchange shall (if so required by the Agent) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Agent duly executed, by the Holder thereof or its attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to Sections 3.6 and
8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder and deliver any Certificate
presented or surrendered for registration of transfer or for exchange on or
after the Business Day immediately preceding the earlier of the Purchase
Contract Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate, (ii) in the case of Income PRIDES, if a Termination Event shall
have occurred prior to the Purchase Contract Settlement Date, transfer the
aggregate Stated Amount of the Preferred Securities or the Treasury Portfolio,
as applicable, evidenced thereby, or (iii) in the case of Growth PRIDES, if a
Termination Event shall have occurred prior to the Purchase Contract Settlement
Date, transfer the Treasury Securities evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
SECTION 3.6. BOOK-ENTRY INTERESTS.
The Certificates, on original issuance, will be issued in the form of
one or more, fully registered Global Certificates, to be delivered to the
Depositary by, or on behalf of, the Company. Such Global Certificate shall
initially be registered on the books and records of the Company in the name of
Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive
a definitive Certificate representing such Beneficial Owner's interest in such
Global Certificate, except as provided in Section 3.9. The Agent shall enter
into an agreement with the Depositary if so requested by the Company. Unless and
until definitive, fully registered Certificates have been issued to Beneficial
Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in
full force and effect;
(b) the Company shall be entitled to deal with the
Clearing Agency for all purposes of this Agreement (including the payment of
Contract Adjustment Payments, if any,
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and receiving approvals, votes or consents hereunder) as the Holder of the
Securities and the sole holder of the Global Certificate(s) and shall have no
obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section
3.6 conflict with any other provisions of this Agreement, the provisions of this
Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants. The Clearing Agency
will make book entry transfers among Clearing Agency Participants and receive
and transmit payments of Contract Adjustment Payments, if any, to such Clearing
Agency Participants.
SECTION 3.7. NOTICES TO HOLDERS.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any
Securities registered in the name of a Clearing Agency or the nominee of a
Clearing Agency, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
SECTION 3.8. APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Securities.
SECTION 3.9. DEFINITIVE CERTIFICATES.
If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 3.8, (ii) the Company elects to terminate the book-entry system through
the Clearing Agency with respect to the Securities, or (iii) there shall have
occurred and be continuing a default by the Company in respect of its
obligations under one or more Purchase Contracts, then upon surrender of the
Global Certificates representing the Book-Entry Interests with respect to the
Securities by the Clearing Agency, accompanied by registration instructions, the
Company shall cause definitive Certificates to be delivered to Beneficial Owners
in accordance with the instructions of the Clearing Agency. The Company shall
not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be protected in relying on, such instructions.
SECTION 3.10. MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES.
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If any mutilated Certificate is surrendered to the Agent, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new
Certificate at the cost of the Holder, evidencing the same number of Income
PRIDES or Growth PRIDES, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Agent that such Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same number of Income PRIDES or
Growth PRIDES, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Business Day immediately preceding the earlier of
the Purchase Contract Settlement Date (or the Early Settlement) or the
Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of
the applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the Agent
shall (i) if the Purchase Contract Settlement Date has occurred, deliver the
shares of Common Stock issuable in respect of the Purchase Contracts forming a
part of the Securities evidenced by such Certificate, or (ii) if a Termination
Event shall have occurred prior to the Purchase Contract Settlement Date,
transfer the Preferred Securities, the appropriate Applicable Ownership Interest
of the Treasury Portfolio or the Treasury Securities, as the case may be,
evidenced thereby, in each case subject to the applicable conditions and in
accordance with the applicable provisions of Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require the payment by the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Agent)
connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
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The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.11. PERSONS DEEMED OWNERS.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Agent, and any agent of the Company or the Agent, may treat
the Person in whose name such Certificate is registered as the owner of the
Income PRIDES or Growth PRIDES evidenced thereby, for the purpose of receiving
distributions on the Preferred Securities or on the maturing quarterly interest
strips of the Treasury Portfolio, as applicable, receiving payments of Contract
Adjustment Payments, if any, performance of the Purchase Contracts and for all
other purposes whatsoever, whether or not any distributions on the Preferred
Securities or the Contract Adjustment Payments, if any, payable in respect of
the Purchase Contracts constituting a part of the Income PRIDES or Growth PRIDES
evidenced thereby shall be overdue and notwithstanding any notice to the
contrary, and neither the Company nor the Agent, nor any agent of the Company or
the Agent, shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or the Agent, from giving effect to any written certification, proxy or other
authorization furnished by any Clearing Agency (or its nominee), as a Holder,
with respect to such Global Certificate or impair, as between such Clearing
Agency and owners of beneficial interests in such Global Certificate, the
operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
SECTION 3.12. CANCELLATION.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date, upon the transfer of Preferred
Securities, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, after the occurrence of a
Termination Event or pursuant to an Early Settlement, or upon the registration
of a transfer or exchange of a Security, or a Collateral Substitution or the
re-establishment of an Income PRIDES shall, if surrendered to any Person other
than the Agent, be delivered to the Agent and, if not already cancelled, shall
be promptly cancelled by it. The Company may at any time deliver to the Agent
for cancellation any Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Certificates so delivered shall, upon Issuer Order, be
promptly cancelled by the Agent. No Certificates shall be authenticated,
executed on behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Agent shall
upon written request be returned to the Company.
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If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
SECTION 3.13. ESTABLISHMENT OR REESTABLISHMENT OF GROWTH PRIDES.
A Holder may separate the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as applicable, from the
related Purchase Contracts in respect of an Income PRIDES by substituting for
such Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, Treasury Securities in an aggregate
principal amount equal to the aggregate Stated Amount of such Preferred
Securities or for the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
applicable (a "Collateral Substitution"), at any time from and after the date of
this Agreement and on or prior to the fifth Business Day immediately preceding
the Purchase Contract Settlement Date in the case of the Preferred Securities
and on or prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date in the case of the appropriate Applicable Ownership
Interest of the Treasury Portfolio, in each case by (a) depositing with the
Collateral Agent Treasury Securities having an aggregate principal amount equal
to the aggregate Stated Amount of the Preferred Securities comprising part of
such Income PRIDES or for the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio comprising part of such Income PRIDES, as the case may be, and (b) (i)
by delivering cash in an amount equal to the Contract Adjustment Payments, if
any, that would have accrued since the last date that Contract Adjustment
Payments, if any, were made through the date of substitution on the Growth
PRIDES being created by the holder, which amount the Agent shall promptly remit
to the Company, and (ii) transferring the related Income PRIDES to the Agent
accompanied by a notice to the Agent, substantially in the form of Exhibit D
hereto, stating that the Holder has transferred the relevant amount of Treasury
Securities to the Collateral Agent and requesting that the Agent instruct the
Collateral Agent to release the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
underlying such Income PRIDES, whereupon the Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of Exhibit C
hereto. Upon receipt of the Treasury Securities described in clause (a) above
and the instruction described in clause (b) above, in accordance with the terms
of the Pledge Agreement, the Collateral Agent will release to the Agent, on
behalf of the Holder, Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, having a
corresponding aggregate Stated Amount of such Preferred Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, from the
Pledge, free and clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
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(ii) transfer the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, to the Holder; and
(iii) authenticate, execute on behalf of such Holder
and deliver a Growth PRIDES Certificate executed by the Company in accordance
with Section 3.3 evidencing the same number of Purchase Contracts as were
evidenced by the cancelled Income PRIDES.
Holders who elect to separate the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, from the related Purchase Contract and to substitute Treasury Securities
for such Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, shall be responsible for any fees
or expenses payable to the Collateral Agent for its services as Collateral Agent
in respect of the substitution, and the Company shall not be responsible for any
such fees or expenses.
Holders may make Collateral Substitutions (i) only in integral
multiples of 40 Income PRIDES if Preferred Securities are being substituted by
Treasury Securities, or (ii) only in integral multiples of 1,600,000 Income
PRIDES if the appropriate Applicable Ownership Interests of the Treasury
Portfolio are being substituted by Treasury Securities.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Income PRIDES or fails
to deliver an Income PRIDES Certificate(s) to the Agent after depositing
Treasury Securities with the Collateral Agent, the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, constituting a part of such Income PRIDES, and any distributions on such
Preferred Security or the Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, shall be held in the name of the Agent or its
nominee in trust for the benefit of such Holder, until such Income PRIDES is so
transferred or the Income PRIDES Certificate is so delivered, as the case may
be, or, with respect to an Income PRIDES Certificate, such Holder provides
evidence satisfactory to the Company and the Agent that such Income PRIDES
Certificate has been destroyed, lost or stolen, together with any indemnity that
may be required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES shall
not be separable into its constituent parts, and the rights and obligations of
the Holder in respect of the Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, and Purchase
Contract comprising such Income PRIDES may be acquired, and may be transferred
and exchanged, only as an Income PRIDES.
SECTION 3.14. ESTABLISHMENT OR REESTABLISHMENT OF INCOME PRIDES.
A Holder of a Growth PRIDES may create or recreate Income PRIDES at any
time (i) on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement
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Date, if a Tax Event Redemption has not occurred, and (ii) on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date,
if a Tax Event Redemption has occurred and an Applicable Ownership Interest in
the Treasury Portfolio has become a component of the Income PRIDES, in each case
by (a) depositing with the Collateral Agent Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, having an aggregate Stated Amount in the case of the Preferred
Securities, or an appropriate Applicable Ownership Interest (as defined in
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, equal to the aggregate principal amount of the Treasury Securities
comprising part of the Growth PRIDES and (b) transferring the related Growth
PRIDES to the Agent accompanied by a notice to the Agent, substantially in the
form of Exhibit D hereto, stating that the Holder has transferred the relevant
amount of Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, to the Collateral Agent and
requesting that the Agent instruct the Collateral Agent to release the Treasury
Securities underlying such Growth PRIDES, whereupon the Agent shall promptly
give such instruction to the Collateral Agent, substantially in the form of
Exhibit C hereto. Upon receipt of the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
described in clause (a) above and the instruction described in clause (b) above,
in accordance with the terms of the Pledge Agreement, the Collateral Agent will
effect the release of the Treasury Securities having a corresponding aggregate
principal amount from the Pledge to the Agent free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Growth PRIDES;
(ii) transfer the Treasury Securities to the
Holder; and
(iii) authenticate, execute on behalf of such
Holder and deliver an Income PRIDES
Certificate executed by the Company in
accordance with Section 3.3 evidencing the
same number of Purchase Contracts as were
evidenced by the cancelled Growth PRIDES.
Holders of Growth PRIDES may establish or reestablish Income PRIDES in
integral multiples of 40 Growth PRIDES for 40 Income PRIDES if a Tax Event
Redemption has not occurred, and in integral multiples of 1,600,000 Growth
PRIDES for 1,600,000 Income PRIDES if a Tax Event Redemption has occurred.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Growth PRIDES remains in effect, such Growth PRIDES shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Growth PRIDES in respect of the Treasury Security and
Purchase Contract comprising such Growth PRIDES may be acquired, and may be
transferred and exchanged only as a Growth PRIDES.
SECTION 3.15. TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION EVENT.
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Upon the occurrence of a Termination Event and the transfer to the
Agent of the Preferred Securities, the appropriate Applicable Ownership Interest
of the Treasury Portfolio or the Treasury Securities, as the case may be,
underlying the Income PRIDES and the Growth PRIDES pursuant to the terms of the
Pledge Agreement, the Agent shall request transfer instructions with respect to
such Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio or Treasury Securities, as the case may be, from each
Holder by written request mailed to such Holder at its address as it appears in
the Income PRIDES Register or the Growth PRIDES Register, as the case may be.
Upon book-entry transfer of the Income PRIDES or Growth PRIDES or delivery of an
Income PRIDES Certificate or Growth PRIDES Certificate to the Agent with such
transfer instructions, the Agent shall transfer the Preferred Securities, the
Treasury Portfolio or Treasury Securities, as the case may be, underlying such
Income PRIDES or Growth PRIDES, as the case may be, to such Holder by book-entry
transfer, or other appropriate procedures, in accordance with such instructions.
In the event a Holder of Income PRIDES or Growth PRIDES fails to effect such
transfer or delivery, the Preferred Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury Securities, as the case
may be, underlying such Income PRIDES or Growth PRIDES, as the case may be, and
any distributions thereon, shall be held in the name of the Agent or its nominee
in trust for the benefit of such Holder, until such Income PRIDES or Growth
PRIDES are transferred or the Income PRIDES Certificate or Growth PRIDES
Certificate is surrendered or such Holder provides satisfactory evidence that
such Income PRIDES Certificate or Growth PRIDES Certificate has been destroyed,
lost or stolen, together with any indemnity that may be required by the Agent
and the Company.
SECTION 3.16. NO CONSENT TO ASSUMPTION.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company, a
receiver, a liquidator or a person or entity performing similar functions, or
its trustee in the event that the Company becomes a debtor under the Bankruptcy
Code or subject to other similar state or federal law providing for
reorganization or liquidation.
ARTICLE IV
THE PREFERRED SECURITIES
SECTION 4.1. PAYMENT OF DISTRIBUTION; RIGHTS TO DISTRIBUTIONS PRESERVED;
DISTRIBUTION RATE RESET; NOTICE.
A distribution on any Preferred Security or on the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
which is paid on any Payment Date shall, subject to receipt thereof by the Agent
from the Collateral Agent as provided by the terms of the Pledge Agreement, be
paid to the Person in whose name the Income PRIDES Certificate (or one or more
Predecessor Income PRIDES Certificates) of which such Preferred Security or the
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appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, is a part is registered at the close of business on the Record Date for
such Payment Date.
Each Income PRIDES Certificate evidencing Preferred Securities
delivered under this Agreement upon registration of transfer of or in exchange
for or in lieu of any other Income PRIDES Certificate shall carry the rights to
distributions accrued and unpaid, and to accrue distributions, which were
carried by the Preferred Securities underlying such other Income PRIDES
Certificate.
In the case of any Income PRIDES with respect to which Cash Settlement
of the underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date pursuant to prior notice, or
with respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date, or with respect to which a Collateral
Substitution is effected, in each case on a date that is after any Record Date
and on or prior to the next succeeding Payment Date, distributions on the
Preferred Securities or on the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, underlying such Income PRIDES otherwise
payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement or Early Settlement or Collateral
Substitution, and such distributions shall, subject to receipt thereof by the
Agent, be payable to the Person in whose name the Income PRIDES Certificate (or
one or more Predecessor Income PRIDES Certificates) was registered at the close
of business on the Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Income PRIDES with respect to
which Cash Settlement or Early Settlement of the underlying Purchase Contract is
effected on the Business Day immediately preceding the Purchase Contract
Settlement Date or an Early Settlement Date, as the case may be, or with respect
to which a Collateral Substitution has been effected, distributions on the
related Preferred Securities or on the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, that would otherwise be payable
after the Purchase Contract Settlement Date or Early Settlement Date shall not
be payable hereunder to the Holder of such Income PRIDES; provided, however,
that to the extent that such Holder continues to hold the separated Preferred
Securities that formerly comprised a part of such Holder's Income PRIDES, such
Holder shall be entitled to receive the distributions on such separated
Preferred Securities.
The applicable Coupon Rate on the Preferred Securities on and after the
Purchase Contract Settlement Date will be reset on the third Business Day
immediately preceding the Purchase Contract Settlement Date to the Reset Rate
(such Reset Rate to be in effect on and after the Purchase Contract Settlement
Date). On the Reset Announcement Date the Reset Spread and the Two-Year
Benchmark Treasury to be used to determine the Reset Rate will be announced by
the Company. On the Business Day immediately following the Reset Announcement
Date, the Preferred Securities Holders will be notified of such Reset Spread and
Two-Year Benchmark Treasury by the Company. Such notice shall be sufficiently
given to Holders of Preferred Securities if published in an Authorized Newspaper
in The City of New York.
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Not later than 7 calendar days nor more than 15 calendar days prior to
the Reset Announcement Date, the Company will notify the DTC or its nominee (or
any successor Clearing Agency or its nominee) by first-class mail, postage
prepaid, to notify the Beneficial Owners or Clearing Agency Participants holding
Income PRIDES or Growth PRIDES, of such Reset Announcement Date and the
procedures to be followed by such Holders of Income PRIDES who intend to settle
their obligation under the Purchase Contract with separate cash on the Purchase
Contract Settlement Date.
SECTION 4.2. NOTICE AND VOTING.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Preferred
Securities pledged with the Collateral Agent but only to the extent instructed
by the Holders as described below. Upon receipt of notice of any meeting at
which holders of Preferred Securities are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Preferred Securities,
the Agent shall, as soon as practicable thereafter, mail to the Holders of
Income PRIDES a notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each Holder on the record date set by
the Agent therefor (which, to the extent possible, shall be the same date as the
record date for determining the holders of Preferred Securities entitled to
vote) shall be entitled to instruct the Agent as to the exercise of the voting
rights pertaining to the Preferred Securities underlying their Income PRIDES and
(c) stating the manner in which such instructions may be given. Upon the written
request of the Holders of Income PRIDES on such record date, the Agent shall
endeavor insofar as practicable to vote or cause to be voted, in accordance with
the instructions set forth in such requests, the maximum number of Preferred
Securities as to which any particular voting instructions are received. In the
absence of specific instructions from the Holder of an Income PRIDES, the Agent
shall abstain from voting the Preferred Security underlying such Income PRIDES.
The Company hereby agrees, if applicable, to solicit Holders of Income PRIDES to
timely instruct the Agent in order to enable the Agent to vote such Preferred
Securities and the Trust shall covenant to such effect in the Trust Agreement.
SECTION 4.3. DISTRIBUTION OF DEBENTURES; TAX EVENT REDEMPTION.
Upon the occurrence of an Investment Company Event or a liquidation of
the Trust in accordance with the Trust Agreement, a principal amount of
Debentures constituting the assets of the Trust and underlying the Preferred
Securities equal to the aggregate Stated Amount of the Pledged Preferred
Securities shall be delivered to the Collateral Agent in exchange for the
Pledged Preferred Securities. Thereafter, the Debentures will be substituted for
the Pledged Preferred Securities, and will be held by the Collateral Agent in
accordance with the terms of the Pledge Agreement to secure the obligations of
each Holder of an Income PRIDES to purchase the Common Stock of the Company
under the Purchase Contracts constituting a part of such Income PRIDES.
Following the occurrence of an Investment Company Event or a liquidation of the
Trust, the Holders and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Debentures as the Holders and the
Collateral Agent had
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in respect of the Preferred Securities subject to the Pledge thereof as provided
in Articles II, III, IV, V and VI of the Pledge Agreement, and any reference
herein to the Preferred Securities shall be deemed to be a reference to such
Debentures. The Company may cause to be made in any Income PRIDES Certificates
thereafter to be issued such change in phraseology and form (but not in
substance) as may be appropriate to reflect the liquidation of the Trust and the
substitution of Debentures for Preferred Securities as Collateral.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Income PRIDES the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Agent for payment to the Holders of such Income PRIDES. The
Treasury Portfolio will be substituted for the Pledged Preferred Securities, and
will be held by the Collateral Agent in accordance with the terms of the Pledge
Agreement to secure the obligation of each Holder of an Income PRIDES to
purchase the Common Stock of the Company under the Purchase Contract
constituting a part of such Income PRIDES. Following the occurrence of a Tax
Event Redemption prior to the Purchase Contract Settlement Date, the Holders of
Income PRIDES and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Treasury Portfolio as the Holder of
Income PRIDES and the Collateral Agent had in respect of the Preferred Security
or Debentures, as the case may be, subject to the Pledge thereof as provided in
Articles II, III, IV, V, and VI of the Pledge Agreement, and any reference
herein to the Preferred Security or the Debenture shall be deemed to be
reference to such Treasury Portfolio. The Company may cause to be made in any
Income PRIDES Certificates thereafter to be issued such change in phraseology
and form (but not in substance) as may be appropriate to reflect the liquidation
of the Trust and the substitution of the Treasury Portfolio for Preferred
Securities or Debentures as collateral.
ARTICLE V
THE PURCHASE CONTRACTS
SECTION 5.1. PURCHASE OF SHARES OF COMMON STOCK.
Each Purchase Contract shall, unless an Early Settlement has occurred
in accordance with Section 5.9 hereof, obligate the Holder of the related
Security to purchase, and the Company to sell, not later than the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price"), a number of shares of Common Stock of the Company equal to the
Settlement Rate unless, on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event with respect to the Security of
which such Purchase Contract is a part. The "Settlement Rate" is equal to (a) if
the Applicable Market Value (as defined below) is equal to or greater than
$111.45 (the "Threshold Appreciation Price"), .2243 shares
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of Common Stock per Purchase Contract, (b) if the Applicable Market Value is
less than the Threshold Appreciation Price, but is greater than $92.875 (the
"Reference Price"), the number of shares of Common Stock equal to the Stated
Amount divided by the Applicable Market Value and (c) if the Applicable Market
Value is less than or equal to the Reference Price, .2692 shares of Common Stock
per Purchase Contract, in each case subject to adjustment as provided in Section
5.6 (and in each case rounded upward or downward to the nearest 1/10,000th of a
share). As provided in Section 5.10, no fractional shares of Common Stock will
be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination means
the closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock on The New York Stock Exchange, Inc. (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, the last quoted bid price for the Common Stock in
the over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market value
of the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the Company. A
"Trading Day" means a day on which the Common Stock (A) is not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Stock.
Each Holder of an Income PRIDES or a Growth PRIDES, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the execution
of Certificates on behalf of such Holder), agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its obligations under such
Purchase Contracts, and consents to the provisions hereof, irrevocably
authorizes the Agent as its attorney-in-fact to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to and
agrees to be bound by the Pledge of the Preferred Securities, the Treasury
Portfolio or the Treasury Securities pursuant to the Pledge Agreement; provided
that upon a Termination Event, the rights of the Holder of such Security under
the Purchase Contract may be enforced without regard to any other rights or
obligations. Each Holder of an Income PRIDES or a Growth PRIDES, by its
acceptance thereof, further covenants and agrees, that, to the extent and in the
manner provided in Section 5.4 and the Pledge Agreement, but subject to the
terms thereof, payments in respect of the Stated Amount of the Preferred
Securities or the Proceeds of the Treasury Securities or the Treasury Portfolio
on the Purchase Contract Settlement Date shall be paid by the Collateral Agent
to the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
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Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such
transferee), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor shall be
released from the obligations under this Agreement, the Purchase Contracts
underlying the Certificates so transferred and the Pledge Agreement. The Company
covenants and agrees, and each Holder of a Certificate, by its acceptance
thereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph.
SECTION 5.2. CONTRACT ADJUSTMENT PAYMENTS.
Subject to Section 5.3 herein, the Company shall pay, on each Payment
Date, the Contract Adjustment Payments, if any, payable in respect of each
Purchase Contract to the Person in whose name an Income PRIDES Certificate or a
Growth PRIDES Certificate (or one or more Predecessor Certificates) is
registered at the close of business on the Record Date next preceding such
Payment Date. The Contract Adjustment Payments, if any, will be payable at the
office of the Agent in The City of New York maintained for that purpose or, at
the option of the Company, by check mailed to the address of the Person entitled
thereto at such Person's address as it appears on the Income PRIDES Register or
the Growth PRIDES Register.
Upon the occurrence of a Termination Event, the Company's obligation to
pay Contract Adjustment Payments, if any, (including any accrued or Deferred
Contract Adjustment Payments) shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the re-establishment of an Income PRIDES) any other
Certificate shall carry the rights to Contract Adjustment Payments, if any,
accrued and unpaid, and to accrue Contract Adjustment Payments, if any, which
were carried by the Purchase Contracts underlying such other Certificates.
Subject to Section 5.9, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date that is after any Record Date and on or prior to the next
succeeding Payment Date, Contract Adjustment Payments, if any, otherwise payable
on such Payment Date shall be payable on such Payment Date notwithstanding such
Early Settlement, and such Contract Adjustment Payments, if any, shall be paid
to the Person in whose name the Certificate evidencing such Security (or one or
more Predecessor Certificates) is registered at the close of business on such
Record Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Security with respect to which Early Settlement of
the underlying Purchase Contract is effected on an Early Settlement Date,
Contract Adjustment Payments, if any, that would otherwise be payable after the
Early Settlement Date with respect to such Purchase Contract shall not be
payable.
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The Company's obligations with respect to Contract Adjustment Payments,
if any, will be subordinated and junior in right of payment to the Company's
obligations under any Senior Indebtedness.
SECTION 5.3. DEFERRAL OF PAYMENT DATES FOR CONTRACT ADJUSTMENT PAYMENTS.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) at least ten
Business Days prior to the earlier of (i) the next succeeding Payment Date or
(ii) the date the Company is required to give notice of the Record Date or
Payment Date with respect to payment of such Contract Adjustment Payments, if
any, to the NYSE or other applicable self-regulatory organization or to Holders
of the Securities, but in any event not less than one Business Day prior to such
Record Date. Any Contract Adjustment Payments, if any, so deferred shall bear
additional Contract Adjustment Payments thereon at the rate of 8.25% per annum
(computed on the basis of a 360 day year of twelve 30 day months), compounding
on each succeeding Payment Date, until paid in full (such deferred installments
of Contract Adjustment Payments, if any, together with the additional Contract
Adjustment Payments accrued thereon, being referred to herein as the "Deferred
Contract Adjustment Payments"). Deferred Contract Adjustment Payments shall be
due on the next succeeding Payment Date except to the extent that payment is
deferred pursuant to this Section. No Contract Adjustment Payments, if any, may
be deferred to a date that is after the Purchase Contract Settlement Date. If
the Purchase Contracts are terminated upon the occurrence of a Termination
Event, the Holder's right to receive Contract Adjustment Payments, if any, and
Deferred Contract Adjustment Payments will terminate.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, each Holder will receive on the Purchase Contract
Settlement Date in lieu of a cash payment a number of shares of Common Stock (in
addition to a number of shares of Common Stock equal to the Settlement Rate)
equal to (x) the aggregate amount of Deferred Contract Adjustment Payments
payable to such Holder divided by (y) the Applicable Market Value.
No fractional shares of Common Stock will be issued by the Company with
respect to the payment of Deferred Contract Adjustment Payments on the Purchase
Contract Settlement Date. In lieu of fractional shares otherwise issuable with
respect to such payment of Deferred Contract Adjustment Payments, the Holder
will be entitled to receive an amount in cash as provided in Section 5.10.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then, until the Deferred Contract
Adjustment Payments have been paid, the Company may not, and may not permit any
subsidiary of the Company to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation
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payment with respect to, any of the Company's capital stock or (ii) make any
payment of principal, interest or premium, if any, on or repay, repurchase or
redeem any debt securities of the Company (including other Junior Subordinated
Debt Securities) that rank pari passu with or junior in interest to the
Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks pari passu or junior in interest to the Subordinated
Debentures (other than (a) dividends or distributions in 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 under such plans in the future,
(c) payments under any guarantee, 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).
SECTION 5.4. PAYMENT OF PURCHASE PRICE.
(a)(i) Unless a Tax Event Redemption has occurred or a Holder settles
the underlying Purchase Contract through the early delivery of cash to the
Purchase Contract Agent in the manner described in Section 5.9, each Holder of
an Income PRIDES must notify the Agent by use of a notice in substantially the
form of Exhibit E hereto of its intention to pay in cash ("Cash Settlement") the
Purchase Price for the shares of Common Stock to be purchased pursuant to a
Purchase Contract. Such notice shall be made on or prior to 5:00 p.m., New York
City time, on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date. The Agent shall promptly notify the Collateral Agent of the
receipt of such a notice from a Holder intending to make a Cash Settlement.
(ii) A Holder of an Income PRIDES who has so notified the Agent of
its intention to make a Cash Settlement is required to pay the Purchase Price to
the Collateral Agent prior to 11:00 a.m., New York City time, on the Business
Day immediately preceding the Purchase Contract Settlement Date in lawful money
of the United States by certified or cashiers' check or wire transfer, in each
case in immediately available funds payable to or upon the order of the Company.
Any cash received by the Collateral Agent will be invested promptly by the
Collateral Agent in Permitted Investments and paid to the Company on the
Purchase Contract Settlement Date in settlement of the Purchase Contract in
accordance with the terms of this Agreement and the Pledge Agreement. Any funds
received by the Collateral Agent in respect of the investment earnings from the
investment in such Permitted Investments, will be distributed to the Agent when
received for payment to the Holder.
(iii) If a Holder of an Income PRIDES fails to notify the Agent of
its intention to make a Cash Settlement in accordance with paragraph (a)(i)
above, such failure shall constitute an event of default and the Holder shall be
deemed to have consented to the disposition of the pledged Preferred Securities
pursuant to the Remarketing as described in paragraph (b) below. If a Holder of
an Income PRIDES does notify the Agent as provided in paragraph (a)(i) above of
its intention to pay the Purchase Price in cash, but fails to make such payment
as required by paragraph (a)(ii) above, such failure shall also constitute a
default; however, the Preferred
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Securities of such a Holder will not be remarketed but instead the Collateral
Agent, for the benefit of the Company, will exercise its rights as a secured
party with respect to such Preferred Securities, including those rights
specified in paragraph (c) below.
(b) In order to dispose of the Preferred Securities (or Debentures
exchanged for Preferred Securities following an Investment Company Event or
other dissolution of the Trust) of Income PRIDES Holders who have not notified
the Agent of their intention to effect a Cash Settlement as provided in
paragraph (a)(i) above, the Company shall engage a nationally recognized
investment bank (the "Remarketing Agent") pursuant to the Remarketing Agreement
to sell such Preferred Securities (or Debentures). In order to facilitate the
remarketing, the Agent shall notify, by 10:00 a.m., New York City time, on the
fourth Business Day immediately preceding the Purchase Contract Settlement Date,
the Remarketing Agent of the aggregate number of Preferred Securities (or
Debentures) to be remarketed. Concurrently, the Collateral Agent, pursuant to
the terms of the Pledge Agreement, will present for remarketing such Preferred
Securities (or Debentures) to the Remarketing Agent. Upon receipt of such notice
from the Agent and such Preferred Securities (or Debentures) from the Collateral
Agent, the Remarketing Agent will, on the third Business Day immediately
preceding the Purchase Contract Settlement Date, use its reasonable efforts to
remarket such Preferred Securities (or Debentures) on such date at a price of
approximately 100.50% (but not less than 100%) of the aggregate stated
liquidation amount of such Preferred Securities (or Debentures), plus accrued
and unpaid distributions (including deferred distributions), if any, thereon.
After deducting as the remarketing fee ("Remarketing Fee") an amount not
exceeding 25 basis points (.25%) of the aggregate stated liquidation amount of
the remarketed Preferred Securities (or Debentures) from any amount of such
proceeds in excess of the aggregate stated liquidation amount of the remarketed
Preferred Securities (or Debentures) plus accrued and unpaid distributions
(including any deferred distributions), if any, then the Remarketing Agent will
remit the entire amount of the proceeds from such remarketing to the Collateral
Agent. Such portion of the proceeds, equal to the aggregate stated liquidation
amount of such Preferred Securities (or Debentures) will automatically be
applied by the Collateral Agent, in accordance with the Pledge Agreement to
satisfy in full such Income PRIDES holders' obligations to pay the Purchase
Price for the Common Stock under the related Purchase Contracts on the Purchase
Contract Settlement Date. Any proceeds in excess of those required to pay the
Purchase Price and the Remarketing Fee will be remitted to the Agent for payment
to the Holders of the related Income PRIDES. Income PRIDES Holders whose
Preferred Securities (or Debentures) are so remarketed will not otherwise be
responsible for the payment of any Remarketing Fee in connection therewith. If,
in spite of using its reasonable efforts, the Remarketing Agent cannot remarket
the related Preferred Securities (or Debentures) of such Holders of Income
PRIDES at a price not less than 100% of the aggregate stated liquidation amount
of such Preferred Securities (or Debentures) plus accrued and unpaid
distributions (including deferred distributions), if any, the remarketing will
be deemed to have failed (a "Failed Remarketing") and in accordance with the
terms of the Pledge Agreement the Collateral Agent for the benefit of the
Company will exercise its rights as a secured party with respect to such
Preferred Securities (or Debentures), including those actions specified in
paragraph (c) below; provided, that if upon a Failed Remarketing the Collateral
Agent exercises such rights for the benefit of the Company with respect to such
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Preferred Securities (or Debentures), any accrued and unpaid distributions
(including any deferred distributions) on such Preferred Securities (or
Debentures) will become payable by the Company to the Agent for payment to the
Holder of the Income PRIDES to which such Preferred Securities (or Debentures)
relates. Such payment will be made by the Company on or prior to 11 a.m. New
York City time on the Purchase Contract Settlement Date in lawful money of the
United States by certified or cashiers' check or wire transfer in immediately
available funds payable to or upon the order of the Agent. The Company will
cause a notice of such Failed Remarketing to be published on the second Business
Day immediately preceding the Purchase Contract Settlement Date in a daily
newspaper in the English language of general circulation in The City of New
York, which is expected to be The Wall Street Journal.
(c) With respect to any Preferred Securities beneficially owned by
Holders who have elected Cash Settlement but failed to deliver cash as required
in (a)(ii) above, or with respect to Preferred Securities which are subject to a
Failed Remarketing, the Collateral Agent for the benefit of the Company reserves
all of its rights as a secured party with respect thereto and, subject to
applicable law and paragraph (h) below, may, among other things, (i) retain the
Preferred Securities in full satisfaction of the Holders' obligations under the
Purchase Contracts or (ii) sell the Preferred Securities in one or more public
or private sales.
(d) (i) Unless a Holder of Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) settles the underlying Purchase Contract
through the early delivery of cash to the Purchase Contract Agent in
the manner described in Section 5.9, each Holder of a Growth PRIDES or
Income PRIDES (if a Tax Event Redemption has occurred) must notify the
Agent by use of a notice in substantially the form of Exhibit E hereto
of its intention to pay in cash the Purchase Price for the shares of
Common Stock to be purchased pursuant to a Purchase Contract on or
prior to 5:00 p.m., New York City time, on the second Business Day
immediately preceding the Purchase Contract Settlement Date.
(ii) A Holder of a Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) who has so notified the Agent of its
intention to make a Cash Settlement in accordance with paragraph (d)(i)
above is required to pay the Purchase Price to the Collateral Agent
prior to 11:00 a.m., New York City time, on the Business Day
immediately preceding the Purchase Contract Settlement Date in lawful
money of the United States by certified or cashiers' check or wire
transfer, in each case in immediately available funds payable to or
upon the order of the Company. Any cash received by the Collateral
Agent will be invested promptly by the Collateral Agent in Permitted
Investments and paid to the Company on the Purchase Contract Settlement
Date in settlement of the Purchase Contract in accordance with the
terms of this Agreement and the Pledge Agreement. Any funds received by
the Collateral Agent in respect of the investment earnings from the
investment in such Permitted Investments will be distributed to the
Agent when received for payment to the Holder.
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(iii) If a Holder of a Growth PRIDES or an Income PRIDES (if a
Tax Event Redemption has occurred) fails to notify the Agent of its
intention to make a Cash Settlement in accordance with paragraph (d)(i)
above, or if a Holder of a Growth PRIDES or an Income PRIDES (if a Tax
Event Redemption has occurred) does notify the Agent as provided in
paragraph (d)(i) above its intention to pay the Purchase Price in cash,
but fails to make such payment as required by paragraph (d)(ii) above,
then upon the maturity of the Pledged Treasury Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, held by the Collateral Agent on the Business Day
immediately prior to the Purchase Contract Settlement Date, the
principal amount of the Treasury Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, received by the Collateral Agent will be invested promptly in
overnight Permitted Investments. On the Purchase Contract Settlement
Date an amount equal to the Purchase Price will be remitted to the
Company as payment thereof without receiving any instructions from the
Holder. In the event the sum of the proceeds from the related Pledged
Treasury Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, and the investment earnings
earned from such investments is in excess of the aggregate Purchase
Price of the Purchase Contracts being settled thereby, the Collateral
Agent will distribute such excess to the Agent for the benefit of the
Holder of the related Growth PRIDES or Income PRIDES when received.
(d) Any distribution to Holders of excess funds, and interest described
above, shall be payable at the office of the Agent in The City of New York
maintained for that purpose or, at the option of the Holder, by check mailed to
the address of the Person entitled thereto at such address as it appears on the
Register.
(e) Unless a Holder settles the underlying Purchase Contract through
the early delivery of cash to the Collateral Agent in the manner described
herein, the Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificate therefor to the
Holder unless it shall have received payment in full of the Purchase Price for
the shares of Common Stock to be purchased thereunder in the manner herein set
forth.
(f) Upon Cash Settlement of any Purchase Contract, (i) the Collateral
Agent will in accordance with the terms of the Pledge Agreement cause the
Pledged Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, or the Pledged Treasury Securities
underlying the relevant Security to be released from the Pledge by the
Collateral Agent free and clear of any security interest of the Company and
transferred to the Agent for delivery to the Holder thereof or its designee as
soon as practicable and (ii) subject to the receipt thereof from the Collateral
Agent, the Agent shall, by book-entry transfer, or other appropriate procedures,
in accordance with instructions provided by the Holder thereof, transfer such
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, or such Treasury Securities (or, if no
such instructions are given to the Agent by the Holder, the Agent shall hold
such Preferred Securities or the
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Treasury Portfolio, as the case may be, or such Treasury Securities, and any
distribution thereon, in the name of the Agent or its nominee in trust for the
benefit of such Holder).
(g) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and are payable solely out of any Cash Settlement or
the proceeds of any Collateral pledged to secure the obligations of the Holders
and in no event will Holders be liable for any deficiency between the proceeds
of Collateral disposition and the Purchase Price.
SECTION 5.5. ISSUANCE OF SHARES OF COMMON STOCK.
Unless a Termination Event or an Early Settlement shall have occurred,
on the Purchase Contract Settlement Date, upon its receipt of payment in full of
the Purchase Price for the shares of Common Stock purchased by the Holders
pursuant to the foregoing provisions of this Article and subject to Section
5.6(b), the Company shall issue and deposit with the Agent, for the benefit of
the Holders of the Outstanding Securities, one or more certificates representing
the shares of Common Stock registered in the name of the Agent (or its nominee)
as custodian for the Holders (such certificates for shares of Common Stock,
together with any dividends or distributions for which both a record date and
payment date for such dividend or distribution has occurred after the Purchase
Contract Settlement Date, being hereinafter referred to as the "Purchase
Contract Settlement Fund") to which the Holders are entitled hereunder. Subject
to the foregoing, upon surrender of a Certificate to the Agent on or after the
Purchase Contract Settlement Date, together with settlement instructions thereon
duly completed and executed, the Holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of Common Stock which such Holder is entitled to receive pursuant to the
provisions of this Article Five (after taking into account all Securities then
held by such Holder) together with cash in lieu of fractional shares as provided
in Section 5.10 and any dividends or distributions with respect to such shares
constituting part of the Purchase Contract Settlement Fund, but without any
interest thereon, and the Certificate so surrendered shall forthwith be
cancelled. Such shares shall be registered in the name of the Holder or the
Holder's designee as specified in the settlement instructions provided by the
Holder to the Agent. If any shares of Common Stock issued in respect of a
Purchase Contract are to be registered to a Person other than the Person in
whose name the Certificate evidencing such Purchase Contract is registered, no
such registration shall be made unless the Person requesting such registration
has paid any transfer and other taxes required by reason of such registration in
a name other than that of the registered Holder of the Certificate evidencing
such Purchase Contract or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.
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SECTION 5.6. ADJUSTMENT OF SETTLEMENT RATE.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Settlement Rate, as in
effect at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this paragraph (1), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include any shares issuable
in respect of any scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock (not being available on an
equivalent basis to Holders of the Securities upon settlement of the Purchase
Contracts underlying such Securities) entitling them, for a period expiring
within 45 days after the record date for the determination of stockholders
entitled to receive such rights, options or warrants, to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price per share of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights, options or
warrants (other than pursuant to a dividend reinvestment plan), the Settlement
Rate in effect at the opening of business on the day following the date fixed
for such determination shall be increased by dividing such Settlement Rate by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock which the aggregate of the offering
price of the total number of shares of Common Stock so offered for subscription
or purchase would purchase at such Current Market Price and the denominator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
Common Stock so offered for subscription or purchase, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this paragraph (2), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include any shares issuable
in respect of any scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company shall not issue any such rights, options or warrants
in respect of shares of Common Stock held in the treasury of the Company.
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(3) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common Stock, the
Settlement Rate in effect at the opening of business on the day following the
day upon which such subdivision or split becomes effective shall be
proportionately increased, and, conversely, in case outstanding shares of Common
Stock shall each be combined into a smaller number of shares of Common Stock,
the Settlement Rate, in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision, split or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness or
assets (including securities, but excluding any rights or warrants referred to
in paragraph (2) of this Section, any dividend or distribution paid exclusively
in cash and any dividend or distribution referred to in paragraph (1) of this
Section), the Settlement Rate shall be adjusted so that the same shall equal the
rate determined by dividing the Settlement Rate in effect immediately prior to
the close of business on the date fixed for the determination of stockholders
entitled to receive such distribution by a fraction of which the numerator shall
be the Current Market Price per share of the Common Stock on the date fixed for
such determination less the then fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution filed with the Agent) of the portion of the assets or evidences of
indebtedness so distributed applicable to one share of Common Stock and the
denominator shall be such Current Market Price per share of the Common Stock,
such adjustment to become effective immediately prior to the opening of business
on the day following the date fixed for the determination of stockholders
entitled to receive such distribution. In any case in which this paragraph (4)
is applicable, paragraph (2) of this Section shall not be applicable.
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (i) regular
quarterly cash distributions, (ii) any cash that is distributed in a
Reorganization Event to which Section 5.6(b) applies or (iii) cash that is
distributed as part of a distribution referred to in paragraph (4) of this
Section) in an aggregate amount that, combined together with (II) the aggregate
amount of any other distributions to all holders of its Common Stock (other than
regular quarterly cash distributions) made exclusively in cash within the 12
months preceding the date of payment of such distribution and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made and (III) the aggregate of any cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) of consideration payable in
respect of any tender or exchange offer (other than consideration payable in
respect of any odd-lot tender offer) by the Company or any of its subsidiaries
for all or any portion of the Common Stock concluded within the 12 months
preceding the date of payment of the distribution described in clause (I) above
and in respect of which no adjustment pursuant to this paragraph (5) or
paragraph (6) of this Section has been made, exceeds 15% of the product of the
Current Market Price per share of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
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distribution times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after the close of business on
such date for determination, the Settlement Rate, shall be increased so that the
same shall equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the date fixed for determination
of the stockholders entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the Current Market Price per share of the
Common Stock on the date fixed for such determination less an amount equal to
the quotient of (x) the combined amount distributed or payable in the
transactions described in clauses (I), (II) and (III) above and (y) the number
of shares of Common Stock outstanding on such date for determination and (ii)
the denominator of which shall be equal to the Current Market Price per share of
the Common Stock on such date for determination.
(6) In case (I) a tender or exchange offer made by the Company
or any subsidiary of the Company for all or any portion of the Common Stock
shall expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares) of an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) that combined together with (II) the
aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer (other
than consideration payable in respect of any odd-lot tender offer) by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph (5)
of this Section or this paragraph (6) has been made and (III) the aggregate
amount of any distributions (other than regular quarterly cash distributions) to
all holders of the Company's Common Stock made exclusively in cash within the 12
months preceding the expiration of such tender or exchange offer and in respect
of which no adjustment pursuant to paragraph (5) of this Section or this
paragraph (6) has been made, exceeds 15% of the product of the Current Market
Price per share of the Common Stock as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in each such
case, immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate, shall be adjusted so that the same
shall equal the rate determined by dividing the Settlement Rate immediately
prior to the close of business on the date of the Expiration Time by a fraction
(i) the numerator of which shall be equal to (A) the product of (I) the Current
Market Price per share of the Common Stock on the date of the Expiration Time
and (II) the number of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time less (B) the amount of cash plus the
fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the transactions described in clauses (I), (II)
and (III) above (assuming in the case of clause (I) the acceptance, up to any
maximum specified in the terms of the tender or exchange offer, of Purchased
Shares), and (ii) the denominator of
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which shall be equal to the product of (A) the Current Market Price per share of
the Common Stock as of the Expiration Time and (B) the number of shares of
Common Stock outstanding (including any tendered shares) as of the Expiration
Time less the number of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any reclassification
upon a Reorganization Event to which Section 5.6(b) applies) shall be deemed to
involve (a) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of stockholders entitled
to receive such distribution" and the "date fixed for such determination" within
the meaning of paragraph (4) of this Section), and (b) a subdivision, split or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of shares
of Common Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
or split becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such subdivision, split
or combination becomes effective" within the meaning of paragraph (3) of this
Section).
(8) The "Current Market Price" per share of Common Stock on
any day means the average of the daily Closing Prices for the 5 consecutive
Trading Days selected by the Company commencing not more than 30 Trading Days
before, and ending not later than, the earlier of the day in question and the
day before the "ex date" with respect to the issuance or distribution requiring
such computation. For purposes of this paragraph, the term "ex date", when used
with respect to any issuance or distribution, shall mean the first date on which
the Common Stock trades regular way on such exchange or in such market without
the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate, shall be
calculated to the nearest 1/10,000th of a share of Common Stock (or if there is
not a nearest 1/10,000th of a share to the next lower 1/10,000th of a share). No
adjustment in the Settlement Rate shall be required unless such adjustment would
require an increase or decrease of at least one percent therein; provided,
however, that any adjustments which by reason of this subparagraph are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. If an adjustment is made to the Settlement Rate pursuant
to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a),
an adjustment shall also be made to the Applicable Market Value solely to
determine which of clauses (a), (b) or (c) of the definition of Settlement Rate
in Section 5.1 will apply on the Purchase Contract Settlement Date. Such
adjustment shall be made by multiplying the Applicable Market Value by a
fraction of which the numerator shall be the Settlement Rate immediately after
such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of this Section 5.6(a) and the denominator shall be the Settlement Rate
immediately before such adjustment; provided, however, that if such adjustment
to the Settlement Rate is required to be made pursuant to the occurrence of any
of the events contemplated by paragraph (1), (2), (3),
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(4), (5), (7) or (10) of this Section 5.6(a) during the period taken into
consideration for determining the Applicable Market Value, appropriate and
customary adjustments shall be made to the Settlement Rate.
(10) The Company may make such increases in the Settlement
Rate, in addition to those required by this Section, as it considers to be
advisable in order to avoid or diminish any income tax to any holders of shares
of Common Stock resulting from any dividend or distribution of stock or issuance
of rights or warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event. In the event of (i) any consolidation or merger of the Company with or
into another Person (other than a merger or consolidation in which the Company
is the continuing corporation and in which the Common Stock outstanding
immediately prior to the merger or consolidation is not exchanged for cash,
securities or other property of the Company or another corporation), (ii) any
sale, transfer, lease or conveyance to another Person of the property of the
Company as an entirety or substantially as an entirety, (iii) any statutory
exchange of securities of the Company with another Person (other than in
connection with a merger or acquisition) or (iv) any liquidation, dissolution or
winding up of the Company other than as a result of or after the occurrence of a
Termination Event (any such event, a "Reorganization Event"), the Settlement
Rate will be adjusted to provide that each Holder of Securities will receive on
the Purchase Contract Settlement Date with respect to each Purchase Contract
forming a part thereof, the kind and amount of securities, cash and other
property receivable upon such Reorganization Event (except as otherwise
specifically provided, without any interest thereon, and without any right to
dividends or distributions thereon which have a record date that is prior to the
Purchase Contract Settlement Date) by a Holder of the number of shares of Common
Stock issuable on account of each Purchase Contract if the Purchase Contract
Settlement Date had occurred immediately prior to such Reorganization Event
assuming such Holder of Common Stock is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (any such Person,
a "Constituent Person"), or an Affiliate of a Constituent Person to the extent
such Reorganization Event provides for different treatment of Common Stock held
by Affiliates of the Company and non-affiliates and such Holder failed to
exercise its rights of election, if any, as to the kind or amount of securities,
cash and other property receivable upon such Reorganization Event (provided that
if the kind or amount of securities, cash and other property receivable upon
such Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). If all or a portion of the consideration payable to the
Holders of Common Stock in a Reorganization Event is cash, the Settlement Rate
shall be further adjusted to provide that each Holder of Securities will receive
on such Purchase Contract Settlement Date with respect to each Purchase Contract
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forming a part thereof an amount equal to interest that could otherwise accrue
on such cash, such interest to accumulate and compound quarterly from the date
the Reorganization Event is consummated to the Purchase Contract Settlement Date
(or, in the case of an Early Settlement, the date of Early Settlement) at 7.75%
per annum (as defined in the Trust Agreement). In the event of such a
Reorganization Event, the Person formed by such consolidation, merger or
exchange or the Person which acquires the assets of the Company or, in the event
of a liquidation or dissolution of the Company, the Company or a liquidating
trust created in connection therewith, shall execute and deliver to the Agent an
agreement supplemental hereto providing that the Holders of each Outstanding
Security shall have the rights provided by this Section 5.6. Such supplemental
agreement shall provide for adjustments which, for events subsequent to the
effective date of such supplemental agreement, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section. The above
provisions of this Section shall similarly apply to successive Reorganization
Events.
SECTION 5.7. NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS.
(a) Whenever the Settlement Rate is adjusted as herein provided,
the Company shall:
(i) forthwith compute the Settlement Rate in accordance with
Section 5.6 and prepare and transmit to the Agent an Officer's Certificate
setting forth the Settlement Rate, the method of calculation thereof in
reasonable detail, and the facts requiring such adjustment and upon which such
adjustment is based; and
(ii) within 10 Business Days following the occurrence of an
event that requires an adjustment to the Settlement Rate pursuant to Section 5.6
(or if the Company is not aware of such occurrence, as soon as practicable after
becoming so aware), provide a written notice to the Holders of the Securities of
the occurrence of such event and a statement in reasonable detail setting forth
the method by which the adjustment to the Settlement Rate was determined and
setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Settlement Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at the time
be issued or delivered with respect to any Purchase Contract; and the Agent
makes no representation with respect thereto. The Agent shall not be responsible
for any failure of the Company to issue, transfer or deliver any shares of
Common Stock pursuant to a Purchase Contract or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article.
SECTION 5.8. TERMINATION EVENT; NOTICE.
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The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or Deferred Contract Adjustment Payments, if the Company shall
have such obligation, and the rights and obligations of Holders to purchase
Common Stock, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Agent or the Company, if,
on or prior to the Purchase Contract Settlement Date, a Termination Event shall
have occurred. Upon and after the occurrence of a Termination Event, the
Securities shall thereafter represent the right to receive the Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, forming a part of such Securities in the case of
Income PRIDES, or Treasury Securities in the case of Growth PRIDES, in
accordance with the provisions of Section 4.3 of the Pledge Agreement. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Register.
SECTION 5.9. EARLY SETTLEMENT.
(a) Subject to and upon compliance with the provisions of this Section
5.9, at the option of the Holder thereof, Purchase Contracts underlying
Securities having an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof may be settled early ("Early Settlement") in the case of Income
PRIDES (unless a Tax Event Redemption has occurred) on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date and in
the case of Growth PRIDES on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, in each case, as provided
herein; provided however, that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Income PRIDES, Purchase
Contracts underlying Income PRIDES may be settled early, on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date,
but only in an aggregate amount of $40,000,000 or in an integral multiple
thereof. In order to exercise the right to effect Early Settlement with respect
to any Purchase Contracts, the Holder of the Certificate evidencing Securities
shall deliver such Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early on the reverse thereof duly completed and accompanied by payment
(payable to the Company in immediately available funds in an amount (the "Early
Settlement Amount") equal to (i) the product of (A) the Stated Amount times (B)
the number of Purchase Contracts with respect to which the Holder has elected to
effect Early Settlement plus (ii) if such delivery is made with respect to any
Purchase Contracts during the period from the close of business on any Record
Date next preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the sum of (x) the Contract Adjustment Payments, if
any, payable on such Payment Date with respect to such Purchase Contracts plus
(y) in the case of Income PRIDES Certificate, the distributions on the related
Preferred Securities payable on such Payment Date. Except as provided in the
immediately preceding sentence and subject to the second to last paragraph of
Section 5.2, no payment or adjustment shall be made upon Early Settlement of any
Purchase Contract on account of any
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Contract Adjustment Payments, if any, accrued on such Purchase Contract or on
account of any dividends on the Common Stock issued upon such Early Settlement
or on account of any Deferred Contract Adjustment Payments. If the foregoing
requirements are first satisfied with respect to Purchase Contracts underlying
any Securities at or prior to 5:00 p.m., New York City time, on a Business Day,
such day shall be the "Early Settlement Date" with respect to such Securities
and if such requirements are first satisfied after 5:00 p.m., New York City
time, on a Business Day or on a day that is not a Business Day, the "Early
Settlement Date" with respect to such Securities shall be the next succeeding
Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities and payment of any transfer or similar taxes payable by such
Holder in connection with the issuance of the related Common Stock to any person
other than such Holder, the Company shall issue, and the Holder shall be
entitled to receive, shares of Common Stock on account of each Purchase Contract
as to which Early Settlement is effected (the "Early Settlement Rate");
provided, however, that upon the Early Settlement of the Purchase Contracts, the
Holder of such related Securities will forfeit the right to receive any Deferred
Contract Adjustment Payments and future Contract Adjustment Payments, if any.
The Early Settlement Rate shall be adjusted in the same manner and at the same
time as the Settlement Rate is adjusted. As promptly as practicable after Early
Settlement of Purchase Contracts in accordance with the provisions of this
Section 5.9, the Company shall issue and shall deliver to the Agent at the
Corporate Trust Office a certificate or certificates for the full number of
shares of Common Stock issuable upon such Early Settlement together with payment
in lieu of any fraction of a share, as provided in Section 5.10.
(c) No later than the third Business Day after the applicable Early
Settlement Date the Company shall cause (i) the shares of Common Stock issuable
upon Early Settlement of Purchase Contracts to be issued and delivered, and (ii)
the related Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, in the case of Income PRIDES, or the related
Treasury Securities, in the case of Growth PRIDES, to be released from the
Pledge by the Collateral Agent and transferred, in each case to the Agent for
delivery to the Holder thereof or its designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Preferred Securities,
the appropriate Applicable Ownership Interest of the Treasury Portfolio or
Treasury Securities, as the case may be, from the Collateral Agent, as
applicable, the Agent shall, in accordance with the instructions provided by the
Holder thereof on the applicable form of Election to Settle Early on the reverse
of the Certificate evidencing the related Securities, (i) transfer to the Holder
the Preferred Securities, Treasury Portfolio or Treasury Securities, as the case
may be, forming a part of such Securities, and (ii) deliver to the Holder a
certificate or certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.10.
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(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
SECTION 5.10. NO FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
Purchase Contract Settlement Date or upon Early Settlement, the Company, through
the Agent, shall make a cash payment in respect of such fractional interest in
an amount equal to the value of such fractional shares times the Applicable
Market Value. The Company shall provide the Agent from time to time with
sufficient funds to permit the Agent to make all cash payments required by this
Section 5.10 in a timely manner.
SECTION 5.11. CHARGES AND TAXES.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts and in payment of any Deferred Contract Adjustment
Payments; provided, however, that the Company shall not be required to pay any
such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Security or any issuance of a share
of Common Stock in a name other than that of the registered Holder of a
Certificate surrendered in respect of the Securities evidenced thereby, other
than in the name of the Agent, as custodian for such Holder, and the Company
shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
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ARTICLE VI
REMEDIES
SECTION 6.1. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE CONTRACT ADJUSTMENT
PAYMENTS AND TO PURCHASE COMMON STOCK.
In the event that Contract Adjustment Payments shall constitute a
component of Income PRIDES or Growth PRIDES, the Holder of any Income PRIDES or
Growth PRIDES shall have the right, which is absolute and unconditional (subject
to the right of the Company to defer payment thereof pursuant to Section 5.3,
the prepayment of Contract Adjustment Payments, if any, pursuant to Section
5.9(a) and to the forfeiture of any Deferred Contract Adjustment Payments upon
Early Settlement pursuant to Section 5.9(b) or upon the occurrence of a
Termination Event), to receive payment of each installment of the Contract
Adjustment Payments, if any, with respect to the Purchase Contract constituting
a part of such Security on the respective Payment Date for such Security and to
purchase Common Stock pursuant to such Purchase Contract and, in each such case,
to institute suit for the enforcement of any such payment and right to purchase
Common Stock, and such rights shall not be impaired without the consent of such
Holder.
SECTION 6.2. RESTORATION OF RIGHTS AND REMEDIES.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such Holder
shall continue as though no such proceeding had been instituted.
SECTION 6.3. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.4. DELAY OR OMISSION NOT WAIVER.
No delay or omission of any Holder to exercise any right or remedy upon
a default shall impair any such right or remedy or constitute a waiver of any
such right. Every right and
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remedy given by this Article or by law to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by such Holders.
SECTION 6.5. UNDERTAKING FOR COSTS.
All parties to this Agreement agree, and each Holder of Income PRIDES
or Growth PRIDES, by its acceptance of such Income PRIDES or Growth PRIDES shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Agreement, or in any
suit against the Agent for any action taken, suffered or omitted by it as Agent,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided that the provisions of this Section shall not
apply to any suit instituted by the Company, to any suit instituted by the
Agent, to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% of the Outstanding Securities, or to any suit instituted
by any Holder for the enforcement of distributions on any Preferred Securities
or Contract Adjustment Payments, if any, on any Purchase Contract on or after
the respective Payment Date therefor in respect of any Security held by such
Holder, or for enforcement of the right to purchase shares of Common Stock under
the Purchase Contracts constituting part of any Security held by such Holder.
SECTION 6.6. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE VII
THE AGENT
SECTION 7.1. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) (1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically set
forth in this Agreement and the Pledge Agreement, and no implied
covenants or obligations shall be read into this Agreement against the
Agent; and
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(2) The Agent may, with respect to the Securities, conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to
the Agent and conforming to the requirements of this Agreement, but in
the case of any certificates or opinions which by any provision hereof
are specifically required to be furnished to the Agent, the Agent shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent failure to
act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Agent was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.
(d) The Agent is authorized to execute and deliver the Pledge Agreement
in its capacity as Agent.
SECTION 7.2. NOTICE OF DEFAULT.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge, the
Agent shall transmit by mail to the Company and the Holders of Securities, as
their names and addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
SECTION 7.3. CERTAIN RIGHTS OF AGENT.
Subject to the provisions of Section 7.1:
(a) the Agent may rely and shall be 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
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document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officer's Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate of the Company;
(d) the Agent may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Agent 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 Agent,
in its discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Agent shall determine to make
such further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed with
due care by it hereunder.
SECTION 7.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company and the Agent assumes no responsibility for their
accuracy. The Agent makes no representations as to the validity or sufficiency
of either this Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.
SECTION 7.5. MAY HOLD SECURITIES.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
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SECTION 7.6. MONEY HELD IN CUSTODY.
Money held by the Agent in custody hereunder need not be segregated
from the other funds except to the extent required by law or provided herein.
The Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
SECTION 7.7. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Agent from time to time such compensation
for all services rendered by it hereunder as the parties shall agree
from time to time;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Agent in accordance
with any provision of this 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, willful misconduct or bad faith; and
(3) to indemnify the Agent and any predecessor Agent for, and
to hold it harmless against, any loss, liability or expense incurred
without negligence, willful misconduct or bad faith on its part,
arising out of or in connection with the acceptance or administration
of its duties hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
SECTION 7.8. CORPORATE AGENT REQUIRED; ELIGIBILITY.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a member of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having a
Corporate Trust Office in the Borough of Manhattan, The City of New York, if
there be such a corporation in the Borough of Manhattan, The City of New York,
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation 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 Agent shall cease to be eligible in
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accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 7.9. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice
thereof to the Company 60 days prior to the effective date of such resignation.
If the instrument of acceptance by a successor Agent required by Section 7.10
shall not have been delivered to the Agent within 30 days after the giving of
such notice of resignation, the resigning Agent may petition any court of
competent jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of
a majority in number of the Outstanding Securities delivered to the Agent and
the Company.
(d) if at any time
(1) the Agent fails to comply with Section 310(b) of the TIA,
as if the Agent were an indenture trustee under an indenture qualified
under the TIA, after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Agent shall cease to be eligible under Section 7.8 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver for the Agent or for its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case,
(i) the Company by a Board Resolution may remove the Agent, or (ii) any
Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the
Agent and the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of Section 7.10. If no successor
Agent shall have been so appointed by the Company and accepted appointment in
the manner required by Section 7.10, any Holder who has been a bona fide Holder
of a Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Agent.
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(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their names and addresses
appear in the applicable Register. Each notice shall include the name of the
successor Agent and the address of its Corporate Trust Office.
SECTION 7.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Agent,
every such successor Agent so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Agent an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Agent
shall become effective and such successor Agent, without any further act, deed
or conveyance, shall become vested with all the rights, powers, agencies and
duties of the retiring Agent; but, on the request of the Company or the
successor Agent, such retiring Agent shall, upon payment of its charges, execute
and deliver an instrument transferring to such successor Agent all the rights,
powers and trusts of the retiring Agent and shall duly assign, transfer and
deliver to such successor Agent all property and money held by such retiring
Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies referred
to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the
time of such acceptance such successor Agent shall be qualified and eligible
under this Article.
SECTION 7.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation to
such Agent may adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Securities.
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SECTION 7.12. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the
Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof that
each such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Agreement or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit,
then the Agent shall mail to all the Holders copies of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Agent of the materials to be mailed and of
payment, or provision for the payment, of the reasonable expenses of such
mailing.
SECTION 7.13. NO OBLIGATIONS OF AGENT.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligations and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees, and
each Holder of a Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the Agent's execution of the Certificates on behalf of the Holders
shall be solely as agent and attorney-in-fact for the Holders, and that the
Agent shall have no obligation to perform such Purchase Contracts on behalf of
the Holders, except to the extent expressly provided in Article Five hereof.
SECTION 7.14. TAX COMPLIANCE.
(a) The Agent, on its own behalf and on behalf of the Company,
will comply with all applicable certification, information reporting and
withholding (including "backup" withholding) requirements imposed by applicable
tax laws, regulations or administrative practice with respect to (i) any
payments made with respect to the Securities or (ii) the issuance, delivery,
holding, transfer, redemption or exercise of rights under the Securities. Such
compliance shall include, without limitation, the preparation and timely filing
of required returns and the timely payment of all amounts required to be
withheld to the appropriate taxing authority or its designated agent.
(b) The Agent shall comply with any written direction received
from the Company with respect to the application of such requirements to
particular payments or Holders or in other particular circumstances, and
may for purposes of this Agreement rely on any such direction in accordance with
the provisions of Section 7.1(a)(2) hereof.
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(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.1. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of the
Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.6(b); or
(5) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein, or
to make any other provisions with respect to such matters or questions arising
under this Agreement, provided such action shall not adversely affect the
interests of the Holders.
SECTION 8.2. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one Class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts, or the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that, except as
contemplated herein, no such supplemental agreement shall, without the consent
of the Holder of each Outstanding Security affected thereby,
(1) change any Payment Date;
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(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's Obligations under the Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral (except for the rights of
Holders of Income PRIDES to substitute the Treasury Securities for the
Pledged Preferred Securities or the rights of holders of Growth PRIDES
to substitute Preferred Securities for the Pledged Treasury Securities)
or otherwise adversely affect the Holder's rights in or to such
Collateral or adversely alter the rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments, if any, or any
Deferred Contract Adjustment Payment, or change any place where, or the
coin or currency in which, any Contract Adjustment Payment is payable;
(4) impair the right to institute suit for the enforcement of
any Purchase Contract, any Contract Payment Adjustments or any Deferred
Contract PAyment Adjustments;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price to
purchase shares of Common Stock upon settlement of any Purchase
Contract, change the Purchase Contract Settlement Date or the right to
Early Settlement or otherwise adversely affect the Holder's rights
under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement; provided, that if any amendment or proposal
referred to above would adversely affect only the Income PRIDES or the
Growth PRIDES, then only the affected class of Holders as of the record
date for the Holders entitled to vote thereon will be entitled to vote
on such amendment or proposal, and such amendment or proposal shall not
be effective except with the consent of Holders of not less than a
majority of such class.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 8.3. EXECUTION OF SUPPLEMENTAL AGREEMENTS.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Agent shall be entitled to receive
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement. The Agent may, but shall not be
obligated to, enter into any such supplemental agreement which affects the
Agent's own rights, duties or immunities under this Agreement or otherwise.
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SECTION 8.4. EFFECT OF SUPPLEMENTAL AGREEMENTS.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder shall be bound thereby.
SECTION 8.5. REFERENCE TO SUPPLEMENTAL AGREEMENTS.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such supplemental
agreement may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Agent in exchange for
Outstanding Certificates.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1. COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY PROPERTY
EXCEPT UNDER CERTAIN CONDITIONS.
The Company covenants that it will not merge or consolidate with any
other Person or sell, assign, transfer, lease or convey all or substantially all
of its properties and assets to any Person or group of affiliated Persons in one
transaction or a series of related transactions, unless (i) either the Company
shall be the continuing corporation, or the successor (if other than the
Company) shall be a corporation organized and existing under the laws of the
United States of America or a State thereof or the District of Columbia and such
corporation shall expressly assume all the obligations of the Company under the
Purchase Contracts, the Subordinated Debentures, this Agreement, the Pledge
Agreement, the Subordinated Indenture (including any supplemental indenture
thereto) and the Remarketing Agreement by one or more supplemental agreements in
form reasonably satisfactory to the Agent and the Collateral Agent, executed and
delivered to the Agent and the Collateral Agent by such corporation, and (ii)
the Company or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, assignment,
transfer, lease or conveyance, be in default of its payment obligations
thereunder or in material default in the performance of any of its obligations
thereunder.
SECTION 9.2. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor corporation in
accordance with Section 9.1, such
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successor corporation shall succeed to and be substituted for the Company with
the same effect as if it had been named herein as the Company. Such successor
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of Lincoln National Corporation any or all of the
Certificates evidencing Securities issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Agent; and, upon the
order of such successor corporation, instead of the Company, and subject to all
the terms, conditions and limitations in this Agreement prescribed, the Agent
shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Agent for authentication and execution, and any
Certificate evidencing Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Agent for that purpose. All the
Certificates so issued shall in all respects have the same legal rank and
benefit under this Agreement as the Certificates theretofore or thereafter
issued in accordance with the terms of this Agreement as though all of such
Certificates had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance, such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued as
may be appropriate.
SECTION 9.3. OPINION OF COUNSEL GIVEN TO AGENT.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
assignment, transfer, lease or conveyance, and any such assumption, complies
with the provisions of this Article and that all conditions precedent hereunder
to the consummation of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance have been met.
ARTICLE X
COVENANTS
SECTION 10.1. PERFORMANCE UNDER PURCHASE CONTRACTS.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
SECTION 10.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain or cause to be maintained in the Borough of
Manhattan, The City of New York an office or agency where Certificates may be
presented or surrendered for acquisition of shares of Common Stock upon
settlement of the Purchase Contracts on the Purchase Contract Settlement Date or
Early Settlement and for transfer of Collateral upon occurrence of a Termination
Event, where Certificates may be surrendered for registration of
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transfer or exchange, for a Collateral Substitution or re-establishment of an
Income PRIDES and where notices and demands to or upon the Company in respect of
the Securities and this Agreement may be served. The Company will give prompt
written notice to the Agent of the location, and any change in the location, of
such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Agent with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office, and the Company hereby appoints the
Agent as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The Company will
give prompt written notice to the Agent of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company hereby designates as the place of payment for the Securities the
Corporate Trust Office and appoints the Agent at its Corporate Trust Office as
paying agent in such city.
SECTION 10.3. COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
SECTION 10.4. COVENANTS AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly 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
By:/s/ Janet Chrzan
----------------------------------------
Name: Janet Chrzan
Title: Vice President and Treasurer
THE FIRST NATIONAL BANK OF
CHICAGO, as Purchase Contract
Agent
By:/s/ John R. Prendiville
----------------------------------------
Name: John R. Prendiville
Title: Vice President
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EXHIBIT A
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
No. _____ Cusip No. Number of Income PRIDES
_______
Form of Face of Income PRIDES Certificate
____% Income PRIDES
This Income PRIDES Certificate certifies that ___________ is the
registered Holder of the number of Income PRIDES set forth above. Each Income
PRIDES represents (i) either (a) beneficial ownership by the Holder of one __%
Preferred Security (the "Preferred Security") of Lincoln National Capital IV, a
Delaware statutory business trust (the "Trust"), having a stated liquidation
amount of $25, subject to the Pledge of such Preferred Security by such Holder
pursuant to the Pledge Agreement or (b) upon the occurrence of a Tax Event
Redemption prior to the Purchase Contract Settlement Date, the appropriate
Applicable Ownership Interest of the Treasury Portfolio, subject to the Pledge
of such Applicable Ownership Interest of the Treasury Portfolio by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract with Lincoln National Corporation, an Indiana
corporation (the "Company"). All capitalized terms used herein which are defined
in the Purchase Contract Agreement have the meanings set forth therein.
Pursuant to the Pledge Agreement, the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, constituting part of each Income PRIDES evidenced hereby have been
pledged to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising a portion of
such Income PRIDES.
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The Pledge Agreement provides that all payments of the Stated Amount of
or the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as the case may be, or
cash distributions on, any Pledged Preferred Securities (as defined in the
Pledge Agreement) or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, constituting part of the Income PRIDES
received by the Collateral Agent shall be paid by the Collateral Agent by wire
transfer in same day funds (i) in the case of (A) cash distributions with
respect to Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, and (B) any payments of the Stated
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such terms) of the Treasury Portfolio, as the case may
be, with respect to any Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, that have been
released from the Pledge pursuant to the Pledge Agreement, to the Agent to the
account designated by the Agent, no later than 2:00 p.m., New York City time, on
the Business Day such payment is received by the Collateral Agent (provided that
in the event such payment is received by the Collateral Agent on a day that is
not a Business Day or after 12:30 p.m., New York City time, on a Business Day,
then such payment shall be made no later than 10:30 a.m., New York City time, on
the next succeeding Business Day) and (ii) in the case of payments of the Stated
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, as the case may
be, of any Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, to the Company on the Purchase Contract
Settlement Date (as defined herein) in accordance with the terms of the Pledge
Agreement, in full satisfaction of the respective obligations of the Holders of
the Income PRIDES of which such Pledged Preferred Securities or the Treasury
Portfolio, as the case may be, are a part under the Purchase Contracts forming a
part of such Income PRIDES. Distributions on any Preferred Security or the
appropriate Applicable Ownership Interest (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio, as the case may be, forming
part of an Income PRIDES evidenced hereby, which are payable quarterly in
arrears on February 16, May 16, August 16 and November 16 each year, commencing
November 16, 1998 (a "Payment Date"), shall, subject to receipt thereof by the
Agent from the Collateral Agent, be paid to the Person in whose name this Income
PRIDES Certificate (or a Predecessor Income PRIDES Certificate) is registered at
the close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, not later than
__________________, 2001 (the "Purchase Contract Settlement Date"), at a price
equal to $25 (the "Stated Amount"), a number of shares of Common Stock, no par
value ("Common Stock"), of the Company, equal to the Settlement Rate, unless on
or prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Income PRIDES of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the
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shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby, if not paid earlier, shall be paid on the Purchase Contract Settlement
Date by application of payment received in respect of the Stated Amount or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, of the
Pledged Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, pledged to secure the obligations
under such Purchase Contract of the Holder of the Income PRIDES of which such
Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of an Income PRIDES evidenced hereby an amount
(the "Contract Adjustment Payments") equal to ___% per annum of the Stated
Amount, computed on the basis of a 360 day year of twelve 30 day months, subject
to deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments, if any, shall be payable to the Person in whose name this
Income PRIDES Certificate (or a Predecessor Income PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment Date.
Distributions on the Preferred Securities or the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
of the Treasury Portfolio, as the case may be, and Contract Adjustment Payments,
if any, will be payable at the office of the Agent in The City of New York or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto as such address appears on the Income PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
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Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Income PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
LINCOLN NATIONAL CORPORATION
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE FIRST NATIONAL BANK OF
CHICAGO not individually but
solely as Attorney-in-Fact of such
Holder
By:___________________________
Name:
Title:
Dated: , 1998
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AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF
CHICAGO, as Purchase Contract
Agent
By:_________________________
Authorized Officer
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(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of _____, 1998 (as it may be supplemented from time
to time, the "Purchase Contract Agreement"), between the Company and The First
National Bank of Chicago, as Purchase Contract Agent (herein called the
"Agent"), to which Purchase Contract Agreement and supplemental agreements
thereto reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company, and the Holders and of the terms upon which the Income
PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, not later than
the Purchase Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price"), a number of shares of Common Stock of the Company equal to
the Settlement Rate, unless, on or prior to the Purchase Contract Settlement
Date, there shall have occurred a Termination Event or Early Settlement with
respect to the Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $______ (the "Threshold Appreciation Price"),
____ shares of Common Stock per Purchase Contract, (b) if the Applicable Market
Value is less than the Threshold Appreciation Price but is greater than the
Reference Price, the number of shares of Common Stock per Purchase Contract
equal to the Stated Amount divided by the Applicable Market Value and (c) if the
Applicable Market Amount is less than or equal to $____, ____ shares of Common
Stock per Purchase Contract, in each case subject to adjustment as provided in
the Purchase Contract Agreement. No fractional shares of Common Stock will be
issued upon settlement of Purchase Contracts, as provided in the Purchase
Contract Agreement.
Each Purchase Contract evidenced hereby which is settled either through
Early Settlement or Cash Settlement shall obligate the Holder of the related
Income PRIDES to purchase at the Purchase Price, and the Company to sell, a
number of shares of Common Stock equal to the Early Settlement Rate or the
Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date.
The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on The New York Stock Exchange, Inc.
(the "NYSE") on such date or, if the Common Stock is not listed for trading on
the NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by the Nasdaq National Market, or, if
the Common Stock is not
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so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company. A "Trading
Day" means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the national
or regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Income PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement, an Early Settlement or from the proceeds
of a remarketing of the related Pledged Preferred Securities of such holders. A
Holder of Income PRIDES who does not elect, on or prior to 5:00 p.m. New York
City time on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, to make an effective Cash Settlement or an Early Settlement,
shall pay the Purchase Price for the shares of Common Stock to be issued under
the related Purchase Contract from the Proceeds of the sale of the related
Pledged Preferred Securities held by the Collateral Agent. Such sale will be
made by the Remarketing Agent pursuant to the terms of the Remarketing Agreement
and the Remarketing Underwriting Agreement on the third Business Day immediately
preceding the Purchase Contract Settlement Date. If, as provided in the Purchase
Contract Agreement, upon the occurrence of a Failed Remarketing the Collateral
Agent, for the benefit of the Company, exercises its rights as a secured
creditor with respect to the Pledged Preferred Securities related to this Income
PRIDES certificate, any accrued and unpaid distributions (including deferred
distributions) on such Pledged Preferred Securities will become payable by the
Company to the holder of this Income PRIDES Certificate in the manner provided
for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses as
they appear in the Income PRIDES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Preferred
Security (as defined in the Pledge Agreement) or the appropriate Applicable
Ownership Interest of the Treasury Portfolio forming a part of each Income
PRIDES, or the Liquidation Distribution received in respect of such Pledged
Preferred Security, from the Pledge. An Income PRIDES shall thereafter represent
the right to receive the Preferred Security or the appropriate Applicable
Ownership Interest of the Treasury Portfolio forming a part of such Income
PRIDES, or the
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Liquidation Distribution received in respect of such Preferred Security, in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Preferred Securities. Upon receipt of notice of any meeting at which holders of
Preferred Securities are entitled to vote or upon the solicitation of consents,
waivers or proxies of holders of Preferred Securities, the Agent shall, as soon
as practicable thereafter, mail to the Income PRIDES holders a notice (a)
containing such information as is contained in the notice or solicitation, (b)
stating that each Income PRIDES holder on the record date set by the Agent
therefor (which, to the extent possible, shall be the same date as the record
date for determining the holders of Preferred Securities entitled to vote) shall
be entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Preferred Securities constituting a part of such holder's
Income PRIDES and (c) stating the manner in which such instructions may be
given. Upon the written request of the Income PRIDES Holders on such record
date, the Agent shall endeavor insofar as practicable to vote or cause to be
voted, in accordance with the instructions set forth in such requests, the
maximum number of Preferred Securities as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of an Income PRIDES, the Agent shall abstain from voting the Preferred
Security evidenced by such Income PRIDES.
Upon the occurrence of an Investment Company Event or liquidation of
the Trust, a principal amount of the Debentures constituting the assets of the
Trust and underlying the Preferred Securities equal to the aggregate Stated
Amount of the Pledged Preferred Securities shall be delivered to the Collateral
Agent in exchange for Pledged Preferred Securities. Thereafter, the Debentures
shall be held by the Collateral Agent to secure the obligations of each Holder
of Income PRIDES to purchase shares of Common Stock under the Purchase Contracts
constituting a part of such Income PRIDES. Following the liquidation of the
Trust, the Holders and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Debentures as the Holders and the
Collateral Agent had in respect of the Pledged Preferred Securities, and any
reference in the Purchase Contract Agreement or Pledge Agreement to the
Preferred Securities shall be deemed to be a reference to the Debentures.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent for the benefit of the Company will apply an amount equal to
the Redemption Amount of such Redemption Price to purchase the Treasury
Portfolio and promptly remit the remaining portion of such Redemption Price to
the Agent for payment to the Holders of such Income PRIDES.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such
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security interests rights and obligations with respect to the Treasury Portfolio
as the Holder of Income PRIDES and the Collateral Agent had in respect of the
Preferred Security or Debentures, as the case may be, subject to the Pledge
thereof as provided in Articles II, III, IV, V and VI, of the Pledge Agreement
and any reference herein to the Preferred Security or the Debenture shall be
deemed to be a reference to such Treasury Portfolio.
The Income PRIDES Certificates are issuable only in registered form and
only in denominations of a single Income PRIDES and any integral multiple
thereof. The transfer of any Income PRIDES Certificate will be registered and
Income PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Income PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A holder who elects to substitute Treasury
Securities for Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, thereby creating Growth PRIDES, shall be
responsible for any fees or expenses payable in connection therewith. Except as
provided in the Purchase Contract Agreement, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES shall
not be separable into its constituent parts, and the rights and obligations of
the Holder of such Income PRIDES in respect of Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, and Purchase Contract constituting such Income PRIDES may be transferred
and exchanged only as an Income PRIDES. The holder of an Income PRIDES may
substitute for the Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio securing its obligation under the
related Purchase Contract, Treasury Securities in an aggregate principal amount
equal to the aggregate Stated Amount of the Pledged Preferred Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement. From and after such
Collateral Substitution, the Security for which such Pledged Treasury Securities
secures the holder's obligation under the Purchase Contract shall be referred to
as a "Growth PRIDES." A Holder may make such Collateral Substitution only in
integral multiples of 40 Income PRIDES for 40 Growth PRIDES; provided, however,
that if a Tax Event Redemption has occurred and the Treasury Portfolio has
become a component of the Income PRIDES, a Holder may make such Collateral
Substitutions only in integral multiples of 1,600,000 Income PRIDES for
1,600,000 Growth PRIDES. Such Collateral Substitution may cause the equivalent
aggregate principal amount of this Certificate to be increased or decreased;
provided, however, the equivalent aggregate principal amount outstanding under
this Income PRIDES Certificate shall not exceed $_____________. All such
adjustments to the equivalent aggregate principal amount of this Income PRIDES
Certificate shall be duly recorded by placing an appropriate notation on the
Schedule attached hereto.
A Holder of Growth PRIDES may create or recreate Income PRIDES by
delivering to the Collateral Agent Preferred Securities or the appropriate
Applicable Ownership Interest of the
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Treasury Portfolio, with a Stated Amount, in the case of such Preferred
Securities, or with the appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, in the
case of such appropriate Applicable Ownership Interest of the Treasury
Portfolio, equal to the aggregate principal amount of the Pledged Treasury
Securities in exchange for the release of such Pledged Treasury Securities in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Income PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment Payments,
if any, will be payable at the office of the Agent in The City of New York or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Income PRIDES Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so
deferred shall bear additional Contract Adjustment Payments thereon at the rate
of ____% per annum (computed on the basis of a 360 day year of twelve 30 day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments, if any, may be deferred to a date that is after
the Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Income PRIDES Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of Common Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of this Income PRIDES Certificate
divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then until the Deferred Contract
Adjustment Payments have been paid, the Company may not, and may not permit any
subsidiary of the Company to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company (including other Junior Subordinated Debt Securities)
that rank pari passu with or
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<PAGE> 78
junior in interest to the Subordinated Debentures or make any guarantee payments
with respect to any guarantee by the Company of the debt securities of any
subsidiary of the Company if such guarantee ranks pari passu or junior in
interest to the Subordinated Debentures (other than (a) dividends or
distributions in 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 under such plans in the future, (c) payments under any guarantee, 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).
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, if any, or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Income PRIDES Register. Upon and after the occurrence of a Termination Event,
the Collateral Agent shall release the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
from the Pledge in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of the
Income PRIDES, Holders may early settle Income PRIDES only in integral multiples
of 1,600,000 Income PRIDES. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Income
PRIDES Certificate, the Holder of this Income PRIDES Certificate shall deliver
this Income PRIDES Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the order of the Company in an
amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase Contracts. Upon Early
Settlement of Purchase Contracts by a Holder of the related Securities, the
Pledged Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio underlying such Securities shall be released from the
Pledge as provided in the Pledge Agreement and the Holder shall be
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<PAGE> 79
entitled to receive a number of shares of Common Stock on account of each
Purchase Contract forming part of a Income PRIDES as to which Early Settlement
is effected equal to the Early Settlement Rate; provided however, that upon the
Early Settlement of the Purchase Contracts, the Holder thereof will forfeit the
right to receive any Deferred Contract Adjustment Payments and future Contract
Adjustment Payments on such Purchase Contracts. The Early Settlement Rate shall
initially be equal to _____ shares of Common Stock and shall be adjusted in the
same manner and at the same time as the Settlement Rate is adjusted as provided
in the Purchase Contract Agreement.
Upon registration of transfer of this Income PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Income
PRIDES Certificate. The Company covenants and agrees, and the Holder, by its
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Income PRIDES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Income PRIDES evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to the
Pledge of the Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, underlying this Income
PRIDES Certificate pursuant to the Pledge Agreement. The Holder further
covenants and agrees, that, to the extent and in the manner provided in the
Purchase Contract Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect to the Stated Amount of the Pledged Preferred
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Income PRIDES Certificate
is registered as the owner
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<PAGE> 80
of the Income PRIDES evidenced hereby for the purpose of receiving payments of
distributions payable quarterly on the Preferred Securities, receiving payments
of Contract Adjustment Payments, if any, and any Deferred Contract Adjustment
Payments, performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the Agent
nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian----------------------
(cust) (minor)
Under Uniform Gifts to Minors Act
-------------------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not in the above list.
---------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
---------------------------------------------------------
- ------------------------------------------------------------------------------
- --------
(Please insert Social Security or Taxpayer I.D. or other Identifying
Number of Assignee)
- ------------------------------------------------------------------------------
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<PAGE> 81
______________________________________________________________________________
_________
(Please Print or Type Name and Address Including Postal Zip Code of
Assignee) the within Income PRIDES Certificates and all rights thereunder,
hereby irrevocably constituting and appointing
______________________________________________________________________________
_________
attorney to transfer said Income PRIDES Certificates on the books of
Lincoln National Corporation with full power of substitution in the premises.
Dated:
_________________ _____________________________
Signature
NOTICE: The
signature to this
assignment must
correspond with
the name as it
appears upon the
face of the within
Income PRIDES
Certificates in
every particular,
without alteration
or enlargement or
any change
whatsoever.
Signature Guarantee:
________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Income PRIDES evidenced
by this Income PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:
___________________ ____________________________________
Signature
Signature Guarantee:
_______________
(if assigned to another person)
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<PAGE> 82
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
REGISTERED HOLDER
If shares are to be registered in the name of and delivered to a Person other
than the Holder, please (i) print such Person's name and address and (ii)
provide a guarantee of your signature:
Please print name
and address of
Registered Holder:
______________________________ ______________________________
Name Name
______________________________ ______________________________
Address Address
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Income PRIDES evidenced by this Income PRIDES
Certificate specified below. The undersigned Holder directs that a certificate
for shares of Common Stock deliverable upon such Early Settlement be registered
in the name of, and delivered, together with a check in payment for any
fractional share and any Income PRIDES Certificate representing any Income
PRIDES evidenced hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below.
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<PAGE> 83
Pledged Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, deliverable upon such Early
Settlement will be transferred in accordance with the transfer instructions set
forth below. If shares are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:________________________ _______________________________
Signature
Signature Guarantee:________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
REGISTERED HOLDER
If shares of Common Stock or
Income PRIDES Certificates are
to be registered in the name of
and delivered to and Pledged
Preferred Securities, or the
Treasury Portfolio, as the case
may be, are to be transferred
to a Person other than the
Holder, please print such
Person's name and address:
Please print name
and address of
Registered Holder:
______________________________ ______________________________
Name Name
______________________________ ______________________________
Address Address
______________________________ ______________________________
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<PAGE> 84
______________________________ ______________________________
______________________________ ______________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________
Transfer Instructions for Pledged Preferred Securities, or the Treasury
Portfolio, as the case may be, Transferable Upon Early Settlement or a
Termination Event:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
==============================================================================
<TABLE>
<CAPTION>
====================================================================================================================
Principal Signature of
Amount of this authorized
Global office of
Amount of Amount of increase Certificate Trustee or
decrease in in Principal Amount following such Securities
Principal Amount of the Global decrease or Custodian
Date of the Global Certificate increase
Certificate
====================================================================================================================
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 85
EXHIBIT B
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
No.______ Number of Growth PRIDES________ Cusip No.
Form of Face of Growth PRIDES Certificate
This Growth PRIDES Certificate certifies that __________ is the
registered Holder of the number of Growth PRIDES set forth above. Each Growth
PRIDES represents (i) a 1/40 undivided beneficial ownership interest, of a
Treasury Security having a principal amount at maturity equal to $1,000, subject
to the Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with Lincoln National Corporation, an Indiana corporation (the
"Company"). All capitalized terms used herein which are defined in the Purchase
Contract Agreement have the meanings set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell, not later than
_______________, 2001 (the "Purchase Contract Settlement Date"), at a price
equal to $25 (the "Stated Amount"), a number of shares of Common stock, no par
value per share ("Common Stock"), of the Company equal
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<PAGE> 86
to the Settlement Rate, unless on or prior to the Purchase Contract Settlement
Date there shall have occurred a Termination Event or an Early Settlement with
respect to the Growth PRIDES of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. The purchase price for the shares of Common Stock purchased
pursuant to each Purchase Contract evidenced hereby will be paid by application
of the Proceeds from the Treasury Securities pledged to secure the obligations
under such Purchase Contract in accordance with the terms of the Pledge
Agreement.
The Company shall pay on each Payment Date in respect of each Purchase
Contract evidenced hereby an amount (the "Contract Adjustment Payments") equal
to ___% per annum of the Stated Amount, computed on the basis of the actual
number of days elapsed in a year of 360 day year of twelve 30 day months, as the
case may be, subject to deferral at the option of the Company as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof. Such
Contract Adjustment Payments, if any, shall be payable to the Person in whose
name this Growth PRIDES Certificate (or a Predecessor Growth PRIDES Certificate)
is registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments, if any, will be payable at the office of
the Agent in The City of New York or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears on
the Growth PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
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<PAGE> 87
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Growth PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
LINCOLN NATIONAL CORPORATION
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE FIRST NATIONAL BANK OF
CHICAGO not individually but
solely as Attorney-in-Fact of such
Holder
By:___________________________
Name:
Title:
Dated: , 1998
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<PAGE> 88
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the within-mentioned
Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF
CHICAGO, as Purchase Contract Agent
By:________________________________
Authorized Signatory
(Reverse of
Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of _____, 1998 (as may be supplemented from time to
time, the "Purchase Contract Agreement") between the Company and The First
National Bank of Chicago, as Purchase Contract Agent (including its successors
thereunder, herein called the "Agent"), to which the Purchase Contract Agreement
and supplemental agreements thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Agent, the Company and the Holders and of the terms
upon which the Growth PRIDES Certificates are, and are to be, executed and
delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company to sell, not later than
the Purchase Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price") a number of shares of Common Stock of the Company equal to the
Settlement Rate, unless on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event or an Early Settlement with
respect to the Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $_____ (the "Threshold Appreciation Price"),
_____ shares of Common Stock per Purchase Contract, (b) if the Applicable Market
Value is less than the Threshold Appreciation Price but is greater than the
Reference Price, the number of shares of Common Stock per Purchase Contract
equal to the Stated Amount divided by the Applicable Market Value and (c) if the
Applicable Market Amount is less than or equal to $_____, then _____ shares of
Common Stock per Purchase Contract, in each case subject to adjustment as
provided in the Purchase Contract Agreement. No fractional shares of Common
Stock will be issued upon settlement of Purchase Contracts, as provided in the
Purchase Contract Agreement.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the twenty consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the
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<PAGE> 89
Common Stock on any date of determination means the closing sale price (or, if
no closing price is reported, the last reported sale price) of the Common Stock
as reported by The New York Stock Exchange, Inc. (the "NYSE") on such date or,
if the Common Stock is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if the Common
Stock is not so listed on a United States national or regional securities
exchange, as reported by the Nasdaq National Market, or, if the Common Stock is
not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company. A "Trading
Day" means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the national
or regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Growth PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting either an Early Settlement of each such Purchase Contract or
by applying a principal amount of the Pledged Treasury Securities underlying
such Holder's Growth PRIDES equal to the Stated Amount of such Purchase Contract
to the purchase of the Common Stock.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses as
they appear in the Growth PRIDES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Treasury
Securities (as defined in the Pledge Agreement) forming a part of each Growth
PRIDES from the Pledge.
The Growth PRIDES Certificates are issuable only in registered form and
only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered and
Growth PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Growth PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
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<PAGE> 90
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A Holder who elects to substitute Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, for Treasury Securities, thereby recreating
Income PRIDES, shall be responsible for any fees or expenses associated
therewith. Except as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract underlying a Growth PRIDES remains in effect, such Growth
PRIDES shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Growth PRIDES in respect of the Treasury
Security and the Purchase Contract constituting such Growth PRIDES may be
transferred and exchanged only as a Growth PRIDES. A Holder of Growth PRIDES may
create or recreate Income PRIDES by delivering to the Collateral Agent Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, with a Stated Amount, in the case of such Preferred Securities, or
with the appropriate Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio, in the case of such
appropriate Applicable Ownership Interest of the Treasury Portfolio, equal to
the aggregate principal amount of the Pledged Treasury Securities in exchange
for the release of such Pledged Treasury Securities in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement. From and after such
substitution, the Holder's Security shall be referred to as an "Income PRIDES."
Such substitution may cause the equivalent aggregate principal amount of this
Certificate to be increased or decreased; provided, however, the equivalent
aggregate principal amount outstanding under this Growth PRIDES Certificate
shall not exceed $__________. All such adjustments to the equivalent aggregate
principal amount of this Growth PRIDES Certificate shall be duly recorded by
placing an appropriate notation on the Schedule attached hereto.
A Holder of an Income PRIDES may create or recreate a Growth PRIDES by
delivering to the Collateral Agent Treasury Securities in an aggregate principal
amount equal to the aggregate Stated Amount of the Pledged Preferred Securities
or the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as the case may be, in
exchange for the release of such Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. Any such recreation of a Growth PRIDES may be effected only in
multiples of 40 Income PRIDES for 40 Growth PRIDES; provided, however, if a Tax
Event Redemption has occurred and the Treasury Portfolio has become a component
of the Income PRIDES, a Holder may make such Collateral Substitution in integral
multiples of 1,600,000 Income PRIDES for 1,600,000 Growth PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Growth PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment Payments,
if any, will be payable at the office of the Agent in The City of New York or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Growth PRIDES Register.
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<PAGE> 91
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so
deferred shall bear additional Contract Adjustment Payments thereon at the rate
of ____% per annum (computed on the basis of a 360 day year of twelve 30 day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments shall be due on the next succeeding Payment Date except to the extent
that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments, if any, may be deferred to a date that is after
the Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Growth PRIDES Certificate will
receive on the Purchase Contract Settlement Date, in lieu of a cash payment, a
number of Shares of Common Stock equal to (x) the aggregate amount of Deferred
Contract Adjustment Payments payable to the Holder of the Growth PRIDES
Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then, until the Deferred Contract
Adjustment Payments have been paid, the Company may not, and may not permit any
subsidiary of the Company to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company (including other Junior Subordinated Debt Securities)
that rank pari passu with or junior in interest to the Subordinated Debentures
or make any guarantee payments with respect to any guarantee by the Company of
the debt securities of any subsidiary of the Company if such guarantee ranks
pari passu or junior in interest to the Subordinated Debentures (other than (a)
dividends or distributions in 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 under such plans in the future, (c) payments under any
guarantee, 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).
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of
-84-
<PAGE> 92
any notice or action by any Holder, the Agent or the Company, if, on or prior to
the Purchase Contract Settlement Date, a Termination Event shall have occurred.
Upon the occurrence of a Termination Event, the Company shall promptly but in no
event later than two Business Days thereafter give written notice to the Agent,
the Collateral Agent and to the Holders, at their addresses as they appear in
the Growth PRIDES Register. Upon and after the occurrence of a Termination
Event, the Collateral Agent shall release the Treasury Securities from the
Pledge in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this Growth
PRIDES Certificate, the Holder of this Growth PRIDES Certificate shall deliver
this Growth PRIDES Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the order of the Company in an
amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase Contracts. Upon Early
Settlement of Purchase Contracts by a Holder of the related Securities, the
Pledged Treasury Securities underlying such Securities shall be released from
the Pledge as provided in the Pledge Agreement and the Holder shall be entitled
to receive, a number of shares of Common Stock on account of each Purchase
Contract forming part of a Growth PRIDES as to which Early Settlement is
effected equal to ______ shares of Common Stock per Purchase Contract (the
"Early Settlement Rate"); provided however, that upon the Early Settlement of
the Purchase Contracts, the Holder thereof will forfeit the right to receive any
Deferred Contract Adjustment Payments and future Contract Adjustment Payments on
such Purchase Contracts. The Early Settlement Rate shall be adjusted in the same
manner and at the same time as the Settlement Rate is adjusted as provided in
the Purchase Contract Agreement.
Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Growth
PRIDES Certificate. The Company covenants and agrees, and the Holder, by his
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Growth PRIDES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Growth
-85-
<PAGE> 93
PRIDES evidenced hereby on his behalf as its attorney-in-fact, expressly
withholds any consent to the assumption (i.e., affirmance) of the Purchase
Contracts by the Company or its trustee in the event that the Company becomes
the subject of a case under the Bankruptcy Code, agrees to be bound by the terms
and provisions thereof, covenants and agrees to perform its obligations under
such Purchase Contracts, consents to the provisions of the Purchase Contract
Agreement, authorizes the Agent to enter into and perform the Pledge Agreement
on its behalf as its attorney-in-fact, and consents to the Pledge of the
Treasury Securities underlying this Growth PRIDES Certificate pursuant to the
Pledge Agreement. The Holder further covenants and agrees, that, to the extent
and in the manner provided in the Purchase Contract Agreement and the Pledge
Agreement, but subject to the terms thereof, payments in respect to the Stated
Amount of the Pledged Treasury Securities on the Purchase Contract Settlement
Date shall be paid by the Collateral Agent to the Company in satisfaction of
such Holder's obligations under such Purchase Contract and such Holder shall
acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Growth PRIDES Certificate
is registered as the owner of the Growth PRIDES evidenced hereby for the purpose
of receiving payments of interest on the Treasury Securities, receiving payments
of Contract Adjustment Payments, if any, and any Deferred Contract Adjustment
Payments, performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the Agent
nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
-86-
<PAGE> 94
TEN COM - as tenants in common
UNIF GIFT MIN ACT - -----------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not in the above list.
------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
----------------------------------------------------------
-----------------------------------------------------------------
(Please insert
Social Security or Taxpayer I.D. or other Identifying Number of Assignee)
- --------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Growth PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
- --------------------------------------------------------------------------------
attorney to transfer said Growth PRIDES Certificates on the books of Lincoln
National Corporation with full power of substitution in the premises.
Dated:
----------------- ------------------------------
Signature
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Growth PRIDES
Certificates in every particular, without
alteration or enlargement or any change
whatsoever.
-87-
<PAGE> 95
Signature Guarantee:________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Growth PRIDES evidenced
by this Growth PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:___________________ ________________________________
Signature:
Signature Guarantee:____________
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
REGISTERED HOLDER
If shares are to be registered
in the name of and delivered to
a Person other the Holder,
please (i) print such Person's
name and address:
Please print name and address of Registered
Holder:
-88-
<PAGE> 96
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Growth PRIDES evidenced by this Growth PRIDES
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Growth PRIDES with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Growth PRIDES Certificate representing any Growth PRIDES evidenced hereby as to
which Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Treasury Securities deliverable upon such
Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer or
similar tax payable incident thereto.
Dated:________________________ _________________________________________
Signature:
Signature Guarantee:_____________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
REGISTERED HOLDER
If shares of Common Stock of
Growth PRIDES Certificates are
to be registered in the name of
and delivered to and Pledged
Treasury Securities are to be
transferred to a Person other
than the Holder, please print
-89-
<PAGE> 97
such Person's name and address:
Please print name
and address of
Registered Holder:
______________________________ ______________________________
Name Name
______________________________ ______________________________
Address Address
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
______________________________
______________________________
______________________________
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
===============================================================================
-90-
<PAGE> 98
<TABLE>
<CAPTION>
====================================================================================================================
Principal Signature of
Amount of this authorized
Global office of
Amount of Amount of increase Certificate Trustee or
decrease in in Principal Amount following such Securities
Principal Amount of the Global decrease or Custodian
Date of the Global Certificate increase
Certificate
====================================================================================================================
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
-91-
<PAGE> 99
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attn: Global Trust Services
Re: FELINE PRIDES of Lincoln National Corporation
(the "Company"), and Lincoln National Capital IV
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of August 14, 1998, among the Company, yourselves, as
Collateral Agent, and ourselves, as Purchase Contract Agent and as
attorney-in-fact for the holders of [Income PRIDES] [Growth PRIDES] from time to
time, that the holder of securities listed below (the "Holder") has elected to
substitute [$_____ aggregate [principal amount] of Treasury Securities]
[$_______ Stated Amount of Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] in exchange
for the [Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] to you, as Collateral
Agent. We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be], and upon the
payment by such Holder of any applicable fees, to release the [Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to such [Income
PRIDES] [Growth PRIDES] to us in accordance with the Holder's instructions.
Date: ________________________ _________________________________
By: _____________________________
Name:
Title:
Guarantee:________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security
-92-
<PAGE> 100
Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] for the
[Pledged Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities]:
______________________________ _________________________________
Name Social Security or other Taxpayer
Identification Number, if any
______________________________
Address
______________________________
______________________________
-93-
<PAGE> 101
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Lincoln National Corporation
(the "Company"), and Lincoln National Capital IV
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent, $_______ aggregate
principal amount of [Treasury Securities] [Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] in exchange for the [Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,]
[Pledged Treasury Securities] held by the Collateral Agent, in accordance with
Section [4.1][4.2] of the Pledge Agreement, dated August 14, 1998, among you,
the Company and the Collateral Agent. The undersigned Holder has paid the
Collateral Agent all applicable fees relating to such exchange. The undersigned
Holder hereby instructs you to instruct the Collateral Agent to release to you
on behalf of the undersigned Holder the [Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] [Pledged Treasury Securities] related to such [Income PRIDES] [Growth
PRIDES].
Dated:________________________ ____________________________
Signature
Signature Guarantee:________
Please print name and address of Registered Holder:
______________________________ ____________________________
Name Social Security or other
Taxpayer Identification
Number, if any
Address
______________________________
______________________________
______________________________
-94-
<PAGE> 102
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Lincoln National Corporation
(the "Company"), and Lincoln National Capital IV
The undersigned Holder hereby irrevocably notifies you in
accordance with Section 5.9 of the Purchase Contract Agreement, dated as of
August 14, 1998 among the Company, yourselves, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder has
elected to pay to the Collateral Agent, on or prior to 11:00 a.m. New York City
time, on the Business Day immediately preceding the Purchase Contract Settlement
Date, (in lawful money of the United States by [certified or cashiers check or]
wire transfer, in each case in immediately available funds), $_________ as the
Purchase Price for the shares of Common Stock issuable to such Holder by the
Company under the related Purchase Contract on the Purchase Contract Settlement
Date. The undersigned Holder hereby instructs you to notify promptly the
Collateral Agent of the undersigned Holders' election to make such cash
settlement with respect to the Purchase Contracts related to such Holder's
[Income PRIDES] [Growth PRIDES].
Dated:________________________ ___________________________
Signature
Signature Guarantee:_______
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder:
-95-
<PAGE> 103
______________________________ ______________________________
Name Social Security or other
Taxpayer Identification Number,
if any
Address
______________________________
______________________________
______________________________
-96-
<PAGE> 1
EXHIBIT 4.7
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
No. IP-1 Number of Income PRIDES 7,000,000 Cusip No. 534187604
7.75% Income PRIDES
This Income PRIDES Certificate certifies that Cede & Co. is the
registered Holder of the number of Income PRIDES set forth above. Each Income
PRIDES represents (i) either (a) beneficial ownership by the Holder of one 6.40%
Preferred Security (the "Preferred Security") of Lincoln National Capital IV, a
Delaware statutory business trust (the "Trust"), having a stated liquidation
amount of $25, subject to the Pledge of such Preferred Security by such Holder
pursuant to the Pledge Agreement or (b) upon the occurrence of a Tax Event
Redemption prior to the Purchase Contract Settlement Date, the appropriate
Applicable Ownership Interest of the Treasury Portfolio, subject to the Pledge
of such Applicable Ownership Interest of the Treasury Portfolio by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract with Lincoln National Corporation, an Indiana
corporation (the "Company"). All capitalized terms used herein which are defined
in the Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, constituting part of each Income PRIDES evidenced hereby have been
pledged to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising a portion of
such Income PRIDES.
The Pledge Agreement provides that all payments of the Stated Amount of
or the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as the case may be, or
cash distributions on, any Pledged Preferred Securities (as defined in the
Pledge Agreement) or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, constituting part of the Income PRIDES
received by the Collateral Agent shall be paid by the Collateral Agent by wire
transfer in same day funds (i) in the case of (A) cash distributions with
respect to Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, and (B) any payments of the Stated
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such terms) of the Treasury Portfolio, as the case may
be, with respect to any Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, that have been
released from the Pledge pursuant to the Pledge Agreement, to the Agent to the
account designated by the Agent, no later than 2:00 p.m., New York City time, on
the Business Day such payment is received by the Collateral Agent (provided that
in the event such payment is received by the Collateral Agent on a day that is
not a Business Day or after 12:30 p.m., New York City time, on a Business Day,
then such payment shall be made no later than 10:30 a.m., New York City time, on
the next succeeding Business Day) and (ii) in the case of payments of the Stated
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, as the case may
be, of any Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as
<PAGE> 2
the case may be, to the Company on the Purchase Contract Settlement Date (as
defined herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Income PRIDES
of which such Pledged Preferred Securities or the Treasury Portfolio, as the
case may be, are a part under the Purchase Contracts forming a part of such
Income PRIDES. Distributions on any Preferred Security or the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, forming part of an
Income PRIDES evidenced hereby which are payable quarterly in arrears on
February 16, May 16, August 16 and November 16 each year, commencing November
16, 1998 (a "Payment Date"), shall, subject to receipt thereof by the Agent from
the Collateral Agent, be paid to the Person in whose name this Income PRIDES
Certificate (or a Predecessor Income PRIDES Certificate) is registered at the
close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, not later than
August 16, 2001 (the "Purchase Contract Settlement Date"), at a price equal to
$25 (the "Stated Amount"), a number of shares of Common Stock, no par value
("Common Stock"), of the Company, equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Income PRIDES of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the
Purchase Contract Settlement Date by application of payment received in respect
of the Stated Amount or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, of the Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, pledged to secure the obligations under such Purchase Contract of the
Holder of the Income PRIDES of which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of an Income PRIDES evidenced hereby an amount
(the "Contract Adjustment Payments") equal to 1.35% per annum of the Stated
Amount, computed on the basis of a 360 day year of twelve 30 day months, subject
to deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments, if any, shall be payable to the Person in whose name this
Income PRIDES Certificate (or a Predecessor Income PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment Date.
Distributions on the Preferred Securities or the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
of the Treasury Portfolio, as the case may be, and Contract Adjustment Payments,
if any, will be payable at the office of the Agent in The City of New York or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto as such address appears on the Income PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
-2-
<PAGE> 3
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Income PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
LINCOLN NATIONAL CORPORATION
By:
------------------------------
Name: Richard C. Vaughan
Title: Executive Vice President
and Chief Financial Officer
By:
------------------------------
Name: Janet Whitney-Chrzan
Title: Vice President and Treasurer
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE FIRST NATIONAL BANK OF
CHICAGO not individually but
solely as Attorney-in-Fact of such
Holder
By:
------------------------------
Name: John R. Prendiville
Title: Vice President
Dated: August 14, 1998
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
By:
------------------------------
Authorized Signatory
-3-
<PAGE> 4
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of August 14, 1998 (as may be supplemented from
time to time, the "Purchase Contract Agreement"), between the Company and The
First National Bank of Chicago, as Purchase Contract Agent (herein called the
"Agent"), to which Purchase Contract Agreement and supplemental agreements
thereto reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company, and the Holders and of the terms upon which the Income
PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, not later than
the Purchase Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price"), a number of shares of Common Stock of the Company equal to
the Settlement Rate, unless, on or prior to the Purchase Contract Settlement
Date, there shall have occurred a Termination Event or Early Settlement with
respect to the Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $111.45 (the "Threshold Appreciation Price"),
.2243 shares of Common Stock per Purchase Contract, (b) if the Applicable Market
Value is less than the Threshold Appreciation Price but is greater than $92.875
(the "Reference Price"), the number of shares of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value and
(c) if the Applicable Market Amount is less than or equal to the Reference
Price, .2692 shares of Common Stock per Purchase Contract, in each case subject
to adjustment as provided in the Purchase Contract Agreement. No fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Income PRIDES to purchase at the Purchase Price, and the Company to
sell, a number of shares of Common Stock equal to the Early Settlement Rate or
the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date.
The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on The New York Stock Exchange, Inc.
(the "NYSE") on such date or, if the Common Stock is not listed for trading on
the NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by the Nasaq National Market, or, if
the Common Stock is not so reported, the last quoted bid price for the Common
Stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company. A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Income PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement, an Early Settlement or from the proceeds
of a remarketing of the related Pledged Preferred Securities of such holders. A
Holder of Income PRIDES who does not elect, on or prior to 5:00 p.m. New York
City time on the fifth Business Day immediately preceding the Purchase
-4-
<PAGE> 5
Contract Settlement Date, to make an effective Cash Settlement or an Early
Settlement, shall pay the Purchase Price for the shares of Common Stock to be
issued under the related Purchase Contract from the Proceeds of the sale of the
related Pledged Preferred Securities held by the Collateral Agent. Such sale
will be made by the Remarketing Agent pursuant to the terms of the Remarketing
Agreement and the Remarketing Underwriting Agreement on the third Business Day
immediately preceding the Purchase Contract Settlement Date. If, as provided in
the Purchase Contract Agreement, upon the occurrence of a Failed Remarketing the
Collateral Agent, for the benefit of the Company, exercises its rights as a
secured creditor with respect to the Pledged Preferred Securities related to
this Income PRIDES certificate, any accrued and unpaid distributions (including
deferred distributions) on such Pledged Preferred Securities will become payable
by the Company to the holder of this Income PRIDES Certificate in the manner
provided for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses as
they appear in the Income PRIDES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Preferred
Security (as defined in the Pledge Agreement) or the appropriate Applicable
Ownership Interest of the Treasury Portfolio forming a part of each Income
PRIDES, or the Liquidation Distribution received in respect of such Pledged
Preferred Security, from the Pledge. An Income PRIDES shall thereafter represent
the right to receive the Preferred Security or the appropriate Applicable
Ownership Interest of the Treasury Portfolio forming a part of such Income
PRIDES, or the Liquidation Distribution received in respect of such Preferred
Security, in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Preferred Securities. Upon receipt of notice of any meeting at which holders of
Preferred Securities are entitled to vote or upon the solicitation of consents,
waivers or proxies of holders of Preferred Securities, the Agent shall, as soon
as practicable thereafter, mail to the Income PRIDES holders a notice (a)
containing such information as is contained in the notice or solicitation, (b)
stating that each Income PRIDES holder on the record date set by the Agent
therefor (which, to the extent possible, shall be the same date as the record
date for determining the holders of Preferred Securities entitled to vote) shall
be entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Preferred Securities constituting a part of such holder's
Income PRIDES and (c) stating the manner in which such instructions may be
given. Upon the written request of the Income PRIDES Holders on such record
date, the Agent shall endeavor insofar as practicable to vote or cause to be
voted, in accordance with the instructions set forth in such requests, the
maximum number of Preferred Securities as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of an Income PRIDES, the Agent shall abstain from voting the Preferred
Security evidenced by such Income PRIDES.
Upon the occurrence of an Investment Company Event or liquidation of
the Trust, a principal amount of the Debentures constituting the assets of the
Trust and underlying the Preferred Securities equal to the aggregate Stated
Amount of the Pledged Preferred Securities shall be delivered to the Collateral
Agent in exchange for Pledged Preferred Securities. Thereafter, the Debentures
shall be held by the Collateral Agent to secure the obligations of each Holder
of Income PRIDES to purchase shares of Common Stock under the Purchase Contracts
constituting a part of such Income PRIDES. Following the liquidation of the
Trust, the Holders and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Debentures as the Holders and the
Collateral Agent had in respect of the Pledged Preferred Securities, and any
reference in the Purchase Contract Agreement or Pledge Agreement to the
Preferred Securities shall be deemed to be a reference to the Debentures.
-5-
<PAGE> 6
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent for the benefit of the Company will apply an amount equal to
the Redemption Amount of such Redemption Price to purchase, the Treasury
Portfolio and promptly remit the remaining portion of such Redemption Price to
the Agent for payment to the Holders of such Income PRIDES.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests rights and obligations with
respect to the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of the Preferred Security or Debentures, as the
case may be, subject to the Pledge thereof as provided in Articles II, III, IV,
V and VI, of the Pledge Agreement and any reference herein to the Preferred
Security or the Debenture shall be deemed to be reference to such Treasury
Portfolio.
The Income PRIDES Certificates are issuable only in registered form and
only in denominations of a single Income PRIDES and any integral multiple
thereof. The transfer of any Income PRIDES Certificate will be registered and
Income PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Income PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A holder who elects to substitute Treasury
Securities for Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, thereby creating Growth PRIDES, shall be
responsible for any fees or expenses payable in connection therewith. Except as
provided in the Purchase Contract Agreement, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES shall
not be separable into its constituent parts, and the rights and obligations of
the Holder of such Income PRIDES in respect of Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, and Purchase Contract constituting such Income PRIDES may be transferred
and exchanged only as an Income PRIDES. The holder of an Income PRIDES may
substitute for the Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio securing its obligation under the
related Purchase Contract, Treasury Securities in an aggregate principal amount
equal to the aggregate Stated Amount of the Pledged Preferred Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement. From and after such
Collateral Substitution, the Security for which such Pledged Treasury Securities
secures the holder's obligation under the Purchase Contract shall be referred to
as a "Growth PRIDES." A Holder may make such Collateral Substitution only in
integral multiples of 40 Income PRIDES for 40 Growth PRIDES; provided, however,
that if a Tax Event Redemption has occurred and the Treasury Portfolio has
become a component of the Income PRIDES, a Holder may make such Collateral
Substitutions only in integral multiples of 1,600,000 Income PRIDES for
1,600,000 Growth PRIDES. Such Collateral Substitution may cause the equivalent
aggregate principal amount of this Certificate to be increased or decreased;
provided, however, the equivalent aggregate principal amount outstanding under
this Income PRIDES Certificate shall not exceed $230,000,000. All such
adjustments to the equivalent aggregate principal amount of this Income PRIDES
Certificate shall be duly recorded by placing an appropriate notation on the
Schedule attached hereto.
A Holder of Growth PRIDES may create or recreate Income PRIDES by
delivering to the Collateral Agent Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, with a Stated Amount,
in the case of such Preferred Securities, or with the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, in the case of such appropriate Applicable Ownership
Interest of the Treasury Portfolio, equal to the aggregate principal amount of
the Pledged Treasury
-6-
<PAGE> 7
Securities in exchange for the release of such Pledged Treasury Securities in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Income PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment Payments,
if any, will be payable at the office of the Agent in The City of New York or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Income PRIDES Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so
deferred shall bear additional Contract Adjustment Payments thereon at the rate
of 8.25% per annum (computed on the basis of a 360 day year of twelve 30 day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments, if any, may be deferred to a date that is after
the Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Income PRIDES Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of Common Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of this Income PRIDES Certificate
divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then until the Deferred Contract
Adjustment Payments have been paid, the Company may not, and may not permit any
subsidiary of the Company to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company (including other Junior Subordinated Debt Securities)
that rank pari passu with or junior in interest to the Subordinated Debentures
or make any guarantee payments with respect to any guarantee by the Company of
the debt securities of any subsidiary of the Company if such guarantee ranks
pari passu or junior in interest to the Subordinated Debentures (other than (a)
dividends or distributions in 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 under such plans in the future, (c) payments under any
guarantee, 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).
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, if any, or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Income PRIDES Register. Upon and after the occurrence of a Termination Event,
the Collateral Agent shall release the Preferred Securities or the appropriate
-7-
<PAGE> 8
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
from the Pledge in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of the
Income PRIDES, Holders may early settle Income PRIDES only in integral multiples
of 1,600,000 Income PRIDES. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Income
PRIDES Certificate, the Holder of this Income PRIDES Certificate shall deliver
this Income PRIDES Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the order of the Company in an
amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase Contracts. Upon Early
Settlement of Purchase Contracts by a Holder of the related Securities, the
Pledged Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio underlying such Securities shall be released from the
Pledge as provided in the Pledge Agreement and the Holder shall be entitled to
receive a number of shares of Common Stock on account of each Purchase Contract
forming part of a Income PRIDES as to which Early Settlement is effected equal
to the Early Settlement Rate; provided however, that upon the Early Settlement
of the Purchase Contracts, the Holder thereof will forfeit the right to receive
any Deferred Contract Adjustment Payments on such Purchase Contracts. The Early
Settlement Rate shall initially be equal to .2243 shares of Common Stock and
shall be adjusted in the same manner and at the same time as the Settlement Rate
is adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Income PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Income
PRIDES Certificate. The Company covenants and agrees, and the Holder, by its
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Income PRIDES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Income PRIDES evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to the
Pledge of the Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, underlying this Income
PRIDES Certificate pursuant to the Pledge Agreement. The Holder further
covenants and agrees, that, to the extent and in the manner provided in the
Purchase Contract Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect to the Stated Amount of the Pledged Preferred
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
-8-
<PAGE> 9
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Income PRIDES Certificate
is registered as the owner of the Income PRIDES evidenced hereby for the purpose
of receiving payments of distributions payable quarterly on the Preferred
Securities, receiving payments of Contract Adjustment Payments, if any, and any
Deferred Contract Adjustment Payments, performance of the Purchase Contracts and
for all other purposes whatsoever, whether or not any payments in respect
thereof be overdue and notwithstanding any notice to the contrary, and neither
the Company, the Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian----------------------
(cust) (minor)
Under Uniform Gifts to Minors Act
-------------------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not in the above list.
------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
-9-
<PAGE> 10
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ________________________________________
attorney to transfer said Income PRIDES Certificates on the books of Lincoln
National Corporation with full power of substitution in the premises.
Dated: _________________ _____________________________
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Income PRIDES
Certificates in every particular,
without alteration or enlargement or
any change whatsoever.
Signature Guarantee:________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Income PRIDES evidenced
by this Income PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:___________________ ________________________________
Signature
Signature Guarantee:_______________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
REGISTERED HOLDER
If shares are to be registered in the name Please print name and address of
of and delivered to a Person other than the Registered Holder:
Holder, please (i) print such Person's name
and address and (ii) provide a guarantee
of your signature:
-10-
<PAGE> 11
______________________________ ______________________________
Name Name
______________________________ ______________________________
Address Address
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Income PRIDES evidenced by this Income PRIDES
Certificate specified below. The undersigned Holder directs that a certificate
for shares of Common Stock deliverable upon such Early Settlement be registered
in the name of, and delivered, together with a check in payment for any
fractional share and any Income PRIDES Certificate representing any Income
PRIDES evidenced hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below. Pledged Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, deliverable upon such Early Settlement will be
transferred in accordance with the transfer instructions set forth below. If
shares are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incident thereto.
Dated:
______________________________ ______________________________
Signature
Signature Guarantee:
______________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
-11-
<PAGE> 12
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
REGISTERED HOLDER
If shares of Common Stock or Please print name and address of
Income PRIDES Certificates are Registered Holder:
to be registered in the name of
and delivered to and Pledged
Preferred Securities, or the
Treasury Portfolio, as the case
may be, are to be transferred
to a Person other than the
Holder, please print such
Person's name and address:
______________________________ ______________________________
Name Name
______________________________ ______________________________
Address Address
______________________________ ______________________________
______________________________ ______________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________
Transfer Instructions for Pledged Preferred Securities, or the Treasury
Portfolio, as the case may be, Transferable Upon Early Settlement or a
Termination Event:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
-12-
<PAGE> 13
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
<TABLE>
<CAPTION>
==================================================================================================================
Principal Signature of
Amount of this authorized
Global office of
Amount of Amount of increase Certificate Trustee or
decrease in in Principal Amount following such Securities
Principal Amount of the Global decrease or Custodian
Date of the Global Certificate increase
Certificate
<S> <C> <C> <C> <C>
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
</TABLE>
-13-
<PAGE> 14
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
No. IP-2 Number of Income PRIDES 1,200,000 Cusip No. 534187604
7.75% Income PRIDES
This Income PRIDES Certificate certifies that Cede & Co. is the
registered Holder of the number of Income PRIDES set forth above. Each Income
PRIDES represents (i) either (a) beneficial ownership by the Holder of one 6.40%
Preferred Security (the "Preferred Security") of Lincoln National Capital IV, a
Delaware statutory business trust (the "Trust"), having a stated liquidation
amount of $25, subject to the Pledge of such Preferred Security by such Holder
pursuant to the Pledge Agreement or (b) upon the occurrence of a Tax Event
Redemption prior to the Purchase Contract Settlement Date, the appropriate
Applicable Ownership Interest of the Treasury Portfolio, subject to the Pledge
of such Applicable Ownership Interest of the Treasury Portfolio by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract with Lincoln National Corporation, an Indiana
corporation (the "Company"). All capitalized terms used herein which are defined
in the Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, constituting part of each Income PRIDES evidenced hereby have been
pledged to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising a portion of
such Income PRIDES.
The Pledge Agreement provides that all payments of the Stated Amount of
or the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as the case may be, or
cash distributions on, any Pledged Preferred Securities (as defined in the
Pledge Agreement) or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, constituting part of the Income PRIDES
received by the Collateral Agent shall be paid by the Collateral Agent by wire
transfer in same day funds (i) in the case of (A) cash distributions with
respect to Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, and (B) any payments of the Stated
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such terms) of the Treasury Portfolio, as the case may
be, with respect to any Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, that have been
released from the Pledge pursuant to the Pledge Agreement, to the Agent to the
account designated by the Agent, no later than 2:00 p.m., New York City time, on
the Business Day such payment is received by the Collateral Agent (provided that
in the event such payment is received by the Collateral Agent on a day that is
not a Business Day or after 12:30 p.m., New York City time, on a Business Day,
then such payment shall be made no later than 10:30 a.m., New York City time, on
the next succeeding Business Day) and (ii) in the case of payments of the Stated
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, as the case may
be, of any Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as
<PAGE> 15
the case may be, to the Company on the Purchase Contract Settlement Date (as
defined herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Income PRIDES
of which such Pledged Preferred Securities or the Treasury Portfolio, as the
case may be, are a part under the Purchase Contracts forming a part of such
Income PRIDES. Distributions on any Preferred Security or the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, forming part of an
Income PRIDES evidenced hereby which are payable quarterly in arrears on
February 16, May 16, August 16 and November 16 each year, commencing November
16, 1998 (a "Payment Date"), shall, subject to receipt thereof by the Agent from
the Collateral Agent, be paid to the Person in whose name this Income PRIDES
Certificate (or a Predecessor Income PRIDES Certificate) is registered at the
close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, not later than
August 16, 2001 (the "Purchase Contract Settlement Date"), at a price equal to
$25 (the "Stated Amount"), a number of shares of Common Stock, no par value
("Common Stock"), of the Company, equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Income PRIDES of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the
Purchase Contract Settlement Date by application of payment received in respect
of the Stated Amount or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, of the Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, pledged to secure the obligations under such Purchase Contract of the
Holder of the Income PRIDES of which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of an Income PRIDES evidenced hereby an amount
(the "Contract Adjustment Payments") equal to 1.35% per annum of the Stated
Amount, computed on the basis of a 360 day year of twelve 30 day months, subject
to deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments, if any, shall be payable to the Person in whose name this
Income PRIDES Certificate (or a Predecessor Income PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment Date.
Distributions on the Preferred Securities or the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
of the Treasury Portfolio, as the case may be, and Contract Adjustment Payments,
if any, will be payable at the office of the Agent in The City of New York or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto as such address appears on the Income PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
-2-
<PAGE> 16
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Income PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
LINCOLN NATIONAL CORPORATION
By:
--------------------------------
Name: Richard C. Vaughan
Title: Executive Vice President and
Chief Financial Officer
By:
--------------------------------
Name: Janet Chrzan
Title: Vice President and Treasurer
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE FIRST NATIONAL BANK OF
CHICAGO not individually but solely
as Attorney-in-Fact of such Holder
By:
--------------------------------
Name: John R. Prendiville
Title: Vice President
Dated: August 21, 1998
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF
CHICAGO, as Purchase Contract
Agent
By:
--------------------------------
Authorized Officer
-3-
<PAGE> 17
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of August 14, 1998 (as may be supplemented from
time to time, the "Purchase Contract Agreement"), between the Company and The
First National Bank of Chicago, as Purchase Contract Agent (herein called the
"Agent"), to which Purchase Contract Agreement and supplemental agreements
thereto reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company, and the Holders and of the terms upon which the Income
PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, not later than
the Purchase Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price"), a number of shares of Common Stock of the Company equal to
the Settlement Rate, unless, on or prior to the Purchase Contract Settlement
Date, there shall have occurred a Termination Event or Early Settlement with
respect to the Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $111.45 (the "Threshold Appreciation Price"),
.2243 shares of Common Stock per Purchase Contract, (b) if the Applicable Market
Value is less than the Threshold Appreciation Price but is greater than $92.875
(the "Reference Price"), the number of shares of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value and
(c) if the Applicable Market Amount is less than or equal to the Reference
Price, .2692 shares of Common Stock per Purchase Contract, in each case subject
to adjustment as provided in the Purchase Contract Agreement. No fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Income PRIDES to purchase at the Purchase Price, and the Company to
sell, a number of shares of Common Stock equal to the Early Settlement Rate or
the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date.
The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on The New York Stock Exchange, Inc.
(the "NYSE") on such date or, if the Common Stock is not listed for trading on
the NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by the Nasaq National Market, or, if
the Common Stock is not so reported, the last quoted bid price for the Common
Stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company. A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Income PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement, an Early Settlement or from the proceeds
of a remarketing of the related Pledged Preferred Securities of such holders. A
Holder of Income PRIDES who does not elect, on or prior to 5:00 p.m. New York
City time on the fifth Business Day immediately preceding the Purchase
-4-
<PAGE> 18
Contract Settlement Date, to make an effective Cash Settlement or an Early
Settlement, shall pay the Purchase Price for the shares of Common Stock to be
issued under the related Purchase Contract from the Proceeds of the sale of the
related Pledged Preferred Securities held by the Collateral Agent. Such sale
will be made by the Remarketing Agent pursuant to the terms of the Remarketing
Agreement and the Remarketing Underwriting Agreement on the third Business Day
immediately preceding the Purchase Contract Settlement Date. If, as provided in
the Purchase Contract Agreement, upon the occurrence of a Failed Remarketing the
Collateral Agent, for the benefit of the Company, exercises its rights as a
secured creditor with respect to the Pledged Preferred Securities related to
this Income PRIDES certificate, any accrued and unpaid distributions (including
deferred distributions) on such Pledged Preferred Securities will become payable
by the Company to the holder of this Income PRIDES Certificate in the manner
provided for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses as
they appear in the Income PRIDES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Preferred
Security (as defined in the Pledge Agreement) or the appropriate Applicable
Ownership Interest of the Treasury Portfolio forming a part of each Income
PRIDES, or the Liquidation Distribution received in respect of such Pledged
Preferred Security, from the Pledge. An Income PRIDES shall thereafter represent
the right to receive the Preferred Security or the appropriate Applicable
Ownership Interest of the Treasury Portfolio forming a part of such Income
PRIDES, or the Liquidation Distribution received in respect of such Preferred
Security, in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Preferred Securities. Upon receipt of notice of any meeting at which holders of
Preferred Securities are entitled to vote or upon the solicitation of consents,
waivers or proxies of holders of Preferred Securities, the Agent shall, as soon
as practicable thereafter, mail to the Income PRIDES holders a notice (a)
containing such information as is contained in the notice or solicitation, (b)
stating that each Income PRIDES holder on the record date set by the Agent
therefor (which, to the extent possible, shall be the same date as the record
date for determining the holders of Preferred Securities entitled to vote) shall
be entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Preferred Securities constituting a part of such holder's
Income PRIDES and (c) stating the manner in which such instructions may be
given. Upon the written request of the Income PRIDES Holders on such record
date, the Agent shall endeavor insofar as practicable to vote or cause to be
voted, in accordance with the instructions set forth in such requests, the
maximum number of Preferred Securities as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of an Income PRIDES, the Agent shall abstain from voting the Preferred
Security evidenced by such Income PRIDES.
Upon the occurrence of an Investment Company Event or liquidation of
the Trust, a principal amount of the Debentures constituting the assets of the
Trust and underlying the Preferred Securities equal to the aggregate Stated
Amount of the Pledged Preferred Securities shall be delivered to the Collateral
Agent in exchange for Pledged Preferred Securities. Thereafter, the Debentures
shall be held by the Collateral Agent to secure the obligations of each Holder
of Income PRIDES to purchase shares of Common Stock under the Purchase Contracts
constituting a part of such Income PRIDES. Following the liquidation of the
Trust, the Holders and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Debentures as the Holders and the
Collateral Agent had in respect of the Pledged Preferred Securities, and any
reference in the Purchase Contract Agreement or Pledge Agreement to the
Preferred Securities shall be deemed to be a reference to the Debentures.
-5-
<PAGE> 19
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent for the benefit of the Company will apply an amount equal to
the Redemption Amount of such Redemption Price to purchase, the Treasury
Portfolio and promptly remit the remaining portion of such Redemption Price to
the Agent for payment to the Holders of such Income PRIDES.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests rights and obligations with
respect to the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of the Preferred Security or Debentures, as the
case may be, subject to the Pledge thereof as provided in Articles II, III, IV,
V and VI, of the Pledge Agreement and any reference herein to the Preferred
Security or the Debenture shall be deemed to be reference to such Treasury
Portfolio.
The Income PRIDES Certificates are issuable only in registered form and
only in denominations of a single Income PRIDES and any integral multiple
thereof. The transfer of any Income PRIDES Certificate will be registered and
Income PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Income PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A holder who elects to substitute Treasury
Securities for Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, thereby creating Growth PRIDES, shall be
responsible for any fees or expenses payable in connection therewith. Except as
provided in the Purchase Contract Agreement, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES shall
not be separable into its constituent parts, and the rights and obligations of
the Holder of such Income PRIDES in respect of Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, and Purchase Contract constituting such Income PRIDES may be transferred
and exchanged only as an Income PRIDES. The holder of an Income PRIDES may
substitute for the Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio securing its obligation under the
related Purchase Contract, Treasury Securities in an aggregate principal amount
equal to the aggregate Stated Amount of the Pledged Preferred Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement. From and after such
Collateral Substitution, the Security for which such Pledged Treasury Securities
secures the holder's obligation under the Purchase Contract shall be referred to
as a "Growth PRIDES." A Holder may make such Collateral Substitution only in
integral multiples of 40 Income PRIDES for 40 Growth PRIDES; provided, however,
that if a Tax Event Redemption has occurred and the Treasury Portfolio has
become a component of the Income PRIDES, a Holder may make such Collateral
Substitutions only in integral multiples of 1,600,000 Income PRIDES for
1,600,000 Growth PRIDES. Such Collateral Substitution may cause the equivalent
aggregate principal amount of this Certificate to be increased or decreased;
provided, however, the equivalent aggregate principal amount outstanding under
this Income PRIDES Certificate shall not exceed $230,000,000. All such
adjustments to the equivalent aggregate principal amount of this Income PRIDES
Certificate shall be duly recorded by placing an appropriate notation on the
Schedule attached hereto.
A Holder of Growth PRIDES may create or recreate Income PRIDES by
delivering to the Collateral Agent Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, with a Stated Amount,
in the case of such Preferred Securities, or with the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, in the case of such appropriate Applicable Ownership
Interest of the Treasury Portfolio, equal to the aggregate principal amount of
the Pledged Treasury
-6-
<PAGE> 20
Securities in exchange for the release of such Pledged Treasury Securities in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Income PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment Payments,
if any, will be payable at the office of the Agent in The City of New York or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Income PRIDES Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so
deferred shall bear additional Contract Adjustment Payments thereon at the rate
of 8.25% per annum (computed on the basis of a 360 day year of twelve 30 day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments, if any, may be deferred to a date that is after
the Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Income PRIDES Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of Common Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of this Income PRIDES Certificate
divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then until the Deferred Contract
Adjustment Payments have been paid, the Company may not, and may not permit any
subsidiary of the Company to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company (including other Junior Subordinated Debt Securities)
that rank pari passu with or junior in interest to the Subordinated Debentures
or make any guarantee payments with respect to any guarantee by the Company of
the debt securities of any subsidiary of the Company if such guarantee ranks
pari passu or junior in interest to the Subordinated Debentures (other than (a)
dividends or distributions in 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 under such plans in the future, (c) payments under any
guarantee, 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).
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, if any, or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Income PRIDES Register. Upon and after the occurrence of a Termination Event,
the Collateral Agent shall release the Preferred Securities or the appropriate
-7-
<PAGE> 21
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
from the Pledge in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of the
Income PRIDES, Holders may early settle Income PRIDES only in integral multiples
of 1,600,000 Income PRIDES. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Income
PRIDES Certificate, the Holder of this Income PRIDES Certificate shall deliver
this Income PRIDES Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the order of the Company in an
amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase Contracts. Upon Early
Settlement of Purchase Contracts by a Holder of the related Securities, the
Pledged Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio underlying such Securities shall be released from the
Pledge as provided in the Pledge Agreement and the Holder shall be entitled to
receive a number of shares of Common Stock on account of each Purchase Contract
forming part of a Income PRIDES as to which Early Settlement is effected equal
to the Early Settlement Rate; provided however, that upon the Early Settlement
of the Purchase Contracts, the Holder thereof will forfeit the right to receive
any Deferred Contract Adjustment Payments on such Purchase Contracts. The Early
Settlement Rate shall initially be equal to .2243 shares of Common Stock and
shall be adjusted in the same manner and at the same time as the Settlement Rate
is adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Income PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Income
PRIDES Certificate. The Company covenants and agrees, and the Holder, by its
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Income PRIDES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Income PRIDES evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to the
Pledge of the Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, underlying this Income
PRIDES Certificate pursuant to the Pledge Agreement. The Holder further
covenants and agrees, that, to the extent and in the manner provided in the
Purchase Contract Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect to the Stated Amount of the Pledged Preferred
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
-8-
<PAGE> 22
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Income PRIDES Certificate
is registered as the owner of the Income PRIDES evidenced hereby for the purpose
of receiving payments of distributions payable quarterly on the Preferred
Securities, receiving payments of Contract Adjustment Payments, if any, and any
Deferred Contract Adjustment Payments, performance of the Purchase Contracts and
for all other purposes whatsoever, whether or not any payments in respect
thereof be overdue and notwithstanding any notice to the contrary, and neither
the Company, the Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian----------------------
(cust) (minor)
Under Uniform Gifts to Minors Act
-------------------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not in the above list.
------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
-9-
<PAGE> 23
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ________________________ attorney to
transfer said Income PRIDES Certificates on the books of Lincoln National
Corporation with full power of substitution in the premises.
Dated: ___________________ _________________________________
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Income PRIDES Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee:
_________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Income PRIDES evidenced
by this Income PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:
___________________ ___________________________________
Signature
Signature Guarantee:
_______________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
REGISTERED HOLDER
If shares are to be registered in the name Please print name and address of
of and delivered to a Person other than the Registered Holder:
Holder, please (i) print such Person's name
and address and (ii) provide a guarantee of
your signature:
-10-
<PAGE> 24
______________________________ ______________________________
Name Name
______________________________ ______________________________
Address Address
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Income PRIDES evidenced by this Income PRIDES
Certificate specified below. The undersigned Holder directs that a certificate
for shares of Common Stock deliverable upon such Early Settlement be registered
in the name of, and delivered, together with a check in payment for any
fractional share and any Income PRIDES Certificate representing any Income
PRIDES evidenced hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below. Pledged Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, deliverable upon such Early Settlement will be
transferred in accordance with the transfer instructions set forth below. If
shares are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incident thereto.
Dated:
________________________ _______________________________
Signature
Signature Guarantee:
__________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
-11-
<PAGE> 25
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
REGISTERED HOLDER
If shares of Common Stock or Please print name and address of
Income PRIDES Certificates are Registered Holder:
to be registered in the name of
and delivered to and Pledged
Preferred Securities, or the
Treasury Portfolio, as the case
may be, are to be transferred
to a Person other than the Holder,
please print such Person's name and address:
______________________________ ______________________________
Name Name
______________________________ ______________________________
Address Address
______________________________ ______________________________
______________________________ ______________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________
Transfer Instructions for Pledged Preferred Securities, or the Treasury
Portfolio, as the case may be, Transferable Upon Early Settlement or a
Termination Event:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
-12-
<PAGE> 26
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been
made:
<TABLE>
<CAPTION>
==================================================================================================================
Principal Signature of
Amount of this authorized
Global office of
Amount of Amount of increase Certificate Trustee or
decrease in in Principal Amount following such Securities
Principal Amount of the Global decrease or Custodian
Date of the Global Certificate increase
Certificate
<S> <C> <C> <C> <C>
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
</TABLE>
-13-
<PAGE> 1
EXHIBIT 4.8
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this certificate is presented by an authorized representative of
the Depository Trust Company (55 Water Street, New York, New York) to the
company or its agent for registration of transfer, exchange or payment and any
certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of the Depository Trust Company,
and any payment thereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest therein.
No.GP-1 Number of Growth PRIDES 1,000,000 Cusip No. 534187703
This Growth PRIDES Certificate certifies that Cede & Co. is the
registered Holder of the number of Growth PRIDES set forth above. Each Growth
PRIDES represents (i) a 1/40 undivided beneficial ownership interest, of a
Treasury Security having a principal amount at maturity equal to $1,000, subject
to the Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with Lincoln National Corporation, an Indiana corporation (the
"Company"). All capitalized terms used herein which are defined in the Purchase
Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell, not later than
August 16, 2001 (the "Purchase Contract Settlement Date"), at a price equal to
$25 (the "Stated Amount"), a number of shares of Common stock, no par value per
share ("Common Stock"), of the Company equal to the Settlement Rate, unless on
or prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Growth PRIDES of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price for
the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby will be paid by application of the Proceeds from the Treasury
Securities pledged to secure the obligations under such Purchase Contract in
accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each Purchase
Contract evidenced hereby an amount (the "Contract Adjustment Payments") equal
to 1.85% per annum of the Stated Amount, computed on the basis of the actual
number of days elapsed in a year of 360 day year of twelve 30 day months, as the
case may be, subject to deferral at the option of the Company as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof. Such
Contract Adjustment Payments, if any, shall be payable to the Person in whose
name this Growth PRIDES Certificate (or a Predecessor Growth PRIDES Certificate)
is registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments, if any, will be payable at the office of
the Agent in The City of New York or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears on
the Growth PRIDES Register.
<PAGE> 2
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
-2-
<PAGE> 3
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Income PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
LINCOLN NATIONAL CORPORATION
By:
-----------------------------------
Name: Richard C. Vaughan
Title: Executive Vice President
and Chief Financial Officer
By:
----------------------------------
Name: Janet Whitney-Chrzan
Title: Vice President and Treasurer
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE FIRST NATIONAL BANK OF
CHICAGO not individually but
solely as Attorney-in-Fact
of such Holder
By:
----------------------------------
Name: John R. Prendiville
Title: Vice President
Dated: August 14, 1998
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF
CHICAGO, as Purchase Contract
Agent
By:
----------------------------------
Authorized Officer
-3-
<PAGE> 4
(Reverse of
Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of August 14, 1998 (as may be supplemented from
time to time, the "Purchase Contract Agreement") between the Company and The
First National Bank of Chicago, as Purchase Contract Agent (including its
successors thereunder, herein called the "Agent"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Agent, the Company and the Holders and
of the terms upon which the Growth PRIDES Certificates are, and are to be,
executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company to sell, not later than
the Purchase Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price") a number of shares of Common Stock of the Company equal to the
Settlement Rate, unless on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event or an Early Settlement with
respect to the Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $111.45 (the "Threshold Appreciation Price"),
.2243 shares of Common Stock per Purchase Contract, (b) if the Applicable Market
Value is less than the Threshold Appreciation Price but is greater than $92.875
(the "Reference Price"), the number of shares of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value and
(c) if the Applicable Market Amount is less than or equal to the Reference
Price, then .2692 shares of Common Stock per Purchase Contract, in each case
subject to adjustment as provided in the Purchase Contract Agreement. No
fractional shares of Common Stock will be issued upon settlement of Purchase
Contracts, as provided in the Purchase Contract Agreement.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the twenty consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination means
the closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock as reported by The New York Stock Exchange, Inc.
(the "NYSE") on such date or, if the Common Stock is not listed for trading on
the NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, the last quoted bid price for the Common Stock in
the over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market value
of the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the Company. A
"Trading Day" means a day on which the Common Stock (A) is not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Growth PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting either an Early Settlement of each such Purchase Contract or
by applying a principal amount of the Pledged Treasury Securities underlying
such Holder's Growth PRIDES equal to the Stated Amount of such Purchase Contract
to the purchase of the Common Stock.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
-4-
<PAGE> 5
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses as
they appear in the Growth PRIDES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Treasury
Securities (as defined in the Pledge Agreement) forming a part of each Growth
PRIDES.
The Growth PRIDES Certificates are issuable only in registered form and
only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered and
Growth PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Growth PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A Holder who elects to substitute Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, for Treasury Securities, thereby recreating
Income PRIDES, shall be responsible for any fees or expenses associated
therewith. Except as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract underlying a Growth PRIDES remains in effect, such Growth
PRIDES shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Growth PRIDES in respect of the Treasury
Security and the Purchase Contract constituting such Growth PRIDES may be
transferred and exchanged only as a Growth PRIDES. A Holder of Growth PRIDES may
create or recreate Income PRIDES by delivering to the Collateral Agent Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, with a Stated Amount, in the case of such Preferred Securities, or
with the appropriate Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio, in the case of such
appropriate Applicable Ownership Interest of the Treasury Portfolio, equal to
the aggregate principal amount of the Pledged Treasury Securities in exchange
for the release of such Pledged Treasury Securities in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement. From and after such
substitution, the Holder's Security shall be referred to as an "Income PRIDES."
Such substitution may cause the equivalent aggregate principal amount of this
Certificate to be increased or decreased; provided, however, the equivalent
aggregate principal amount outstanding under this Growth PRIDES Certificate
shall not exceed $230,000,000. All such adjustments to the equivalent aggregate
principal amount of this Growth PRIDES Certificate shall be duly recorded by
placing an appropriate notation on the Schedule attached hereto.
A Holder of an Income PRIDES may create or recreate a Growth PRIDES by
delivering to the Collateral Agent Treasury Securities in an aggregate principal
amount equal to the aggregate Stated Amount of the Pledged Preferred Securities
or the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as the case may be, in
exchange for the release of such Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. Any such recreation of a Growth PRIDES may be effected only in
multiples of 40 Income PRIDES for 40 Growth PRIDES; provided, however, if a Tax
Event Redemption has occurred and the Treasury Portfolio has become a component
of the Income PRIDES, a Holder may make such Collateral Substitution in integral
multiples of 1,600,000 Income PRIDES for 1,600,000 Growth PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Growth PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment Payments,
if any, will be payable at the office of the Agent in The City of New York or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Growth PRIDES Register.
-5-
<PAGE> 6
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so
deferred shall bear additional Contract Adjustment Payments thereon at the rate
of 8.25% per annum (computed on the basis of a 360 day year of twelve 30 day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments shall be due on the next succeeding Payment Date except to the extent
that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments, if any, may be deferred to a date that is after
the Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Growth PRIDES Certificate will
receive on the Purchase Contract Settlement Date, in lieu of a cash payment, a
number of Shares of Common Stock equal to (x) the aggregate amount of Deferred
Contract Adjustment Payments payable to the Holder of the Growth PRIDES
Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then, until the Deferred Contract
Adjustment Payments have been paid, the Company may not, and may not permit any
subsidiary of the Company to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company (including other Junior Subordinated Debt Securities)
that rank pari passu with or junior in interest to the Subordinated Debentures
or make any guarantee payments with respect to any guarantee by the Company of
the debt securities of any subsidiary of the Company if such guarantee ranks
pari passu or junior in interest to the Subordinated Debentures (other than (a)
dividends or distributions in 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 under such plans in the future, (c) payments under any
guarantee, 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).
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two business days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Growth PRIDES Register. Upon and after the occurrence of a Termination Event,
the Collateral Agent shall release the Treasury Securities from the Pledge in
accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this Growth
PRIDES Certificate, the Holder of this Growth PRIDES Certificate shall deliver
this Growth PRIDES Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the order
-6-
<PAGE> 7
of the Company in an amount (the "Early Settlement Amount") equal to (i) the
product of (A) the Stated Amount times (B) the number of Purchase Contracts with
respect to which the Holder has elected to effect Early Settlement, plus (ii) if
such delivery is made with respect to any Purchase Contracts during the period
from the close of business on any Record Date for any Payment Date to the
opening of business on such Payment Date, an amount equal to the Contract
Adjustment Payments, if any, payable on such Payment Date with respect to such
Purchase Contracts. Upon Early Settlement of Purchase Contracts by a Holder of
the related Securities, the Pledged Treasury Securities underlying such
Securities shall be released from the Pledge as provided in the Pledge Agreement
and the Holder shall be entitled to receive, a number of shares of Common Stock
on account of each Purchase Contract forming part of a Growth PRIDES as to which
Early Settlement is effected equal to .2243 shares of Common Stock per Purchase
Contract (the "Early Settlement Rate"); provided however, that upon the Early
Settlement of the Purchase Contracts, the Holder thereof will forfeit the right
to receive any Deferred Contract Adjustment Payments on such Purchase Contracts.
The Early Settlement Rate shall be adjusted in the same manner and at the same
time as the Settlement Rate is adjusted as provided in the Purchase Contract
Agreement.
Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Growth
PRIDES Certificate. The Company covenants and agrees, and the Holder, by his
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Growth PRIDES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Growth PRIDES evidenced hereby on his behalf as its
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to the
Pledge of the Treasury Securities underlying this Growth PRIDES Certificate
pursuant to the Pledge Agreement. The Holder further covenants and agrees, that,
to the extent and in the manner provided in the Purchase Contract Agreement and
the Pledge Agreement, but subject to the terms thereof, payments in respect to
the Stated Amount of the Pledged Treasury Securities on the Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Growth PRIDES Certificate
is registered as the owner of the Growth PRIDES evidenced hereby for the purpose
of receiving payments of interest on the Treasury Securities, receiving payments
of Contract Adjustment Payments, if any, and any Deferred Contract Adjustment
Payments, performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the Agent
nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
-7-
<PAGE> 8
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - -----------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not in the above list.
------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________________________________
_________________________________________________________________(Please insert
Social Security or Taxpayer I.D. or other Identifying Number of Assignee)
_______________________________________________________________________________
_______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing________________________________________
attorney to transfer said Income PRIDES Certificates on the books of Lincoln
National Corporation with full power of substitution in the premises.
Dated: _________________ _____________________________
Signature
NOTICE: The signature to this
assignment must correspond
with the name as it appears
upon the face of the within
Income PRIDES Certificates in
every particular, without
alteration or enlargement or
any change whatsoever.
Signature Guarantee:________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
-8-
<PAGE> 9
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Growth PRIDES evidenced
by this Growth PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:___________________ __________________________________
Signature
Signature Guarantee:______________
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
REGISTERED HOLDER
If shares are to be registered Please print name and
in the name of and delivered to address of Registered
a Person other than the Holder, Holder:
please (i) print such Person's
name and address:
____________________________ ___________________________
Name Name
____________________________ ___________________________
Address Address
____________________________ ___________________________
Social Security or other
Taxpayer Identification
Number, if any ___________________________
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Growth PRIDES evidenced by this Growth PRIDES
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Growth PRIDES with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Growth PRIDES Certificate representing any Growth PRIDES evidenced hereby as to
which Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Treasury Securities deliverable upon such
Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be
-9-
<PAGE> 10
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer or similar tax payable incident thereto.
Dated:________________________ ___________________________________________
Signature
Signature Guarantee:_______________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
REGISTERED HOLDER
If shares of Common Stock of Please print name and address
Growth PRIDES Certificates are of Registered Holder:
to be registered in the name of
and delivered to and Pledged
Treasury Securities are to be
transferred to a Person other
than the Holder, please print
such Person's name and address:
______________________________ ______________________________
Name Name
______________________________ ______________________________
Address Address
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
_______________________________
_______________________________
_______________________________
-10-
<PAGE> 11
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been
made:
<TABLE>
<CAPTION>
==========================================================================================================
Principal Signature of
Amount of this authorized
Global office of
Amount of decrease in Amount of increase in Certificate following Trustee or
Principal Amount of the Principal Amount of the such decrease or Securities
Global Certificate Global Certificate increase Custodian
Date
<S> <C> <C> <C> <C>
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
_____ ________________ _________________ ______________ _____________
</TABLE>
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<PAGE> 1
EXHIBIT 4.9
LINCOLN NATIONAL CORPORATION
THE CHASE MANHATTAN BANK,
AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS PURCHASE CONTRACT AGENT
PLEDGE AGREEMENT
DATED AS OF AUGUST 14, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
RECITALS .......................................................................................................-1-
Section 1. Definitions..........................................................................................-2-
Section 2. Pledge; Control and Perfection.......................................................................-6-
Section 2.1. The Pledge................................................................................-6-
Section 2.2. Control and Perfection....................................................................-8-
Section 3. Distributions on Pledged Collateral..................................................................-9-
Section 4. Substitution, Release, Repledge and Settlement of Preferred Securities..............................-10-
Section 4.1. Substitution for Preferred Securities and the Creation of Growth
PRIDES..............................................................................-10-
Section 4.2. Substitution of Treasury Securities and the Creation of Income
PRIDES..............................................................................-11-
Section 4.3. Termination Event........................................................................-12-
Section 4.4. Cash Settlement..........................................................................-12-
Section 4.5 Early Settlement.........................................................................-14-
Section 4.6. Application of Proceeds Settlement.......................................................-14-
Section 5. Voting Rights -- Preferred Securities...............................................................-16-
Section 6. Rights and Remedies; Distribution of the Debentures; Tax Event
Redemption...................................................................................-17-
Section 6.1. Rights and Remedies of the Collateral Agent..............................................-17-
Section 6.2. Distribution of the Debentures; Investment Company Event; Tax
Event Redemption....................................................................-18-
Section 6.3. Substitutions............................................................................-19-
Section 7. Representations and Warranties; Covenants...........................................................-19-
Section 7.1. Representations and Warranties...........................................................-19-
Section 7.2. Covenants................................................................................-20-
Section 8. The Collateral Agent................................................................................-20-
Section 8.1. Appointment, Powers and Immunities.......................................................-20-
Section 8.2. Instructions of the Company..............................................................-21-
</TABLE>
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<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 8.3. Reliance by Collateral Agent.............................................................-21-
Section 8.4. Rights in Other Capacities...............................................................-21-
Section 8.5. Non-Reliance on Collateral Agent.........................................................-22-
Section 8.6. Compensation and Indemnity...............................................................-22-
Section 8.7. Failure to Act...........................................................................-22-
Section 8.8. Resignation of Collateral Agent..........................................................-23-
Section 8.9. Right to Appoint Agent or Advisor........................................................-24-
Section 8.10. Survival................................................................................-24-
Section 8.11. Exculpation.............................................................................-24-
Section 9. Amendment...........................................................................................-24-
Section 9.1. Amendment Without Consent of Holders.....................................................-24-
Section 9.2. Amendment with Consent of Holders........................................................-25-
Section 9.3. Execution of Amendments..................................................................-25-
Section 9.4. Effect of Amendments.....................................................................-26-
Section 9.5. Reference to Amendments..................................................................-26-
Section 10. Miscellaneous......................................................................................-26-
Section 10.1. No Waiver...............................................................................-26-
Section 10.2. Governing Law...........................................................................-26-
Section 10.3. Notices.................................................................................-27-
Section 10.4. Successors and Assigns..................................................................-27-
Section 10.5. Counterparts............................................................................-27-
Section 10.6. Severability............................................................................-27-
Section 10.7. Expenses, etc...........................................................................-27-
Section 10.8. Security Interest Absolute..............................................................-28-
EXHIBIT A
Instruction to Collateral Agent................................................................................-30-
EXHIBIT B
Instruction to Purchase Contract Agent.........................................................................-32-
EXHIBIT C
Instruction to Custodial Agent Regarding Remarketing...........................................................-33-
EXHIBIT D
Instruction to Custodial Agent Regarding Withdrawal from
Remarketing...................................................................................................-37-
</TABLE>
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<PAGE> 4
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of August 14, 1998 (this "Agreement"), among
Lincoln National Corporation, an Indiana corporation (the "Company"), The Chase
Manhattan Bank, a New York banking corporation, not individually but solely as
collateral agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent"), as custodial agent (in such capacity,
together with its successors in such capacity, the "Custodial Agent") and as
"securities intermediary" as defined in Section 8-102(a)(14) of the Code (as
defined herein) (in such capacity, together with its successors in such
capacity, the "Securities Intermediary"), and The First National Bank of
Chicago, not individually but solely as purchase contract agent and as
attorney-in-fact of the Holders (as defined in the Purchase Contract Agreement)
from time to time of the Securities (as hereinafter defined) (in such capacity,
together with its successors in such capacity, the "Purchase Contract Agent")
under the Purchase Contract Agreement (as herein after defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement, dated as of the date hereof (as modified and supplemented
and in effect from time to time, the "Purchase Contract Agreement"), pursuant to
which there may be issued up to 8,000,000 FELINE PRIDES of the Company
(9,200,000 if the Underwriters' over-allotment option pursuant to the
Underwriting Agreement and Pricing Agreement is exercised in full), having a
stated amount of $25 (the "Stated Amount") per FELINE PRIDES.
The FELINE PRIDES will initially consist of (A) 7,000,000 units
(8,200,000 if the Underwriters' over-allotment option pursuant to the
Underwriting Agreement and Pricing Agreement is exercised in full) (referred to
as "Income PRIDES") with a face amount, per Income PRIDES, equal to the Stated
Amount and (B) 1,000,000 units (referred to as "Growth PRIDES" and, together
with the Income PRIDES, the "Securities") with a face amount, per Growth PRIDES,
equal to the Stated Amount. Each Income PRIDES will initially be comprised of
(a) a stock purchase contract (the "Purchase Contract") under which (i) the
holder will purchase from the Company not later than August 16, 2001 (the
"Purchase Contract Settlement Date"), for an amount of cash equal to the Stated
Amount, a number of shares of common stock, no par value per share (the "Common
Stock"), of the Company equal to the Settlement Rate (as defined below), and
(ii) the Company will pay to the Holder unsecured contract adjustment payments
("Contract Adjustment Payments"), if any, at the rate of 1.35% of the Stated
Amount per annum and (b) either beneficial ownership of a Preferred Security (as
defined below) or upon the occurrence of a Tax Event Redemption (as defined
herein) prior to the Purchase Contract Settlement Date, the Applicable Ownership
Interest of the Treasury Portfolio (as defined below). Each Growth PRIDES will
initially be comprised of (a) a Purchase Contract under which (i) the holder
will purchase from the Company not later than the Purchase Contract Settlement
Date, for an amount in cash equal to the Stated Amount, a number of shares of
Common Stock of the Company, equal to the Settlement Rate, and (ii) the Company
will pay the Holder Contract Adjustment Payments, if any, at the rate of 1.85%
of the Stated Amount per annum, and (b) a 1/40 undivided beneficial interest in
a zero-coupon U.S. Treasury Security (CUSIP No. 912820 BB 2)
<PAGE> 5
having a principal amount equal to $1,000 and maturing on August 15, 2001 (the
"Treasury Securities").
Pursuant to the terms of the Trust Agreement (as defined below),
Lincoln National Capital IV, a statutory business trust formed under the laws of
the State of Delaware (the "Trust") will issue 8,000,000 (9,200,000 if the
Underwriters' over-allotment option pursuant to the Underwriting Agreement and
Pricing Agreement is exercised in full) 6.40% Preferred Securities, Series D
(the "Preferred Securities") having a stated liquidation value equal to the
Stated Amount.
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Preferred
Securities, any Applicable Ownership Interest in the Treasury Portfolio and any
Treasury Securities delivered in exchange therefor to secure each Holder's
obligations under the related Purchase Contract, as provided herein and subject
to the terms hereof. Upon such pledge, the Preferred Securities will be
beneficially owned by the Holders but will be owned of record by the Purchase
Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own
behalf and as attorney-in-fact of the Holders from time to time of the
Securities, agree as follows:
SECTION 1. DEFINITIONS. For all purposes of this 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;
(b) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in
the Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board
Resolution,(iv) Cash Settlement, (v) Certificate, (vi) Contract
Adjustment Payments,(vii) Debentures, (viii) Early Settlement, (ix)
Early Settlement Amount, (x) Early Settlement Date, (xi) Failed
Remarketing, (xii) Holder, (xiii) Opinion of Counsel, (xiv) Outstanding
Securities, (xv) Remarketing Agent,(xvi) Remarketing Agreement, (xvii)
Settlement Rate, and (xviii) Termination Event; and
(d) the following terms have the meanings as signed to them in
the Trust Agreement: (i) Applicable Principal Amount, (ii) Indenture,
(iii) Investment Company Event, (iv) Primary Treasury Dealer, (v)
Property Trustee, (vi) Quotation Agent, (vii)
-2-
<PAGE> 6
Redemption Amount, (viii) Redemption Price, (ix) Tax Event, (x) Tax
Event Redemption, (xi) Tax Event Redemption Date, (xii) Treasury
Portfolio, (xiii) Treasury Portfolio Purchase Price.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Ownership Interest" means, with respect to an Income PRIDES
and the U.S. Treasury Securities in the Treasury Portfolio, (A) a 1/40, or 2.5%,
undivided beneficial ownership interest in a $1,000 principal or interest amount
of a principal or interest strip in a U.S. Treasury Security included in such
Treasury Portfolio which matures on or prior to August 15, 2001 and (B) for each
scheduled interest payment date on the Debentures that occurs after the Tax
Event Redemption Date, a .04% undivided beneficial ownership interest in a
$1,000 face amount of such U.S. Treasury Security which is a principal or
interest strip maturing on such date.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State of
New York) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the securities account (number C27960)
maintained at The Chase Manhattan Bank in the name "The First National Bank of
Chicago, as Purchase Contract Agent on behalf of the holders of certain
securities of Lincoln National Capital IV, Collateral Account subject to the
security interest of The Chase Manhattan Bank, as Collateral Agent, for the
benefit of Lincoln National Corporation, as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this instrument.
"Common Stock" has the meaning specified in the Recitals.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
-3-
<PAGE> 7
"Custodial Agent" has the meaning specified in the Recitals.
"Debenture Trustee" means The First National Bank of Chicago, as
trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Permitted Investments" means any one of the following which shall
mature not later than the next succeeding Business Day (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US $200.0 million at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which commercial paper has a
rating at the time of purchase at least equal to "A-1" by Standard & Poor's
Ratings Services ("S&P") or at least equal to "P-1" by Moody's Investors
Service, Inc. ("Moody's"); and (v) investments in money market funds registered
under the Investment Company Act of 1940, as amended, rated in the highest
applicable rating category by S&P or Moody's.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Preferred Securities" has the meaning specified in Section 2.1
hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Preferred Securities" has the meaning specified in the Recitals.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Sections 8-102(a)(9) of the Code)
and other property from time to time received, receivable or otherwise
distributed upon the sale, exchange, collection or disposition of the
Collateral or any proceeds thereof.
-4-
<PAGE> 8
"Purchase Contract" has the meaning specified in the Recitals.
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the
Recitals.
"Purchase Contract Settlement Date" has the meaning specified in the
Recitals.
"Remarketing Underwriting Agreement" means the Remarketing Underwriting
Agreement attached as Exhibit A to the Remarketing Agreement.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section
8-102(a)(17) of the Code.
"Separate Preferred Securities" means any Preferred Securities that are
not Pledged Preferred Securities.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance with
the instructions of the Collateral Agent, the Purchase Contract Agent or the
Holder, as applicable:
(i) in the case of Collateral consisting of securities which
cannot be delivered by book-entry or which the parties agree
are to be delivered in physical form, delivery in appropriate
physical form to the recipient accompanied by any duly
executed instruments of transfer, assignments in blank,
transfer tax stamps and any other documents necessary to
constitute a legally valid transfer to the recipient;
(ii) in the case of Collateral consisting of securities maintained
in book-entry form by causing a "securities intermediary" (as
defined in Section 8-102(a)(14) of
-5-
<PAGE> 9
the Code) to (i) credit a "security entitlement" (as defined
in Section 8-102(a)(17) of the Code) with respect to such
securities to a "securities account" (as defined in Section
8-501(a) of the Code) maintained by or on behalf of the
recipient and (ii) to issue a confirmation to the recipient
with respect to such credit. In the case of Collateral to be
delivered to the Collateral Agent, the Securities Intermediary
shall be the Securities Intermediary and the securities
account shall be the Collateral Account.
"Treasury Security" has the meaning specified in the Recitals.
"Trust" has the meaning specified in the Recitals.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated
as of August 14, 1998, among the Company as depositor, the trustees named
therein and the holders from time to time of undivided beneficial interests in
the assets of the Trust.
"Value" with respect to any item of Collateral on any date means, as to
(i) a Preferred Security, the Stated Amount, (ii) Cash, the face amount thereof
and (iii) Treasury Securities, the aggregate principal amount thereof at
maturity.
SECTION 2. PLEDGE; CONTROL AND PERFECTION.
SECTION 2.1. THE PLEDGE. The Holders from time to time acting through
the Purchase Contract Agent, as their attorney-in-fact, and the Purchase
Contract Agent, as such attorney-in-fact, hereby pledge and grant to the
Collateral Agent, for the benefit of the Company, as collateral security for the
performance when due by such Holders of their respective obligations under the
related Purchase Contracts, a security interest in all of the right, title and
interest of the Purchase Contract Agent and such Holders (a) in the Preferred
Securities and Treasury Securities constituting a part of the Securities and any
Treasury Securities delivered in exchange for any Preferred Securities, and any
Preferred Securities delivered in exchange for any Treasury Securities, in
accordance with Section 4 hereof, in each case that have been Transferred to or
received by the Collateral Agent and not released by the Collateral Agent to
such Holders under the provisions of this Agreement; (b) in payments made by
Holders pursuant to Section 4.4; (c) in the Collateral Account and all
securities, financial assets, Cash and other property credited thereto and all
Security Entitlements related thereto; (d) in any Debentures delivered to the
Collateral Agent upon the occurrence of an Investment Company Event or a
liquidation of the Trust as provided in Section 6.2; (e) in the Treasury
Portfolio purchased on behalf of the Holders of Income PRIDES by the Collateral
Agent upon the occurrence of a Tax Event Redemption as provided in Section 6.2
and (f) all Proceeds of the foregoing (all of the foregoing, collectively, the
"Collateral"). Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Securities, shall cause the Preferred Securities comprising a part of the Income
PRIDES, and the Treasury Securities comprising a part of the Growth PRIDES, to
be Transferred to the Collateral Agent for the benefit of the Company. Such
Preferred Securities shall be
-6-
<PAGE> 10
Transferred by physically delivering such Securities to the Securities
Intermediary indorsed in blank and causing the Securities Intermediary to credit
the Collateral Account with such Securities and sending the Collateral Agent a
confirmation of the deposit of such Securities. In the event a Holder of Income
PRIDES so elects, such Holder may Transfer Treasury Securities to the Collateral
Agent for the benefit of the Company in exchange for the release by the
Collateral Agent on behalf of the Company of Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, with an aggregate stated liquidation amount equal to the aggregate
principal amount of the Treasury Securities so Transferred, in the case of
Preferred Securities, or with an appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio equal to the aggregate principal amount of the Treasury Securities so
transferred, in the event that a Tax Event Redemption has occurred, to the
Purchase Contract Agent on behalf of such Holder. Treasury Securities and the
Treasury Portfolio, as applicable, shall be Transferred to the Collateral
Account maintained by the Collateral Agent at the Securities Intermediary by
book-entry transfer to the Collateral Account in accordance with the TRADES
Regulations and other applicable law and by the notation by the Securities
Intermediary on its books that a Security Entitlement with respect to such
Treasury Securities or Treasury Portfolio, has been credited to the Collateral
Account. For purposes of perfecting the Pledge under applicable law, including,
to the extent applicable, the TRADES Regulations or the Uniform Commercial Code
as adopted and in effect in any applicable jurisdiction, the Collateral Agent
shall be the agent of the Company as provided herein. The pledge provided in
this Section 2.1 is herein referred to as the "Pledge" and the Preferred
Securities (or the Debentures that are delivered pursuant to Section 6.2 hereof)
or Treasury Securities subject to the Pledge, excluding any Preferred Securities
(or the Debentures that are delivered pursuant to Section 6.2 hereof) or
Treasury Securities released from the Pledge as provided in Section 4 hereof,
are hereinafter referred to as "Pledged Preferred Securities" or the "Pledged
Treasury Securities," respectively. Subject to the Pledge and the provisions of
Section 2.2 hereof, the Holders from time to time shall have full beneficial
ownership of the Collateral. Whenever directed by the Collateral Agent acting on
behalf of the Company, the Securities Intermediary shall have the right to
reregister the Preferred Securities or any other Securities held in physical
form in its name.
Except as may be required in order to release Preferred Securities in
connection with a Holder's election to convert its investment from an Income
PRIDES to a Growth PRIDES, or except as otherwise required to release Securities
as specified herein, neither the Collateral Agent nor the Securities
Intermediary shall relinquish physical possession of any certificate evidencing
a Preferred Security prior to the termination of this Agreement. If it becomes
necessary for the Securities Intermediary to relinquish physical possession of a
certificate in order to release a portion of the Preferred Securities evidenced
thereby from the Pledge, the Securities Intermediary shall use its best efforts
to obtain physical possession of a replacement certificate evidencing any
Preferred Securities remaining subject to the Pledge hereunder registered to it
or endorsed in blank within fifteen days of the date it relinquished possession.
The Securities Intermediary shall promptly notify the Company and the Collateral
Agent of the Securities Intermediary's failure to obtain possession of any such
replacement certificate as required hereby.
-7-
<PAGE> 11
SECTION 2.2. CONTROL AND PERFECTION. (a) In connection with the Pledge
granted in Section 2.1, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, hereby authorize and direct the Securities Intermediary
(without the necessity of obtaining the further consent of the Purchase Contract
Agent or any of the Holders), and the Securities Intermediary agrees, to comply
with and follow any instructions and entitlement orders (as defined in Section
8-102(a)(8) of the Code) that the Collateral Agent on behalf of the Company may
give in writing with respect to the Collateral Account, the Collateral credited
thereto and any Security Entitlements with respect to any thereof. Such
instructions and entitlement orders may, without limitation, direct the
Securities Intermediary to transfer, redeem, sell, liquidate, assign, deliver or
otherwise dispose of the Preferred Securities, the Treasury Securities, the
Treasury Portfolio, and any Security Entitlements with respect thereto and to
pay and deliver any income, proceeds or other funds derived therefrom to the
Company. The Holders from time to time acting through the Purchase Contract
Agent hereby further authorize and direct the Collateral Agent, as Agent of the
Company, to itself issue instructions and entitlement orders, and to otherwise
take action, with respect to the Collateral Account, the Collateral credited
thereto and any Security Entitlements with respect thereto, pursuant to the
terms and provisions hereof, all without the necessity of obtaining the further
consent of the Purchase Contract Agent or any of the Holders. The Collateral
Agent shall be the agent of the Company and shall act as directed in writing by
the Company. Without limiting the generality of the foregoing, the Collateral
Agent shall issue entitlement orders to the Securities Intermediary when and as
directed by the Company.
(b) The Securities Intermediary hereby confirms and agrees that: (i)
all securities or other property underlying any financial assets credited to the
Collateral Account shall be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in blank or credited to
another Collateral Account maintained in the name of the Securities Intermediary
and in no case will any financial asset credited to the Collateral Account be
registered in the name of the Purchase Contract Agent, the Collateral Agent, the
Company or any Holder, payable to the order of, or specially indorsed to, the
Purchase Contract Agent, the Collateral Agent, the Company or any Holder except
to the extent the foregoing have been specially indorsed to the Securities
Intermediary or in blank; (ii) all property delivered to the Securities
Intermediary pursuant to this Pledge Agreement (including, without limitation,
any Preferred Securities, the Treasury Portfolio or Treasury Securities) will be
promptly credited to the Collateral Account; (iii) the Collateral Account is an
account to which financial assets are or may be credited, and the Securities
Intermediary shall, subject to the terms of this Agreement, treat the Purchase
Contract Agent as entitled to exercise the rights of any financial asset
credited to the Collateral Account; (iv) the Securities Intermediary has not
entered into, and until the termination of this Agreement will not enter into,
any agreement with any other person relating to the Collateral Account and/or
any financial assets credited thereto pursuant to which it has agreed to comply
with entitlement orders (as defined in Section 8-102(a)(8) of the Code) of such
other person; and (v) the Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into, any agreement with
the Company, the Collateral Agent or the Purchase
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<PAGE> 12
Contract Agent purporting to limit or condition the obligation of the Securities
Intermediary to comply with entitlement orders as set forth in this Section 2.2
hereof.
(c) The Securities Intermediary hereby agrees that each item of
property (whether investment property, financial asset, security, instrument or
cash) credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorney-in-fact to take on behalf of, and in
the name, place and stead of the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such
power-of-attorney shall not be deemed to require of the Collateral Agent any
specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder.
SECTION 3. DISTRIBUTIONS ON PLEDGED COLLATERAL. So long as the Purchase
Contract Agent is the registered owner of the Pledged Preferred Securities, it
shall receive all payments thereon. If the Pledged Preferred Securities are
reregistered, such that the Collateral Agent becomes the registered holder, all
payments of the Stated Amount or, if applicable, the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, or cash distributions on, the Pledged Preferred
Securities or on the appropriate Applicable Ownership Interest (as specified in
clause (B) of the definition of such term) of the Treasury Portfolio, as the
case may be, and all payments of the principal of, or cash distributions on, any
Pledged Treasury Securities received by the Collateral Agent that are properly
payable hereunder shall be paid by the Collateral Agent by wire transfer in same
day funds:
(i) In the case of (A) cash distributions with respect to the
Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of
the Treasury Portfolio, as the case may be, and (B) any payments of the
Stated Amount or, if applicable, the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio with respect to any Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Purchase Contract Agent, for the benefit of
the relevant Holders of Securities, to the account designated by the
Purchase Contract Agent for such purpose, no later than 2:00 p.m., New
York City time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment is received
by the Collateral Agent on a day that is not a Business Day or after
12:30 p.m., New York City time, on a
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<PAGE> 13
Business Day, then such payment shall be made no later than 10:30 a.m.,
New York City time, on the next succeeding Business Day);
(ii) In the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Holders of the Growth PRIDES to the accounts
designated by them in writing for such purpose no later than 2:00 p.m.,
New York City time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment is received
by the Collateral Agent on a day that is not a Business Day or after
12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day); and
(iii) In the case of payments of the Stated Amount of any
Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio, as the case may be, or the principal of any
Pledged Treasury Securities, to the Company on the Purchase Contract
Settlement Date in accordance with the procedure set forth in Section
4.6(a) or 4.6(b) hereof, in full satisfaction of the respective
obligations of the Holders under the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein shall be
applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount or, if
applicable, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) on account of any Preferred Security
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
applicable, that, at the time of such payment, is a Pledged Preferred Security
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, or a Holder of a Growth PRIDES shall receive any payments of
principal on account of any Treasury Securities that, at the time of such
payment, are Pledged Treasury Securities, the Purchase Contract Agent or such
Holder shall hold the same as trustee of an express trust for the benefit of the
Company (and promptly deliver the same over to the Company) for application to
the obligations of the Holders under the related Purchase Contracts, and the
Holders shall acquire no right, title or interest in any such payments of Stated
Amount or principal so received.
SECTION 4. SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF PREFERRED
SECURITIES.
SECTION 4.1. SUBSTITUTION FOR PREFERRED SECURITIES AND THE CREATION OF
GROWTH PRIDES. At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (unless a Tax Event Redemption
has occurred), a Holder of Income PRIDES shall have the right to substitute
Treasury Securities for the Pledged Preferred Securities securing such Holder's
obligations under the Purchase Contract(s) comprising a part of its Income
PRIDES in integral multiples of 40 Income PRIDES by (a)
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<PAGE> 14
Transferring to the Collateral Agent Treasury Securities having a Value equal to
the aggregate Stated Amount of the Pledged Preferred Securities to be released
and (b)(i) delivering to the Purchase Contract Agent cash in an amount equal to
the excess of the Contract Adjustment Payments, if any, that would have accrued
since the last date that Contract Adjustment Payments were made through the date
of substitution on the Growth PRIDES being created by the Holder, which amount
the Purchase Contract Agent shall promptly remit to the Company, and (ii)
delivering the related Income PRIDES to the Purchase Contract Agent, accompanied
by a notice, substantially in the form of Exhibit B hereto, to the Purchase
Contract Agent stating that such Holder has Transferred Treasury Securities to
the Collateral Agent pursuant to clause (a) above (stating the Value of the
Treasury Securities Transferred by such Holder) and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release from the Pledge the
Pledged Preferred Securities related to such Income PRIDES. The Purchase
Contract Agent shall instruct the Collateral Agent in the form provided in
Exhibit A; provided, however, that if a Tax Event Redemption has occurred and
the Treasury Portfolio has become a component of the Income PRIDES, Holders of
Income PRIDES may make such substitution only in integral multiples of 1,600,000
Income PRIDES at any time on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date. Upon receipt of Treasury
Securities from a Holder of Income PRIDES and the related instruction from the
Purchase Contract Agent, the Collateral Agent shall release the Pledged
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, and shall promptly Transfer such Pledged
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, free and clear of any lien, pledge or
security interest created hereby, to the Purchase Contract Agent. All items
Transferred and/or substituted by any Holder pursuant to this Section 4.1,
Section 4.2 or any other Section of this Agreement shall be Transferred and/or
substituted free and clear of all liens, claims and encumbrances.
SECTION 4.2. SUBSTITUTION OF TREASURY SECURITIES AND THE CREATION OF
INCOME PRIDES. At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (unless a Tax Event Redemption
has occurred), a Holder of Growth PRIDES shall have the right to establish or
reestablish Income PRIDES consisting of the Purchase Contracts and Preferred
Securities in integral multiples of 40 Income PRIDES by (a) Transferring to the
Collateral Agent Preferred Securities having a Value equal to the Value of the
Pledged Treasury Securities to be released and (b) delivering the related Growth
PRIDES to the Purchase Contract Agent, accompanied by a notice, substantially in
the form of Exhibit B hereto, to the Purchase Contract Agent stating that such
Holder has transferred Preferred Securities to the Collateral Agent pursuant to
clause (a) above and requesting that the Purchase Contract Agent instruct the
Collateral Agent to release from the Pledge the Pledged Treasury Securities
related to such Growth PRIDES. The Purchase Contract Agent shall instruct the
Collateral Agent in the form provided in Exhibit A; provided, however, that if a
Tax Event Redemption has occurred and the Treasury Portfolio has become a
component of the Income PRIDES, Holders of Growth PRIDES may make such
substitution only in integral multiples of 1,600,000 Growth PRIDES, at any time
on or prior to the Business Day immediately preceding the Purchase
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<PAGE> 15
Contract Settlement Date. Upon receipt of the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, from such Holder and the instruction from the Purchase Contract Agent,
the Collateral Agent shall release the Treasury Securities and shall promptly
Transfer such Treasury Securities, free and clear of any lien, pledge or
security interest created hereby, to the Purchase Contract Agent.
SECTION 4.3. TERMINATION EVENT. Upon receipt by the Collateral Agent of
written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall promptly Transfer any Pledged Preferred Securities (or
the Applicable Ownership Interest of the Treasury Portfolio if a Tax Event
Redemption has occurred) and Pledged Treasury Securities to the Purchase
Contract Agent for the benefit of the Holders of the Income PRIDES and the
Growth PRIDES, respectively, free and clear of any lien, pledge or security
interest or other interest created hereby.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Preferred Securities, the Treasury Portfolio or of the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3, the Purchase
Contract Agent shall (i) use its best efforts to obtain an opinion of a
nationally recognized law firm reasonably acceptable to the Collateral Agent to
the effect that, as a result of the Company's being the debtor in such a
bankruptcy case, the Collateral Agent will not be prohibited from releasing or
Transferring the Collateral as provided in this Section 4.3, and shall deliver
such opinion to the Collateral Agent within ten days after the occurrence of
such Termination Event, and if (y) the Purchase Contract Agent shall be unable
to obtain such opinion within ten days after the occurrence of such Termination
Event or (z) the Collateral Agent shall continue, after delivery of such
opinion, to refuse to effectuate the release and Transfer of all Pledged
Preferred Securities, the Treasury Portfolio or the Pledged Treasury Securities,
as the case may be, as provided in this Section 4.3, then the Purchase Contract
Agent shall within fifteen days after the occurrence of such Termination Event
commence an action or proceeding in the court with jurisdiction of the Company's
case under the Bankruptcy Code seeking an order requiring the Collateral Agent
to effectuate the release and transfer of all Pledged Preferred Securities, the
Treasury Portfolio or of the Pledged Treasury Securities, as the case may be, as
provided by this Section 4.3 or (ii) commence an action or proceeding like that
described in subsection (i)(z) hereof within ten days after the occurrence of
such Termination Event.
SECTION 4.4. CASH SETTLEMENT. (a) Upon receipt by the Collateral Agent
of (i) a notice from the Purchase Contract Agent promptly after the receipt by
the Purchase Contract Agent of such notice that a Holder of an Income PRIDES or
Growth PRIDES has elected, in accordance with the procedures specified in
Section 5.4(a)(i) or (d)(i) of the Purchase Contract Agreement, respectively, to
settle its Purchase Contract with Cash and (ii) payment of the amount required
to settle such contract by such Holder on or prior to 11:00 a.m., New York City
time, on the Business Day immediately preceding the Purchase Contract
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<PAGE> 16
Settlement Date in lawful money of the United States by certified or cashiers'
check or wire transfer in immediately available funds payable to or upon the
order of the Company, then the Collateral Agent shall promptly invest any Cash
received from a Holder in connection with a Cash Settlement in Permitted
Investments. Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Purchase Contract Settlement Date, the Collateral Agent shall
pay the portion of such proceeds and deliver any certified or cashiers' checks
received and any funds so wired, in an aggregate amount equal to the Purchase
Price, to the Company on the Purchase Contract Settlement Date, and shall
distribute any funds in respect of the interest earned from the Permitted
Investments to the Purchase Contract Agent for payment to the relevant Holders.
(b) If a Holder of an Income PRIDES fails to notify the Agent of its
intention to make a Cash Settlement in accordance with Section 5.4(a)(i) of the
Purchase Contract Agreement, such failure shall constitute an event of default
under the Purchase Contract Agreement and hereunder, and the Holder shall be
deemed to have consented to the disposition of the Pledged Preferred Securities
pursuant to the remarketing as described in Section 5.4(b) of the Purchase
Contract Agreement, which is incorporated herein by reference. If a Holder of an
Income PRIDES does notify the Agent as provided in Section 5.4(a)(i) of the
Purchase Contract Agreement of its intention to pay the Purchase Price in cash,
but fails to make such payment as required by Section 5.4(a)(ii) of the Purchase
Contract Agreement, the Preferred Securities of such a Holder will not be
remarketed but instead the Collateral Agent, for the benefit of the Company,
will exercise its rights as a secured party with respect to such Preferred
Securities at the direction of the Company to retain or dispose of the
Collateral in accordance with applicable law. In addition, in the event of a
Failed Remarketing as described in Section 5.4(b) of the Purchase Contract
Agreement, such Failed Remarketing shall constitute an event of default
hereunder by such Holder and the Collateral Agent, for the benefit of the
Company, will also exercise its rights as a secured party with respect to such
Preferred Securities at the direction of the Company to retain or dispose of the
Collateral in accordance with applicable law.
(c) If a Holder of a Growth PRIDES fails to notify the Purchase
Contract Agent of such Holder's intention to make a Cash Settlement in
accordance with Section 5.4(d)(i) of the Purchase Contract Agreement, or if a
Holder of a Growth PRIDES does notify the Agent as provided in paragraph 5.4
(d)(i) of the Purchase Contract Agreement of its intention to pay the Purchase
Price in cash, but fails to make such payment as required by paragraph
5.4(d)(ii) of the Purchase Contract Agreement, such failure shall constitute an
event of default hereunder by such Holder and upon the maturity of any Pledged
Treasury Securities or the Treasury Portfolio, if any, held by the Collateral
Agent on the Business Day immediately preceding the Purchase Contract Settlement
Date, the principal amount of the Pledged Treasury Securities or the Treasury
Portfolio received by the Collateral Agent shall, upon written direction of the
Company, be invested promptly in Permitted Investments. On the Purchase Contract
Settlement Date, an amount equal to the Purchase Price will be remitted to the
Company as payment thereof. In the event the sum of the proceeds from the
related Pledged Treasury Securities or the Treasury Portfolio, as the case may
be, and the investment earnings earned from such investments is in excess of the
aggregate Purchase
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<PAGE> 17
Price of the Purchase Contracts being settled thereby, the Collateral Agent will
distribute such excess to the Purchase Contract Agent for the benefit of the
Holder of the related Growth PRIDES or Income PRIDES when received.
SECTION 4.5. EARLY SETTLEMENT. Upon written notice to the Collateral
Agent by the Purchase Contract Agent that one or more Holders of Securities have
elected to effect Early Settlement of their respective obligations under the
Purchase Contracts forming a part of such Securities in accordance with the
terms of the Purchase Contracts and the Purchase Contract Agreement (setting
forth the number of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio in the case of a Holder
of Income PRIDES or (b) Pledged Treasury Securities in the case of a Holder of
Growth PRIDES, as the case may be, with a principal amount equal to the product
of (i) the Stated Amount times (ii) the number of such Purchase Contracts as to
which such Holders have elected to effect Early Settlement and shall Transfer
all such Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio or Pledged Treasury Securities, as the case
may be, free and clear of the Pledge created hereby, to the Purchase Contract
Agent for the benefit of the Holders.
SECTION 4.6. APPLICATION OF PROCEEDS SETTLEMENT. (a) In the event a
Holder of Income PRIDES (if a Tax Event Redemption has not occurred) has not
elected to make an effective Cash Settlement by notifying the Purchase Contract
Agent in the manner provided for in paragraph 5.4(a)(i) in the Purchase Contract
Agreement or has not made an Early Settlement of the Purchase Contract(s)
underlying its Income PRIDES, such Holder shall be deemed to have elected to pay
for the shares of Common Stock to be issued under such Purchase Contract(s) from
the Proceeds of the related Pledged Preferred Securities. The Collateral Agent
shall, by 10:00 a.m., New York City time, on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date, without any instruction from
such Holder of Income PRIDES, present the related Pledged Preferred Securities
to the Remarketing Agent for remarketing. Upon receiving such Pledged Preferred
Securities, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement and the Remarketing Underwriting Agreement, will use its reasonable
efforts to remarket such Pledged Preferred Securities on such date at a price
not less than approximately 100.50% of the aggregate Value of such Pledged
Preferred Securities, plus accrued and unpaid distributions (including deferred
distributions), if any, thereon. After deducting as the Remarketing Fee an
amount not exceeding 25 basis points (.25%) of the aggregate Value of the
Pledged Preferred Securities from any amount of such Proceeds in excess of the
aggregate Value, plus such accrued and unpaid distributions (including deferred
distributions) of the remarketed Pledged Preferred Securities, the Remarketing
Agent will remit the entire amount of the Proceeds of such remarketing to the
Collateral Agent. On the Purchase Contract Settlement Date, the Collateral Agent
shall apply that portion of the Proceeds from
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<PAGE> 18
such remarketing equal to the aggregate Value, plus such accrued and unpaid
distributions (including deferred distributions) of such Pledged Preferred
Securities, to satisfy in full the obligations of such Holders of Income PRIDES
to pay the Purchase Price to purchase the Common Stock under the related
Purchase Contracts. The remaining portion of such Proceeds, if any, shall be
distributed by the Collateral Agent to the Purchase Contract Agent for payment
to the Holders. If the Remarketing Agent advises the Collateral Agent in writing
that it cannot remarket the related Pledged Preferred Securities of such Holders
of Income PRIDES at a price not less than 100% of the aggregate Value of such
Pledged Preferred Securities plus any accrued and unpaid distributions
(including deferred distributions), thus resulting in a Failed Remarketing and
an event of default under the Purchase Contract Agreement and hereunder, the
Collateral Agent, for the benefit of the Company will, at the written direction
of the Company, retain or dispose of the Pledged Preferred Securities in
accordance with applicable law and satisfy in full, from any such disposition or
retention, such Holder's obligation to pay the Purchase Price for the Common
Stock.
(b) In the event a Holder of Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) has not made an Early Settlement of the Purchase
Contract(s) underlying its Growth PRIDES or Income PRIDES, such Holder shall be
deemed to have elected to pay for the shares of Common Stock to be issued under
such Purchase Contract(s) from the Proceeds of the related Pledged Treasury
Securities or the Treasury Portfolio, as the case may be. On the Business Day
immediately prior to the Purchase Contract Settlement Date, the Collateral Agent
shall, at the written direction of the Purchase Contract Agent, invest the Cash
proceeds of the maturing Pledged Treasury Securities or the Treasury Portfolio,
as the case may be, in overnight Permitted Investments. Without receiving any
instruction from any such Holder of Growth PRIDES or Income PRIDES, the
Collateral Agent shall apply the Proceeds of the related Pledged Treasury
Securities or Treasury Portfolio to the settlement of such Purchase Contracts on
the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities or Treasury Portfolio and the investment earnings from the investment
in overnight Permitted Investments is in excess of the aggregate Purchase Price
of the Purchase Contracts being settled thereby, the Collateral Agent shall
distribute such excess, when received, to the Purchase Contract Agent for the
benefit of the Holders.
(c) Pursuant to the Remarketing Agreement and subject to the terms of
the Remarketing Underwriting Agreement, on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, but no earlier than
the Payment Date immediately preceding the Purchase Contract Settlement Date,
holders of Separate Preferred Securities may elect to have their Separate
Preferred Securities remarketed by delivering their Separate Preferred
Securities, together with a notice of such election, substantially in the form
of Exhibit C hereto, to the Custodial Agent. The Custodial Agent will hold such
Separate Preferred Securities in an account separate from the Collateral
Account. A holder of Separate Preferred Securities electing to have its Separate
Preferred Securities remarketed will also have the right to withdraw such
election by written notice to the Custodial Agent,
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<PAGE> 19
substantially in the form of Exhibit D hereto, on or prior to the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, upon which
notice the Custodial Agent will return such Separate Preferred Securities to
such holder. On the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, the Custodial Agent will deliver to the Remarketing
Agent for remarketing all separate Preferred Securities delivered to the
Custodial Agent pursuant to this Section 4.6(c) and not withdrawn pursuant to
the terms hereof prior to such date. The portion of the proceeds from such
remarketing equal to the aggregate Value of such Separate Preferred Securities
will automatically be remitted by the Remarketing Agent to the Custodial Agent
for the benefit of the holders of such Separate Preferred Securities. In
addition, after deducting as the Remarketing Fee an amount not exceeding 25
basis points (.25%) of the Value of the remarketed Separate Preferred
Securities, from any amount of such proceeds in excess of the aggregate Value of
the remarketed Separate Preferred Securities plus any accrued and unpaid
distributions (including deferred distributions, if any), the Remarketing Agent
will remit to the Custodial Agent the remaining portion of the proceeds, if any,
for the benefit of such holders. If, despite using its reasonable efforts, the
Remarketing Agent advises the Custodial Agent in writing that it cannot remarket
the related Separate Preferred Securities of such holders at a price not less
than 100% of the aggregate Value of such Separate Preferred Securities plus
accrued and unpaid distributions (including deferred distributions) and thus
resulting in a Failed Remarketing, the Remarketing Agent will promptly return
such Preferred Securities to the Custodial Agent for redelivery to such holders.
In the event of a dissolution of the Trust and the distribution of the
Debentures as described in the Trust Agreement, all references to "Separate
Preferred Securities" in this Section 4.6(c) shall be deemed to be references to
Debentures which are not pledged hereunder or required to be part of the
Collateral.
SECTION 5. VOTING RIGHTS -- PREFERRED SECURITIES. The Purchase Contract
Agent may exercise, or refrain from exercising, any and all voting and other
consensual rights pertaining to the Pledged Preferred Securities or any part
thereof for any purpose not inconsistent with the terms of this Agreement and in
accordance with the terms of the Purchase Contract Agreement; provided, that the
Purchase Contract Agent shall not exercise or, as the case may be, shall not
refrain from exercising such right if, in the judgment of the Company, such
action would impair or otherwise have a material adverse effect on the value of
all or any of the Pledged Preferred Securities; and provided, further, that the
Purchase Contract Agent shall give the Company and the Collateral Agent at least
five days' prior written notice of the manner in which it intends to exercise,
or its reasons for refraining from exercising, any such right. Upon receipt of
any notices and other communications in respect of any Pledged Preferred
Securities, including notice of any meeting at which holders of Preferred
Securities are entitled to vote or solicitation of consents, waivers or proxies
of holders of Preferred Securities, the Collateral Agent shall use reasonable
efforts to send promptly to the Purchase Contract Agent such notice or
communication, and as soon as reasonably practicable after receipt of a written
request therefor from the Purchase Contract Agent, execute and deliver to the
Purchase Contract Agent such proxies and other instruments in respect of such
Pledged Preferred Securities (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect to
the Pledged Preferred Securities.
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<PAGE> 20
SECTION 6. RIGHTS AND REMEDIES; DISTRIBUTION OF THE DEBENTURES; TAX
EVENT REDEMPTION
SECTION 6.1. RIGHTS AND REMEDIES OF THE COLLATERAL AGENT. (a) In
addition to the rights and remedies specified in Section 4.4 hereof or otherwise
available at law or in equity, after an event of default hereunder, the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
"Code") (whether or not the Code is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Wherever reference is made in this Agreement to any section of the
Code, such reference shall be deemed to include a reference to any provision of
the Code which is a successor to, or amendment of, such section. Without
limiting the generality of the foregoing, such remedies may include, to the
extent permitted by applicable law, (i) retention of the Pledged Preferred
Securities or other Collateral in full satisfaction of the Holders obligations
under the Purchase Contracts or (ii) sale of the Pledged Preferred Securities or
other Collateral in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio or on account of principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities, or such appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, and such obligations of such Holder, any and all of
the rights and remedies available to a secured party under the Code and the
TRADES Regulations after default by a debtor, and as otherwise granted herein or
under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the Stated Amount of or,
cash distributions on, the Pledged Preferred Securities, (ii) the principal
amount of the Pledged Treasury Securities, or (iii) the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, subject, in each case, to the provisions of Section
3, and as otherwise granted herein.
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(d) The Purchase Contract Agent, individually and as attorney-in-fact
for each Holder of Securities, in the event such Holder becomes the Holder of a
Growth PRIDES, agrees that, from time to time, upon the written request of the
Collateral Agent, the Purchase Contract Agent or such Holder shall execute and
deliver such further documents and do such other acts and things as the
Collateral Agent may reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the Collateral
Agent hereunder. The Purchase Contract Agent shall have no liability to any
Holder for executing any documents or taking any such acts requested by the
Collateral Agent hereunder, except for liability for its own negligent act, its
own negligent failure to act or its own willful misconduct.
SECTION 6.2. DISTRIBUTION OF THE DEBENTURES; INVESTMENT COMPANY EVENT;
TAX EVENT REDEMPTION. Upon the occurrence of an Investment Company Event or a
liquidation of the Trust, a principal amount of the Debentures constituting the
assets of the Trust and underlying the Preferred Securities equal to the
aggregate stated liquidation amount of the Pledged Preferred Securities shall be
delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. In the event the Collateral Agent receives such Debentures in
respect of Pledged Preferred Securities upon the occurrence of an Investment
Company Event or liquidation of the Trust, the Collateral Agent shall Transfer
the Debentures to the Collateral Account in the manner specified herein
(including, without limitation, physical delivery thereof as set forth in
Section 2.1) for Pledged Preferred Securities to secure the obligations of the
Holders of Income PRIDES to purchase the Company's Common Stock under the
related Purchase Contracts. Thereafter, the Collateral Agent shall have such
security interests, rights and obligations with respect to the Debentures as it
had in respect of the Pledged Preferred Securities as provided in Sections 2, 3,
4, 5 and 6 hereof, and any reference herein to the Pledged Preferred Securities
shall be deemed to be referring to such Debentures.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent by the Property Trustee or upon a
dissolution of the Trust and the distribution of the related Debentures by the
Debenture Trustee on or prior to 12:30 p.m., New York City time, by check or
wire transfer in immediately available funds at such place and at such account
as may be designated by the Collateral Agent in exchange for the Pledged
Preferred Securities or Debentures, as the case may be. In the event the
Collateral Agent receives such Redemption Price, the Collateral Agent will, at
the written direction of the Company, apply an amount equal to the Redemption
Amount of such Redemption Price to purchase from the Quotation Agent the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Purchase Contract Agent for payment to the Holders of Income
PRIDES. The Collateral Agent shall Transfer the Treasury Portfolio to the
Collateral Account in the manner specified herein for Pledged Preferred
Securities to secure the obligation of all Holders of Income PRIDES to purchase
Common Stock of the Company under the Purchase Contracts constituting a part of
such Income PRIDES, in substitution for the Pledged Preferred Securities.
Thereafter the Collateral Agent shall have such security
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interests, rights and obligations with respect to the Treasury Portfolio as it
had in respect of the Pledged Preferred Securities or Debentures, as the case
may be, as provided in Sections 2, 3, 4, 5 and 6, and any reference herein to
the Pledged Preferred Securities or the Debentures shall be deemed to be
reference to such Treasury Portfolio.
SECTION 6.3. SUBSTITUTIONS. Whenever a Holder has the right to
substitute Treasury Securities, Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, for
Collateral held by the Collateral Agent, such substitution shall not constitute
a novation of the security interest created hereby.
SECTION 7. REPRESENTATIONS AND WARRANTIES; COVENANTS.
SECTION 7.1. REPRESENTATIONS AND WARRANTIES. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security
interest in and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the
Collateral and, in the case of Collateral delivered
in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or
has the right to Transfer, the Collateral it
Transfers to the Collateral Agent, free and clear of
any security interest, lien, encumbrance, call,
liability to pay money or other restriction other
than the security interest and lien granted under
Section 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral
Account, the Collateral Agent, for the benefit of the
Company, will have a valid and perfected first
priority security interest therein (assuming that any
central clearing operation or any Intermediary or
other entity not within the control of the Holder
involved in the Transfer of the Collateral, including
the Collateral Agent, gives the notices and takes the
action required of it hereunder and under applicable
law for perfection of that interest and assuming the
establishment and exercise of control pursuant to
Section 2.2 hereof); and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result in
the creation of any security interest, lien or other
encumbrance on the Collateral other than the security
interest and lien granted under Section 2 hereof or
violate any provision of any existing law or
regulation applicable to it or of any mortgage,
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charge, pledge, indenture, contract or undertaking to
which it is a party or which is binding on it or any
of its assets.
SECTION 7.2. COVENANTS. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders
will create or purport to create or allow to subsist
any mortgage, charge, lien, pledge or any other
security interest whatsoever over the Collateral or
any part of it other than pursuant to this Agreement;
and
(b) neither the Purchase Contract Agent nor such Holders
will sell or otherwise dispose (or attempt to
dispose) of the Collateral or any part of it except
for the beneficial interest therein, subject to the
pledge hereunder, transferred in connection with the
Transfer of the Securities.
SECTION 8. THE COLLATERAL AGENT. It is hereby agreed as follows:
SECTION 8.1. APPOINTMENT, POWERS AND IMMUNITIES. The Collateral Agent
shall act as Agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. Each of
the Collateral Agent, the Custodial Agent and the Securities Intermediary: (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants or obligations shall be inferred from
this Agreement against any of them, nor shall any of them be bound by the
provisions of any agreement by any party hereto beyond the specific terms
hereof; (b) shall not be responsible for any recitals contained in this
Agreement, or in any certificate or other document referred to or provided for
in, or received by it under, this Agreement, the Securities or the Purchase
Contract Agreement, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement (other than as against the
Collateral Agent), the Securities or the Purchase Contract Agreement or any
other document referred to or provided for herein or therein or for any failure
by the Company or any other Person (except the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be) to perform any of its
obligations hereunder or thereunder or for the perfection, priority or, except
as expressly required hereby, maintenance of any security interest created
hereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder (except in the case of the Collateral Agent,
pursuant to directions furnished under Section 8.2 hereof, subject to Section
8.6 hereof); (d) shall not be responsible for any action taken or omitted to be
taken by it hereunder or under any other document or instrument referred to or
provided for herein or in connection herewith or therewith, except for its own
negligence or willful misconduct; and (e) shall not be required to advise any
party as to selling or retaining, or taking or refraining from taking any action
with respect to, the Securities or other property deposited hereunder. Subject
to the foregoing, during the term of this
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Agreement, the Collateral Agent shall take all reasonable action in connection
with the safekeeping and preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the Value of
the Collateral. Notwithstanding the foregoing, the Collateral Agent, the
Custodial Agent, the Purchase Contract Agent and Securities Intermediary, each
in its individual capacity, hereby waive any right of setoff, bankers lien,
liens or perfection rights as securities intermediary or any counterclaim with
respect to any of the Collateral.
SECTION 8.2. INSTRUCTIONS OF THE COMPANY. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, to direct the time, method and place of conducting any proceeding
for the realization of any right or remedy available to the Collateral Agent, or
of exercising any power conferred on the Collateral Agent, the Custodial Agent
or the Securities Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this Agreement; provided,
however, that (i) such direction shall not conflict with the provisions of any
law or of this Agreement and (ii) the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall be adequately indemnified as provided herein.
Nothing in this Section 8.2 shall impair the right of the Collateral Agent in
its discretion to take any action or omit to take any action which it deems
proper and which is not inconsistent with such direction.
SECTION 8.3. RELIANCE BY COLLATERAL AGENT. Each of the Securities
Intermediary, the Custodial Agent and the Collateral Agent shall be entitled
conclusively to rely upon any certification, order, judgment, opinion, notice or
other communication (including, without limitation, any thereof by telephone,
telecopy, telex or facsimile) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons
(without being required to determine the correctness of any fact stated
therein), and upon advice and statements of legal counsel and other experts
selected by the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be. As to any matters not expressly provided for
by this Agreement, the Collateral Agent, the Custodial Agent and the Securities
Intermediary shall in all cases be fully protected in acting, or in refraining
from acting, hereunder in accordance with instructions given by the Company in
accordance with this Agreement.
SECTION 8.4. RIGHTS IN OTHER CAPACITIES. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any Holder of
Securities and any holder of separate Preferred Securities (and any of their
respective subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, and the Collateral Agent,
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the Custodial Agent and the Securities Intermediary and their affiliates may
accept fees and other consideration from the Purchase Contract Agent, any Holder
of Securities or any holder of separate Preferred Securities without having to
account for the same to the Company; provided that each of the Securities
Intermediary, the Custodial Agent and the Collateral Agent covenants and agrees
with the Company that it shall not accept, receive or permit there to be created
in favor of itself and shall take no affirmative action to permit there to be
created in favor of any other Person, any security interest, lien or other
encumbrance of any kind in or upon the Collateral and the Collateral shall not
be commingled with any other assets of any such Person.
SECTION 8.5. NON-RELIANCE ON COLLATERAL AGENT. None of the Securities
Intermediary, the Custodial Agent or the Collateral Agent shall be required to
keep itself informed as to the performance or observance by the Purchase
Contract Agent or any Holder of Securities of this Agreement, the Purchase
Contract Agreement, the Securities or any other document referred to or provided
for herein or therein or to inspect the properties or books of the Purchase
Contract Agent or any Holder of Securities. The Collateral Agent, the Custodial
Agent and the Securities Intermediary shall not have any duty or responsibility
to provide the Company or the Remarketing Agent with any credit or other
information concerning the affairs, financial condition or business of the
Purchase Contract Agent, any Holder of Securities or any holder of separate
Preferred Securities (or any of their respective subsidiaries or affiliates)
that may come into the possession of the Collateral Agent, the Custodial Agent
or the Securities Intermediary or any of their respective affiliates.
SECTION 8.6. COMPENSATION AND INDEMNITY. The Company agrees: (i) to pay
each of the Collateral Agent and the Custodial Agent from time to time such
compensation as shall be agreed in writing between the Company and the
Collateral Agent or the Custodial Agent, as the case may be, for all services
rendered by each of them hereunder and (ii) to indemnify the Collateral Agent,
the Custodial Agent and the Securities Intermediary for, and to hold each of
them harmless from and against, any loss, liability or reasonable out-of-pocket
expense incurred without negligence, willful misconduct or bad faith on its
part, arising out of or in connection with the acceptance or administration of
its powers and duties under this Agreement, including the reasonable
out-of-pocket costs and expenses (including reasonable fees and expenses of
counsel) of defending itself against any claim or liability in connection with
the exercise or performance of such powers and duties. The Collateral Agent, the
Custodial Agent and the Securities Intermediary shall each promptly notify the
Company of any third party claim which may give rise to the indemnity hereunder
and give the Company the opportunity to participate in the defense of such claim
with counsel reasonably satisfactory to the indemnified party, and no such claim
shall be settled without the written consent of the Company, which consent shall
not be unreasonably withheld.
SECTION 8.7. FAILURE TO ACT. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent and the Custodial Agent shall
be entitled, after prompt notice to the Company and the Purchase Contract Agent,
at its sole option, to refuse to comply with any and all claims,
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demands or instructions with respect to such property or funds so long as such
dispute or conflict shall continue, and neither the Collateral Agent nor the
Custodial Agent shall be or become liable in any way to any of the parties
hereto for its failure or refusal to comply with such conflicting claims,
demands or instructions. The Collateral Agent and the Custodial Agent shall be
entitled to refuse to act until either (i) such conflicting or adverse claims or
demands shall have been finally determined by a court of competent jurisdiction
or settled by agreement between the conflicting parties as evidenced in a
writing, satisfactory to the Collateral Agent or the Custodial Agent, as the
case may be, or (ii) the Collateral Agent or the Custodial Agent, as the case
may be, shall have received security or an indemnity reasonably satisfactory to
the Collateral Agent or the Custodial Agent, as the case may be, sufficient to
save the Collateral Agent or the Custodial Agent, as the case may be, harmless
from and against any and all loss, liability or reasonable out-of-pocket expense
which the Collateral Agent or the Custodial Agent, as the case may be, may incur
by reason of its acting without bad faith, willful misconduct or gross
negligence. The Collateral Agent or the Custodial Agent may in addition elect to
commence an interpleader action or seek other judicial relief or orders as the
Collateral Agent or the Custodial Agent, as the case may be, may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor the Custodial Agent shall be required to take any action
that is in its opinion contrary to law or to the terms of this Agreement, or
which would in its opinion subject it or any of its officers, employees or
directors to liability.
SECTION 8.8. RESIGNATION OF COLLATERAL AGENT. Subject to the
appointment and acceptance of a successor Collateral Agent or Custodial Agent as
provided below, (a) the Collateral Agent and the Custodial Agent may resign at
any time by giving notice thereof to the Company and the Purchase Contract Agent
as attorney-in-fact for the Holders of Securities, (b) the Collateral Agent and
the Custodial Agent may be removed at any time by the Company and (c) if the
Collateral Agent or the Custodial Agent fails to perform any of its material
obligations hereunder in any material respect for a period of not less than 20
days after receiving written notice of such failure by the Purchase Contract
Agent and such failure shall be continuing, the Collateral Agent or the
Custodial Agent may be removed by the Purchase Contract Agent. The Purchase
Contract Agent shall promptly notify the Company of any removal of the
Collateral Agent pursuant to clause (c) of the immediately preceding sentence.
Upon any such resignation or removal, the Company shall have the right to
appoint a successor Collateral Agent or Custodial Agent, as the case may be. If
no successor Collateral Agent or Custodial Agent, as the case may be, shall have
been so appointed and shall have accepted such appointment within 30 days after
the retiring Collateral Agent's or Custodial Agent's giving of notice of
resignation or such removal, then the retiring Collateral Agent or Custodial
Agent, as the case may be, may petition any court of competent jurisdiction for
the appointment of a successor Collateral Agent or Custodial Agent, as the case
may be. Each of the Collateral Agent and the Custodial Agent shall be a bank
which has an office in New York, New York with a combined capital and surplus of
at least $75,000,000. Upon the acceptance of any appointment as Collateral Agent
or Custodial Agent, as the case may be, hereunder by a successor Collateral
Agent or Custodial Agent, as the case may be, such successor shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent or Custodial Agent, as
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the case may be, and the retiring Collateral Agent or Custodial Agent, as the
case may be, shall take all appropriate action to transfer any money and
property held by it hereunder (including the Collateral) to such successor. The
retiring Collateral Agent or Custodial Agent shall, upon such succession, be
discharged from its duties and obligations as Collateral Agent or Custodial
Agent hereunder. After any retiring Collateral Agent's or Custodial Agent's
resignation hereunder as Collateral Agent or Custodial Agent, the provisions of
this Section 8 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Collateral
Agent or Custodial Agent. Any resignation or removal of the Collateral Agent
hereunder shall be deemed for all purposes of this Agreement as the simultaneous
resignation or removal of the Custodial Agent and the Securities Intermediary.
SECTION 8.9. RIGHT TO APPOINT AGENT OR ADVISOR. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
SECTION 8.10. SURVIVAL. The provisions of this Section 8 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent or the Custodial Agent.
SECTION 8.11. EXCULPATION. Anything in this Agreement to the contrary
notwithstanding, in no event shall any of the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, employees or agents be
liable under this Agreement to any third party for indirect, special, punitive,
or consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent, the Custodial Agent or the Securities Intermediary, or any of them,
incurred without any act or deed that is found to be attributable to gross
negligence or willful misconduct on the part of the Collateral Agent, the
Custodial Agent or the Securities Intermediary.
SECTION 9. AMENDMENT.
SECTION 9.1. AMENDMENT WITHOUT CONSENT OF HOLDERS. Without the consent
of any Holders or the holders of any Separate Preferred Securities, the Company,
the Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
for any of the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of the
Company; or
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(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon the
Company so long as such covenants or such surrender do not adversely affect the
validity, perfection or priority of the security interests granted or created
hereunder; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or Purchase
Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, or to make any other provisions with respect to such matters or
questions arising under this Agreement, provided such action shall not adversely
affect the interests of the Holders.
SECTION 9.2. AMENDMENT WITH CONSENT OF HOLDERS. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided, however, that no
such supplemental agreement shall, without the consent of the Holder of each
Outstanding Security adversely affected thereby,
(1) change the amount or type of Collateral underlying a
Security (except for the rights of holders of Income PRIDES to
substitute the Treasury Securities for the Pledged Preferred Securities
or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, or the rights of Holders of Growth
PRIDES to substitute Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as applicable, for the
Pledged Treasury Securities), impair the right of the Holder of any
Security to receive distributions on the underlying Collateral or
otherwise adversely affect the Holder's rights in or to such
Collateral; or
(2) otherwise effect any action that would require the consent
of the Holder of each Outstanding Security affected thereby pursuant to
the Purchase Contract Agreement if such action were effected by an
agreement supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
SECTION 9.3. EXECUTION OF AMENDMENTS. In executing any amendment
permitted by this Section, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the
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Purchase Contract Agent shall be entitled to receive and (subject to Section 6.1
hereof, with respect to the Collateral Agent, and Section 7.1 of the Purchase
Contract Agreement, with respect to the Purchase Contract Agent) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Agreement and that all
conditions precedent, if any, to the execution and delivery of such amendment
have been satisfied.
SECTION 9.4. EFFECT OF AMENDMENTS. Upon the execution of any amendment
under this Section 9, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
SECTION 9.5. REFERENCE TO AMENDMENTS. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Section may, and shall if required
by the Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement in exchange for Outstanding
Security Certificates.
SECTION 10. MISCELLANEOUS.
SECTION 10.1. NO WAIVER. No failure on the part of any party hereto or
any of its agents to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by any party hereto or
any of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
SECTION 10.2. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting
the foregoing, the above choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent and the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account. The Company,
the Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase
Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. The Company, the
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Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
SECTION 10.3. NOTICES. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
SECTION 10.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.
SECTION 10.5. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
SECTION 10.6. SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
SECTION 10.7. EXPENSES, ETC. The Company agrees to reimburse the
Collateral Agent and the Custodial Agent for: (a) all reasonable out-of-pocket
costs and expenses of the Collateral Agent and the Custodial Agent (including,
without limitation, the reasonable fees and expenses of counsel to the
Collateral Agent and the Custodial Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other
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<PAGE> 31
similar taxes, assessments or charges levied by any governmental or revenue
authority in respect of this Agreement or any other document referred to herein
and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
SECTION 10.8. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of
the Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
any other term of, or any increase in the amount of, all or any of the
obligations of Holders of Securities under the related Purchase
Contracts, or any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the Purchase Contract
Agreement or any Purchase Contract or any other agreement or instrument
relating thereto; or
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
LINCOLN NATIONAL CORPORATION
By:/s/ Janet C. Chrzan
------------------------------------------
Name: Janet C. Chrzan
Title: Vice President and Treasurer
Address for Notices:
LINCOLN NATIONAL CORPORATION
200 East Berry Street
Fort Wayne, IN 46802-2706
Attention: Chief Financial Officer
Telecopy: (310) 231-4222
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<PAGE> 32
THE FIRST NATIONAL BANK OF CHICAGO, as
Purchase Contract Agent and as
attorney-in-fact of the Holders from time to
time of the Securities
By:/s/ John R. Prendiville
------------------------------------------
Name: John R. Prendiville
Title: Vice President
Address for Notices:
The First National Bank of Chicago
One First National Plaza,
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Telecopy: (312) 407-1708
The Chase Manhattan Bank,
as Collateral Agent, Custodial Agent and as
Securities Intermediary
By:/s/ Larry O'Brien
------------------------------------------
Name: Larry O'Brien
Title: Senior Trust Officer
Address for Notices:
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10001
Attention: Global Trust Services
Telecopy: (212) 946-8159
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<PAGE> 33
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10001
Attention: Global Trust Services
Re: FELINE PRIDES of Lincoln National Corporation (the "Company"),
and Lincoln National Capital IV
We hereby notify you in accordance with Section [4.1] [4.2] of
the Pledge Agreement, dated as of August 14, 1998, (the "Pledge Agreement")
among the Company, yourselves, as Collateral Agent, Custodial Agent and
Securities Intermediary and ourselves, as Purchase Contract Agent and as
attorney-in-fact for the holders of [Income PRIDES] [Growth PRIDES] from time to
time, that the holder of Securities listed below (the "Holder") has elected to
substitute [$_____ aggregate principal amount of Treasury Securities]
[$_______Stated Amount of Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio] in exchange for an equal Value of
[Pledged Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio] [Pledged Treasury Securities] held by you in
accordance with the Pledge Agreement and has delivered to us a notice stating
that the Holder has Transferred [Treasury Securities] [Preferred Securities or
the appropriate Applicable Ownership Interest of the Treasury Portfolio] to you,
as Collateral Agent. We hereby instruct you, upon receipt of such [Pledged
Treasury Securities] [Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio], to release the [Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio] [Treasury Securities] related to such [Income PRIDES] [Growth PRIDES]
to us in accordance with the Holder's instructions. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.
Date: ____________ ______________________________________
By: ____________________________________
Name:
Title:
Signature Guarantee:
__________________________________
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<PAGE> 34
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio] for the [Pledged Preferred
Securities or the Treasury Portfolio] [Pledged Treasury Securities]:
_____________________ _________________________________________
Name Social Security or other Taxpayer
Identification Number, if any
_____________________
Address
_____________________
_____________________
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<PAGE> 35
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust, Services Division
Re: FELINE PRIDES of Lincoln National Corporation (the Company"),
and Lincoln National Capital IV
The undersigned Holder hereby notifies you that it has delivered to The
Chase Manhattan Bank, as Collateral Agent, [$_______ aggregate principal amount
of Treasury Securities] [$ aggregate Stated Amount of Preferred Securities or
the appropriate Applicable Ownership Interest of the Treasury Portfolio] in
exchange for an equal Value of [Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] [Pledged Treasury
Securities] held by the Collateral Agent, in accordance with Section 4.1 of the
Pledge Agreement, dated August 14, 1998 (the "Pledge Agreement"), between you,
the Company and the Collateral Agent. The undersigned Holder hereby instructs
you to instruct the Collateral Agent to release to you on behalf of the
undersigned Holder the [Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] [Pledged Treasury
Securities] related to such [Income PRIDES] [Growth PRIDES]. Capitalized terms
used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Dated: _____________ ______________________________________
Signature
Signature Guarantee:_______________
Please print name and address of Registered Holder:
_____________________ ______________________________
Name Social Security or other
Taxpayer Identification
Number, if any
_________________________
Address
_________________________
_________________________
_________________________
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<PAGE> 36
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10001
Attention: Global Trust Services
Re: Preferred Securities of Lincoln National Corporation (the
"Company"), and Lincoln National Capital IV
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of August 14, 1998 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and The First National Bank of Chicago, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Income PRIDES and Growth PRIDES
from time to time, that the undersigned elects to deliver $__________ stated
liquidation amount of Preferred Securities for delivery to the Remarketing Agent
on the fourth Business Day immediately preceding the Purchase Contract
Settlement Date for remarketing pursuant to Section 4.6(c) of the Pledge
Agreement. The undersigned will, upon request of the Remarketing Agent, execute
and deliver any additional documents deemed by the Remarketing Agent or by the
Company to be necessary or desirable to complete the sale, assignment and
transfer of the Preferred Securities tendered hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions". The undersigned hereby instructs you, in the event of
Failed Remarketing, upon receipt of the Preferred Securities tendered herewith
from the Remarketing Agent, to be delivered to the person(s) and the address(es)
indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Preferred Securities tendered hereby and that the undersigned is
the record owner of any Preferred Securities tendered herewith in physical form
or a participant in The Depositary Trust Company ("DTC") and the beneficial
owner of any Preferred Securities tendered herewith by book-entry transfer to
your account at DTC and (ii) agrees to be bound by the terms and conditions of
Section 4.6(c) of the Pledge
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<PAGE> 37
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
Date: ______________
______________________________
By: __________________________
Name:
Title:
Signature Guarantee:_________________
Please print name and address:
_________________________ __________________________________
Name Social Security or other Taxpayer
Identification Number, if any
__________________________
Address
__________________________
__________________________
__________________________
_________________________________________________________________
PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
Name(s) _______________________________
(Please Print)
Address ______________________________
(Please Print)
_______________________________________
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<PAGE> 38
_______________________________________
(Zip Code)
______________________________________________
(Tax Identification or Social Security Number)
-35-
<PAGE> 39
B. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Preferred Securities which are in physical
form should be delivered to the person(s) set forth below and mailed to the
address set forth below.
Name(s) ______________________________________
(Please Print)
Address ______________________________________
(Please Print)
______________________________________________
______________________________________________
(Zip Code)
______________________________________________
(Tax Identification or Social Security Number)
In the event of a Failed Remarketing, Preferred Securities which are in
book-entry form should be credited to the account at The Depositary Trust
Company set forth below.
___________________
DTC Account Number
Name of Account Party: _____________________
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<PAGE> 40
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10001
Attention: Global Trust Services
Re: Preferred Securities of Lincoln National
Corporation (the "Company"), and Lincoln National Capital IV
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of August 14, 1998 (the "Pledge Agreement")
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and The First National Bank of Chicago, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Income PRIDES and Growth PRIDES
from time to time, that the undersigned elects to withdraw the $_____ aggregate
stated liquidation amount of Preferred Securities delivered to the Custodial
Agent on ___________, 2001 for remarketing pursuant to Section 4.6(c) of the
Pledge Agreement. The undersigned hereby instructs you to return such Preferred
Securities to the undersigned in accordance with the undersigned's instructions.
With this notice, the Undersigned hereby agrees to be bound by the terms and
conditions of Section 4.6(c) of the Pledge Agreement. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.
Date: _______________ _____________________________________
By: _________________________________
Name: _______________________________
Title: ______________________________
Signature Guarantee: ________________
Please print name and address:
__________________________ __________________________________
(Name) Social Security or other Taxpayer
-37-
<PAGE> 41
Identification Number, if any
______________________________
Address
______________________________
______________________________
_________________________________________________________________
A. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Preferred Securities which are in physical
form should be delivered to the person(s) set forth below and mailed to the
address set forth below.
Name(s) ______________________________________
(Please Print)
Address ______________________________________
(Please Print)
______________________________________________
______________________________________________
(Zip Code)
______________________________________________
(Tax Identification or Social Security Number)
In the event of a Failed Remarketing, Preferred Securities which are in
book-entry form should be credited to the account at The Depositary Trust
Company set forth below.
__________________
DTC Account Number
Name of Account Party: __________________
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<PAGE> 1
EXHIBIT 4.10
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of August 14, 1998 (the
"Remarketing Agreement") by and among Lincoln National Corporation, an Indiana
corporation (the "Company"), Lincoln National Capital IV, a Delaware statutory
business trust (the "Trust"), The First National Bank of Chicago, a national
banking association, not individually but solely as Purchase Contract Agent (the
"Purchase Contract Agent") and as attorney-in-fact of the holders of Purchase
Contracts (each as defined in the Purchase Contract Agreement (as defined
herein)), and Merrill Lynch & Co./Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as reset agent and remarketing agent (the "Remarketing Agent").
WITNESSETH:
WHEREAS, the Company will issue its FELINE PRIDES (the "FELINE
PRIDES") with an aggregate Stated Amount of $200,000,000 ($230,000,000 in the
event the Underwriters' Over-Allotment Option (as defined below) is exercised)
under the Purchase Contract Agreement, dated as of August 14, 1998, by and
between the Purchase Contract Agent and the Company (the "Purchase Contract
Agreement");
WHEREAS, concurrently with the issuance of the FELINE PRIDES,
the Trust will issue separately 1,000,000 6.40% Preferred Securities, Series D
(the "Separate Preferred Securities," and together with the 7,000,000 6.40%
Preferred Securities, Series D, comprising part of the Income PRIDES (8,200,000
in the event the Underwriters' Over-Allotment Option (as defined below) is
exercised) (the "Underlying Preferred Securities"), the "Preferred Securities")
in an aggregate stated liquidation amount of $25,000,000 under the Amended and
Restated Trust Agreement, dated as of August 14, 1998, by and among the Company,
the Administrative Trustees, the Delaware Trustee and the Property Trustee (the
"Trust Agreement");
WHEREAS, the FELINE PRIDES will initially consist of 7,000,000
units referred to as "Income PRIDES" (which number shall be increased to
8,200,000 Income PRIDES in the event the Underwriters' Over-Allotment Option (as
defined below) is exercised) and 1,000,000 units referred to as "Growth PRIDES;"
WHEREAS, the sole assets of the Trust, consisting of
$206,186,000 aggregate principal amount of 6.40% Subordinated Debentures, Series
D, due August 15, 2003 ($237,113,850 in the event the Underwriters'
Over-Allotment Option is exercised) (collectively, the "Debentures") of the
Company will be purchased by the Trust from the Company with the proceeds of the
sale of the Preferred Securities and the proceeds of the sale of the common
securities of the Trust (the "Common Securities" and, together with the
Preferred Securities, the "Trust Securities");
<PAGE> 2
WHEREAS, the Underlying Preferred Securities comprising part
of the Income PRIDES (or upon a dissolution of the Trust and the distribution of
the Debentures as described in the Trust Agreement, such Debentures) will be
pledged pursuant to the Pledge Agreement (the "Pledge Agreement"), dated as of
August 14, 1998, by and among the Company, The Chase Manhattan Bank, as
collateral agent (the "Collateral Agent"), and the Purchase Contract Agent, to
secure an Income PRIDES holder's obligations under the related Purchase Contract
on the Purchase Contract Settlement Date;
WHEREAS, the Company and the Trust have entered into an
Underwriting Agreement dated August 10, 1998 and a Pricing Agreement dated
August 10, 1998 (collectively, the "Underwriting Agreement") (a) providing for
the issuance and sale to the underwriters named therein (the "Underwriters") of
the original 7,000,000 Income PRIDES, 1,000,000 Growth PRIDES and 1,000,000
Separate Preferred Securities and (b) granting to the Underwriters the right
(the "Underwriters' Over-Allotment Option"), exercisable for 30 days, to
purchase up to an additional 1,200,000 Income PRIDES on the terms and subject to
the conditions set forth in the Underwriting Agreement;
WHEREAS, the Underlying Preferred Securities comprising part
of the Income PRIDES, or the Debentures, as the case may be, of such holders of
Preferred Securities or Debentures electing to have their Preferred Securities
or Debentures remarketed, or of such Income PRIDES holders who have elected not
to settle the Purchase Contracts related to their Income PRIDES from the
proceeds of a Cash Settlement and who have not settled their Purchase Contracts
early, will be remarketed by the Remarketing Agent on the third Business Day
immediately preceding the Purchase Contract Settlement Date (the "Remarketing
Date");
WHEREAS, the applicable distribution rate on the Preferred
Securities (and, thus, the interest rate on the Debentures) that remain
outstanding on and after the Purchase Contract Settlement Date will be reset on
the third Business Day immediately preceding the Purchase Contract Settlement
Date, to the Reset Rate to be determined by the Reset Agent as the rate that
such Preferred Securities (and, thus, the Debentures) should bear in order to
have an approximate market value of 100.5% of the aggregate stated liquidation
amount of the Preferred Securities or the aggregate principal amount of the
Debentures on the third Business Day immediately preceding the Purchase Contract
Settlement Date, provided that in the determination of such Reset Rate, the
Company may limit the Reset Spread (a component of the Reset Rate) to be no
higher than 200 basis points (2%);
WHEREAS, the Company and the Trust have requested that Merrill
Lynch & Co./Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch")
act as the Reset Agent and as the Remarketing Agent and, as such, to perform the
services described herein; and
WHEREAS, Merrill Lynch is willing to act as Reset Agent and
Remarketing Agent and as such to perform such duties on the terms and conditions
expressly set forth herein;
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<PAGE> 3
NOW, THEREFORE, for and in consideration of the covenants
herein made, and subject to the conditions herein set forth, the parties hereto
agrees as follows:
Section i. Definitions. Capitalized terms used and not defined
in this Agreement shall have the meanings assigned to them in the Purchase
Contract Agreement or, if not therein stated, the Trust Agreement or the Pledge
Agreement.
Section ii. Appointment and Obligations of Remarketing Agent.
The Company and the Trust hereby appoint Merrill Lynch and Merrill Lynch hereby
accepts such appointment, (i) as the Reset Agent, to determine, in consultation
with the Company, in the manner provided for in the Trust Agreement with respect
to the Trust Securities and in the Indenture with respect to the Debentures, the
Reset Rate that, in the opinion of the Reset Agent, will, when applied to the
Trust Securities (and, thus, the Debentures), enable a Trust Security (and,
thus, a Debenture), to have an approximate market value of approximately 100.5%
of the aggregate stated liquidation amount, in the case of such Trust Security,
and of the aggregate principal amount, in the case of such Debenture (provided
that the Company may limit such Reset Rate to be no higher than the rate on the
Two-Year Benchmark Treasury plus 200 basis points (2%), and provided, further,
that the Reset Rate shall in no event exceed the rate permitted by applicable
law), and (ii) as the exclusive Remarketing Agent to remarket the Preferred
Securities, or the Debentures, as the case may be, of such holders of Underlying
Preferred Securities or Debentures which elect to have their Underlying
Preferred Securities or Debentures remarketed, or of such Income PRIDES holders
which have not settled the related Purchase Contracts early and have failed to
notify the Purchase Contract Agent, on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, of their intention
to settle the related Purchase Contracts through Cash Settlement, for settlement
on the Purchase Contract Settlement Date, pursuant to a remarketing underwriting
agreement with the Company, the Trust and the Purchase Contract Agent (the
"Remarketing Underwriting Agreement"), substantially in the form attached hereto
as Exhibit A (with such changes as the Company, the Purchase Contract Agent and
the Remarketing Agent may agree upon, it being understood that changes may be
necessary in the representations, warranties, covenants and other provisions of
the Remarketing Underwriting Agreement due to changes in law or facts and
circumstances). Pursuant to the Remarketing Underwriting Agreement, the
Remarketing Agent, either as the sole remarketing underwriter or as the
representative of a syndicate including the Remarketing Agent and one or more
other remarketing underwriters designated by the Remarketing Agent, will agree,
subject to the terms and conditions set forth therein, that the Remarketing
Agent and any such other remarketing underwriters will purchase severally the
Underlying Preferred Securities or the Debentures, as the case may be, to be
sold by the holder or holders of Underlying Preferred Securities comprising part
of the Income PRIDES on the third Business Day immediately preceding the
Purchase Contract Settlement Date and will use its reasonable efforts to
remarket such Underlying Preferred Securities or the Debentures, as the case may
be (such purchase and remarketing being hereinafter referred to as the
"Remarketing"), at a price of approximately 100.5% of the aggregate stated
liquidation amount of such Underlying Preferred Securities plus any accrued and
unpaid distributions (including any deferred distributions) and, in the case of
Debentures, at a price of approximately 100.5% of the aggregate principal amount
of
-3-
<PAGE> 4
such Debentures plus any accrued and unpaid interest thereon (including any
deferred interest). Notwithstanding the preceding sentence, the Remarketing
Agent shall neither purchase nor remarket any Underlying Preferred Securities or
Debentures, as the case may be, for a price less than 100% of the aggregate
stated liquidation amount or aggregate principal amount of such Underlying
Preferred Securities or Debentures, respectively, plus accumulated and unpaid
distributions or accrued and unpaid interest, as the case may be. However, such
market value may be less than 100.5%, including where the Reset Spread is
limited to the maximum of 2% or if the Reset Rate were to be limited by
applicable law.
"Two-Year Benchmark Treasury" means a direct obligation of the
United States (which may be an obligation traded on a when-issued basis only)
having a maturity comparable to the remaining term to maturity of the Preferred
Securities, as agreed upon by the Company and the Reset Agent. The rate for the
Two-Year Benchmark Treasury will be the bid side rate displayed at 10:00 A.M.,
New York City time, on the third Business Day immediately preceding the Purchase
Contract Settlement Date in the Telerate system (or if the Telerate system is
(a) no longer available on the third Business Day immediately preceding the
Purchase Contract Settlement Date, or (b) in the opinion of the Reset Agent
(after consultation with the Company) no longer an appropriate system from which
to obtain such rate, in either case such other nationally recognized quotation
system as, in the opinion of the Reset Agent (after consultation with the
Company), is appropriate). If such rate is not so displayed, the rate for the
Two-Year Benchmark Treasury shall be calculated by the Reset Agent, the yield to
maturity for the Two-Year Benchmark Treasury, expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis, and computed by taking the arithmetic mean of the secondary market bid
rates, as of 10:30 A.M., New York City time, on the third Business Day
immediately preceding the Purchase Contract Settlement Date of three leading
United States government securities dealers selected by the Reset Agent (after
consultation with the Company) (which may include the Reset Agent or an
affiliate thereof).
On the tenth Business Day immediately preceding the Purchase
Contract Settlement Date, the Two-Year Benchmark Treasury to be used to
determine the Reset Rate on the Purchase Contract Settlement Date will be
selected and the Reset Spread to be added to the rate on the Two-Year Benchmark
Treasury in effect on the third Business Day immediately preceding the Purchase
Contract Settlement Date will be established by the Reset Agent, and the Reset
Spread and the Two-Year Benchmark Treasury will be announced by the Company (the
"Reset Announcement Date"). The Company will cause a notice of the Reset Spread
and such Two-Year Benchmark Treasury to be published on the Business Day
following the Reset Announcement Date by publication in a daily newspaper in the
English language of general circulation in The City of New York, which is
expected to be The Wall Street Journal. The Company will request, not later than
7 nor more than 15 calendar days prior to the Reset Announcement Date, that the
Depositary notify its participants holding Preferred Securities, Income PRIDES
or Growth Prides of such Reset Announcement Date and of the procedures that must
be followed if any owner of Income PRIDES wishes to settle the related Purchase
Contract with cash on the Business Day immediately preceding the Purchase
Contract Settlement Date.
-4-
<PAGE> 5
"Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New York are
authorized or required by law or executive order to remain closed, or a day on
which the Property Trustee or the Subordinated Indenture Trustee is closed for
business.
The proceeds of such Remarketing shall be paid to the
Collateral Agent in accordance with Section 4.6 of the Pledge Agreement and
Section 5.4 of the Purchase Contract Agreement (each of which Sections is
incorporated herein by reference). The right of each holder of Underlying
Preferred Securities or Debentures to have Underlying Preferred Securities or
Debentures, as the case may be, rendered for purchase shall be limited to the
extent that (i) the Remarketing Agent conducts a Remarketing pursuant to the
terms of this Agreement, (ii) any Underlying Preferred Securities or Debentures,
as the case may be, tendered have not been called for redemption, (iii) the
Remarketing Agent is able to find a purchaser or purchasers for tendered
Underlying Preferred Securities or Debentures, as the case may be, and (iv) such
purchaser or purchasers deliver the purchase price therefor to the Remarketing
Agent. The Remarketing Agent is not obligated to purchase any Preferred
Securities or Debentures that would otherwise remain unsold in a Remarketing.
None of the Trust, any Trustee, the Company nor the Remarketing Agent shall be
obligated in any case to provide funds to make payment upon tender of Preferred
Securities or Debentures for remarketing.
Section iii. Fees. With respect to the Remarketing, the
Remarketing Agent shall retain as a remarketing fee (the "Remarketing Fee") an
amount not exceeding 25 basis points (.25%) of the aggregate stated liquidation
amount of the remarketed Preferred Securities or 25 basis points (.25%) of the
aggregate principal amount of the Debentures, as the case may be, from any
amount received in connection with such Remarketing in excess of the aggregate
stated liquidation amount or aggregate principal amount of such remarketed
Preferred Securities or Debentures plus any accrued and unpaid (including
deferred) distributions or any accrued and unpaid interest (including any
deferred interest), as the case may be. In addition, the Reset Agent shall
receive from the Company a reasonable and customary fee as the reset agent fee
(the "Reset Agent Fee"); provided, however, that if the Remarketing Agent shall
also act as the Reset Agent, then the Reset Agent shall not be entitled to
receive any such Reset Agent Fee. Payment of such Reset Agent Fee shall be made
by the Company on the third Business Day immediately preceding the Purchase
Contract Settlement Date in immediately available funds or, upon the
instructions of the Reset Agent by certified or official bank check or checks or
by wire transfer.
Section iv. Failed Remarketing. If, despite using its
reasonable efforts, the Remarketing Agent cannot remarket the Underlying
Preferred Securities or Debentures (other than to the Company) at a price not
less than 100% of the aggregate stated liquidation amount of such Underlying
Preferred Securities or 100% of the aggregate principal amount of the
Debentures, plus any accumulated and unpaid distributions (including deferred
distributions, if any) or accrued and unpaid interest (including any deferred
interest) or if the remarketing shall not have occurred because a condition
precedent to the remarketing shall not have been fulfilled, resulting in a
Failed Remarketing, the Company will exercise its rights as a secured party to
dispose of the Underlying Preferred Securities or Debentures in accordance with
the applicable
-5-
<PAGE> 6
law and satisfy in full, from the proceeds of such disposition, such holder's
obligation to purchase Common Stock under the related Purchase Contracts;
provided, that if the Company exercises such rights as a secured creditor, any
accrued and unpaid distributions (including deferred distributions, if any) on
such Underlying Preferred Securities or accrued and unpaid interest (including
any deferred interest) in respect of the Debentures will be paid in cash by the
Company to the holders of record of such Underlying Preferred Securities or
Debentures, as the case may be. The Company will cause a notice of such Failed
Remarketing to be published on the second Business Day immediately preceding the
Purchase Contract Settlement Date by publication in a daily newspaper in the
English language of general circulation in The City of New York which is
expected to be The Wall Street Journal. In addition, the Company will request,
not later than seven nor more than 15 calendar days prior to the remarketing
date, that the Depositary notify its participants holding Preferred Securities,
Income PRIDES and Growth PRIDES of such remarketing, including, in the case of a
Failed Remarketing, the procedures that must be followed if a holder of
Preferred Securities or Debentures, as the case may be, wishes to exercise its
right to put its Preferred Securities or Debentures, as the case may be, to the
Company as described in the Trust Agreement.
Section v. Optional Remarketing. Subject to the terms of the
Remarketing Underwriting Agreement, on or prior to the fifth Business Date
immediately preceding the Purchase Contract Settlement Date, but no earlier than
the Payment Date immediately preceding the Purchase Contract Settlement Date,
holders of Separate Preferred Securities which are not components of Income
PRIDES may elect to have their Separate Preferred Securities remarketed in the
same manner as Underlying Preferred Securities which are components of Income
PRIDES (as described herein) by delivering their Separate Preferred Securities,
along with a notice of such election, to the Custodial Agent. The Custodial
Agent will hold such Separate Preferred Securities in an account separate from
the collateral account in which the Pledged Securities will be held. Holders of
Separate Preferred Securities electing to have their Separate Preferred
Securities remarketed will also have the right to withdraw such election on or
prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date.
Section vi. Replacement and Resignation of Remarketing Agent.
(i) The Company may in its absolute discretion replace Merrill Lynch as the
Remarketing Agent and/or as the Reset Agent in either such capacity hereunder by
giving notice prior to 3:00 p.m., New York City time, on the eleventh Business
Day immediately prior to the Purchase Contract Settlement Date. Any such
replacement shall become effective, and Merrill Lynch shall be discharged from
its duties and obligations hereunder, as Remarketing Agent and/or Reset Agent
upon the Company's appointment of a successor to perform the services that would
otherwise be performed hereunder by the Remarketing Agent and/or the Reset Agent
and the agreement of any such successor so to serve. Upon providing such notice,
the Company shall use all reasonable efforts to appoint such a successor and to
enter into a new remarketing agreement with such successor as soon as reasonably
practicable.
(ii) Merrill Lynch may resign at any time and shall be
discharged from its duties and obligations hereunder as the Remarketing Agent
and/or as the Reset Agent by giving
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<PAGE> 7
notice prior to 3:00 p.m., New York City time, on the eleventh Business Day
immediately prior to the Purchase Contract Settlement Date. Any such resignation
shall become effective upon the Company's appointment of a successor to perform
the services that would otherwise be performed hereunder by the Remarketing
Agent and/or the Reset Agent and the agreement of any such successor so to
serve. Upon receiving notice from the Remarketing Agent and/or the Reset Agent
that it wishes to resign hereunder, the Company shall appoint such a successor
and enter into a new remarketing agreement with it as soon as reasonably
practicable.
Section vii. Dealing in the Securities. Merrill Lynch, when
acting as Remarketing Agent hereunder or under the Remarketing Underwriting
Agreement or when acting in its individual or any other capacity, may, to the
extent permitted by law, buy, sell, hold or deal in any of the Preferred
Securities or Debentures, as the case may be. With respect to any Preferred
Securities or Debentures, as the case may be, owned by it, the Remarketing Agent
may exercise any vote or join in any action with like effect as if it did not
act in any capacity hereunder. Merrill Lynch, in its individual capacity, either
as principal or agent, may also engage in or have an interest in any financial
or other transaction with the Company as freely as if it did not act in any
capacity hereunder.
Section viii. Registration Statement and Prospectus. In
connection with the Remarketing, if and to the extent required (in the opinion
of counsel for either the Remarketing Agent or the Company) by applicable law,
regulations or interpretations in effect at the time of such Remarketing, the
Company shall use its reasonable efforts to have a registration statement
relating to the full amount of the Preferred Securities effective under the
Securities Act of 1933 by the third Business Day immediately preceding the
Purchase Contract Settlement Date, shall furnish a current prospectus and/or
prospectus supplement to be used in such Remarketing by the remarketing
underwriter or underwriters under the Remarketing Underwriting Agreement, and
shall pay all expenses relating thereto.
Section ix. Conditions to the Remarketing Agent's Obligations.
(i) The obligations of the Remarketing Agent and any other remarketing
underwriters to purchase and remarket the Preferred Securities or the
Debentures, as the case may be, shall be subject to the terms and conditions of
the Remarketing Underwriting Agreement.
(ii) If at any time during the term of this Agreement, any
Debenture Event of Default or Trust Agreement Event of Default, or event that
with the passage of time or the giving of notice or both would become an
Indenture Event of Default or Trust Agreement Event of Default, has occurred and
is continuing under the Indenture or the Trust Agreement, then the obligations
and duties of the Remarketing Agent under this Agreement shall be suspended
until such default or event has been cured. The Company shall cause the
Subordinated Indenture Trustee and the Property Trustee to give the Remarketing
Agent notice of all such defaults and events of which the Trustee is aware.
Section x. Termination of Remarketing Agreement. This
Agreement shall terminate as to any Remarketing Agent which is replaced on the
effective date of its replacement
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<PAGE> 8
pursuant to Section 4(a) hereof or pursuant to Section 4(b) hereof.
Notwithstanding any such termination, the obligations of the Company set forth
in Section 3 hereof shall survive and remain in full force and effect until all
amounts payable under said Section 3 shall have been paid in full.
Section xi. Remarketing Agent's Performance: Duty of Care.
The duties and obligations of the Remarketing Agent hereunder shall be
determined solely by the express provisions of this Agreement and the
Remarketing Underwriting Agreement.
Section xii. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
Section xiii. Term of Agreement. Unless otherwise terminated
in accordance with the provisions hereof and except as otherwise provided
herein, this Agreement shall remain in full force and effect from the date
hereof until three months following the Remarketing Date.
Section xiv. Successors and Assigns. The rights and
obligations of the Company hereunder may not be assigned or delegated to any
other person without the prior written consent of Merrill Lynch, as the
Remarketing Agent and/or the Reset Agent. Subject to the provisions of Section
6, the rights and obligations of Merrill Lynch, as the Remarketing Agent and/or
the Reset Agent hereunder, may not be assigned or delegated to any other person
without the prior written consent of the Company. This Agreement shall inure to
the benefit of and be binding upon the Company and the Remarketing Agent and/or
the Reset Agent and their respective successors and assigns. The terms
"successors" and "assigns" shall not include any purchaser of Preferred
Securities or Debentures merely because of such purchase.
Section xv. Headings. Section headings have been inserted in
this Agreement as a matter of convenience of reference only, and it is agreed
that such section headings are not a part of this Agreement and will not be used
in the interpretation of any provision of this Agreement.
Section xvi. Severability. If any provision of this Agreement
shall be held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provisions of any constitution, statute, rule or
public policy or for any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstances or jurisdiction, or of rendering
any other provision or provisions of this Agreement invalid, inoperative or
unenforceable to any extent whatsoever.
Section xvii. Counterparts. This Agreement may be executed in
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
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<PAGE> 9
Section xviii. Amendments. This Agreement may be amended by
any instrument in writing signed by the parties hereto.
Section xix. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made hereunder or pursuant
hereto shall be made in writing or transmitted by any standard form of
telecommunication, including telephone, telegraph or telecopy, and confirmed in
writing. All written notices and confirmations of notices by telecommunication
shall be deemed to have been validly given or made when delivered or mailed,
registered or certified mail, return receipt requested and postage prepaid. All
such notices, requests, consents or other communications shall be addressed as
follows: if to the Company, to Lincoln National Corporation, 200 East Berry
Street, Fort Wayne, IN, 46802-2706, Attention: Richard C. Vaughan, Executive
Vice President and Chief Financial Officer, with a copy to Sonnenschein Nath &
Rosenthal, 8000 Sears Tower, Chicago, IL 60606, Attention: Arthur J. Simon,
Esq.; if to the Trust, to c/o Lincoln National Corporation, 200 East Berry
Street, Fort Wayne, IN, 46802-2706; if to the Remarketing Agent or Reset Agent
(if Merrill Lynch and Co. is the Remarketing Agent or the Reset Agent), to c/o
Merrill Lynch & Co. at Merrill Lynch World Headquarters, World Financial Center,
North Tower, 250 Vesey Street, New York, New York 10281, Attention: Robin Mass,
Esq., with a copy to LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125 West 55th
Street, New York, NY 10019-5389, Attention: Michael Groll, Esq.; and if to the
Purchase Contract Agent, to The First National Bank of Chicago, Corporate Trust
Services Division, One First National Plaza, Suite 0126, Chicago IL 60670-0126,
or to such other address as any of the above shall specify to the other in
writing.
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<PAGE> 10
IN WITNESS WHEREOF, each of the Company and the Remarketing
Agent has caused this Agreement to be executed in its name and on its behalf by
one of its duly authorized officers as of the date first above written.
LINCOLN NATIONAL CORPORATION
By: /s/ John L. Steinkamp
-------------------------------------
Name: John L. Steinkamp
Title: Vice President
LINCOLN NATIONAL CAPITAL IV
By: /s/ Janet C. Chrzan
-------------------------------------
Name: Janet C. Chrzan
Title: Administrative Trustee
CONFIRMED AND ACCEPTED:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ John P. Tullsen, Jr.
--------------------------------------
Authorized Signatory
THE FIRST NATIONAL BANK OF CHICAGO
not individually but solely as Purchase Contract
Agent and as attorney-in-fact for the holders
of the Purchase Contracts
By: /s/ John R. Prendiville
--------------------------------------
Name: John R. Prendiville
Title: Vice President
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<PAGE> 11
Exhibit A to
Remarketing Agreement
FORM OF REMARKETING UNDERWRITING AGREEMENT
Merrill Lynch & Co./Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Remarketing Underwriter") hereby agrees to purchase the
Preferred Securities or, if a Tax Event Redemption has occurred prior to the
Purchase Contract Settlement Date, the Debentures (such Preferred Securities or
Debentures, as the case may be, being hereinafter referred to as the
"Securities"), that have been tendered by the holders of the Income PRIDES for
sale on August 13, 2001.
i. Definitions. Capitalized terms used and not defined in this
Agreement shall have the meanings assigned to them in the purchase contract
agreement (the "Purchase Contract Agreement"), the pledge agreement (the "Pledge
Agreement"), the underwriting agreement (the "Underwriting Agreement"), the
amended and restated Trust Agreement (the "Trust Agreement") and the junior
subordinated indenture, as supplemented by the first supplemental indenture (the
"Indenture"), each as identified in Schedule I hereto.
ii. Registration Statement and Prospectus. If required (in the
opinion of counsel to either the Remarketing Underwriter or the Company) by
applicable law, the Company and the Trust have filed with the Securities and
Exchange Commission, and there has become effective, a registration statement on
Form S-3 (Nos. 333-49201 and 333-49201-02), including a prospectus, relating to
the Securities. Such registration statement, as amended to the date of this
Agreement, is hereinafter referred to as the "Registration Statement", the
prospectus included in the Registration Statement is hereinafter referred to as
the "Basic Prospectus" and the Basic Prospectus, as amended or supplemented to
the date of this Agreement to relate to the Securities and to the remarketing of
the Securities, is hereinafter referred to as the "Final Prospectus" (including
in each case all documents incorporated by reference).
iii. Provisions Incorporated by Reference.
(i) Subject to Section 3(b), the provisions of the
Underwriting Agreement shall be incorporated, as applicable, into this Agreement
and made applicable to the obligations of the Remarketing Underwriter, except as
explicitly amended hereby.
(ii) With respect to the provisions of the
Underwriting Agreement incorporated herein, for the purposes hereof, (i) all
references therein to the "Underwriter" or "Underwriters" shall be deemed to
refer to the Remarketing Underwriter; (ii) all references therein to the
"Preferred Securities" which are the subject thereof shall be deemed to refer to
the Securities as defined herein; (iii) all references therein to the "Closing
Date" shall be deemed to refer to the Remarketing Closing Date specified in
Schedule I hereto (the "Remarketing Closing Date"); (iv) all references therein
to the "Registration Statement" and the "Prospectus" shall be
A-1
<PAGE> 12
deemed to refer to the Registration Statement, and the Prospectus,respectively,
as defined herein.
iv. Purchase and Sale; Remarketing Underwriting Fee. Subject
to the terms and conditions and in reliance upon the representations and
warranties herein set forth or incorporated herein, the Remarketing Underwriter
agrees to purchase from the registered holder or holders thereof in the manner
specified in Section 5 hereof, the principal amount of Securities set forth in
Schedule I hereto at a purchase price not less than 100% of such Securities'
aggregate stated liquidation amount or aggregate principal amount, as the case
may be, plus any accrued and unpaid distributions or interest, as applicable,
thereon. In connection therewith, the registered holder or holders thereof
agree, in the manner specified in Section 5 hereof, to pay to the Remarketing
Underwriter a Remarketing Underwriting Fee equal to an amount not exceeding 25
basis points (.25%), from any amount received in connection from such
Remarketing in excess of the aggregate stated liquidation amount or aggregate
principal amount, as the case may be, of the Securities. The right of each
holder of Securities to have Securities tendered for purchase shall be limited
to the extent that (i) the Remarketing Agent conducts a remarketing pursuant to
the terms of the Remarketing Agreement, (ii) Securities tendered have not been
called for redemption, (iii) the Remarketing Agent is able to find a purchaser
or purchasers for tendered Securities and (iv) such purchaser or purchasers
deliver the purchase price therefor to the Remarketing Agent. The Remarketing
Agent is not obligated to purchase any Securities that would otherwise remain
unsold in a remarketing. Neither the Trust, any Trustee, the Company nor the
Remarketing Agent shall be obligated in any case to provide funds to make
payment upon tender of Securities for remarketing.
v. Delivery and Payment. Delivery of payment for the
remarketed Securities and payment of the Remarketing Underwriting Fee shall be
made on the Remarketing Closing Date at the location and time specified in
Schedule I hereto (or such later date not later than five business days after
such date as the Remarketing representatives shall designate), which date and
time may be postponed by agreement between the Remarketing Underwriter, the
Company, the Trust and the [registered holder or holders thereof]. Delivery of
the remarketed Securities and payment of the Remarketing [Underwriting] Fee
shall be made to the Remarketing Underwriter [to or upon the order of the
[registered holder or holders of the Remarketed Securities] by certified or
official bank check or checks drawn on or by a New York Clearing House bank and
payable in immediately available funds][in immediately available funds by wire
transfer to an account or accounts designated by the [Company] [Trustee]
[registered holder or holders of the remarketed Securities]] or, if the
remarketed Securities are represented by a Global Security, by any method of
transfer agreed upon by the Remarketing Underwriter and the Depositary for the
Securities under the Trust Agreement or Indenture, as applicable.
[It is understood that any registered holder or, if the
Securities are represented by a Global Security, any beneficial owner, that has
an account at the Remarketing Underwriter and tenders its Securities through
such account will not be required to pay any fee or commission to the
Remarketing Underwriter.]
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<PAGE> 13
If the Securities are not represented by a Global Security,
certificates for the Securities shall be registered in such names and
denominations as the Remarketing Representatives may request not less than three
full business days in advance of the Remarketing Closing Date, and the Company,
the Trust and the [registered holder or holders thereof] agree to have such
certificates available for inspection, packaging and checking by the Remarketing
Underwriter in New York, New York not later than 1:00 p.m. on the Business Day
prior to the Remarketing Closing Date.
vi. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made hereunder or pursuant
hereto shall be made in writing or transmitted by any standard form of
telecommunication, including telephone, telegraph or telecopy, and confirmed in
writing. All written notices and confirmations of notices by telecommunication
shall be deemed to have been validly given or made when delivered or mailed,
registered or certified mail, return receipt requested and postage prepaid. All
such notices, requests, consents or other communications shall be addressed as
follows: if to the Company, to Lincoln National Corporation, 200 East Berry
Street, Fort Wayne, IN, 46802-2706, Attention: Richard C. Vaughan, Executive
Vice President and Chief Financial Officer, with a copy to Sonnenschein Nath &
Rosenthal, 8000 Sears Tower, Chicago, IL 60606, Attention: Arthur J. Simon,
Esq.; if to the Remarketing Agent or Reset Agent (if Merrill Lynch and Co. is
the Remarketing Agent or the Reset Agent), to c/o Merrill Lynch & Co. at Merrill
Lynch World Headquarters, World Financial Center, North Tower, 250 Vesey Street,
New York, New York 10281, Attention: Robin Mass, Esq., with a copy to LeBoeuf,
Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New York, NY 10019-5389,
Attention: Michael Groll, Esq.; and if to the Purchase Contract Agent, to The
First National Bank of Chicago, Corporate Trust Services Division, One First
National Plaza, Suite 0126, Chicago IL 60670-0126, or to such other address as
any of the above shall specify to the other in writing.
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<PAGE> 14
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Remarketing Underwriters.
Very truly yours,
LINCOLN NATIONAL CORPORATION
By:
---------------------------------
Name:
Title:
LINCOLN NATIONAL CAPITAL IV
By:
---------------------------------
Name:
Title: Administrative Trustee
CONFIRMED AND ACCEPTED:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
------------------------------
Authorized Signatory
THE FIRST NATIONAL BANK OF CHICAGO
not individually but solely as Purchase Contract
Agent and as attorney-in-fact for the holders
of the Purchase Contracts
By:
------------------------------
Name:
Title:
A-4
<PAGE> 15
SCHEDULE I
Purchase Contract Agreement, dated as of
August 14, 1998 by and between
Lincoln National Corporation, an Indiana corporation, and
The First National Bank of Chicago, a national banking association
Pledge Agreement dated as of August 14, 1998
by and between Lincoln National Corporation, an Indiana
corporation, The First National Bank of Chicago,
a national banking association, and
The Chase Manhattan Bank
Amended and Restated Trust Agreement of Trust dated as of
August 14, 1998 of Lincoln National Capital IV,
a Delaware business trust
Junior Subordinated Indenture dated as of May 1, 1996
by and between Lincoln National Corporation, an Indiana
corporation, and The First National Bank of Chicago
First Supplemental Indenture, dated as of August 14,
1998 by and between Lincoln National Corporation, an Indiana
corporation, and The First National Bank of Chicago
Registration Statement Nos. 333-49201 and 333-49201-02
Principal Amount of Securities: $200,000,000 ($230,000,000 if the
Underwriters' over-allotment option is exercised)
Underwriting Agreement, dated as of August 10, 1998, among Lincoln National
Corporation, Lincoln National Capital IV, and Merrill Lynch & Co./Merrill Lynch,
Pierce, Fenner & Smith Incorporated, BT Alex. Brown Incorporated and CIBC
Oppenheimer Corp.
Remarketing [Underwriting] Fee: .25% ($.0025)
Remarketing Closing Date, Time and Location
A-5
<PAGE> 1
EXHIBIT 8.1
[Letterhead of Sonnenschein Nath & Rosenthal]
August 14, 1998
Lincoln National Corporation
Lincoln National Capital IV
200 East Berry Street
Fort Wayne, Indiana 46802-2706
Re: Lincoln National Capital IV
FELINE PRIDES(SM) and 6.40% 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 IV and the prospectus dated April. 27, 1998 contained
therein and the prospectus supplement dated August 10, 1998 to such prospectus
(collectively, the "Prospectus") relating to the offering of FELINE PRIDES(SM)
and 6.40% Trust Originated Preferred Securities, Series D (the "Securitites").
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 "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 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, 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 maybe interred beyond the matters stated
herein. This opinion shall not be construed as or deemed to be a guaranty or
insuring agreement.
<PAGE> 2
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 headings "Legal
Opinions" and "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
/s/ Thomas M. Stephens
By:
Thomas M. Stephens
