AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 21, 1998
REGISTRATION NO. 333-64809
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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<TABLE>
<CAPTION>
CITY HOLDING COMPANY CITY HOLDING CAPITAL TRUST II
<S> <C>
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter)
WEST VIRGINIA DELAWARE
(State or other jurisdiction of (State of other jurisdiction of
incorporation or organization) incorporation or organization)
55-0619957 54-6439249
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
25 GATEWATER ROAD 25 GATEWATER ROAD
CHARLESTON, WEST VIRGINIA 25313 CHARLESTON, WEST VIRGINIA 25313
(304) 769-1100 (304) 769-1100
(Address, including zip code, and telephone number, (Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices) including area code, of registrant's principal executive
offices)
</TABLE>
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STEVEN J. DAY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
25 GATEWATER ROAD
CHARLESTON, WEST VIRGINIA 25313
(304) 769-1100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
---------------
COPIES TO:
<TABLE>
<S> <C>
LATHAN M. EWERS, JR. FRANK M. CONNER, III
MICHAEL J. MCCULLOUGH JONATHAN H. TALCOTT
HUNTON & WILLIAMS ALSTON & BIRD LLP
RIVERFRONT PLAZA, EAST TOWER 601 PENNSYLVANIA AVENUE
951 EAST BYRD STREET NORTH BUILDING, 11TH FLOOR
RICHMOND, VIRGINIA 23219-4074 WASHINGTON, D.C. 20004
(804) 788-8269 (202) 756-3303
</TABLE>
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Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement in light
of market conditions and other factors.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended (the "Securities Act"), other than securities offered only
in connection with dividend or interest reinvestment plans, check the following
box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. UNDER NO CIRCUMSTANCES SHALL THIS PROSPECTUS CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF
THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH JURISDICTION.
SUBJECT TO COMPLETION, DATED OCTOBER 13, 1998
PROSPECTUS
CITY HOLDING CAPITAL TRUST II
$ 50,000,000
% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $25.00 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
[City Holding Company Logo]
---------------
The % Capital Securities (the "Capital Securities") offered hereby
represent preferred undivided beneficial interests in the assets of City
Holding Capital Trust II, a statutory business trust created under the laws of
the State of Delaware (the "Issuer Trust"). City Holding Company, a West
Virginia corporation, (the "Company") initially will be the holder of all the
beneficial interests represented by common securities of the Issuer Trust (the
"Common Securities" and, collectively with the Capital Securities, the "Trust
Securities"). The Issuer Trust exists for the sole purpose of issuing the Trust
Securities and investing the proceeds thereof in % Junior Subordinated
Deferrable Interest Debentures, Series B (the "Junior Subordinated Debentures")
to be issued by the Company and engaging in only those other activities
necessary, convenient or incidental thereto. The Junior Subordinated Debentures
will mature on , 2028 (the "Stated Maturity"). See "Description of Junior
Subordinated Debentures -- General." The Capital Securities will have a
preference under certain circumstances over the Common Securities with respect
to cash distributions and amounts payable on liquidation, redemption or
otherwise. The Capital Securities have been approved for quotation on the Nasdaq
National Market System ("Nasdaq NMS"), subject to notice of issuance, under the
symbol "CHCOP." See "Description of Capital Securities -- Subordination of
Common Securities."
(CONTINUED ON NEXT PAGE)
SEE "RISK FACTORS" BEGINNING ON PAGE 12 HEREOF FOR A DISCUSSION OF CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN EVALUATING AN
INVESTMENT IN THE CAPITAL SECURITIES.
---------------
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
INSURER OR GOVERNMENT AGENCY.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE (1) COMMISSION (2) ISSUER TRUST (3)(4)
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<S> <C> <C> <C>
Per Capital Security ......... $25.00 (4) $25.00
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Total (5) .................... $50,000,000 (4) $50,000,000
</TABLE>
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(1) Plus accumulated Distributions (as defined herein), if any, from ,
1998.
(2) The Company and the Issuer Trust have agreed to indemnify the several
Underwriters (as defined herein) against certain liabilities, including
certain liabilities under the Securities Act (as defined herein). See
"Underwriting."
(3) Before deducting estimated expenses of $300,000 payable by the Company.
(4) In view of the fact that the proceeds of the sale of the Capital Securities
will be invested in the Junior Subordinated Debentures, the Company, as
issuer of the Junior Subordinated Debentures, has agreed to pay the
Underwriters, as compensation, $ per Capital Security (or $ in the
aggregate). See "Underwriting."
(5) The Issuer Trust has granted to the Underwriters an option, exercisable
within 30 days of the date hereof, to purchase up to 300,000 additional
Capital Securities on the same terms and conditions set forth above solely
to cover over-allotments, if any. If the Underwriters exercise such option
in full, the total Initial Public Offering Price, Underwriting Commission
and Proceeds to Issuer Trust will be $57,500,000, $ and $57,500,000,
respectively. See "Underwriting."
---------------
The Capital Securities are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that
delivery of the Capital Securities will be made on or about , 1998 against
payment therefor in immediately available funds.
---------------
WHEAT FIRST UNION FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
The date of this Prospectus is , 1998
<PAGE>
(COVER PAGE CONTINUED)
Holders of the Capital Securities will be entitled to receive preferential
cumulative cash distributions ("Distributions") accumulating from the date of
original issuance and payable quarterly in arrears on the day of , ,
and , of each year (each a "Distribution Date"), commencing , 1998, at
an annual rate equal to % on the Liquidation Amount of $25.00 per Capital
Security ("Distributions"). The distribution rate and the distribution payment
dates and other payment dates for the Capital Securities will correspond to the
interest rate and interest payment dates and other payment dates on the Junior
Subordinated Debentures, which will be the sole assets of the Issuer Trust. So
long as no Event of Default (as defined in the Junior Subordinated Indenture
(as defined herein)) has occurred and is continuing with respect to the Junior
Subordinated Debentures (a "Debenture Event of Default"), the Company has the
right to defer payment of interest on the Junior Subordinated Debentures at any
time or from time to time for a period not exceeding 20 consecutive quarterly
periods with respect to each deferral period (each, an "Extension Period"),
provided that no Extension Period may extend beyond the Stated Maturity of the
Junior Subordinated Debentures. No interest shall be due and payable during any
Extension Period, except at the end thereof. Upon the termination of any such
Extension Period and the payment of all amounts then due, the Company may elect
to begin a new Extension Period subject to the requirements set forth herein.
If interest payments on the Junior Subordinated Debentures are so deferred,
Distributions on the Capital Securities will also be deferred and the Company
will not be permitted, subject to certain exceptions described herein, to
declare or pay any cash distributions with respect to the Company's capital
stock or with respect to debt securities of the Company that rank PARI PASSU in
all respects with or junior to the Junior Subordinated Debentures. During an
Extension Period, interest on the Junior Subordinated Debentures will continue
to accrue (and the amount of Distributions to which holders of the Capital
Securities are entitled will accumulate) at a rate equal to %, compounded
quarterly, and holders of Capital Securities will be required to accrue
interest income for United States federal income tax purposes. See "Description
of Junior Subordinated Debentures -- Option to Extend Interest Payment Period"
and "Certain Federal Income Tax Consequences -- Interest Income and Original
Issue Discount."
The Company will, through the Guarantee, the Trust Agreement, the Junior
Subordinated Debentures and the Junior Subordinated Indenture (each as defined
herein), taken together, fully, irrevocably and unconditionally guarantee all
the Issuer Trust's obligations under the Capital Securities as described below.
See "Relationship Among the Capital Securities, the Junior Subordinated
Debentures and the Guarantee -- Full and Unconditional Guarantee." The
Guarantee of the Company guarantees the payment of Distributions and payments
on liquidation or redemption of the Capital Securities, but only in each case
to the extent of funds held by the Issuer Trust, as described herein (the
"Guarantee"). See "Description of Guarantee." If the Company does not make
payments on the Junior Subordinated Debentures held by the Issuer Trust, the
Issuer Trust will have insufficient funds to pay Distributions on the Capital
Securities. The Guarantee does not cover payment of Distributions when the
Issuer Trust does not have sufficient funds to pay such Distributions. In such
an event, a holder of Capital Securities may institute a legal proceeding
directly against the Company to enforce payment of such Distributions to such
holder. See "Description of Junior Subordinated Debentures -- Enforcement of
Certain Rights by Holders of Capital Securities." The obligations of the
Company under the Guarantee and the Capital Securities are subordinate and
junior in right of payment to all Senior Indebtedness (as defined in
"Description of Junior Subordinated Debentures -- Subordination") of the
Company.
The Capital Securities are subject to mandatory redemption (i) in whole,
but not in part, upon repayment of the Junior Subordinated Debentures at the
Stated Maturity, (ii) prior to , 2003, in whole, but not in part,
contemporaneously with the optional redemption by the Company of the Junior
Subordinated Debentures at any time within 90 days following the occurrence and
during the continuation of a Tax Event, Investment Company Event or Capital
Treatment Event (each as defined herein), in each case subject to possible
regulatory approval and (iii) in whole or in part at any time on or after ,
2003, contemporaneously with the optional redemption by the Company of the
Junior Subordinated Debentures in whole or in part, in each case at the
applicable Redemption Price (as defined herein). The Junior Subordinated
Debentures are redeemable prior to maturity at the option of the Company (i) on
or after , 2003, in whole at any time or in part from time to time, or (ii)
prior to , 2003, in whole, but not in part, at any time within 90 days
following the occurrence and continuation of a Tax Event, Investment Company
Event or Capital Treatment Event (each as defined herein), in each case at a
redemption price set forth herein, which includes the accrued and unpaid
interest on the Junior Subordinated Debentures so redeemed to the date fixed
for redemption. The ability of the Company to exercise its rights to redeem the
Junior Subordinated Debentures or to cause the redemption of the Capital
Securities prior to the Stated Maturity may be subject to prior regulatory
approval by the Board of Governors of the Federal Reserve System (the "Federal
Reserve"), if then required under applicable Federal Reserve capital guidelines
or policies. See "Description of Junior Subordinated Debentures -- Redemption"
and "Description of Capital Securities -- Liquidation Distribution Upon
Dissolution."
2
<PAGE>
In the event of the dissolution of the Issuer Trust, after satisfaction of
liabilities to creditors of the Issuer Trust as provided by applicable law, the
holders of the Capital Securities will be entitled to receive a Liquidation
Amount of $25.00 per Capital Security plus accumulated and unpaid Distributions
thereon to the date of payment, subject to certain exceptions, which may be in
the form of a distribution of such amount in Junior Subordinated Debentures.
See "Description of Capital Securities -- Liquidation Distribution Upon
Dissolution."
The holders of the outstanding Common Securities have the right at any
time to dissolve the Issuer Trust and, after satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, to cause the
Junior Subordinated Debentures to be distributed to the holders of the Capital
Securities and Common Securities in liquidation of the Issuer Trust. The
ability of the Company to dissolve the Issuer Trust may be subject to prior
regulatory approval of the Federal Reserve, if then required under applicable
Federal Reserve capital guidelines or policies. See "Description of Capital
Securities -- Liquidation Distribution Upon Dissolution."
The Junior Subordinated Debentures are unsecured and subordinated to all
Senior Indebtedness of the Company. See "Description of Junior Subordinated
Debentures -- Subordination."
THE JUNIOR SUBORDINATED DEBENTURES ARE DIRECT AND UNSECURED OBLIGATIONS OF
THE COMPANY, DO NOT EVIDENCE DEPOSITS AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER INSURER OR GOVERNMENT AGENCY.
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MADE HEREBY MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE
CAPITAL SECURITIES. SUCH TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF
CAPITAL SECURITIES TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF
PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
3
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the regional offices of the Commission located at
7 World Trade Center, 13th Floor, Suite 1300, New York, New York 10048 and
Suite 1400, Citicorp Center, 14th Floor, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material can also be obtained at prescribed
rates by writing to the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549. Such material may also be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov. The Company's $2.50 par value common stock (the "Common
Stock") is traded on the Nasdaq NMS. Reports, proxy statements and other
information concerning the Company can be inspected at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company and the Issuer Trust have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered hereby.
This Prospectus omits, in accordance with the rules and regulations of the
Commission, certain of the information contained in the Registration Statement.
Reference is hereby made to the Registration Statement and the exhibits, and
the financial statements, notes and schedules filed as a part thereof or
incorporated by reference therein for further information with respect to the
Company, the Issuer Trust and the securities offered hereby. Statements
contained herein concerning the provisions of any document are not necessarily
complete and, in each instance, where a copy of such document has been filed as
an exhibit to the Registration Statement or otherwise has been filed with the
Commission, reference is made to the copy so filed. Each such statement is
qualified in its entirety by such reference.
No separate financial statements of the Issuer Trust have been included or
incorporated by reference herein. The Company and the Issuer Trust do not
consider that such financial statements would be material to holders of the
Capital Securities because (i) the Issuer Trust is a newly formed special
purpose entity, has no operating history or independent operations and is not
engaged in and does not propose to engage in any activity other than holding as
trust assets the Junior Subordinated Debentures and issuing the Trust
Securities, (ii) all of the voting securities of the Issuer Trust will be
owned, directly or indirectly by the Company, a reporting company under the
Exchange Act, and (iii) the obligations of the Issuer Trust under the Capital
Securities are guaranteed by the Company as described herein. See "City Holding
Capital Trust II," "Description of Capital Securities," "Description of Junior
Subordinated Debentures" and "Description of Guarantee." In addition, the
Company does not expect that the Issuer Trust will be filing reports under the
Exchange Act with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
(Commission File No. 0-11733) under the Exchange Act are hereby incorporated by
reference in this Prospectus:
(1) the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, filed March 16, 1998;
(2) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, and June 30, 1998;
(3) the Company's Current Report on Form 8-K dated September 14,
1998; and
(4) the description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, filed under the Exchange Act, including
any reports filed under the Exchange Act for the purpose of updating such
description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act prior to the termination of the offering of all of
the Capital Securities shall be deemed to be incorporated by reference herein.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide on request and without charge to each person to
whom this Prospectus is delivered a copy (without exhibits) of any or all
documents incorporated by reference into this Prospectus. Requests for such
copies should
4
<PAGE>
be directed to City Holding Company, 25 Gatewater Road, Charleston, West
Virginia 25313, Attention: Chief Financial Officer (telephone (304) 769-1100).
On August 7, 1998, the Company announced that it had entered into a
definitive agreement and plan of reorganization to merge with Horizon Bancorp,
Inc. ("Horizon"). For additional information about this transaction, see "City
Holding Company" and "Index to Financial Information." The following
information regarding Horizon, filed by the Company with the Commission in a
Current Report on Form 8-K, dated September 14, 1998, is incorporated herein by
reference and shall be deemed to be a part hereof:
(1) Consolidated Balance Sheets of Horizon for the years ended December
31, 1997 and 1996 and Consolidated Statements of Income and Cash Flows of
Horizon for the years ended December 31, 1997, 1996 and 1995, and
Management's Discussion and Analysis of Financial Condition and Results of
Operations as incorporated by reference in Horizon's Annual Report on Form
10-K for the year ended December 31, 1997; and
(2) Consolidated Financial Statements of Horizon for the three and six
months ended June 30, 1998 and 1997 and Management's Discussion and
Analysis of Financial Condition and Results of Operations as included in
Horizon's Quarterly Report on Form 10-Q for the quarter ended June 30,
1998.
5
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS.
AS USED HEREIN, (I) THE "JUNIOR SUBORDINATED INDENTURE" MEANS THE JUNIOR
SUBORDINATED INDENTURE, AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME, BETWEEN
THE COMPANY AND THE CHASE MANHATTAN BANK, AS TRUSTEE (THE "DEBENTURE TRUSTEE"),
PURSUANT TO WHICH THE JUNIOR SUBORDINATED DEBENTURES ARE ISSUED, (II) THE
"TRUST AGREEMENT" MEANS THE AMENDED AND RESTATED TRUST AGREEMENT RELATING TO
THE ISSUER TRUST, AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME, AMONG THE
COMPANY, AS DEPOSITOR, THE CHASE MANHATTAN BANK, AS PROPERTY TRUSTEE (THE
"PROPERTY TRUSTEE"), CHASE MANHATTAN BANK DELAWARE, AS DELAWARE TRUSTEE (THE
"DELAWARE TRUSTEE") (COLLECTIVELY, THE "ISSUER TRUSTEES"), THE ADMINISTRATORS
(AS DEFINED HEREIN) NAMED THEREIN, AND THE HOLDERS, FROM TIME TO TIME, OF
UNDIVIDED BENEFICIAL INTERESTS IN THE ASSETS OF THE ISSUER TRUST, AND (III) THE
"GUARANTEE" MEANS THE GUARANTEE AGREEMENT RELATING TO THE CAPITAL SECURITIES,
AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME, BETWEEN THE COMPANY AND THE
CHASE MANHATTAN BANK, AS GUARANTEE TRUSTEE (THE "GUARANTEE TRUSTEE").
CITY HOLDING COMPANY
The Company is a registered bank holding company, chartered under the laws
of the State of West Virginia, and headquartered in Charleston, West Virginia.
At June 30, 1998, the Company had total consolidated assets of approximately
$1.5 billion, total consolidated deposits of approximately $1.1 billion, and
total consolidated stockholders' equity of approximately $126 million.
Through its lead bank subsidiary, City National Bank of West Virginia
("City National"), the Company provides a wide variety of retail and commercial
banking products and services to individuals and small- and medium-sized
businesses through 43 banking offices in the State of West Virginia. In
addition to City National, the Company owns Del Amo Savings Bank, FSB ("Del
Amo" and, together with City National, the "Banks"), a federally-chartered
savings bank headquartered in Torrance, California. Del Amo operates three
locations in Southern California and complements the Company's mortgage loan
origination businesses located in Irvine and Costa Mesa, California.
The Company maintains a diverse loan portfolio which consists of
commercial, real estate, and consumer loans to customers in its markets. At
June 30, 1998, the Company had non-performing loans, consisting of non-accrual,
past-due, and restructured credits of $7.4 million, or 0.79% of gross loans.
Net charge-offs through June 30, 1998 were 0.12% of average loans. The
allowance for loan losses at June 30, 1998, was 0.93% of gross loans and
117.81% of non-performing loans. Additionally, the Company's net charge-offs to
average loans ratio has averaged 0.19% over the five years ended December 31,
1997. For the six months ended June 30, 1998 the Company's return on average
assets and return on average equity were 0.94% and 11.13%, respectively.
On August 7, 1998, the Company announced that it had entered into a
definitive agreement and plan of reorganization to merge with Horizon Bancorp,
Inc. ("Horizon"). Horizon is a bank holding company with total assets of $1.04
billion as of June 30, 1998. The combined company would have total assets in
excess of $2.5 billion, rank third in deposit market share in the State of West
Virginia, and rank among the Top 100 banks in the country in terms of market
capitalization. It is the intention of Horizon and the Company that the
transaction be accounted for as a pooling of interests and close during the
first quarter of 1999, although the consummation of this transaction is subject
to certain conditions including, but not limited to, shareholder approval by
Horizon and the Company and regulatory approval. No assurance can be provided
that the necessary shareholder and regulatory approvals can be obtained or that
the other conditions precedent to the merger will be satisfied.
Recognizing the increasing competition in the financial services industry,
the Company's management has embarked upon a strategy to increase non-interest
income and diversify the markets in which it operates in addition to increasing
its commercial banking presence in the State of West Virginia. The Company
currently operates four separate retail origination platforms, a servicer of
junior lien and other similar mortgage loan products, an escrow services
division and a wholesale loan division. It is the Company's intention to sell
the various loan products generated by these divisions through a combination of
loan securitizations and whole loan sales, where, in the case of loan
securitizations, the Company would retain the right to service the loans.
Through June 30, 1998, the Company had completed three transactions involving
the securitization of approximately of $183 million of high loan-to-value
loans. The Company plans to securitize a portion of its junior lien loan
portfolio every quarter. The Company's strategy is to develop these loan
origination divisions into marketing platforms, that through the use of
technology and direct mail and telemarketing solicitations, permit the Company
to access additional geographic markets and efficiently deliver a variety of
financial service products.
In addition to these mortgage and servicing operations, the Company also
operates a full-service securities brokerage and investment advisory company,
an insurance agency, a direct mail/marketing division and an internet service
provider and web site development division. Additionally, it has acquired an
equity stake in a specialty financial services company that originates and
purchases conventional home improvement, high loan-to-value debt consolidation,
and other similar loans.
6
<PAGE>
The Company was organized under the laws of the State of West Virginia on
March 12, 1982. The Company's principal executive offices are located at 25
Gatewater Road, Charleston, West Virginia 25313, and its telephone number at
such address is (304) 769-1100.
For additional information regarding the Company and its financial
condition and results of operations, see "City Holding Company,"
"Capitalization," "Selected Consolidated Financial Data and Other Information,"
"Selected Pro Forma Financial Data of the Company and Horizon Combined,"
"Selected Historical Financial Data of Horizon" and "Index to Financial
Information."
CITY HOLDING CAPITAL TRUST II
The Issuer Trust is a statutory business trust created under Delaware law
on September 17, 1998. The Issuer Trust will be governed by the Amended and
Restated Trust Agreement among the Company, as Depositor, Chase Manhattan Bank
Delaware, as Delaware Trustee, and The Chase Manhattan Bank, as Property
Trustee. The Issuer Trust exists for the exclusive purposes of (i) issuing and
selling the Trust Securities, (ii) using the proceeds from the sale of the
Trust Securities to acquire the Junior Subordinated Debentures and (iii)
engaging in only those other activities necessary, convenient or incidental
thereto (such as registering the transfer of the Trust Securities).
Accordingly, the Junior Subordinated Debentures will be the sole assets of the
Issuer Trust, and payments under the Junior Subordinated Debentures will be the
sole source of revenue of the Issuer Trust.
Upon issuance of the Capital Securities, the purchasers thereof will own
all of the Capital Securities of the Issuer Trust. Upon issuance of the Common
Securities, the Company will own all of the Common Securities of the Issuer
Trust which will represent an aggregate Liquidation Amount equal to at least 3%
of the Issuer Trust's total capital. See "City Holding Capital Trust II."
THE OFFERING
Securities Offered.............. $50,000,000 aggregate Liquidation Amount of
% Capital Securities (Liquidation Amount
$25.00 per Capital Security).
Offering Price.................. $25.00 per Capital Security (Liquidation
Amount $25.00), plus accumulated
Distributions, if any, from the date of
original issuance.
Distribution Dates............ , , , and , of each year,
commencing , 1998.
Extension Periods............... So long as no Debenture Event of Default
(as defined herein) has occurred and is
continuing, Distributions on Capital
Securities may be deferred for the duration
of any Extension Period selected by the
Company with respect to the payment of
interest on the Junior Subordinated
Debentures. No Extension Period may exceed 20
consecutive quarterly periods or extend
beyond the Stated Maturity. See "Description
of Capital Securities -- Distributions,"
"Description of Junior Subordinated
Debentures -- Option to Extend Interest
Payment Period" and "Certain Federal Income
Tax Consequences -- Interest Income and
Original Issue Discount."
Ranking......................... The Capital Securities will rank PARI
PASSU, and payments thereon will be made PRO
RATA, with the Common Securities except as
described under "Description of Capital
Securities -- Subordination of Common
Securities." The Junior Subordinated
Debentures will be unsecured and subordinate
and junior in right of payment to the extent
and in the manner set forth in the Junior
Subordinated Indenture to all Senior
Indebtedness of the Company. See "Description
of Junior Subordinated Debentures." The
Guarantee will constitute an unsecured
obligation of the Company and will rank
subordinate and junior in right of payment to
the extent and in the manner set forth in the
Guarantee to all Senior Indebtedness of the
Company. See "Description of Guarantee." In
addition, because the Company is a holding
company,
7
<PAGE>
the Junior Subordinated Debentures and the
Guarantee will be effectively subordinated
to all existing and future liabilities of
the Company's subsidiaries, including the
Banks' deposit liabilities. See "Description
of Capital Securities -- Redemption" and
"Description of Junior Subordinated
Debentures -- Subordination."
Redemption...................... The Trust Securities are subject to
mandatory redemption (i) in whole, but not in
part, at the Stated Maturity upon repayment
of the Junior Subordinated Debentures, (ii)
prior to , 2003, in whole, but not in
part, contemporaneously with the optional
redemption at any time by the Company of the
Junior Subordinated Debentures at any time
within 90 days following the occurrence and
during the continuation of a Tax Event,
Investment Company Event or Capital Treatment
Event in each case, subject to possible
regulatory approval and (iii) in whole or in
part, at any time on or after , 2003,
contemporaneously with the optional
redemption by the Company of the Junior
Subordinated Debentures in whole or in part,
in each case at the applicable Redemption
Price (as defined herein). See "Description
of Capital Securities -- Redemption."
No Rating....................... The Capital Securities are not expected to
be rated by any rating service.
ERISA Considerations............ Prospective purchasers should carefully
consider the restrictions on purchase set
forth under "Certain ERISA Considerations."
Absence of Market for the
Capital Securities.............. The Capital Securities will be a new issue of
securities for which there currently is no
market. The Capital Securities have been
approved for quotation on the Nasdaq NMS,
subject to notice of issuance, under the
symbol "CHCOP." However, there can be no
assurance that an active public market will
develop for the Capital Securities or that,
if such market develops, that it will be
maintained. See "Underwriting."
For additional information regarding the Capital Securities, see "City
Holding Capital Trust II," "Accounting Treatment," "Use of Proceeds,"
"Description of Capital Securities," "Description of Junior Subordinated
Debentures," "Description of Guarantee," "Relationship Among the Capital
Securities, the Junior Subordinated Debentures and the Guarantee," "Certain
Federal Income Tax Consequences" and "Certain ERISA Considerations."
USE OF PROCEEDS
All proceeds to the Issuer Trust from the sale of the Capital Securities
will be invested by the Issuer Trust in the Junior Subordinated Debentures. All
the net proceeds to be received by the Company from the sale of the Junior
Subordinated Debentures will be used for general corporate purposes, potential
future acquisitions, repayment of corporate debt and investments in or
extensions of credit to its subsidiaries. See "Use of Proceeds." Approximately
24% or $12 million of the proceeds from the Capital Securities will immediately
qualify as Tier 1 or core capital, with the remaining 76% or $38 million of the
proceeds afforded Tier 2 capital treatment under the risk-based capital
guidelines of the Federal Reserve. However, it is anticipated that upon the
consummation of the merger with Horizon, the remaining $38 million of the
proceeds will qualify as Tier 1 capital.
RISK FACTORS
Prospective investors should carefully consider the matters set forth under
"Risk Factors."
8
<PAGE>
RECENT DEVELOPMENTS
On October 21, 1998, the Company reported its preliminary unaudited
financial results for the third quarter ended September 30, 1998, as follows:
<TABLE>
<CAPTION>
FOR THE
THREE MONTHS ENDED FOR THE NINE MONTHS
SEPTEMBER 30, ENDED SEPTEMBER 30,
----------------------- -----------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Interest income .............................................. $28,749 $24,823 $83,475 $70,875
Interest expense ............................................. 14,461 11,502 40,719 32,084
Net interest income .......................................... 14,288 13,321 42,756 38,791
Provision for loan losses .................................... 846 393 2,047 1,221
Non-interest income .......................................... 17,909 6,490 49,905 16,389
Non-interest expense ......................................... 26,227 14,156 75,428 39,348
Net income ................................................... $ 3,760 $ 3,485 $10,172 $ 9,489
</TABLE>
Net income for the three months ended September 30, 1998 increased to
$3.76 million as compared to $3.48 million, an increase of 7.9%, reported for
the three months ended September 30, 1997. Earnings per common share for the
third quarter of 1998 were 0.56 compared to 0.57 for the third quarter of 1997.
For the nine months ended September 30, 1998, the Company reported net
income of $10.17 million compared to $9.49 million reported for the nine months
ended September 30, 1997, an increase of 7.2%. Earnings per common share for
the nine months ended September 30, 1998 were $1.52 compared to $1.56 during
the same period in 1997.
The foregoing information for the quarters ended September 30, 1998 and
1997, and the prior nine months ended September 30, 1998 is unaudited and
includes all adjustments, consisting only of normal recurring adjustments,
which the Company considers necessary for a fair presentation in accordance
with generally accepted accounting principles.
9
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA AND OTHER INFORMATION
The following table sets forth selected consolidated financial information
for the Company for the five years ended December 31, 1997, and the six-month
periods ended June 30, 1998 and 1997. The selected consolidated financial data
as of and for each of the years in the five-year period ended December 31, 1997
have been derived from the Company's consolidated financial statements which
have been audited by Ernst & Young, LLP, independent auditors. The data should
be read in conjunction with the consolidated financial statements and related
notes incorporated by reference herein. The information presented as of and for
the six-month periods ended June 30, 1998 and 1997 is derived from the
Company's unaudited consolidated financial statements for those periods. Those
unaudited consolidated financial statements, which are incorporated by
reference elsewhere in this Prospectus, include all adjustments, consisting
only of normal recurring accruals, which management considers necessary for a
fair presentation of the financial condition and results of operations for such
interim periods. Results for the six-month period ended June 30, 1998 are not
necessarily indicative of results to be expected for the full year or any other
interim period. See also "Incorporation of Certain Documents by Reference,"
"Experts" and "Index to Financial Information."
<TABLE>
<CAPTION>
AS OF AND FOR THE
SIX MONTHS ENDED
JUNE 30,
---------------------------
1998 1997
------------- -------------
(UNAUDITED)
<S> <C> <C>
Summary of Operations
Total interest income ...................... $ 54,726 $ 46,052
Total interest expense ..................... 26,258 20,582
Net interest income ........................ 28,468 25,470
Provision for loan losses .................. 1,201 828
Total other income ......................... 31,996 9,899
Total other expenses ....................... 49,201 25,192
Income before income taxes ................. 10,062 9,349
Net income ................................. 6,412 6,004
Per Share Data
Net income (basic) ......................... 0.97 0.99
Net income (diluted) ....................... 0.96 0.99
Cash dividends declared (1) ................ 0.38 0.36
Book value per share ....................... 18.73 14.41
Average Balance Sheet Summary
Total loans ................................ 841,367 739,362
Securities ................................. 162,074 179,447
Deposits ................................... 1,010,554 876,887
Long-term debt ............................. 88,313 37,504
Stockholders' equity ....................... 115,229 85,172
Total assets ............................... 1,371,538 1,147,712
At Period End
Net loans .................................. 920,592 752,539
Securities ................................. 166,994 182,393
Deposits ................................... 1,131,709 901,087
Long-term debt ............................. 81,295 39,400
Stockholders' equity ....................... 126,108 87,483
Total assets ............................... 1,501,500 1,147,684
Selected Ratios
Return on average assets ................... 0.94% 1.05%
Return on average stockholders' equity ..... 11.13 14.10
Average equity to assets ................... 8.40 7.42
Dividend payout ratio (1) .................. 39.18 36.36
<CAPTION>
AS OF AND FOR THE YEAR ENDED
DECEMBER 31,
---------------------------------------------------------------------
1997 1996 1995 1994 1993
------------- ------------- ------------- ------------- -------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<S> <C> <C> <C> <C> <C>
Summary of Operations
Total interest income ...................... $ 96,796 $ 86,069 $ 75,125 $ 62,762 $ 55,301
Total interest expense ..................... 44,691 39,064 33,580 25,168 22,425
Net interest income ........................ 52,105 47,005 41,545 37,594 32,876
Provision for loan losses .................. 1,662 1,678 1,104 1,040 1,434
Total other income ......................... 26,716 11,123 6,346 5,249 3,862
Total other expenses ....................... 57,670 40,982 33,887 30,116 24,292
Income before income taxes ................. 19,489 15,468 12,900 11,687 11,012
Net income ................................. 12,464 10,130 8,718 8,141 7,645
Per Share Data
Net income (basic) ......................... 2.03 1.81 1.55 1.44 1.35
Net income (diluted) ....................... 2.02 1.81 1.55 1.44 1.35
Cash dividends declared (1) ................ 0.73 0.63 0.56 0.49 0.46
Book value per share ....................... 16.56 14.21 13.09 11.66 11.56
Average Balance Sheet Summary
Total loans ................................ 757,803 665,641 608,551 504,795 413,645
Securities ................................. 179,590 166,667 221,743 264,976 262,742
Deposits ................................... 892,865 812,655 771,303 736,115 639,480
Long-term debt ............................. 46,129 24,666 8,204 6,252 4,387
Stockholders' equity ....................... 92,317 76,130 69,463 67,652 63,511
Total assets ............................... 1,213,261 1,079,540 957,048 864,690 739,804
At Period End
Net loans .................................. 772,689 690,701 650,195 547,809 462,424
Securities ................................. 162,912 163,922 194,368 239,882 283,833
Deposits ................................... 938,498 828,670 797,415 746,805 709,958
Long-term debt ............................. 68,400 34,250 20,000 6,875 5,875
Stockholders' equity ....................... 106,255 79,373 73,139 66,299 65,605
Total assets ............................... 1,266,143 1,048,810 1,040,969 895,785 816,225
Selected Ratios
Return on average assets ................... 1.03% 0.94% 0.91% 0.94% 1.03%
Return on average stockholders' equity ..... 13.50 13.31 12.55 12.03 12.04
Average equity to assets ................... 7.61 7.05 7.26 7.82 8.58
Dividend payout ratio (1) .................. 35.96 34.81 36.47 33.91 34.36
</TABLE>
- ---------
(1) Cash dividends and the related payout ratio are based on historical results
of the Company and do not include cash dividends of acquired subsidiaries
prior to the dates of consummation.
10
<PAGE>
SELECTED PRO FORMA FINANCIAL DATA
OF THE COMPANY AND HORIZON COMBINED
The following selected pro forma financial data gives effect to the
proposed merger of the Company with Horizon, to be accounted for as a pooling
of interests, based on an exchange ratio of 1.111 shares of the Company's
Common Stock for each share of common stock of Horizon. The pro forma data is
based upon the historical financial statements of the Company and Horizon and
may not be indicative of the results that actually would have occurred if the
combination had been in effect on the dates indicated. See also "Incorporation
of Certain Documents by Reference," "Experts" and "Index to Financial
Information."
<TABLE>
<CAPTION>
AS OF AND FOR THE
SIX MONTHS ENDED AS OF AND FOR THE YEAR ENDED
JUNE 30, DECEMBER 31,
--------------------------- --------------------------------------------
1998 1997 1997 1996 1995
------------- ------------- -------------- -------------- --------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE
(UNAUDITED) INFORMATION)
<S> <C> <C> <C> <C> <C>
Summary of Operations
Total interest income ...................... $ 95,754 $ 83,002 $ 173,166 $ 159,708 $ 145,743
Total interest expense ..................... 44,229 35,307 76,012 68,334 61,180
Net interest income ........................ 51,525 47,695 97,154 91,374 84,563
Provision for loan losses .................. 2,467 1,928 4,064 5,012 3,609
Total other income ......................... 35,335 12,661 32,613 16,473 11,343
Total other expense ........................ 63,167 38,645 84,899 70,066 61,908
Income before income taxes ................. 21,226 19,783 40,804 32,769 30,389
Net income ................................. 13,736 12,758 26,291 21,281 20,200
Per Share Data
Net income (basic) ......................... 0.82 0.78 1.60 1.34 1.26
Net income (diluted) ....................... 0.81 0.78 1.60 1.34 1.26
Cash dividends declared .................... 0.38 0.36 0.73 0.63 0.56
Book value per share ....................... 14.34 12.19 13.24 11.86 11.52
Average Balance Sheet Summary
Total loans ................................ 1,586,237 1,382,963 1,427,270 1,286,868 1,206,408
Securities ................................. 375,541 414,516 409,713 419,974 464,024
Deposits ................................... 1,870,118 1,669,961 1,698,699 1,616,479 1,559,106
Long-term debt ............................. 96,080 37,504 47,603 24,666 8,204
Stockholders' equity ....................... 229,968 195,504 204,118 181,923 168,353
Total assets ............................... 2,416,831 2,088,471 2,180,461 2,021,988 1,874,056
At Period End
Net loans .................................. 1,670,724 1,406,939 1,490,411 1,315,078 1,262,243
Securities ................................. 376,017 408,353 378,330 412,586 450,570
Deposits ................................... 1,993,215 1,702,442 1,779,805 1,626,666 1,602,996
Long-term debt ............................. 87,267 39,400 75,502 34,250 20,000
Stockholders' equity ....................... 242,020 199,365 220,277 188,784 177,522
Total assets ............................... 2,542,007 2,102,385 2,286,424 1,995,878 1,983,871
Selected Ratios
Return on average assets ................... 1.14% 1.22% 1.21% 1.05% 1.08%
Return on average stockholders' equity ..... 11.95 13.05 12.88 11.70 12.00
Dividend payout ratio ...................... 39.18 36.36 35.96 34.81 36.47
Average equity to assets ................... 9.52 9.36 9.36 9.00 8.98
</TABLE>
11
<PAGE>
RISK FACTORS
PROSPECTIVE PURCHASERS OF THE CAPITAL SECURITIES SHOULD CAREFULLY REVIEW
THE INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS AND SHOULD PARTICULARLY
CONSIDER THE FOLLOWING MATTERS. CERTAIN STATEMENTS IN THIS PROSPECTUS AND
DOCUMENTS INCORPORATED HEREIN BY REFERENCE ARE FORWARD-LOOKING AND ARE
IDENTIFIED BY THE USE OF FORWARD-LOOKING WORDS OR PHRASES SUCH AS "INTENDED,"
"WILL BE POSITIONED," "EXPECTS," IS OR ARE "EXPECTED," "ANTICIPATES," AND
"ANTICIPATED." THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE COMPANY'S
CURRENT EXPECTATIONS. TO THE EXTENT ANY OF THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS CONSTITUTES A "FORWARD-LOOKING
STATEMENT" AS DEFINED IN SECTION 21E(I)(1) OF THE EXCHANGE ACT, THE RISK
FACTORS SET FORTH BELOW ARE CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT FACTORS
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE
FORWARD-LOOKING STATEMENT.
RISK FACTORS RELATING TO THE CAPITAL SECURITIES
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES
The obligations of the Company under the Guarantee issued by the Company
for the benefit of the holders of Capital Securities and under the Junior
Subordinated Debentures are subordinate and junior in right of payment to all
Senior Indebtedness of the Company. At June 30, 1998, the Senior Indebtedness
of the Company aggregated approximately $193 million. None of the Junior
Subordinated Indenture, the Guarantee or the Trust Agreement places any
limitation on the amount of secured or unsecured debt, including Senior
Indebtedness, that may be incurred by the Company. See "Description of
Guarantee -- Status of the Guarantee" and "Description of Junior Subordinated
Debentures -- Subordination."
The obligations of the Company under the Junior Subordinated Debentures
and the Guarantee also rank PARI PASSU to the Company's obligations under the
debentures issued pursuant to the Indenture and the Guarantee of the Company
dated March 31, 1998, related to the sale of trust preferred securities of City
Holding Capital Trust on March 31, 1998.
The ability of the Issuer Trust to pay amounts due on the Capital
Securities is solely dependent upon the Company's making payments on the Junior
Subordinated Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
So long as no Event of Default (as defined in the Junior Subordinated
Indenture) has occurred and is continuing with respect to the Junior
Subordinated Debentures (a "Debenture Event of Default"), the Company has the
right under the Junior Subordinated Indenture to defer the payment of interest
on the Junior Subordinated Debentures at any time or from time to time for a
period not exceeding 20 consecutive quarterly periods with respect to each
Extension Period, provided that no Extension Period may extend beyond the
Stated Maturity of the Junior Subordinated Debentures or end on a day other
than an Interest Payment Date. See "Description of Junior Subordinated
Debentures -- Debenture Events of Default." As a consequence of any such
deferral, quarterly Distributions on the Capital Securities by the Issuer Trust
will be deferred during any such Extension Period. Distributions to which
holders of the Capital Securities are entitled will accumulate additional
Distributions thereon during any Extension Period at a rate equal to % per
annum, compounded quarterly from the relevant payment date for such
Distributions, computed on the basis of a 360-day year of twelve 30-day months
and the actual days elapsed in a partial month in such period. Additional
Distributions payable for each full Distribution period will be computed by
dividing the rate per annum by four. The term "Distributions" as used herein
shall include any such additional Distributions. During any such Extension
Period, the Company may not (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of the Company's capital stock or (ii) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank PARI PASSU in all respects with or junior
in interest to the Junior Subordinated Debentures (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
shareholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into
prior to the applicable Extension Period, (b) as a result of an exchange or
conversion of any class or series of the Company's capital stock (or any
capital stock of a subsidiary of the Company) for any class or series of the
Company's capital stock or of any class or series of the Company's indebtedness
for any class or series of the Company's capital stock, (c) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (d) any declaration of a dividend in connection with
any shareholder's rights plan, or the issuance of rights, stock or other
property under any shareholder's rights plan, or the redemption or repurchase
of rights pursuant thereto, or (e) any dividend in the
12
<PAGE>
form of stock, warrants, options or other rights where the dividend stock or
the stock issuable upon exercise of such warrants, options or other rights is
the same stock as that on which the dividend is being paid or ranks PARI PASSU
with or junior to such stock). Prior to the termination of any such Extension
Period, the Company may further defer the payment of interest, provided that no
Extension Period may exceed 20 consecutive quarterly periods or extend beyond
the Stated Maturity of the Junior Subordinated Debentures. Upon the termination
of any Extension Period and the payment of all interest then accrued and unpaid
(together with interest thereon at a rate equal to % per annum, compounded
quarterly), the Company may elect to begin a new Extension Period subject to
the above conditions. No interest shall be due and payable during an Extension
Period, except at the end thereof. The Company must give the Issuer Trustees
notice of its election of such Extension Period at least one Business Day prior
to the earlier of (i) the date the Distributions on the Capital Securities
would have been payable but for the election to begin such Extension Period and
(ii) the date the Property Trustee is required to give notice to holders of the
Capital Securities of the record date or the date such Distributions are
payable, but in any event not less than one Business Day prior to such record
date. The Property Trustee will give notice of the Company's election to begin
a new Extension Period to the holders of the Capital Securities. Subject to the
foregoing, there is no limitation on the number of times that the Company may
elect to begin an Extension Period. See "Description of Capital Securities --
Distributions" and "Description of Junior Subordinated Debentures -- Option to
Extend Interest Payment Period."
Should an Extension Period occur, a holder of Capital Securities will
accrue interest income (in the form of original issue discount) for United
States federal income tax purposes in respect of its PRO RATA share of the
Junior Subordinated Debentures held by the Issuer Trust. As a result, a holder
of Capital Securities will include such original issue discount income in gross
income for United States federal income tax purposes in advance of the receipt
of cash attributable to such income, and will not receive the cash related to
such income from the Issuer Trust if the holder disposes of the Capital
Securities prior to the record date for the payment of Distributions with
respect to such Extension Period. See "Certain Federal Income Tax Consequences
- -- Interest Income and Original Issue Discount" and " -- Sale or Redemption of
Capital Securities."
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior
Subordinated Debentures. However, should the Company elect to exercise such
right in the future, the market price of the Capital Securities is likely to be
affected. A holder that disposes of its Capital Securities during an Extension
Period, therefore, might not receive the same return on its investment as a
holder that continues to hold its Capital Securities. In addition, as a result
of the existence of the Company's right to defer interest payments, the market
price of the Capital Securities (which represent preferred undivided beneficial
interests in the assets of the Issuer Trust) may be more volatile than the
market prices of other securities on which original issue discount accrues that
are not subject to such deferrals.
TAX EVENT, INVESTMENT COMPANY EVENT OR CAPITAL TREATMENT EVENT REDEMPTION
Upon the occurrence and during the continuation of a Tax Event, Investment
Company Event or Capital Treatment Event, the Company has the right to redeem
the Junior Subordinated Debentures in whole, but not in part, at any time
within 90 days following the occurrence of such Tax Event, Investment Company
Event or Capital Treatment Event and thereby cause a mandatory redemption of
the Capital Securities and Common Securities. Any such redemption shall be at a
price equal to the aggregate liquidation amount of the Capital Securities and
Common Securities, respectively, together with accumulated Distributions to but
excluding the date fixed for redemption and the related amount of the premium,
if any, paid by the Company upon the concurrent redemption of such Junior
Subordinated Debentures. The ability of the Company to exercise its rights to
redeem the Junior Subordinated Debentures prior to the stated maturity may be
subject to prior regulatory approval by the Federal Reserve, if then required
under applicable Federal Reserve capital guidelines or policies. See
"Description of Junior Subordinated Debentures -- Redemption" and "Description
of Capital Securities -- Liquidation Distribution Upon Dissolution."
A "Tax Event" means the receipt by the Issuer Trust of an opinion of
counsel to the Company 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 or administrative pronouncement or action or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or which pronouncement or decision is announced on or after
the date of issuance of the Capital Securities (including, without limitation,
any of the foregoing arising with respect to, or resulting from, any proposal,
proceeding or other action commencing on or before such date of issuance),
there is more than an insubstantial risk that (i) the Issuer Trust is, or will
be within 90 days of the delivery of such opinion, subject to United
13
<PAGE>
States federal income tax with respect to income received or accrued on the
Junior Subordinated Debentures or New Junior Subordinated Debentures, (ii)
interest payable by the Company on the Junior Subordinated Debentures or New
Junior Subordinated Debentures is not, or within 90 days of the delivery of
such opinion will not be, deductible by the Company, in whole or in part, for
United States federal income tax purposes or (iii) the Issuer Trust is, or will
be within 90 days of the delivery of the opinion, subject to more than a DE
MINIMIS amount of other taxes, duties or other governmental charges. According
to a petition recently filed in the United States Tax Court by a corporation
unrelated to the Company and the Issuer Trust, the Internal Revenue Service
(the "IRS") has challenged the deductibility for United States federal income
tax purposes of interest payments on certain purported debt instruments held by
entities intended to be taxable as partnerships for United States federal
income tax purposes, where those entities, in turn, issued preferred securities
to investors. Although the overall structure of the financing arrangement
involved in that case is somewhat similar to the financing structure for the
Junior Subordinated Debentures and the Issuer Trust, the relevant facts in that
case appear to differ significantly from those relating to the Junior
Subordinated Debentures and the Issuer Trust. Whether the IRS would attempt to
challenge the deductibility of interest on the Junior Subordinated Debentures
cannot be predicted. The Company, based on the advice of counsel, intends to
take the position that interest payments on the Junior Subordinated Debentures
will be deductible by the Company for United States federal income tax
purposes. See "Certain Federal Income Tax Consequences -- Classification of the
Junior Subordinated Debentures." Adverse developments relating to the
deductibility of interest, whether arising in connection with the case
currently pending in the United States Tax Court or not, could give rise to a
Tax Event.
"Investment Company Event" means the receipt by the Issuer Trust of an
opinion of counsel to the Company experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change (including any announced prospective change) in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority, there is more than an
insubstantial risk that the Issuer Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), which change or
prospective change becomes effective or would become effective, as the case may
be, on or after the date of the issuance of the Capital Securities.
A "Capital Treatment Event" means the reasonable determination by the
Company that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of issuance of the Capital
Securities, there is more than an insubstantial risk that the Company will not
be entitled to treat the allowable amount (subject to current interpretation of
the Federal Reserve as of the date of this Prospectus) of the Liquidation
Amount of the Capital Securities as "Tier 1 Capital" (or the then equivalent
thereof) for purposes of the risk-based capital adequacy guidelines of the
Federal Reserve, as then in effect and applicable to the Company.
POSSIBLE TAX LAW CHANGES
In both 1996 and 1997, the Clinton Administration proposed to amend the
Internal Revenue Code of 1986, as amended (the "Code"), to deny deductions of
interest on instruments with features similar to those of the Junior
Subordinated Debentures when issued under arrangements similar to the Issuer
Trust. That proposal was not passed by, and is not currently pending before,
Congress. There can be no assurance, however, that future legislative
proposals, future regulations or official administrative pronouncements or
future judicial decisions will not affect the ability of the Company to deduct
interest on the Junior Subordinated Debentures. Such a change could give rise
to a Tax Event, which may permit the Company, upon approval of the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve, to cause a redemption of the Capital Securities, as described
more fully under "Description of Capital Securities -- Redemption."
EXCHANGE OF CAPITAL SECURITIES FOR JUNIOR SUBORDINATED DEBENTURES
The holders of all the outstanding Common Securities have the right at any
time to dissolve the Issuer Trust and, after satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, cause the Junior
Subordinated Debentures to be distributed to the holders of the Capital
Securities and Common Securities in liquidation of the Issuer Trust. The
ability of the Company to dissolve the Issuer Trust may be subject to prior
regulatory approval of the Federal Reserve, if then required under applicable
Federal Reserve capital guidelines or policies. See "Description of Capital
Securities -- Liquidation Distribution Upon Dissolution." The Junior
Subordinated Debentures, if distributed, may be subject to restrictions on
transfer.
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Under current United States federal income tax law and interpretations and
assuming, as expected, that the Issuer Trust will not be taxable as a
corporation, a distribution of the Junior Subordinated Debentures upon a
liquidation of the Issuer Trust will not be a taxable event to holders of the
Capital Securities. However, if a Tax Event were to occur that would cause the
Issuer Trust to be subject to United States federal income tax with respect to
income received or accrued on the Junior Subordinated Debentures, a
distribution of the Junior Subordinated Debentures by the Issuer Trust would be
a taxable event to the Issuer Trust and the holders of the Capital Securities.
See "Certain Federal Income Tax Consequences -- Distribution of Junior
Subordinated Debentures to Holders of Capital Securities."
RIGHTS UNDER THE GUARANTEE
The Chase Manhattan Bank will act as the Guarantee Trustee under the
Guarantee and will hold the Guarantee for the benefit of the holders of the
Capital Securities. The Chase Manhattan Bank will also act as Debenture Trustee
for the Junior Subordinated Debentures and as Property Trustee under the Trust
Agreement. Chase Manhattan Bank Delaware will act as Delaware Trustee under the
Trust Agreement. The Guarantee guarantees to the holders of the Capital
Securities the following payments, to the extent not paid by or on behalf of
the Issuer Trust: (i) any accumulated and unpaid Distributions required to be
paid on the Capital Securities, to the extent that the Issuer Trust has funds
on hand available therefor at such time; (ii) the Redemption Price (as defined
in "Description of Capital Securities -- Redemption") with respect to any
Capital Securities called for redemption, to the extent that the Issuer Trust
has funds on hand available therefor at such time; and (iii) upon a voluntary
or involuntary dissolution of the Issuer Trust (unless the Junior Subordinated
Debentures are distributed to holders of the Capital Securities), the lesser of
(a) the aggregate of the Liquidation Amount and all accumulated and unpaid
Distributions to the date of payment, to the extent that the Issuer Trust has
funds on hand available therefor at such time, and (b) the amount of assets of
the Issuer Trust remaining available for distribution to holders of the Capital
Securities on liquidation of the Issuer Trust. The Guarantee is subordinated as
described under " -- Ranking of Subordinated Obligations Under the Guarantee
and the Junior Subordinated Debentures" and "Description of Guarantee -- Status
of the Guarantee." The holders of not less than a majority in aggregate
Liquidation Amount of the outstanding Capital Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of the Guarantee or to direct the
exercise of any trust power conferred upon the Guarantee Trustee under the
Guarantee. Any holder of the Capital Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Issuer
Trust, the Guarantee Trustee or any other person or entity.
If the Company were to default on its obligation to pay amounts payable
under the Junior Subordinated Debentures, the Issuer Trust would lack funds for
the payment of Distributions or amounts payable on redemption of the Capital
Securities or otherwise, and, in such event, holders of the Capital Securities
would not be able to rely upon the Guarantee for payment of such amounts.
Instead, if a Debenture Event of Default has occurred and is continuing and
such event is attributable to the failure of the Company to pay any amounts
payable in respect of the Junior Subordinated Debentures on the payment date on
which such payment is due and payable, then a holder of Capital Securities may
institute a legal proceeding directly against the Company for enforcement of
payment to such holder of any amounts payable in respect of such Junior
Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Capital Securities of such holder (a "Direct
Action"). In connection with a Direct Action, the Company will have a right of
set-off under the Junior Subordinated Indenture to the extent of any payment
made by the Company to such holder of Capital Securities in the Direct Action.
Except as described herein, holders of Capital Securities will not be able to
exercise directly any other remedy available to the holders of the Junior
Subordinated Debentures or assert directly any other rights in respect of the
Junior Subordinated Debentures. See "Description of Junior Subordinated
Debentures -- Enforcement of Certain Rights by Holders of Capital Securities,"
" -- Debenture Events of Default" and "Description of Guarantee." The Trust
Agreement provides that each holder of Capital Securities by acceptance thereof
agrees to the provisions of the Guarantee and the Junior Subordinated
Indenture.
LIMITED VOTING RIGHTS
Holders of Capital Securities will have limited voting rights relating
generally to the modification of the Capital Securities and the Guarantee and
the exercise of the Issuer Trust's rights as holder of Junior Subordinated
Debentures. Holders of Capital Securities will not be entitled to appoint,
remove or replace the Property Trustee or the Delaware Trustee except upon the
occurrence of certain events specified in the Trust Agreement and described
herein. The Property Trustee and the holders of all the Common Securities may,
subject to certain conditions, amend the Trust Agreement without the consent of
holders of Capital Securities to cure any ambiguity or make other provisions
not inconsistent with the Trust Agreement or
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to ensure that the Issuer Trust (i) will not be taxable other than as a grantor
trust for United States federal income tax purposes, or (ii) will not be
required to register as an "investment company" under the Investment Company
Act. See "Description of Capital Securities -- Voting Rights; Amendment of
Trust Agreement" and " -- Removal of Issuer Trustees; Appointment of
Successors."
MARKET PRICES
There can be no assurance as to the market prices for Capital Securities,
or the market prices for Junior Subordinated Debentures that may be distributed
in exchange for Capital Securities if a liquidation of the Issuer Trust occurs.
Accordingly, the Capital Securities or the Junior Subordinated Debentures that
a holder of Capital Securities may receive on liquidation of the Issuer Trust
may trade at a discount to the price that the investor paid to purchase the
Capital Securities offered hereby. Because holders of Capital Securities may
receive Junior Subordinated Debentures on dissolution of the Issuer Trust,
prospective purchasers of Capital Securities are also making an investment
decision with regard to the Junior Subordinated Debentures and should carefully
review all the information regarding the Junior Subordinated Debentures
contained herein. See "Description of Junior Subordinated Debentures."
ABSENCE OF PRIOR MARKET FOR THE CAPITAL SECURITIES AND CERTAIN TRADING
RESTRICTIONS
There is no current public market for the Capital Securities. Although the
Capital Securities have been approved for listing on the Nasdaq NMS, subject to
notice of issuance, there can be no assurance that an active public market will
develop for the Capital Securities or that, if such market develops, that it
will be maintained or that the market price will equal or exceed the public
offering price set forth on the cover page of this Prospectus. The public
offering price for the Capital Securities has been determined through
negotiations between the Company and the Underwriters. Prices for the Capital
Securities will be determined in the marketplace and may be influenced by many
factors, including prevailing interest rates, the liquidity of the market for
the Capital Securities, investor perceptions of the Company and general industry
and economic conditions. In addition, notwithstanding the registration of the
Capital Securities, holders who are "affiliates" of the Company or the Issuer
Trust as defined under Rule 405 of the Securities Act may publicly offer for
sale or resell the Capital Securities only in compliance with the provisions of
Rule 144 under the Securities Act. See "Underwriting."
Because holders of Capital Securities may receive Junior Subordinated
Debentures on termination of the Issuer Trust, prospective purchasers of
Capital Securities are also making an investment decision with regard to the
Junior Subordinated Debentures and should carefully review all the information
regarding the Junior Subordinated Debentures contained herein. See "Description
of Junior Subordinated Debentures."
CAPITAL SECURITIES ARE NOT INSURED
The Capital Securities are not insured by the Bank Insurance Fund or the
Savings Association Insurance Fund of the Federal Deposit Insurance Corporation
or any other governmental agency.
RISK FACTORS RELATING TO THE COMPANY GROWTH
The Company has grown and may seek to continue growing by acquiring other
financial institutions (such as Horizon), branches of such financial
institutions, and companies engaged in related businesses. However, competition
for acquisitions in the Company's market area is highly competitive. Moreover,
any acquisitions will be subject to regulatory approval and there can be no
assurance that the Company will obtain such approvals. The Company may not be
as successful in the future as it has been in the past in identifying further
acquisition candidates, integrating acquired institutions or preventing deposit
erosion at acquired institutions or branches. Furthermore, the Company's
ability to grow through acquisitions will depend on its maintaining sufficient
regulatory capital levels and on economic conditions.
There is no assurance that the Company will not encounter unforeseen
expenses, as well as difficulties and complications in integrating expanded
operations and new employees without disruption to overall operations. In
connection with the acquisition of Horizon, the Company will be acquiring a
bank holding company of almost equal size and may experience certain
integration issues in connection with this acquisition. In addition, such
growth may adversely affect the Company's operating results because of many
factors, including start-up costs, diversion of management time and resources,
asset quality, and required operating adjustments. There can be no assurance
that the Company will successfully integrate or achieve the anticipated
benefits of its growth or expanded operations, and there is no assurance that
rapid growth in its loan portfolio will not result in an increase in the
Company's loan loss experience.
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RISKS ASSOCIATED WITH MORTGAGE BANKING OPERATION
After approximately two years of providing warehouse funding to an
independent third party financial institution that participated in a FHA Title
I loan securitization conduit, in August 1996 the Company formed City Mortgage
Services ("CMS"), a division of City National. CMS, with offices in Costa Mesa,
California and Cross Lanes, West Virginia, was created as a specialty loan
servicing division focusing on servicing niche loan products such as sub-prime
mortgage, non-conforming mortgage, home improvement, home equity, and other
similar products. During the Fall of 1996, CMS began servicing FHA Title I
loans that were securitized by the third party financial institution to which
the Company had previously provided warehouse funding. In December 1996, the
Company acquired certain assets and assumed certain liabilities of a California
FHA Title I loan servicing company and, as a result, acquired the right to
service, through CMS, a number of securitized loan pools approximating $600
million in unpaid principal balances. In October 1997, the Company acquired an
originator of high loan-to-value, predominately junior lien, mortgage loans,
located in Irvine, California, with an experienced team of junior lien mortgage
originators. Soon thereafter, the Company formed two additional retail
origination platforms, one located in Southern California and the other located
in Charleston, West Virginia. In addition to these three separate retail
origination platforms, the Company maintains a wholesale division in California
which focuses on acquiring high loan-to-value mortgage loans from a network of
correspondent lenders. In August 1998, the Company opened a fourth retail
origination office and expanded its loan servicing division with facilities
located in Dallas, Texas.
High loan-to-value loans obtained by the Company through retail
originations or acquired through the correspondent network are generally sold
to independent third parties or securitized by the Company generally within
90-180 days of funding. Management does not intend to include these high
loan-to-value loans in its core loan portfolio. However, the Company's
prospects must be considered in light of the risks, delays, expenses, and
difficulties frequently encountered in connection with an early-stage business
in a highly-regulated, competitive environment. In addition to the normal risk
of loss and reduced net earnings due to loan delinquencies and other loan
defaults by obligors, which become more acute in an economic slow-down or
recession, the Company is subject to increased risk of loss in its high
loan-to-value lending, because in most cases, the collateral for such loans
will not be sufficient to cover the principal amount of the loans in the event
of default. The Company, in its high loan-to-value lending, relies principally
on the credit-worthiness of the buyer and, to a lesser extent, on the
underlying collateral for repayment. As a result, many of the Company's high
loan-to-value loans equal or exceed the value of the mortgage properties. Upon
the occurrence of a default by a borrower, the Company evaluates the
cost-effectiveness of foreclosing on the property. The Company is less likely
to use foreclosure to mitigate its losses with its high loan-to-value products
because such loans exceed the value of the mortgage properties; loss mitigation
on these loans is undertaken primarily through garnishment proceedings.
Management periodically estimates losses on these loans and records such
estimates as a reduction of income. To the extent that management's estimates
of losses are less than the actual losses, the Company's financial position and
results of operations could be adversely affected in the period of adjustment.
However, as discussed previously, management intends to mitigate this risk of
loss by selling or securitizing this loss product generally within 90 to 180
days of funding.
PREPAYMENT RISK ASSOCIATED WITH SECURITIZATIONS
In order to minimize credit risk in connection with its mortgage loan
business, the Company sells a substantial majority of the loans it originates
and purchases either through whole loan sales or through securitizations. In
connection with securitizations, the Company reports gains on sales of loans
based in part on the estimated fair value of the mortgage-related securities
retained by the Company and on the estimated fair value of retained mortgage
servicing rights related to such loans. In a securitization, the Company
retains a residual-interest security and may retain an interest-only strip
security. The fair value of the residual-interest and interest-only strip
security is the present value of the estimated net cash flows to be received
after considering the effects of prepayments and credit losses. The capitalized
mortgage servicing rights and mortgage-related securities are valued using
prepayment, default, and interest rate assumptions that the Company believes
are reasonable. The amount of revenue recognized upon the sale of loans or loan
participations will vary depending on the assumptions utilized.
The rate of prepayment, rate of default, and the estimates of the future
costs of servicing utilized by the Company are estimates, and actual results
may vary from such estimates and such variations may be material. The gain
recognized by the Company upon the sale of loans will have been overstated or
understated if prepayments and/or defaults are greater than or less than
anticipated, respectively. Higher levels of future prepayments, and/or increase
in delinquencies or liquidations, would result in a lower valuation of the
mortgage-related securities and impairment of the mortgage servicing rights,
thereby adversely affecting the Company's earnings in the period of adjustment.
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COMPETITION
The banking business is highly competitive. In their primary market areas,
the Banks compete with other commercial banks, savings and loan associations,
credit unions, finance companies, mutual funds, insurance companies, mortgage
banking companies, and brokerage and investment banking firms operating locally
and elsewhere. The Banks' primary competitors have substantially greater
resources and lending limits than the Banks. The profitability of the Company
depends upon the Banks' ability to continue to compete in their primary market
areas.
The consumer finance industry is also highly competitive. Competitors in
the consumer finance business include mortgage banking companies, commercial
banks, credit unions, thrift institutions, credit card issuers and finance
companies. Certain of the Company's competitors are substantially larger, have
greater name recognition and have more capital and other resources than the
Company.
DEVELOPMENTS IN TECHNOLOGY
The market for financial services, including banking services, is
increasingly affected by advances in technology, including developments in
telecommunications, data processing, computers, automation, Internet-based
banking, telebanking, debit cards and so-called "smart" cards. The ability of
the Company to compete successfully in its markets may depend on the extent to
which it is able to exploit such technological changes. However, there can be
no assurance that the development of these or any other new technologies, or
the Company's success or failure in anticipating or responding to such
developments, will materially affect the Company's business, financial
condition and operating results.
Additionally, the Company is heavily dependent upon complex computer
systems for all phases of its operations. The Year 2000 Issue is the result of
computer programs being written using two digits rather than four to define the
applicable year. Any of the Company's computer programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a system failure or miscalculations
causing disruptions of operations, including, among other things, a temporary
inability to process transactions or engage in similar normal business
activities.
Based on its assessment, the Company has determined that it will be
required to modify or replace portions of its software so that its computer
systems will function properly with respect to dates in the year 2000 and
thereafter. The Company presently believes that with modifications to existing
software and conversions to new software, the Year 2000 Issue will not pose
significant operational problems for its computer systems. However, if such
modifications and conversions are not made, or are not completed timely, the
Year 2000 Issue could have a material impact on the operations of the Company.
The Company began initiating its Year 2000 project throughout the Company
in January 1997. The project is sponsored and closely monitored by both senior
and executive level management. The Office of the Comptroller of the Currency
("OCC") and the Federal Financial Institutions Examination Council recommends
that all systems reprogramming efforts be completed by December 31, 1998 to
allow for sufficient testing and implementation. Management intends to meet
this recommendation. Plan components are being executed in accordance with
guidelines that have been mandated by the OCC. The Company's approach to Year
2000 compliance encompasses five industry standard phases: awareness,
assessment, renovation, validation, and implementation. The Company has
completed the awareness, assessment, and renovation phases of the project.
Currently, the Company is completing the validation phase and has begun the
implementation phase in certain areas. Management of the Company does not
believe that the sum of the costs incurred to date and the estimated costs
remaining to be incurred are material to the consolidated financial statements
of the Company.
The Company also uses third-party vendors for certain system applications.
The Company has initiated formal communications with its vendors and large
credit customers to determine the extent to which the Company's interface
systems are vulnerable to those third parties' failure to remediate their own
Year 2000 Issues. The Company's total Year 2000 project cost and estimates to
complete include the estimated costs and time associated with the impact of
third party Year 2000 Issues based on presently available information. However,
there can be no guarantee that the systems of other companies on which the
Company's systems rely will be timely converted and would not have an adverse
effect on the Company's systems.
The costs of the project and the date on which the Company believes it
will complete the Year 2000 modifications are based on management's best
estimates, which were derived utilizing numerous assumptions of future events,
including the continued availability of certain resources, third party
modification plans and other factors. However, there can be no guarantee that
these estimates will be achieved and actual results could differ materially
from those anticipated. Specific factors that might cause such material
differences include, but are not limited to, the availability and cost of
personnel trained in
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this area, the ability to locate and correct all relevant computer codes, the
ability of vendors and other third-parties, such as credit customers, to
remediate their own Year 2000 problems and similar uncertainties.
STATUS OF THE COMPANY AS A BANK HOLDING COMPANY
Because the Company is a bank holding company, its right to participate in
any distribution of assets of the Banks upon the Banks' liquidation or
reorganization or otherwise (and thus the ability of holders of the Capital
Securities to benefit indirectly from such a distribution) is subject to the
prior claims of creditors of the Banks (including their depositors), except to
the extent that the Company may itself be recognized as a creditor of the
Banks. At June 30, 1998, the Banks had total liabilities (excluding liabilities
owed to the Company) of approximately $1.3 billion, including deposits.
Accordingly, the Capital Securities effectively will be subordinated to all
existing and future liabilities of the Banks, and holders of Capital Securities
should look only to the assets of the Company for payments on the Capital
Securities. Neither the Guarantee nor the Junior Subordinated Indenture places
any limitation on the amount of secured or unsecured debt that may be incurred
by the Banks in the future. See "Description of Junior Subordinated Debentures"
and "Description of Guarantee."
In addition, almost all of the operating assets of the Company are owned
by the Banks. Historically, the Company has relied primarily on dividends from
the Banks to meet its obligations for the payment of principal and interest on
its separate debt obligations and corporate expenses and for payment of
dividends on its outstanding common stock. The payment of dividends by the
Banks to the Company is subject to certain legal and regulatory limitations, is
subject to ongoing review by banking regulators and, under certain
circumstances, may require prior approval by banking regulatory authorities.
The Banks also are subject to certain restrictions under Federal law on
extensions of credit to, and certain other transactions with, the Company and
certain of its other affiliates, and on investments in the stock or other
securities thereof. Such restrictions prevent the Company and such other
affiliates from borrowing from the Banks unless the loans are secured by
various types of collateral. Further, such secured loans or other transactions
and investments by the Banks are generally limited in amount as to the Company
and as to each such other affiliate to 10% of the Banks' capital and surplus
and as to the Company and all such other affiliates to an aggregate of 20% of
the Banks' capital and surplus.
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CITY HOLDING COMPANY
GENERAL
The Company is a registered bank holding company, chartered under the laws
of the State of West Virginia, and headquartered in Charleston, West Virginia.
At June 30, 1998, the Company had total consolidated assets of approximately
$1.5 billion, total consolidated deposits of approximately $1.1 billion, and
total consolidated stockholders' equity of approximately $126 million.
Through its lead bank subsidiary, City National, the Company provides a
wide variety of retail and commercial banking products and services to
individuals and small- and medium-sized businesses through 43 banking offices
in the State of West Virginia. In addition to City National, the Company
operates Del Amo, a federally-chartered savings bank headquartered in Torrance,
California. Del Amo operates three locations in Southern California and
complements the Company's mortgage loan origination businesses located in
Irvine and Costa Mesa, California.
The Company has experienced significant growth through acquisitions,
having acquired 11 depository and five non-depository institutions since 1985,
adding approximately $700 million in assets and 29 branch offices to the
Company's franchise. In addition, the Company has started six de novo
operations, including one depository institution. While the strategy of the
Company is to permit its various banking operations to be responsive to the
markets in which they operate, the Company has consolidated all back-office
functions, including portions of the credit underwriting, investment portfolio
management, and loan review functions. To promote responsiveness to customer
requests and operational efficiency, the Company has emphasized the use of
technology, including check imaging.
The Company maintains a diverse loan portfolio which consists of
commercial, real estate, and consumer loans to customers in its markets. At
June 30, 1998, the Company had non-performing loans, consisting of non-accrual,
past-due, and restructured credits of $7.4 million, or 0.79% of gross loans.
Net charge-offs through June 30, 1998 were 0.12% of average loans. The
allowance for loan losses at June 30, 1998, was 0.93% of gross loans and
117.81% of non-performing loans. Additionally, the Company's net charge-offs to
average loans ratio has averaged 0.19% over the five years ended December 31,
1997. For the six months ended June 30, 1998 the Company's return on average
assets and return on average equity were 0.94% and 11.13%, respectively.
Recognizing the increasing competition in the financial services industry,
the Company's management has embarked upon a strategy to increase non-interest
income and diversify the markets in which it operates. In 1993, the Company
organized City Financial Corporation ("City Financial"), a full-service
securities brokerage and investment advisory company. City Financial operates
an office in Charleston, West Virginia, from which it offers brokerage and
investment advisory services to customers of the Company and others throughout
West Virginia.
After approximately two years of providing warehouse funding to an
independent third party financial institution that participated in a FHA Title
I loan securitization conduit, in August 1996 the Company formed CMS, a
division of City National. CMS, with offices in Costa Mesa, California and
Cross Lanes, West Virginia, was created as a specialty loan servicing division
focusing on servicing niche loan products such as sub-prime mortgage,
non-conforming mortgage, home improvement, home equity, and other similar
products. During the Fall of 1996, CMS began servicing FHA Title I loans that
were securitized by the third party financial institution to which the Company
had previously provided warehouse funding. In December 1996, the Company
acquired certain assets and assumed certain liabilities of a California FHA
Title I loan servicing company and, as a result, acquired the right to service,
through CMS, a number of securitized loan pools approximating $600 million in
unpaid principal balances. In October 1997, the Company acquired an originator
of high loan-to-value, predominately junior lien, mortgage loans, located in
Irvine, California, with an experienced team of junior lien mortgage
originators. Soon thereafter, the Company formed two additional retail
origination platforms, one located in Southern California and the other located
in Charleston, West Virginia. In addition to these three separate retail
origination platforms, the Company maintains a wholesale division in California
which focuses on acquiring high loan-to-value mortgage loans from a network of
correspondent lenders. In August 1998, the Company opened a fourth retail
origination office and expanded its loan servicing division with facilities
located in Dallas, Texas.
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Currently, these divisions are focusing on generating high loan-to-value
products, primarily 125% loan-to-value products through direct mail and
telemarketing solicitation nationwide. At June 30, 1998, the Company's
portfolio of junior lien mortgages aggregated approximately $178 million, of
which $164 million would be classified as 125% loan-to-value products. The
typical 125% loan-to-value product customer has an average FICO score of
approximately 680, and is generally utilizing the loan product to consolidate
high-rate credit card or other debt or for college tuition, home improvements,
or vacations. It is the Company's intention to sell the various loan products
generated by these divisions through a combination of loan securitizations and
whole loan sales, where, in the case of loan securitizations, the Company would
retain the servicing rights. Through June 30, 1998, the Company had completed
three transactions involving the securitization of approximately $183 million
of high loan-to-value loans. The Company plans to securitize a portion of its
junior lien mortgage loan portfolio every quarter.
The Company's strategy is to develop these loan origination divisions into
marketing platforms, that through the use of technology and direct mail and
telemarketing solicitations, permit the Company to access additional geographic
markets and efficiently deliver a variety of financial service products.
In addition to these mortgage origination and servicing divisions, the
Company also operates an escrow services division, a direct mail/marketing
division and an internet service provider and web site development division.
The Company has also sought to expand the range of insurance products and
services that it provides through the acquisition of an insurance agency
located in Charleston, West Virginia, in December 1997, and one additional
agency in the first quarter of 1998.
RECENT DEVELOPMENTS
HORIZON. On August 7, 1998, the Company announced that it had entered into
a definitive agreement and plan of reorganization to merge with Horizon.
Horizon is a West Virginia bank holding company with assets of $1.04 billion as
of June 30, 1998. The combined company would have total assets in excess of
$2.5 billion, rank third in deposit market share in the State of West Virginia
and rank among the Top 100 banks in the country in terms of market
capitalization. It is the intent of the Company and Horizon that the transaction
be accounted for as a pooling of interests and close during the first quarter of
1999. The Company expects to issue approximately 10,300,000 shares of Common
Stock in connection with the merger with Horizon. Subsequent to the completion
of this merger, Horizon's five bank subsidiaries will be merged into City
National. Steven J. Day, President and Chief Executive Officer of the Company
and City National, will continue to serve in those roles for the combined
entity. Consummation of this transaction is subject to shareholder approval by
Horizon and the Company, regulatory approval, and satisfaction of other
conditions. No assurance can be provided that the necessary shareholder and
regulatory approvals can be obtained or that the other conditions precedent to
the merger will be satisfied. Certain historical financial information regarding
Horizon is incorporated by reference herein. See "Incorporation of Certain
Documents by Reference." In addition, certain pro forma financial information
about the Company and Horizon is included herein. See "Index to Financial
Information."
MEGO. On June 29, 1998, the Company (through City National) completed its
strategic investment in Mego Mortgage Corporation ("Mego"), a specialty
financial services company that originates and purchases conventional home
improvement, high loan-to-value debt consolidation, and other similar loans. As
part of an overall recapitalization of Mego completed by several investors, the
Company invested $10 million to acquire 10,000 shares of Mego Series A
Preferred Stock, which are convertible into 6.7 million shares of Mego common
stock. The Company also acquired an option to purchase an additional 6.7
million shares of Mego common stock at a price of $1.50 per share. Concurrent
with this investment, CMS acquired the right to service approximately $536
million of consumer mortgage loans previously serviced by Mego and the
exclusive right to service up to an additional $1 billion of mortgage loans
originated or acquired by Mego in the future.
The Company expects to take advantage of the consolidation of the
financial services industry by further developing its franchise through the
acquisition of financial institutions and other entities engaged in lines of
business permissible for banks and bank holding companies. The Company believes
that as the competitive environment becomes increasingly challenging to smaller
financial institutions, the Company can offer community banking organizations
an attractive alternative, by providing the technology, product variety, and
efficiencies and services of a larger banking organization, while managing such
institutions in a manner that allows them to remain responsive to the markets
in which they operate. In addition to acquiring community banking
organizations, the Company also has interest in supplementing the Del Amo
acquisition through related acquisitions in California to further support the
Company's mortgage operations in California. Additionally, the Company is
interested in acquiring mortgage operations, including whole operations or
portfolios of mortgage servicing rights and mortgage loans, and in acquiring
technology-related firms. However, the Company remains firmly committed to its
commercial banking operations and expects to increase its commercial banking
presence in West Virginia significantly through its merger with Horizon.
21
<PAGE>
The Company continues to evaluate business combination opportunities and
as a result, business combination discussions and, in some cases, negotiations
take place and future business combinations involving cash, debt, or equity
securities can be expected. Any future business combination or series of
business combinations that the Company may undertake may be material, in terms
of assets acquired or liabilities assumed, to the Company's financial
condition.
The Company was organized under the laws of the State of West Virginia on
March 12, 1982. The Company's principal executive offices are located at 25
Gatewater Road, Charleston, West Virginia 25313, and its telephone number at
such address is (304) 769-1100.
For additional information regarding the Company's financial condition and
results of operations, see "Capitalization," "Selected Consolidated Financial
Data and Other Information," Selected Pro Forma Financial Data of the Company
and Horizon Combined" and "Index to Financial Information."
NEITHER THE CAPITAL SECURITIES NOR THE JUNIOR SUBORDINATED DEBENTURES ARE
OBLIGATIONS OF OR GUARANTEED BY CITY NATIONAL OR DEL AMO.
22
<PAGE>
CITY HOLDING CAPITAL TRUST II
The Issuer Trust is a statutory business trust created under Delaware law
pursuant to a trust agreement and the filing of a certificate of trust with the
Delaware Secretary of State. The Issuer Trust will be governed by the Trust
Agreement among the Company, as Depositor, Chase Manhattan Bank Delaware, as
Delaware Trustee, The Chase Manhattan Bank, as Property Trustee, the
Administrators named therein, and the holders, from time to time, of undivided
beneficial interests in the assets of the Issuer Trust. Two individuals will be
selected by the holders of the Common Securities to act as administrators with
respect to the Issuer Trust (the "Administrators"). The Company, while holder
of the Common Securities, intends to select two individuals who are employees
or officers of or affiliated with the Company to serve as the Administrators.
See "Description of Capital Securities -- Miscellaneous." The Issuer Trust
exists for the exclusive purposes of (i) issuing and selling the Trust
Securities, (ii) using the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debentures and (iii) engaging in only those
other activities necessary, convenient or incidental thereto (such as
registering the transfer of the Trust Securities). Accordingly, the Junior
Subordinated Debentures will be the sole assets of the Issuer Trust, and
payments under the Junior Subordinated Debentures will be the sole source of
revenue of the Issuer Trust. The Delaware Trustee, the Property Trustee and the
Guarantee Trustee serve in the same capacities to City Holding Capital Trust,
and the Securities issued by City Holding Capital Trust rank PARI PASSU with
the Trust Securities.
All the Common Securities will initially be owned by the Company. The
Common Securities will rank PARI PASSU, and payments will be made thereon PRO
RATA, with the Capital Securities, except that upon the occurrence and during
the continuation of a Debenture Event of Default arising as a result of any
failure by the Company to pay any amounts in respect of the Junior Subordinated
Debentures when due, the rights of the holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
or otherwise will be subordinated to the rights of the holders of the Capital
Securities. See "Description of Capital Securities -- Subordination of Common
Securities." The Company will acquire Common Securities in an aggregate
liquidation amount equal to approximately 3% of the total capital of the Issuer
Trust. The Issuer Trust has a term of 31 years, but may dissolve earlier as
provided in the Trust Agreement. The address of the Delaware Trustee is Chase
Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801,
telephone number (302) 428-3375. The address of the Property Trustee, the
Guarantee Trustee and the Debenture Trustee is The Chase Manhattan Bank, 450
West 33rd Street, 15th Floor, New York, New York 10001, telephone number (212)
946-3340.
ACCOUNTING TREATMENT
For financial reporting purposes, the Issuer Trust will be treated as a
subsidiary of the Company and, accordingly, the accounts of the Issuer Trust
will be included in the consolidated financial statements of the Company. The
Capital Securities will be included in the consolidated balance sheets as
liabilities of the Company and appropriate disclosures about the Capital
Securities, the Guarantee and the Junior Subordinated Debentures will be
included in the notes to the consolidated financial statements of the Company.
For financial reporting purposes, distributions on the Capital Securities will
be recorded in the consolidated statements of income of the Company as interest
expense. See also "Capitalization."
USE OF PROCEEDS
All the proceeds to the Issuer Trust from the sale of the Capital
Securities will be invested by the Issuer Trust in the Junior Subordinated
Debentures. All of the net proceeds to be received by the Company from the sale
of the Junior Subordinated Debentures will be used for general corporate
purposes, potential future acquisitions, repayment of corporate debt, and
investments in or extensions of credit to its subsidiaries. Pending such use,
the net proceeds may be temporarily invested. The precise amounts and timing of
the application of proceeds will depend upon the funding requirements of the
Company and its subsidiaries and the availability of other funds. In view of
anticipated funding requirements, the Company may from time to time engage in
additional financings of a character and in amounts to be determined.
Generally, the proceeds from the sale of the Capital Securities are
expected to qualify as Tier 1 or core capital with respect to the Company under
the risk-based capital guidelines established by the Federal Reserve. However,
capital received from the proceeds of the sale of trust preferred securities
cannot constitute more than 25% of the total Tier 1 capital of the Company (the
"25% Capital Limitation"). Amounts in excess of the 25% Capital Limitation will
constitute Tier 2 or supplementary capital of the Company. Because of the 25%
Capital Limitation, only approximately 24% or $12 million of the proceeds from
the Capital Securities will immediately qualify as Tier 1 or core capital, with
the remaining 76% or $38 million of the proceeds qualifying for Tier 2 capital
treatment under the risk-based capital guidelines of the Federal Reserve.
However, it is anticipated that upon the consummation of the merger with
Horizon, the remaining $38 million of the proceeds will qualify for Tier 1
capital.
23
<PAGE>
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following unaudited tables present the consolidated ratios of earnings
to fixed charges of the Company along with that of Horizon and on a combined
basis. The consolidated ratio of earnings to fixed charges has been computed by
dividing income before income taxes and fixed charges by fixed charges. Fixed
charges represent all interest expense (ratios are presented both excluding and
including interest on deposits). Interest expense (other than on deposits)
includes interest on borrowed funds, federal funds purchased and securities
sold under agreements to repurchase, trust preferred securities outstanding,
and other funds borrowed. The first table presents the consolidated ratios of
earnings to fixed charges on a historical basis for the Company. The second
table presents the consolidated ratios of earnings to fixed charges for the
Company and Horizon on a combined basis, along with the pro forma effect
assuming the Capital Securities were outstanding for the six months ended June
30, 1998 and the year ended December 31, 1997.
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
JUNE 30, FOR THE YEAR ENDED DECEMBER 31,
-------------------------------- -----------------------------------------------------------------
1998 1997
PRO PRO
1998 FORMA(1) 1997 1997 FORMA(1) 1996 1995 1994 1993
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Earnings to Fixed
Charges-City Holding
(Historical)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Including interest on
deposits ............ 1.38x x 1.45x 1.44x x 1.40x 1.38x 1.46x 1.49x
Excluding interest on
deposits ............ 2.46 2.98 2.68 2.57 3.01 6.10 13.07
</TABLE>
- ---------
(1) Gives pro forma effect assuming the Capital Securities were outstanding
during the periods indicated.
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
JUNE 30,
--------------------------------------
1998
1998 PRO 1997
COMBINED(1) FORMA(2) COMBINED(1)
------------- ---------- -------------
Earnings to Fixed
Charges-City Holding
and Horizon Combined
<S> <C> <C> <C>
Including interest on
deposits ............ 1.48x x 1.56x
Excluding interest on
deposits ............ 3.66 4.80
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------
1997
1997 PRO 1996 1995 1994 1993
COMBINED(1) FORMA(2) COMBINED(1) COMBINED(1) COMBINED(1) COMBINED(1)
------------- ---------- ------------- ------------- ------------- ------------
Earnings to Fixed
Charges-City Holding
and Horizon Combined
<S> <C> <C> <C> <C> <C> <C>
Including interest on
deposits ............ 1.54x x 1.48x 1.50x 1.57x 1.54x
Excluding interest on
deposits ............ 4.15 4.07 5.24 10.11 18.13
</TABLE>
- ---------
(1) Includes the Company and Horizon combined as though the merger was in
effect during the periods presented.
(2) Gives pro forma effect assuming the Capital Securities were outstanding
during the periods indicated.
24
<PAGE>
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization
of the Company as of June 30, 1998, and as adjusted to give effect to the
consummation of the offering of the Capital Securities and the application of
the net proceeds thereof as provided under "Use of Proceeds." The following
data should be read in conjunction with the Company's reports filed with the
Commission under the Exchange Act. See "Available Information," "Incorporation
of Certain Documents by Reference," "Selected Consolidated Financial Data and
Other Information" and "Index to Financial Information."
<TABLE>
<CAPTION>
AS OF JUNE 30, 1998
(UNAUDITED)
---------------------------------------------------
AS ADJUSTED FOR
THE HORIZON
AS ADJUSTED FOR ACQUISITION AND
CAPITAL CAPITAL
SECURITIES SECURITIES
ACTUAL ISSUANCE ISSUANCE
------------ ----------------- ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Short-term borrowings ....................................... $111,974 $111,974 $155,678
Long-term borrowings ........................................ 81,295 81,295 87,267
Corporation-obligated mandatory redeemable capital securities
of subsidiary trust holding solely junior subordinated
debentures of the corporation(l) ........................... 30,000 80,000 80,000
-------- -------- --------
Total borrowings ........................................... 223,269 273,269 322,945
-------- -------- --------
Stockholders' equity:
Common stock, $2.50 par value, 20,000,000 authorized,
6,749,785 issued and outstanding, including 17,055
shares in treasury ....................................... 16,874 16,874 42,738
Capital surplus ............................................ 63,734 63,734 61,944
Retained earnings .......................................... 44,280 44,280 134,896
Accumulated other comprehensive income ..................... 1,811 1,811 3,033
Cost of common stock in treasury ........................... (591) (591) (591)
-------- -------- --------
Total stockholders' equity ................................. 126,108 126,108 242,020
-------- -------- --------
Total capitalization ....................................... $349,377 $399,377 $564,965
======== ======== ========
Capital ratios:
Tier 1 risk-based capital ratio ............................. 9.37% 10.23% 13.92%
Total risk-based capital ratio .............................. 10.05 13.87 14.80
Leverage ratio .............................................. 8.55 9.35 11.32
</TABLE>
- ---------
(1) Reflects the capital securities issued by City Holding Capital Trust on
March 31, 1998 and the Capital Securities. The Issuer Trust is a subsidiary
of the Company and holds the Junior Subordinated Debentures as its sole
asset. See also "Accounting Treatment."
25
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA AND OTHER INFORMATION
The following table sets forth selected consolidated financial information
for the Company for the five years ended December 31, 1997, and the six-month
periods ended June 30, 1998 and 1997. The selected consolidated financial data
as of and for each of the years in the five-year period ended December 31, 1997
have been derived from the Company's consolidated financial statements which
have been audited by Ernst & Young, LLP, independent auditors. The data should
be read in conjunction with the consolidated financial statements and related
notes incorporated by reference herein. The information presented as of and for
the six-month periods ended June 30, 1998 and 1997 is derived from the
Company's unaudited consolidated financial statements for those periods. Those
unaudited consolidated financial statements, which are incorporated by
reference elsewhere in this Prospectus, include all adjustments, consisting
only of normal recurring accruals, which management considers necessary for a
fair presentation of the financial condition and results of operations for such
interim periods. Results for the six-month period ended June 30, 1998 are not
necessarily indicative of results to be expected for the full year or any other
interim period. See also "Incorporation of Certain Documents by Reference,"
"Experts" and "Index to Financial Information."
<TABLE>
<CAPTION>
AS OF AND FOR THE
SIX MONTHS ENDED
JUNE 30,
---------------------------
1998 1997
------------- -------------
(UNAUDITED)
<S> <C> <C>
Summary of Operations
Total interest income ...................... $ 54,726 $ 46,052
Total interest expense ..................... 26,258 20,582
Net interest income ........................ 28,468 25,470
Provision for loan losses .................. 1,201 828
Total other income ......................... 31,996 9,899
Total other expenses ....................... 49,201 25,192
Income before income taxes ................. 10,062 9,349
Net income ................................. 6,412 6,004
Per Share Data
Net income (basic) ......................... 0.97 0.99
Net income (diluted) ....................... 0.96 0.99
Cash dividends declared (1) ................ 0.38 0.36
Book value per share ....................... 18.73 14.41
Average Balance Sheet Summary
Total loans ................................ 841,367 739,362
Securities ................................. 162,074 179,447
Deposits ................................... 1,010,554 876,887
Long-term debt ............................. 88,313 37,504
Stockholders' equity ....................... 115,229 85,172
Total assets ............................... 1,371,538 1,147,712
At Period End
Net loans .................................. 920,592 752,539
Securities ................................. 166,994 182,393
Deposits ................................... 1,131,709 901,087
Long-term debt ............................. 81,295 39,400
Stockholders' equity ....................... 126,108 87,483
Total assets ............................... 1,501,500 1,147,684
Selected Ratios
Return on average assets ................... 0.94% 1.05%
Return on average stockholders' equity ..... 11.13 14.10
Average equity to assets ................... 8.40 7.42
Dividend payout ratio (1) .................. 39.18 36.36
<CAPTION>
AS OF AND FOR THE YEAR ENDED
DECEMBER 31,
---------------------------------------------------------------------
1997 1996 1995 1994 1993
------------- ------------- ------------- ------------- -------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<S> <C> <C> <C> <C> <C>
Summary of Operations
Total interest income ...................... $ 96,796 $ 86,069 $ 75,125 $ 62,762 $ 55,301
Total interest expense ..................... 44,691 39,064 33,580 25,168 22,425
Net interest income ........................ 52,105 47,005 41,545 37,594 32,876
Provision for loan losses .................. 1,662 1,678 1,104 1,040 1,434
Total other income ......................... 26,716 11,123 6,346 5,249 3,862
Total other expenses ....................... 57,670 40,982 33,887 30,116 24,292
Income before income taxes ................. 19,489 15,468 12,900 11,687 11,012
Net income ................................. 12,464 10,130 8,718 8,141 7,645
Per Share Data
Net income (basic) ......................... 2.03 1.81 1.55 1.44 1.35
Net income (diluted) ....................... 2.02 1.81 1.55 1.44 1.35
Cash dividends declared (1) ................ 0.73 0.63 0.56 0.49 0.46
Book value per share ....................... 16.56 14.21 13.09 11.66 11.56
Average Balance Sheet Summary
Total loans ................................ 757,803 665,641 608,551 504,795 413,645
Securities ................................. 179,590 166,667 221,743 264,976 262,742
Deposits ................................... 892,865 812,655 771,303 736,115 639,480
Long-term debt ............................. 46,129 24,666 8,204 6,252 4,387
Stockholders' equity ....................... 92,317 76,130 69,463 67,652 63,511
Total assets ............................... 1,213,261 1,079,540 957,048 864,690 739,804
At Period End
Net loans .................................. 772,689 690,701 650,195 547,809 462,424
Securities ................................. 162,912 163,922 194,368 239,882 283,833
Deposits ................................... 938,498 828,670 797,415 746,805 709,958
Long-term debt ............................. 68,400 34,250 20,000 6,875 5,875
Stockholders' equity ....................... 106,255 79,373 73,139 66,299 65,605
Total assets ............................... 1,266,143 1,048,810 1,040,969 895,785 816,225
Selected Ratios
Return on average assets ................... 1.03% 0.94% 0.91% 0.94% 1.03%
Return on average stockholders' equity ..... 13.50 13.31 12.55 12.03 12.04
Average equity to assets ................... 7.61 7.05 7.26 7.82 8.58
Dividend payout ratio (1) .................. 35.96 34.81 36.47 33.91 34.36
</TABLE>
- ---------
(1) Cash dividends and the related payout ratio are based on historical results
of the Company and do not include cash dividends of acquired subsidiaries
prior to the dates of consummation.
26
<PAGE>
SELECTED PRO FORMA FINANCIAL DATA
OF THE COMPANY AND HORIZON COMBINED
The following selected pro forma financial data gives effect to the
proposed merger of the Company with Horizon, to be accounted for as a pooling
of interests, based on an exchange ratio of 1.111 shares of the Company's
Common Stock for each share of common stock of Horizon. The pro forma data is
based upon the historical financial statements of the Company and Horizon and
may not be indicative of the results that actually would have occurred if the
combination had been in effect on the dates indicated. See also "Incorporation
of Certain Documents by Reference," "Experts" and "Index to Financial
Information."
<TABLE>
<CAPTION>
AS OF AND FOR THE
SIX MONTHS ENDED AS OF AND FOR THE YEAR ENDED
JUNE 30, DECEMBER 31,
--------------------------- --------------------------------------------
1998 1997 1997 1996 1995
------------- ------------- -------------- -------------- --------------
(UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE
INFORMATION)
<S> <C> <C> <C> <C> <C>
Summary of Operations
Total interest income ...................... $ 95,754 $ 83,002 $ 173,166 $ 159,708 $ 145,743
Total interest expense ..................... 44,229 35,307 76,012 68,334 61,180
Net interest income ........................ 51,525 47,695 97,154 91,374 84,563
Provision for loan losses .................. 2,467 1,928 4,064 5,012 3,609
Total other income ......................... 35,335 12,661 32,613 16,473 11,343
Total other expense ........................ 63,167 38,645 84,899 70,066 61,908
Income before income taxes ................. 21,226 19,783 40,804 32,769 30,389
Net income ................................. 13,736 12,758 26,291 21,281 20,200
Per Share Data
Net income (basic) ......................... 0.82 0.78 1.60 1.34 1.26
Net income (diluted) ....................... 0.81 0.78 1.60 1.34 1.26
Cash dividends declared .................... 0.38 0.36 0.73 0.63 0.56
Book value per share ....................... 14.34 12.19 13.24 11.86 11.52
Average Balance Sheet Summary
Total loans ................................ 1,586,237 1,382,963 1,427,270 1,286,868 1,206,408
Securities ................................. 375,541 414,516 409,713 419,974 464,024
Deposits ................................... 1,870,118 1,669,961 1,698,699 1,616,479 1,559,106
Long-term debt ............................. 96,080 37,504 47,603 24,666 8,204
Stockholders' equity ....................... 229,968 195,504 204,118 181,923 168,353
Total assets ............................... 2,416,831 2,088,471 2,180,461 2,021,988 1,874,056
At Period End
Net loans .................................. 1,670,724 1,406,939 1,490,411 1,315,078 1,262,243
Securities ................................. 376,017 408,353 378,330 412,586 450,570
Deposits ................................... 1,993,215 1,702,442 1,779,805 1,626,666 1,602,996
Long-term debt ............................. 87,267 39,400 75,502 34,250 20,000
Stockholders' equity ....................... 242,020 199,365 220,277 188,784 177,522
Total assets ............................... 2,542,007 2,102,385 2,286,424 1,995,878 1,983,871
Selected Ratios
Return on average assets ................... 1.14% 1.22% 1.21% 1.05% 1.08%
Return on average stockholders' equity ..... 11.95 13.05 12.88 11.70 12.00
Dividend payout ratio ...................... 39.18 36.36 35.96 34.81 36.47
Average equity to assets ................... 9.52 9.36 9.36 9.00 8.98
</TABLE>
27
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA OF HORIZON
The following table sets forth selected consolidated financial information
for Horizon for the five years ended December 31, 1997, and the six-month
periods ended June 30, 1998 and 1997. The selected consolidated financial data
as of and for each of the years in the five-year period ended December 31, 1997
have been derived from Horizon's consolidated financial statements which have
been audited by Ernst & Young LLP, independent auditors, which as to 1995 are
based in part on the report of Diamond, Leftwich, Goheen & Dunn, P.L.L.C. The
data should be read in conjunction with the consolidated financial statements
and related notes incorporated by reference herein. The consolidated financial
statements as of December 31, 1997 and 1996 and for each of the years in the
three-year period ended December 31, 1997, and the report thereon of Ernst &
Young, independent certified public accountants, are incorporated by reference
to this Prospectus. The information presented as of and for the six-month
periods ended June 30, 1998 and 1997 is derived from Horizon's unaudited
consolidated financial statements for those periods. Those unaudited
consolidated financial statements, which are incorporated by reference
elsewhere in this Prospectus, include all adjustments, consisting only of
normal recurring accruals, which management considers necessary for a fair
presentation of the financial condition and results of operations for such
interim periods. Results for the six-month period ended June 30, 1998 are not
necessarily indicative of results to be expected for the full year or any other
interim period. See also "Incorporation of Certain Documents by Reference,"
"Experts" and "Index to Financial Information."
<TABLE>
<CAPTION>
AS OF AND FOR THE
SIX MONTHS ENDED
JUNE 30,
---------------------------
1998 1997
------------- -------------
(UNAUDITED)
<S> <C> <C>
Summary of Operations
Total Interest income ................ $ 41,028 $ 36,950
Total Interest expense ............... 17,971 14,725
Net interest income .................. 23,057 22,225
Provision for loan losses ............ 1,266 1,100
Total other income ................... 3,339 2,762
Total other expense .................. 13,966 13,453
Income before income taxes ........... 11,164 10,434
Net income ........................... 7,324 6,754
Per Share Data
Net income (basic) ................... 0.80 0.73
Net income (diluted) ................. 0.80 0.73
Cash dividends declared .............. 0.38 0.34
Book value per share ................. 12.69 12.08
Average Balance Sheet Summary
Total loans .......................... 744,870 643,601
Securities ........................... 213,467 235,069
Deposits ............................. 859,564 793,074
Long-term debt ....................... 7,767 0
Stockholders' equity ................. 114,739 110,332
Total assets ......................... 1,045,293 940,759
At Period End
Net loans ............................ 750,132 654,400
Securities ........................... 209,023 225,960
Deposits ............................. 861,506 801,355
Long-term debt ....................... 5,972 0
Stockholders' equity ................. 115,912 111,882
Total assets ......................... 1,040,507 954,701
Selected Ratios
Return on average assets ............. 1.40% 1.44%
Return on average stockholders' equity 12.77 12.24
Average equity to assets ............. 10.98 11.73
Dividend payout ratio ................ 47.50 46.58
<CAPTION>
AS OF AND FOR THE YEAR ENDED
DECEMBER 31,
---------------------------------------------------------------------
1997 1996 1995 1994 1993
------------- ------------- ------------- ------------- -------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<S> <C> <C> <C> <C> <C>
Summary of Operations
Total Interest income ................ $ 76,370 $ 73,639 $ 70,618 $ 62,231 $ 61,029
Total Interest expense ............... 31,321 29,270 27,600 21,689 23,189
Net interest income .................. 45,049 44,369 43,018 40,542 37,840
Provision for loan losses ............ 2,402 3,334 2,505 2,264 2,337
Total other income ................... 5,897 5,350 4,997 3,877 4,176
Total other expense .................. 27,229 29,084 28,021 27,161 25,838
Income before income taxes ........... 21,315 17,301 17,489 14,974 13,841
Net income ........................... 13,827 11,151 11,482 10,125 9,496
Per Share Data
Net income (basic) ................... 1.49 1.20 1.23 1.09 1.02
Net income (diluted) ................. 1.49 1.20 1.23 1.09 1.02
Cash dividends declared .............. 0.75 0.62 0.53 0.49 0.47
Book value per share ................. 12.38 11.76 11.23 9.98 9.56
Average Balance Sheet Summary
Total loans .......................... 669,467 621,227 597,857 552,202 509,008
Securities ........................... 230,123 253,307 242,281 252,023 275,019
Deposits ............................. 805,834 803,824 787,803 751,773 742,729
Long-term debt ....................... 1,474 0 0 0 0
Stockholders' equity ................. 111,801 105,793 98,890 90,873 85,966
Total assets ......................... 967,200 942,448 917,008 870,779 854,794
At Period End
Net loans ............................ 717,722 624,377 612,046 574,053 523,725
Securities ........................... 215,418 248,664 256,202 237,266 270,009
Deposits ............................. 841,307 797,996 805,581 762,619 748,798
Long-term debt ....................... 7,102 0 0 0 0
Stockholders' equity ................. 114,022 109,411 104,383 92,892 88,943
Total assets ......................... 1,020,281 947,068 942,902 882,606 864,017
Selected Ratios
Return on average assets ............. 1.43% 1.18% 1.25% 1.16% 1.11%
Return on average stockholders' equity 12.37 10.54 11.61 11.14 11.05
Average equity to assets ............. 11.56 11.23 10.78 10.44 10.06
Dividend payout ratio ................ 50.34 51.67 43.09 44.95 46.08
</TABLE>
28
<PAGE>
DESCRIPTION OF CAPITAL SECURITIES
Pursuant to the terms of the Trust Agreement for the Issuer Trust, the
Issuer Trustees on behalf of the Issuer Trust will issue the Capital Securities
and the Common Securities. The Capital Securities will represent preferred
undivided beneficial interests in the assets of the Issuer Trust and the
holders thereof will be entitled to a preference in certain circumstances with
respect to Distributions and amounts payable on redemption or liquidation over
the Common Securities, as well as other benefits as described in the Trust
Agreement. This summary of certain provisions of the Capital Securities and the
Trust Agreement does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all the provisions of the Trust
Agreement, including the definitions therein of certain terms. Wherever
particular defined terms of the Trust Agreement are referred to herein, such
defined terms are incorporated herein by reference. A copy of the form of the
Trust Agreement is available upon request from the Issuer Trust by contacting
the Issuer Trustees.
GENERAL
The Capital Securities will be limited to $50,000,000 aggregate
Liquidation Amount outstanding. The Capital Securities will rank PARI PASSU,
and payments will be made thereon pro rata, with the Common Securities except
as described under " -- Subordination of Common Securities." The Junior
Subordinated Debentures will be registered in the name of the Issuer Trust and
held by the Property Trustee in trust for the benefit of the holders of the
Capital Securities and Common Securities. The Guarantee will be a guarantee on
a subordinated basis with respect to the Capital Securities but will not
guarantee payment of Distributions or amounts payable on redemption or
liquidation of such Capital Securities when the Issuer Trust does not have
funds on hand available to make such payments. See "Description of Guarantee."
DISTRIBUTIONS
The Capital Securities represent preferred undivided beneficial interests
in the assets of the Issuer Trust, and Distributions on each Capital Security
will be payable at an annual rate equal to % on the stated Liquidation Amount
of $25.00, payable quarterly in arrears on the day of , , and of
each year (each a "Distribution Date"), to the holders of the Capital
Securities at the close of business on the fifteenth day, (whether or not a
Business Day (as defined below)) next preceding the relevant Distribution Date.
Distributions on the Capital Securities will be cumulative. Distributions will
accumulate from the date of original issuance. The first Distribution Date for
the Capital Securities will be , 1998. The amount of Distributions payable
for any period less than a full Distribution period will be computed on the
basis of a 360-day year of twelve 30-day months and the actual days elapsed in
a partial month in such period. Distributions payable for each full
Distribution period will be computed by dividing the rate per annum by four. If
any date on which Distributions are payable on the Capital Securities is not a
Business Day, then payment of the Distributions payable on such date will be
made on the next succeeding day that is a Business Day (without any additional
Distributions or other payment in respect of any such delay), with the same
force and effect as if made on the date such payment was originally payable.
So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Junior Subordinated Indenture to defer the
payment of interest on the Junior Subordinated Debentures at any time or from
time to time for a period not exceeding 20 consecutive quarterly periods with
respect to each 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, provided that no Extension Period may extend beyond the
Stated Maturity of the Junior Subordinated Debentures or end on a day other
than a Distribution Date. As a consequence of any such deferral, quarterly
Distributions on the Capital Securities by the Issuer Trust will be deferred
during any such Extension Period. Distributions to which holders of the Capital
Securities are entitled will accumulate additional Distributions thereon at a
rate equal to % per annum, compounded quarterly from the relevant payment
date for such Distributions, computed on the basis of a 360-day year of twelve
30-day months and the actual days elapsed in a partial month in such period.
Additional Distributions payable for each full Distribution period will be
computed by dividing the rate per annum by four. The term "Distributions" as
used herein shall include any such additional Distributions. During any such
Extension Period, the Company may not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Company that rank PARI PASSU in all respects with or
junior in interest to the Junior Subordinated Debentures (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of
the Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or shareholder stock purchase plan or in connection with the issuance
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of capital stock of the Company (or securities convertible into or exercisable
for such capital stock) as consideration in an acquisition transaction entered
into prior to the applicable Extension Period, (b) as a result of an exchange
or conversion of any class or series of the Company's capital stock (or any
capital stock of a subsidiary of the Company) for any class or series of the
Company's capital stock or of any class or series of the Company's indebtedness
for any class or series of the Company's capital stock, (c) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (d) any declaration of a dividend in connection with
any shareholders' rights plan, or the issuance of rights, stock or other
property under any shareholders' rights plan, or the redemption or repurchase
of rights pursuant thereto, or (e) any dividend in the form of stock, warrants,
options or other rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same stock as that on
which the dividend is being paid or ranks PARI PASSU with or junior to such
stock). Prior to the termination of any such Extension Period, the Company may
further defer the payment of interest, provided that no Extension Period may
exceed 20 consecutive quarterly periods or extend beyond the Stated Maturity of
the Junior Subordinated Debentures. Upon the termination of any such Extension
Period and the payment of all amounts then due, the Company may elect to begin
a new Extension Period. No interest shall be due and payable during an
Extension Period, except at the end thereof. The Company must give the holders
of the Junior Subordinated Debentures and the Issuer Trustees notice of its
election of such Extension Period at least one Business Day prior to the
earlier of (i) the date the Distributions on the Capital Securities would have
been payable but for the election to begin such Extension Period and (ii) the
date the Property Trustee is required to give notice to holders of the Capital
Securities of the record date or the date such Distributions are payable, but
in any event not less than one Business Day prior to such record date. The
Property Trustee will give notice of the Company's election to begin a new
Extension Period to the holders of the Capital Securities. Subject to the
foregoing, there is no limitation on the number of times that the Company may
elect to begin an Extension Period. See "Description of Junior Subordinated
Debentures -- Option to Extend Interest Payment Period" and "Certain Federal
Income Tax Consequences -- Interest Income and Original Issue Discount."
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior
Subordinated Debentures.
The revenue of the Issuer Trust available for distribution to holders of
the Capital Securities will be limited to payments under the Junior
Subordinated Debentures in which the Issuer Trust will invest the proceeds from
the issuance and sale of the Capital Securities. See "Description of Junior
Subordinated Debentures." If the Company does not make payments on the Junior
Subordinated Debentures, the Issuer Trust may not have funds available to pay
Distributions or other amounts payable on the Capital Securities. The payment
of Distributions and other amounts payable on the Capital Securities (if and to
the extent the Issuer Trust has funds legally available for and cash sufficient
to make such payments) is guaranteed by the Company on a limited basis as set
forth herein under "Description of Guarantee."
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Junior
Subordinated Debentures, whether at maturity or upon earlier redemption as
provided in the Junior Subordinated Indenture, the proceeds from such repayment
or redemption shall be applied by the Property Trustee to redeem a Like Amount
(as defined below) of the Trust Securities, upon not less than 30 nor more than
60 days' notice, at a redemption price (the "Redemption Price") equal to the
aggregate Liquidation Amount of such Capital Securities plus accumulated but
unpaid Distributions thereon to but excluding the date of redemption (the
"Redemption Date") and the related amount of the premium, if any, paid by the
Company upon the concurrent redemption of such Junior Subordinated Debentures.
See "Description of Junior Subordinated Debentures -- Redemption." If less than
all the Junior Subordinated Debentures are to be repaid or redeemed on a
Redemption Date, then the proceeds from such repayment or redemption shall be
allocated to the redemption PRO RATA of the Capital Securities and the Common
Securities based on the relative Liquidation Amounts of such classes. The
amount of premium, if any, paid by the Company upon the redemption of all or
any part of the Junior Subordinated Debentures to be repaid or redeemed on a
Redemption Date shall be allocated to the redemption PRO RATA of the Capital
Securities and the Common Securities.
The Company has the right to redeem the Junior Subordinated Debentures (i)
on or after , 2003, in whole at any time or in part from time to time, or
(ii) prior to , 2003, in whole, but not in part, at any time within 90 days
following the occurrence and during the continuation of a Tax Event, Investment
Company Event or Capital Treatment Event (each as defined below), in each case
subject to possible regulatory approval. See " -- Liquidation Distribution Upon
Dissolution." A redemption of the Junior Subordinated Debentures would cause a
mandatory redemption of a Like Amount of the Capital Securities and Common
Securities at the Redemption Price.
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The Redemption Price, in the case of a redemption under (i) or (ii) above,
shall equal the Liquidation Amount, together with accumulated Distributions to
but excluding the date fixed for redemption.
"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 or the City of
Charleston, West Virginia 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.
"Like Amount" means (i) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount (as defined below) equal to that
portion of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Junior Subordinated
Indenture, allocated to the Common Securities and to the Capital Securities
based upon the relative Liquidation Amounts of such classes and (ii) with
respect to a distribution of Junior Subordinated Debentures to holders of Trust
Securities in connection with a dissolution or liquidation of the Issuer Trust,
Junior Subordinated Debentures having a principal amount equal to the
Liquidation Amount of the Trust Securities of the holder to whom such Junior
Subordinated Debentures are distributed.
"Liquidation Amount" means the stated amount of $25.00 per Trust Security.
"Tax Event" means the receipt by the Issuer Trust of an opinion of counsel
to the Company 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 or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of issuance of the Capital Securities (including, without limitation, any of
the foregoing arising with respect to, or resulting from, any proposal,
proceeding or other action commencing on or before such date of issuance),
there is more than an insubstantial risk that (i) the Issuer Trust is, or will
be within 90 days of the delivery of such opinion, subject to United States
federal income tax with respect to income received or accrued on the Junior
Subordinated Debentures, (ii) interest payable by the Company on the Junior
Subordinated Debentures is not, or within 90 days of the delivery of such
opinion, will not be, deductible by the Company, in whole or in part, for
United States federal income tax purposes or (iii) the Issuer Trust is, or will
be within 90 days of the delivery of such opinion, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by the Issuer Trust of an
opinion of counsel to the Company experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change (including any announced prospective change) in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority, there is more than an
insubstantial risk that the Issuer Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act, which change or prospective change becomes effective or would
become effective, as the case may be, on or after the date of the issuance of
the Capital Securities.
"Capital Treatment Event" means the reasonable determination by the
Company that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of issuance of the Capital
Securities, there is more than an insubstantial risk that the Company will not
be entitled to treat the allowable amount (subject to current interpretation of
the Federal Reserve as of the date of this Prospectus) of the Liquidation
Amount of the Capital Securities as "Tier 1 Capital" (or the then equivalent
thereof) for purposes of the risk-based capital adequacy guidelines of the
Federal Reserve, as then in effect and applicable to the Company.
PAYMENT OF ADDITIONAL SUMS. If a Tax Event described in clause (i) or
(iii) of the definition of Tax Event above has occurred and is continuing and
the Issuer Trust is the holder of all the Junior Subordinated Debentures, the
Company will pay Additional Sums (as defined below), if any, on the Junior
Subordinated Debentures.
"Additional Sums" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by the Issuer Trust
on the outstanding Capital Securities and Common Securities of the Issuer Trust
will not be reduced as a result of any additional taxes, duties and other
governmental charges to which the Issuer Trust has become subject as a result
of a Tax Event.
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REDEMPTION PROCEDURES
Capital Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Junior Subordinated Debentures. Redemptions of the Capital
Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Issuer Trust has funds on hand
available for the payment of such Redemption Price. See also " -- Subordination
of Common Securities."
If the Issuer Trust gives a notice of redemption in respect of any Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, in the case of Capital Securities held in
book-entry form, the Property Trustee will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the Redemption Price to the holders of the
Capital Securities. With respect to Capital Securities not held in book-entry
form, the Property Trustee, to the extent funds are available, will irrevocably
deposit with the paying agent for the Capital Securities funds sufficient to
pay the applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing the Capital Securities.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Capital Securities called for redemption shall be
payable to the holders of the Capital Securities on the relevant record dates
for the related Distribution Dates. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such deposit all
rights of the holders of such Capital Securities so called for redemption will
cease, except the right of the holders of such Capital Securities to receive
the Redemption Price, and any distribution payable in respect of the Capital
Securities, but without interest on such Redemption Price, and such Capital
Securities will cease to be outstanding. If any date fixed for redemption of
Capital Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a
Business Day (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 the event
that payment of the Redemption Price in respect of Capital Securities called
for redemption is improperly withheld or refused and not paid either by the
Issuer Trust or by the Company pursuant to the Guarantee as described under
"Description of Guarantee," Distributions on such Capital Securities will
continue to accumulate at the then applicable rate, from the Redemption Date
originally established by the Issuer Trust for such Capital Securities to the
date such Redemption Price is actually paid, in which case the actual payment
date will be the date fixed for redemption for purposes of calculating the
Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities laws), the Company or its affiliates may at any time and
from time to time purchase outstanding Capital Securities by tender, in the
open market or by private agreement, and may resell such securities.
If less than all the Capital Securities and Common Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of such
Capital Securities and Common Securities to be redeemed shall be allocated PRO
RATA to the Capital Securities and the Common Securities based upon the
relative Liquidation Amounts of such classes. The particular Capital Securities
to be redeemed shall be selected on a PRO RATA basis not more than 60 days
prior to the Redemption Date by the Property Trustee from the outstanding
Capital Securities not previously called for redemption, or if the Capital
Securities are then held in the form of a Global Capital Security (as defined
below), in accordance with DTC's customary procedures. The Property Trustee
shall promptly notify the securities registrar for the Trust Securities in
writing of the Capital Securities selected for redemption and, in the case of
any Capital Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of the Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Capital Securities shall relate, in the case of any Capital Securities redeemed
or to be redeemed only in part, to the portion of the aggregate Liquidation
Amount of Capital Securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each registered holder of Capital
Securities to be redeemed at its address appearing on the securities register
for the Trust Securities. Unless the Company defaults in payment of the
Redemption Price on the Junior Subordinated Debentures, on and after the
Redemption Date interest will cease to accrue on the Junior Subordinated
Debentures or portions thereof (and, unless payment of the Redemption Price in
respect of the Capital Securities is withheld or refused and not paid either by
the Issuer Trust or the Company pursuant to the Guarantee, Distributions will
cease to accumulate on the Capital Securities or portions thereof) called for
redemption.
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SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, the Liquidation Distribution in respect of,
and the Redemption Price of, the Capital Securities and Common Securities, as
applicable, shall be made PRO RATA based on the Liquidation Amount of such
Capital Securities and Common Securities. However, if on any Distribution Date
or Redemption Date a Debenture Event of Default has occurred and is continuing
as a result of any failure by the Company to pay any amounts in respect of the
Junior Subordinated Debentures when due, no payment of any Distribution on, or
Liquidation Distribution in respect of, or the Redemption Price of, any of the
Common Securities, and no other payment on account of the redemption,
liquidation or other acquisition of such Common Securities, shall be made
unless payment in full in cash of all accumulated and unpaid Distributions on
all the outstanding Capital Securities for all Distribution periods terminating
on or prior thereto, or in the case of payment of the Redemption Price the full
amount of such Redemption Price on all the outstanding Capital Securities then
called for redemption, or in the case of payment of the Liquidation
Distribution, the full amount of such Liquidation Distribution on all
outstanding Capital 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 Redemption Price of,
the Capital Securities then due and payable.
In the case of any Event of Default (as defined below) resulting from a
Debenture Event of Default, the holders of the Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default under
the Trust Agreement until the effects of all such Events of Default with
respect to such Capital Securities have been cured, waived or otherwise
eliminated. See " -- Events of Default; Notice" and "Description of Junior
Subordinated Debentures -- Debenture Events of Default." Until all such Events
of Default under the Trust Agreement with respect to the Capital Securities
have been so cured, waived or otherwise eliminated, the Property Trustee will
act solely on behalf of the holders of the Capital Securities and not on behalf
of the holders of the Common Securities, and only the holders of the Capital
Securities will have the right to direct the Property Trustee to act on their
behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
The amount payable on the Capital Securities in the event of any
liquidation of the Issuer Trust is $25.00 per Capital Security plus accumulated
and unpaid Distributions to the date of payment, subject to certain exceptions,
which may be in the form of a distribution of such amount in Junior
Subordinated Debentures.
The holders of all the outstanding Common Securities have the right at any
time to dissolve the Issuer Trust and, after satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, cause the Junior
Subordinated Debentures to be distributed to the holders of the Capital
Securities and Common Securities in liquidation of the Issuer Trust.
The Federal Reserve's risk-based capital guidelines currently provide that
redemptions of permanent equity or other capital instruments before stated
maturity could have a significant impact on a bank holding company's overall
capital structure and that any organization considering such a redemption
should consult with the Federal Reserve before redeeming any equity or capital
instrument prior to maturity if such redemption could have a material effect on
the level or composition of the organization's capital base (unless the equity
or capital instrument were redeemed with the proceeds of, or replaced by, a
like amount of a similar or higher quality capital instrument and the Federal
Reserve considers the organization's capital position to be fully adequate
after the redemption).
In the event the Company, while a holder of Common Securities, dissolves
the Issuer Trust prior to the Stated Maturity of the Capital Securities and the
dissolution of the Issuer Trust is deemed to constitute the redemption of
capital instruments by the Federal Reserve under its risk-based capital
guidelines or policies, the dissolution of the Issuer Trust by the Company may
be subject to the prior approval of the Federal Reserve. Moreover, any changes
in applicable law or changes in the Federal Reserve's risk-based capital
guidelines or policies could impose a requirement on the Company that it obtain
the prior approval of the Federal Reserve to dissolve the Issuer Trust.
Pursuant to the Trust Agreement, the Issuer Trust will automatically
dissolve upon expiration of its term or, if earlier, will dissolve on the first
to occur of: (i) certain events of bankruptcy, dissolution or liquidation of
the Company or the holder of the Common Securities; (ii) if the holders of
Common Securities have given written direction to the Property Trustee to
dissolve the Issuer Trust (which direction, subject to the foregoing
restrictions, is optional and wholly within the discretion of the holders of
Common Securities); (iii) the repayment of all the Capital Securities in
connection with the redemption of all the Trust Securities as described under "
- -- Redemption" and (iv) the entry of an order for the dissolution of the Issuer
Trust by a court of competent jurisdiction.
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If dissolution of the Issuer Trust occurs as described in clause (i), (ii)
or (iv) above, the Issuer Trust will be liquidated by the Property Trustee as
expeditiously as the Property Trustee determines to be possible by
distributing, after satisfaction of liabilities to creditors of the Issuer
Trust as provided by applicable law, to the holders of such Trust Securities a
Like Amount of the Junior Subordinated Debentures, unless such distribution is
not practical, in which event such holders will be entitled to receive out of
the assets of the Issuer Trust available for distribution to holders, after
satisfaction of liabilities to creditors of the Issuer Trust as provided by
applicable law, an amount equal to, in the case of holders of Capital
Securities, the aggregate of the Liquidation Amount plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because the Issuer Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Issuer Trust on its Capital Securities shall be paid on a PRO RATA
basis. The holders of the Common Securities will be entitled to receive
distributions upon any such liquidation PRO RATA with the holders of the
Capital Securities, except that if a Debenture Event of Default has occurred
and is continuing as a result of any failure by the Company to pay any amounts
in respect of the Junior Subordinated Debentures when due, the Capital
Securities shall have a priority over the Common Securities. See " --
Subordination of Common Securities."
After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures (i) the Capital Securities will no longer be deemed to
be outstanding, (ii) DTC or its nominee, as the registered holder of Capital
Securities, will receive a registered global certificate or certificates
representing the Junior Subordinated Debentures to be delivered upon such
distribution with respect to Capital Securities held by DTC or its nominee and
(iii) any certificates representing the Capital Securities not held by DTC or
its nominee will be deemed to represent the Junior Subordinated Debentures
having a principal amount equal to the stated Liquidation Amount of the Capital
Securities and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on the Capital Securities until such
certificates are presented to the security registrar for the Trust Securities
for transfer or reissuance.
If the Company does not redeem the Junior Subordinated Debentures prior to
the Stated Maturity and the Issuer Trust is not liquidated and the Junior
Subordinated Debentures are not distributed to holders of the Capital
Securities, the Capital Securities will remain outstanding until the repayment
of the Junior Subordinated Debentures and the distribution of the Liquidation
Distribution to the holders of the Capital Securities.
There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for Capital Securities if a dissolution and liquidation of the Issuer
Trust were to occur. Accordingly, the Capital Securities that an investor may
purchase, or the Junior Subordinated Debentures that the investor may receive
on dissolution and liquidation of the Issuer Trust, may trade at a discount to
the price that the investor paid to purchase the Capital Securities offered
hereby.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under
the Trust Agreement (an "Event of Default") with respect to the Capital
Securities (whatever the reason for such Event of Default and whether it is
voluntary or involuntary or is effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see "Description of
Junior Subordinated Debentures -- Debenture Events of Default");
(ii) default by the Issuer Trust in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a period of
30 days;
(iii) default by the Issuer Trust in the payment of any Redemption Price
of any Trust Security when it becomes due and payable;
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in the Trust Agreement (other
than a covenant or warranty a default in the performance of which or the
breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the Issuer Trustees and
the Company by the holders of at least 25% in aggregate Liquidation Amount of
the outstanding Capital Securities, a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" under the Trust Agreement; or
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(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee if a successor Property Trustee has not been
appointed within 90 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee will transmit
notice of such Event of Default to the holders of Trust Securities and the
Administrators, unless such Event of Default has been cured or waived. The
Company, as Depositor, and the Administrators are required to file annually
with the Property Trustee a certificate as to whether or not they are in
compliance with all the conditions and covenants applicable to them under the
Trust Agreement.
If a Debenture Event of Default has occurred and is continuing as a result
of any failure by the Company to pay any amounts in respect of the Junior
Subordinated Debentures when due, the Capital Securities will have a preference
over the Common Securities with respect to payments of any amounts in respect
of the Capital Securities as described above. See " -- Subordination of Common
Securities," " -- Liquidation Distribution Upon Dissolution" and "Description
of Junior Subordinated Debentures -- Debenture Events of Default."
REMOVAL OF ISSUER TRUSTEES; APPOINTMENT OF SUCCESSORS
The holders of at least a majority in aggregate Liquidation Amount of the
outstanding Capital Securities may remove an Issuer Trustee for cause or, if a
Debenture Event of Default has occurred and is continuing, with or without
cause. If an Issuer Trustee is removed by the holders of the outstanding
Capital Securities, the successor may be appointed by the Company. If an Issuer
Trustee resigns, the Company will appoint its successor. Within one year after
the appointment by the Company of the successor Issuer Trustee by the Company,
an Issuer Trustee who shall succeed the successor Issuer Trustee appointed by
the Company may be chosen by the holders of at least 25% in Liquidation Amount
of Capital Securities. If a successor has not been appointed by the Company or
the holders, any holder of Capital Securities or Common Securities or the other
Issuer Trustee may petition a court in the State of Delaware to appoint a
successor. Any Delaware Trustee must meet the applicable requirements of
Delaware law. Any Property Trustee must be a national or state-chartered bank,
and at the time of appointment have securities rated in one of the three
highest rating categories by a nationally recognized statistical rating
organization and have a combined capital and surplus of at least $50,000,000.
No resignation or removal of an Issuer Trustee and no appointment of a
successor trustee shall be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Trust Agreement.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any entity into which the Property Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which such Issuer
Trustee is a party, or any entity succeeding to all or substantially all of the
corporate trust business of such Issuer Trustee, will be the successor of such
Issuer Trustee under the Trust Agreement, provided such entity is otherwise
qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUER TRUST
The Issuer Trust may not merge with or into, consolidate, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any entity, except as described below or as
otherwise set forth in the Trust Agreement. The Issuer Trust may, at the
request of the holders of the Common Securities and with the consent of the
holders of at least a majority in aggregate Liquidation Amount of the
outstanding Capital Securities, merge with or into, consolidate, amalgamate, or
be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of any
State, so long as (i) such successor entity either (a) expressly assumes all
the obligations of the Issuer Trust with respect to the Capital Securities or
(b) substitutes for the Capital Securities other securities having
substantially the same terms as the Capital Securities (the "Successor
Securities") so long as the Successor Securities have the same priority as the
Capital Securities with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) a trustee of such successor entity, possessing
the same powers and duties as the Property Trustee, is appointed to hold the
Junior Subordinated Debentures, (iii) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Capital
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (iv) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of the holders of
the Capital Securities (including any Successor Securities) in any material
respect, (v) such successor entity has a purpose substantially identical to
that of the Issuer Trust, (vi) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Issuer Trust has
received an opinion from independent counsel experienced in such matters to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect
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the rights, preferences and privileges of the holders of the Capital Securities
(including any Successor Securities) in any material respect and (b) following
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, neither the Issuer Trust nor such successor entity will be required to
register as an investment company under the Investment Company Act, and (vii)
the Company or any permitted successor or assignee owns all 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 Issuer Trust may not,
except with the consent of holders of 100% in aggregate Liquidation Amount of
the Capital 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 Issuer Trust or the successor entity to be taxable other than
as a grantor trust for United States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under " -- Removal of Issuer Trustees;
Appointment of Successors" and "Description of Guarantee -- Amendments and
Assignment" and as otherwise required by law and the Trust Agreement, the
holders of the Capital Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the holders of a
majority in Liquidation Amount of the Common Securities and the Property
Trustee, without the consent of the holders of the Capital Securities, (i) to
cure any ambiguity, correct or supplement any provisions in the Trust Agreement
that may be inconsistent with any other provision, or to make any other
provisions with respect to matters or questions arising under the Trust
Agreement, provided that any such amendment does not adversely affect in any
material respect the interests of any holder of Trust Securities, or (ii) to
modify, eliminate or add to any provisions of the Trust Agreement to such
extent as may be necessary to ensure that the Issuer Trust will not be taxable
other than as a grantor trust for United States federal income tax purposes at
any time that any Trust Securities are outstanding or to ensure that the Issuer
Trust will not be required to register as an "investment company" under the
Investment Company Act. The Trust Agreement may be amended by the holders of a
majority of the Common Securities and the Property Trustee with (i) the consent
of holders representing not less than a majority in aggregate Liquidation
Amount of the outstanding Capital Securities and (ii) receipt by the Issuer
Trustees of an opinion of counsel to the effect that such amendment or the
exercise of any power granted to the Issuer Trustees in accordance with such
amendment will not affect the Issuer Trust's not being taxable other than as a
grantor trust for United States federal income tax purposes or the Issuer
Trust's exemption from status as an "investment company" under the Investment
Company Act, except that, without the consent of each holder of Trust
Securities affected thereby, the Trust Agreement may not be amended to (x)
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 (y) restrict the
right of a holder of Trust Securities to institute suit for the enforcement of
any such payment on or after such date.
So long as any Junior Subordinated Debentures are held by the Property
Trustee on behalf of the Issuer Trust, the Property Trustee will not (i) direct
the time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or execute any trust or power conferred on
the Property Trustee with respect to the Junior Subordinated Debentures, (ii)
waive any past default that is waivable under Section 5.13 of the Junior
Subordinated Indenture, (iii) exercise any right to rescind or annul a
declaration that the Junior Subordinated Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Junior
Subordinated Indenture or the Junior Subordinated Debentures, where such
consent shall be required, without, in each case, obtaining the prior approval
of the holders of at least a majority in aggregate Liquidation Amount of the
Capital Securities, except that, if a consent under the Junior Subordinated
Indenture would require the consent of each holder of Junior Subordinated
Debentures affected thereby, no such consent will be given by the Property
Trustee without the prior written consent of each holder of the Capital
Securities. The Property Trustee may not revoke any action previously
authorized or approved by a vote of the holders of the Capital Securities
except by subsequent vote of the holders of the Capital Securities. The
Property Trustee will notify each holder of Capital Securities of any notice of
default with respect to the Junior Subordinated Debentures. In addition to
obtaining the foregoing approvals of the holders of the Capital Securities,
before taking any of the foregoing actions, the Property Trustee will obtain an
opinion of counsel experienced in such matters to the effect that the Issuer
Trust will not be taxable other than as a grantor trust for United States
federal income tax purposes on account of such action.
Any required approval of holders of Capital Securities may be given at a
meeting of holders of Capital Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which
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holders of Capital Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be given to each
registered holder of Capital Securities in the manner set forth in the Trust
Agreement.
No vote or consent of the holders of Capital Securities will be required
to redeem and cancel Capital Securities in accordance with the Trust Agreement.
Notwithstanding that holders of Capital Securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Company, the Issuer Trustees or any affiliate
of the Company or any Issuer Trustees, will, for purposes of such vote or
consent, be treated as if they were not outstanding.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
The Capital Securities to be issued in the offering may be transferred or
exchanged in the manner and at the offices described below.
The Capital Securities to be issued in the offering initially will be
represented by one or more Capital Securities in registered, global form
(collectively, the "Global Capital Securities"). The Global Capital Securities
will be deposited upon issuance with the Property Trustee as custodian for DTC,
in New York, New York, and registered in the name of DTC or its nominee, in
each case for credit to an account of a direct or indirect participant in DTC,
as described below.
Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the Global Capital
Securities may not be exchanged for Certificated Capital Securities except in
the limited circumstances described under " -- Exchange of Book-Entry Capital
Securities for Certificated Capital Securities" below. In addition, transfer of
beneficial interests in the Global Capital Securities will be subject to the
applicable rules and procedures of DTC and its direct or indirect participants,
which may change from time to time.
DEPOSITARY PROCEDURES
DTC has advised the Issuer Trust and the Company that DTC is a
limited-purpose trust company created to hold securities for its participating
organizations (collectively, the "Participants") and to facilitate the
clearance and settlement of transactions in those securities between
Participants through electronic book-entry changes in accounts of its
Participants. The Participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. Access
to DTC's system is also available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (collectively,
the "Indirect Participants"). Persons who are not Participants may beneficially
own securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interest and transfer of ownership
interest of each actual purchaser of each security held by or on behalf of DTC
are recorded on the records of the Participants and the Indirect Participants.
DTC has also advised the Issuer Trust and the Company that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital
Securities, DTC will credit the accounts of Participants on behalf of
purchasers of the Capital Securities with portions of the Liquidation Amount of
the Global Capital Securities and (ii) ownership of such interests in the
Global Capital Securities will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by DTC (with respect
to the Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interests in the Global Capital
Securities).
Investors in the Global Capital Securities may hold their interests
therein directly through DTC if they are Participants in such system, or
indirectly through organizations which are Participants in such system. All
interests in a Global Security may be subject to the procedures and
requirements of DTC. The laws of some states require that certain persons take
physical delivery in certificated form of securities that they own.
Consequently, the ability to transfer beneficial interests in a Global Capital
Security to such persons will be limited to that extent. Because DTC can act
only on behalf of Participants, which in turn act on behalf of Indirect
Participants and certain banks, the ability of a person having beneficial
interests in a Global Capital Security to pledge such interests to persons or
entities that do not participate in the DTC system, or otherwise take actions
in respect of such interests, may be affected by the lack of a physical
certificate evidencing such interests. For certain other restrictions on the
transferability of the Capital Securities, see " -- Exchange of Book-Entry
Capital Securities for Certificated Capital Securities."
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Except as described below, owners of interests in the Global Capital
Securities will not have Capital Securities registered in their name, will not
receive physical delivery of Certificated Capital Securities and will not be
considered the registered owners or holders thereof under the Trust Agreement
for any purpose.
Payments in respect of the Global Capital Securities registered in the
name of DTC or its nominee will be payable by the Property Trustee to DTC in
its capacity as the registered holder under the Trust Agreement. Under the
terms of the Trust Agreement, the Property Trustee will treat the persons in
whose names the Capital Securities, including the Global Capital Securities,
are registered as the owners thereof for the purpose of receiving such payments
and for any and all other purposes whatsoever. Consequently, neither the
Property Trustee nor any agent thereof has or will have any responsibility or
liability for (i) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
ownership interests in the Global Capital Securities, or for maintaining,
supervising or reviewing any of DTC's records or any Participant's or Indirect
Participant's records relating to the beneficial ownership interests in the
Global Capital Securities or (ii) any other matter relating to the actions and
practices of DTC or any of its Participants or Indirect Participants. DTC has
advised the Issuer Trust and the Company that its current practice, upon
receipt of any payment in respect of securities such as the Capital Securities,
is to credit the account of the relevant Participants with the payment on the
payment date, in amounts proportionate to their respective holdings in
Liquidation Amount of beneficial interests in the relevant security as shown on
the records of DTC unless DTC has reason to believe it will not receive payment
on such payment date. Payments by the Participants and the Indirect
Participants to the beneficial owners of Capital Securities will be governed by
standing instructions and customary practices and will be the responsibility of
the Participants or the Indirect Participants and will not be the
responsibility of DTC, the Property Trustee, the Issuer Trust or the Company.
Neither the Issuer Trust nor the Company or the Property Trustee will be liable
for any delay by DTC or any of its Participants in identifying the beneficial
owners of the Capital Securities, and the Issuer Trust or the Company and the
Property Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
DTC has advised the Issuer Trust and the Company that it will take any
action permitted to be taken by a holder of Capital Securities only at the
direction of one or more Participants to whose account with DTC interests in
the Global Capital Securities are credited and only in respect of such portion
of the Liquidation Amount of the Capital Securities as to which such
Participant or Participants has or have given such direction. However, if there
is an Event of Default under the Trust Agreement, DTC reserves the right to
exchange the Global Capital Securities for Certificated Capital Securities and
to distribute such Capital Securities to its Participants.
The information in this section concerning DTC and book-entry systems has
been obtained from sources that the Issuer Trust and the Company believe to be
reliable, but neither the Issuer Trust nor the Company takes responsibility for
the accuracy thereof.
EXCHANGE OF BOOK-ENTRY CAPITAL SECURITIES FOR CERTIFICATED CAPITAL SECURITIES
A Global Capital Security is exchangeable for Certificated Capital
Securities if (i) DTC (x) notifies the Company and the Property Trustee in
writing that it is unwilling or unable to properly discharge its
responsibilities as depositary for the Global Capital Security and the Company
is unable to locate a qualified successor, or (y) has ceased to be a clearing
agency registered under the Exchange Act and the Company thereupon is unable to
locate a qualified successor, (ii) the Issuer Trust at its option advises DTC
in writing that it elects to terminate the book-entry system through DTC, or
(iii) there shall have occurred and be continuing an Event of Default or any
event which after notice or lapse of time or both would be an Event of Default
under the Trust Agreement. In all cases, Certificated Capital Securities
delivered in exchange for any Global Capital Security or beneficial interests
therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of DTC (in accordance with its
customary procedures).
EXPENSES AND TAXES
In the Trust Agreement, the Company has agreed to pay all debts and other
obligations (other than with respect to the Capital Securities) and all costs
and expenses of the Issuer Trust (including costs and expenses relating to the
organization of the Issuer Trust, the fees and expenses of the Issuer Trustees
and the costs and expenses relating to the operation of the Issuer Trust) and
to pay any and all taxes and all costs and expenses with respect thereto (other
than withholding taxes) to which the Issuer Trust might become subject. The
foregoing obligations of the Company under the Trust Agreement are for the
benefit of, and shall be enforceable by, any person to whom any such debts,
obligations, costs, expenses and taxes are
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owed (a "Creditor") whether or not such Creditor has received notice thereof.
Any such Creditor may enforce such obligations of the Company directly against
the Company, and the Company has irrevocably waived any right or remedy to
require that any such Creditor take any action against the Issuer Trust or any
other person before proceeding against the Company.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities will be made to DTC, which
will credit the relevant accounts at DTC on the applicable Distribution Dates
or, if the Capital Securities are not held by DTC, such payments will be made
by check mailed to the address of the holder entitled thereto as such address
appears on the securities register for the Trust Securities. The paying agent
(the "Paying Agent") initially will be the Property Trustee and any co-paying
agent chosen by the Property Trustee and acceptable to the Administrators. The
Paying Agent will be permitted to resign as Paying Agent upon 30 days' written
notice to the Property Trustee and the Administrators. If the Property Trustee
is no longer the Paying Agent, the Property Trustee will appoint a successor
(which must be a bank or trust company reasonably acceptable to the
Administrators) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Capital Securities.
Registration of transfers of Capital Securities will be effected without
charge by or on behalf of the Issuer Trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The Issuer Trust will not be required to register or cause to be
registered the transfer of the Capital Securities after the Capital Securities
have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Trust Agreement and, after such Event of Default, must
exercise the same degree of care and skill as a prudent person would exercise
or use in the conduct of his or her own affairs. Subject to this provision, the
Property Trustee is under no obligation to exercise any of the powers vested in
it by the Trust Agreement at the request of any holder of Capital Securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby.
For information concerning the relationships between The Chase Manhattan
Bank, the Property Trustee, and the Company, see "Description of Junior
Subordinated Debentures -- Information Concerning the Debenture Trustee."
MISCELLANEOUS
The Administrators and the Property Trustee are authorized and directed to
conduct the affairs of and to operate the Issuer Trust in such a way that the
Issuer Trust will not be deemed to be an "investment company" required to be
registered under the Investment Company Act or taxable other than as a grantor
trust for United States federal income tax purposes and so that the Junior
Subordinated Debentures will be treated as indebtedness of the Company for
United States federal income tax purposes. In this connection, the Property
Trustee and the holders of Common Securities are authorized to take any action,
not inconsistent with applicable law, the certificate of trust of the Issuer
Trust or the Trust Agreement, that the Property Trustee and the holders of
Common Securities determine in their discretion to be necessary or desirable
for such purposes, as long as such action does not materially adversely affect
the interests of the holders of the Capital Securities.
Holders of the Capital Securities have no preemptive or similar rights.
The Issuer Trust may not borrow money or issue debt or mortgage or pledge
any of its assets.
GOVERNING LAW
The Trust Agreement will be governed by and construed in accordance with
the laws of the State of Delaware.
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DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued under the Junior
Subordinated Indenture, under which The Chase Manhattan Bank is acting as
Debenture Trustee. This summary of certain terms and provisions of the Junior
Subordinated Debentures and the Junior Subordinated Indenture does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, all the provisions of the Junior Subordinated Indenture, including the
definitions therein of certain terms. Whenever particular defined terms of the
Junior Subordinated Indenture (as amended or supplemented from time to time)
are referred to herein, such defined terms are incorporated herein by
reference. A copy of the form of Junior Subordinated Indenture is available
from the Debenture Trustee upon request.
GENERAL
Concurrently with the issuance of the Capital Securities, the Issuer Trust
will invest the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in the Junior Subordinated Debentures issued
by the Company. The Junior Subordinated Debentures will bear interest, accruing
from the date of original issuance, at a rate equal to % per annum on the
principal amount thereof, payable quarterly in arrears on the day of , ,
and of each year (each, an "Interest Payment Date"), commencing , 1998,
to the person in whose name each Junior Subordinated Debenture is registered at
the close of business on the fifteenth day, (whether or not a Business Day)
next preceding such Interest Payment Date. It is anticipated that, until the
liquidation of the Issuer Trust, each Junior Subordinated Debenture will be
registered in the name of the Issuer Trust and held by the Property Trustee in
trust for the benefit of the holders of the Trust Securities. The amount of
interest payable for any period less than a full interest period will be
computed on the basis of a 360-day year of twelve 30-day months and the actual
days elapsed in a partial month in such period. The amount of interest payable
for any full interest period will be computed by dividing the rate per annum by
four. If any date on which interest is payable on the Junior Subordinated
Debentures is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (without
any interest or other payment in respect of any such delay), with the same
force and effect as if made on the date such payment was originally payable.
Accrued interest that is not paid on the applicable Interest Payment Date will
bear additional interest on the amount thereof (to the extent permitted by law)
at a rate equal to % per annum, compounded quarterly and computed on the
basis of a 360-day year of twelve 30-day months and the actual days elapsed in
a partial month in such period. The amount of additional interest payable for
any full interest period will be computed by dividing the rate per annum by
four. The term "interest" as used herein includes quarterly interest payments,
interest on quarterly interest payments not paid on the applicable Interest
Payment Date and Additional Sums (as defined below), as applicable.
The Junior Subordinated Debentures will mature on , 2028.
The Junior Subordinated Debentures will be unsecured and will rank junior
and be subordinate in right of payment to all Senior Indebtedness of the
Company. The Junior Subordinated Debentures will not be subject to a sinking
fund and will not be eligible as collateral for any loan made by the Company.
The Junior Subordinated Indenture does not limit the incurrence or issuance of
other secured or unsecured debt by the Company, including Senior Indebtedness,
whether under the Junior Subordinated Indenture or any existing or other
indenture or agreement that the Company may enter into in the future or
otherwise. See " -- Subordination."
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right at any time during the term of the Junior
Subordinated Debentures to defer the payment of interest at any time or from
time to time for a period not exceeding 20 consecutive quarterly periods with
respect to each 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, provided that no Extension Period may extend beyond the
Stated Maturity of the Junior Subordinated Debentures or end on a date other
than an Interest Payment Date. At the end of such Extension Period, the Company
must pay all interest then accrued and unpaid (together with interest thereon
at a rate equal to % per annum, compounded quarterly and computed on the
basis of a 360-day year of twelve 30-day months and the actual days elapsed in
a partial month in such period, to the extent permitted by applicable law). The
amount of additional interest payable for any full interest period will be
computed by dividing the rate per annum by four. During an Extension Period,
interest will continue to accrue and holders of Junior Subordinated Debentures
(or holders of Capital Securities while outstanding) will be required to accrue
original issue discount income for United States federal income tax purposes.
See "Certain Federal Income Tax Consequences -- Interest Income and Original
Issue Discount."
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During any such Extension Period, the Company may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank PARI PASSU in
all respects with, or junior in interest to, the Junior Subordinated Debentures
(other than (a) repurchases, redemptions or other acquisitions of shares of
capital stock of the Company in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of any one or
more employees, officers, directors or consultants, in connection with a
dividend reinvestment or shareholder stock purchase plan or in connection with
the issuance of capital stock of the Company (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Company's
capital stock (or any capital stock of a subsidiary of the Company) for any
class or series of the Company's capital stock or of any class or series of the
Company's indebtedness for any class or series of the Company's capital stock,
(c) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged, (d) any declaration of a dividend
in connection with any shareholder's rights plan, or the issuance of rights,
stock or other property under any shareholder rights plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks PARI PASSU with or
junior to such stock). Prior to the termination of any such Extension Period,
the Company may further defer the payment of interest, provided that no
Extension Period may exceed 20 consecutive quarterly periods or extend beyond
the Stated Maturity of the Junior Subordinated Debentures. Upon the termination
of any such Extension Period and the payment of all amounts then due, the
Company may elect to begin a new Extension Period subject to the above
conditions. No interest shall be due and payable during an Extension Period,
except at the end thereof. The Company must give the holders of the Junior
Subordinated Debentures and the Issuer Trustees notice of its election of such
Extension Period at least one Business Day prior to the earlier of (i) the date
the Distributions on the Capital Securities would have been payable but for the
election to begin such Extension Period and (ii) the date the Property Trustee
is required to give notice to holders of the Capital Securities of the record
date or the date such Distributions are payable, but in any event not less than
one Business Day prior to such record date. The Property Trustee will give
notice of the Company's election to begin a new Extension Period to the holders
of the Capital Securities. There is no limitation on the number of times that
the Company may elect to begin an Extension Period.
REDEMPTION
The Junior Subordinated Debentures are redeemable prior to maturity at the
option of the Company (i) on or after , 2003, in whole at any time or in
part from time to time, or (ii) prior to , 2003, in whole, but not in part,
at any time within 90 days following the occurrence and during the continuation
of a Tax Event, Investment Company Event or Capital Treatment Event (each as
defined under "Description of Capital Securities -- Redemption"), in each case
at the redemption price described below. The proceeds of any such redemption
will be used by the Issuer Trust to redeem the Capital Securities.
The Federal Reserve's risk-based capital guidelines, which are subject to
change, currently provide that redemptions of permanent equity or other capital
instruments before stated maturity could have a significant impact on a bank
holding company's overall capital structure and that any organization
considering such a redemption should consult with the Federal Reserve before
redeeming any equity or capital instrument prior to maturity if such redemption
could have a material effect on the level or composition of the organization's
capital base (unless the equity or capital instrument were redeemed with the
proceeds of, or replaced by, a like amount of a similar or higher quality
capital instrument and the Federal Reserve considers the organization's capital
position to be fully adequate after the redemption).
The redemption of the Junior Subordinated Debentures by the Company prior
to their Stated Maturity would constitute the redemption of capital instruments
under the Federal Reserve's current risk-based capital guidelines and may be
subject to the prior approval of the Federal Reserve. The redemption of the
Junior Subordinated Debentures also could be subject to the additional prior
approval of the Federal Reserve.
The Redemption Price for Junior Subordinated Debentures in the case of a
redemption under (i) or (ii) above shall equal their principal amount, together
with accrued interest to but excluding the date fixed for redemption.
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ADDITIONAL SUMS
The Company has covenanted in the Junior Subordinated Indenture that, if
and for so long as (i) the Issuer Trust is the holder of all Junior
Subordinated Debentures and (ii) the Issuer Trust is required to pay any
additional taxes, duties or other governmental charges as a result of a Tax
Event, the Company will pay as additional sums on the Junior Subordinated
Debentures such amounts as may be required so that the Distributions payable by
the Issuer Trust will not be reduced as a result of any such additional taxes,
duties or other governmental charges. See "Description of Capital Securities --
Redemption."
REGISTRATION, DENOMINATION AND TRANSFER
The Junior Subordinated Debentures will initially be registered in the
name of the Issuer Trust. If the Junior Subordinated Debentures are distributed
to holders of Capital Securities, it is anticipated that the depositary
arrangements for the Junior Subordinated Debentures will be substantially
identical to those in effect for the Capital Securities. See "Description of
Capital Securities -- Form, Denomination, Book-Entry Procedures and Transfer."
Although DTC has agreed to the procedures described above, it is under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within 90 days of receipt of notice from DTC to such effect, the
Company will cause the Junior Subordinated Debentures to be issued in
definitive form.
Payments on Junior Subordinated Debentures represented by a global
security will be made to Cede, the nominee for DTC, as the registered holder of
the Junior Subordinated Debentures, as described under "Description of Capital
Securities -- Form, Denomination, Book-Entry Procedures and Transfer." If
Junior Subordinated Debentures are issued in certificated form, principal and
interest will be payable, the transfer of the Junior Subordinated Debentures
will be registrable and Junior Subordinated Debentures will be exchangeable for
Junior Subordinated Debentures of other authorized denominations of a like
aggregate principal amount, at the corporate trust office of the Debenture
Trustee in New York, New York or at the offices of any Paying Agent or transfer
agent appointed by the Company, provided that payment of interest may be made
at the option of the Company by check mailed to the address of the persons
entitled thereto. However, a holder of $1 million or more in aggregate
principal amount of Junior Subordinated Debentures may receive payments of
interest (other than interest payable at the Stated Maturity) by wire transfer
of immediately available funds upon written request to the Debenture Trustee
not later than 15 calendar days prior to the date on which the interest is
payable.
The Junior Subordinated Debentures will be issuable only in registered
form without coupons in integral multiples of $25.00. Junior Subordinated
Debentures will be exchangeable for other Junior Subordinated Debentures of
like tenor, of any authorized denominations, and of a like aggregate principal
amount.
Junior Subordinated Debentures may be presented for exchange as provided
above, and may be presented for registration of transfer (with the form of
transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the securities registrar appointed under the
Junior Subordinated Indenture or at the office of any transfer agent designated
by the Company for such purpose without service charge and upon payment of any
taxes and other governmental charges as described in the Junior Subordinated
Indenture. The Company will appoint the Debenture Trustee as securities
registrar under the Junior Subordinated Indenture. The Company may at any time
designate additional transfer agents with respect to the Junior Subordinated
Debentures.
In the event of any redemption, neither the Company nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Junior Subordinated Debentures during a period beginning at the opening of
business 15 days before the day of selection for redemption of the Junior
Subordinated Debentures to be redeemed and ending at the close of business on
the day of mailing of the relevant notice of redemption or (ii) to register the
transfer or exchange of any Junior Subordinated Debentures so selected for
redemption in whole or in part, except, in the case of any Junior Subordinated
Debentures being redeemed in part, any portion thereof not to be redeemed.
Any monies deposited with the Debenture Trustee or any paying agent, or
then held by the Company in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debenture and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall, at the request of the Company, be repaid to
the Company and the holder of such Junior Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Company for
payment thereof.
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RESTRICTIONS ON CERTAIN PAYMENTS; CERTAIN COVENANTS OF THE COMPANY
The Company has covenanted that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank PARI PASSU in
all respects with or junior in interest to the Junior Subordinated Debentures
(other than (a) repurchases, redemptions or other acquisitions of shares of
capital stock of the Company in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of any one or
more employees, officers, directors or consultants, in connection with a
dividend reinvestment or shareholder stock purchase plan or in connection with
the issuance of capital stock of the Company (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period or other
event referred to below, (b) as a result of an exchange or conversion of any
class or series of the Company's capital stock (or any capital stock of a
subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class or
series of the Company's capital stock, (c) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(d) any declaration of a dividend in connection with any shareholder rights
plan, or the issuance of rights, stock or other property under any shareholder
rights plan, or the redemption or repurchase of rights pursuant thereto or (e)
any dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks PARI PASSU with or junior to such stock), if at such time (x) there has
occurred any event, (1) of which the Company has actual knowledge, that with
the giving of notice or the lapse of time, or both, would constitute a
Debenture Event of Default and (2) that the Company has not taken reasonable
steps to cure, (y) if the Junior Subordinated Debentures are held by the Issuer
Trust, the Company is in default with respect to its payment of any obligations
under the Guarantee or (z) the Company has given notice of its election of an
Extension Period as provided in the Junior Subordinated Indenture and has not
rescinded such notice, or such Extension Period, or any extension thereof, is
continuing.
The Company has covenanted in the Junior Subordinated Indenture (i) to
continue to hold, directly or indirectly, 100% of the Common Securities,
provided that certain successors that are permitted pursuant to the Junior
Subordinated Indenture may succeed to the Company's ownership of the Common
Securities, (ii) as holder of the Common Securities, not to voluntarily
dissolve, wind up or liquidate the Issuer Trust, other than (a) in connection
with a distribution of Junior Subordinated Debentures to the holders of the
Capital Securities in liquidation of the Issuer Trust or (b) in connection with
certain mergers, consolidations or amalgamations permitted by the Trust
Agreement and (iii) to use its reasonable efforts, consistent with the terms
and provisions of the Trust Agreement, to cause the Issuer Trust to continue
not to be taxable other than as a grantor trust for United States federal
income tax purposes.
MODIFICATION OF JUNIOR SUBORDINATED INDENTURE
From time to time, the Company and the Debenture Trustee may, without the
consent of any of the holders of the outstanding Junior Subordinated
Debentures, amend, waive or supplement the provisions of the Junior
Subordinated Indenture to: (i) evidence succession of another corporation or
association to the Company and the assumption by such person of the obligations
of the Company under the Junior Subordinated Debentures; (ii) add further
covenants, restrictions or conditions for the protection of holders of the
Junior Subordinated Debentures; (iii) cure ambiguities or correct the Junior
Subordinated Debentures in the case of defects or inconsistencies in the
provisions thereof, so long as any such cure or correction does not adversely
affect the interest of the holders of the Junior Subordinated Debentures in any
material respect; (iv) change the terms of the Junior Subordinated Debentures
to facilitate the issuance of the Junior Subordinated Debentures in
certificated or other definitive form; (v) evidence or provide for the
appointment of a successor Debenture Trustee; (vi) qualify, or maintain the
qualification of, the Junior Subordinated Indentures under the Trust Indenture
Act; (vii) convey, transfer, assign, mortgage or pledge any property to or with
the Debenture Trustee or to surrender any right or power conferred on the
Company in the Junior Subordinated Indenture; (viii) establish the form or
terms of Junior Subordinated Debentures or (ix) change or eliminate any
provision of the Junior Subordinated Indenture, so long as at the time of such
change there are no outstanding Junior Subordinated Debentures entitled to the
benefit of such provision or such change does not apply to then outstanding
Junior Subordinated Debentures. The Junior Subordinated Indenture contains
provisions permitting the Company and the Debenture Trustee, with the consent
of the holders of not less than a majority in principal amount of the Junior
Subordinated Debentures, to modify the Junior Subordinated Indenture in a
manner affecting the rights of the holders of the Junior Subordinated
Debentures, except that no such modification may, without the consent of the
holder of each outstanding Junior Subordinated Debenture so affected, (i)
change the Stated Maturity of the principal of, or any installment of interest
on, Junior Subordinated Debentures, or reduce the principal amount thereof, the
rate of interest thereon or any
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premium payable upon the redemption thereof, or change the place of payment
where, or the currency in which, any such amount is payable or impair the right
to institute suit for the enforcement of any Junior Subordinated Debenture or
(ii) reduce the percentage of principal amount of Junior Subordinated
Debentures, the holders of which are required to consent to any such
modification of the Junior Subordinated Indenture. Furthermore, so long as any
of the Capital Securities remain outstanding, no such modification may be made
that adversely affects the holders of such Capital Securities in any material
respect, and no termination of the Junior Subordinated Indenture may occur, and
no waiver of any Debenture Event of Default or compliance with any covenant
under the Junior Subordinated Indenture may be effective, without the prior
consent of the holders of at least a majority of the aggregate Liquidation
Amount of the outstanding Capital Securities unless and until the principal of
(and premium, if any, on) the Junior Subordinated Debentures and all accrued
and unpaid interest thereon have been paid in full and certain other conditions
are satisfied.
DEBENTURE EVENTS OF DEFAULT
The Junior Subordinated Indenture provides that any one or more of the
following described events with respect to the Junior Subordinated Debentures
that has occurred and is continuing constitutes an "Event of Default" with
respect to the Junior Subordinated Debentures:
(i) failure to pay any interest on the Junior Subordinated Debentures
when due and payable, and continuance of such default for a period of 30
days (subject to the deferral of any due date in the case of an Extension
Period);
(ii) failure to pay any principal of or premium, if any, on the Junior
Subordinated Debentures when due whether at maturity, upon redemption, by
declaration of acceleration or otherwise;
(iii) failure to observe or perform certain other covenants contained in
the Junior Subordinated Indenture for 90 days after written notice to the
Company from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of the outstanding Junior
Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Company.
For purposes of the Trust Agreement and this Prospectus, each such Event
of Default under the Junior Subordinated Debenture is referred to as a
"Debenture Event of Default." As described in "Description of Capital
Securities -- Events of Default; Notice," the occurrence of a Debenture Event
of Default will also constitute an Event of Default in respect of the Trust
Securities.
The holders of at least a majority in aggregate principal amount of
outstanding Junior Subordinated Debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee. The Debenture Trustee or the holders of not less than 25% in
aggregate principal amount of outstanding Junior Subordinated Debentures may
declare the principal due and payable immediately upon a Debenture Event of
Default, and, should the Debenture Trustee or such holders of Junior
Subordinated Debentures fail to make such declaration, the holders of at least
25% in aggregate Liquidation Amount of the outstanding Capital Securities shall
have such right. The holders of a majority in aggregate principal amount of
outstanding Junior Subordinated Debentures may annul such declaration and waive
the default if all defaults (other than the non-payment of the principal of
Junior Subordinated Debentures which has become due solely by such
acceleration) have been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee. Should the holders of Junior
Subordinated Debentures fail to annul such declaration and waive such default,
the holders of a majority in aggregate Liquidation Amount of the outstanding
Capital Securities shall have such right.
The holders of at least a majority in aggregate principal amount of the
outstanding Junior Subordinated Debentures affected thereby, and the holders of
a majority in aggregate Liquidation Amount of the Capital Securities issued by
the Issuer Trust, may, on behalf of the holders of all the Junior Subordinated
Debentures, waive any past default, except a default in the payment of
principal (or premium, if any) or interest (unless such default has been cured
and a sum sufficient to pay all matured installments of interests and principal
due otherwise than by acceleration has been deposited with the Debenture
Trustee) or a default in respect of a covenant or provision which under the
Junior Subordinated Indenture cannot be modified or amended without the consent
of the holder of each outstanding Junior Subordinated Debenture affected
thereby. See " -- Modification of Junior Subordinated Indenture." The Company
is required to file annually with the Debenture Trustee a certificate as to
whether or not the Company is in compliance with all the conditions and
covenants applicable to it under the Junior Subordinated Indenture.
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If a Debenture Event of Default occurs and is continuing, the Property
Trustee will have the right to declare the principal of and the interest on the
Junior Subordinated Debentures, and any other amounts payable under the Junior
Subordinated Indenture, to be forthwith due and payable and to enforce its
other rights as a creditor with respect to the Junior Subordinated Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay any amounts payable
in respect of the Junior Subordinated Debentures on the date such amounts are
otherwise payable, a registered holder of Capital Securities may institute a
direct action against the Company for enforcement of payment to such holder of
an amount equal to the amount payable in respect of Junior Subordinated
Debentures having a principal amount equal to the aggregate Liquidation Amount
of the Capital Securities held by such holder (a "Direct Action"). The Company
may not amend the Junior Subordinated Indenture to remove the foregoing right
to bring a Direct Action without the prior written consent of the holders of
all the Capital Securities. The Company will have the right under the Junior
Subordinated Indenture to set-off any payment made to such holder of Capital
Securities by the Company in connection with a Direct Action.
With certain exceptions, the holders of the Capital Securities would not
be able to exercise directly any remedies available to the holders of the
Junior Subordinated Debentures except under the circumstances described in the
preceding paragraph. See "Description of Capital Securities -- Events of
Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Junior Subordinated Indenture provides that the Company may not
consolidate with or merge into any other Person or convey, transfer or lease
its properties and assets substantially as an entirety to any Person, and no
Person may consolidate with or merge into the Company or convey, transfer or
lease its properties and assets substantially as an entirety to the Company,
unless (i) if the Company consolidates with or merges into another Person (as
defined in the Junior Subordinated Indenture) or conveys or transfers its
properties and assets substantially as an entirety to any Person, the successor
Person is organized under the laws of the United States or any state or the
District of Columbia, and such successor Person expressly assumes the Company's
obligations in respect of the Junior Subordinated Debentures; (ii) immediately
after giving effect thereto, no Debenture Event of Default, and no event which,
after notice or lapse of time or both, would constitute a Debenture Event of
Default, has occurred and is continuing; and (iii) certain other conditions as
prescribed in the Junior Subordinated Indenture are satisfied.
The provisions of the Junior Subordinated Indenture do not afford holders
of the Junior Subordinated Debentures protection in the event of a highly
leveraged or other transaction involving the Company that may adversely affect
holders of the Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Junior Subordinated Indenture provides that when, among other things,
all Junior Subordinated Debentures not previously delivered to the Debenture
Trustee for cancellation (i) have become due and payable (ii) will become due
and payable at the Stated Maturity within one year, (iii) or are to be called
for redemption within one year under arrangements satisfactory to the Debenture
Trustee and the Company deposits or causes to be deposited with the Debenture
Trustee funds, in trust, for the purpose and in an amount sufficient to pay and
discharge the entire indebtedness on the Junior Subordinated Debentures not
previously delivered to the Debenture Trustee for cancellation, for the
principal (and premium, if any) and interest to the date of the deposit or to
the Stated Maturity, as the case may be, then the Junior Subordinated Indenture
will upon the Company's request be satisfied and discharged and cease to be of
further effect (except as to any surviving rights of registration of transfer
or exchange, certain obligations of the Company to the Debenture Trustee and
the obligations of the Debenture Trustee to apply money deposited by the
Company in payment of the Junior Subordinated Debentures).
SUBORDINATION
The Junior Subordinated Debentures will be subordinate and junior in right
of payment, to the extent set forth in the Junior Subordinated Indenture, to
all Senior Indebtedness (as defined below) of the Company. If the Company
defaults in the payment of any principal, premium, if any, or interest, if any,
or any other amount payable on any Senior Indebtedness when the same becomes
due and payable, whether at maturity or at a date fixed for redemption or by
declaration of acceleration or otherwise, upon written notice of such default
to the Company, by the holders of Senior Indebtedness, then, unless and until
such default has been cured or waived or has ceased to exist or all Senior
Indebtedness has been paid, no direct
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or indirect payment (in cash, property, securities, by setoff or otherwise) may
be made or agreed to be made on the Junior Subordinated Debentures, or in
respect of any redemption, repayment, retirement, purchase or other acquisition
of any of the Junior Subordinated Debentures.
As used herein, "Senior Indebtedness" means, whether recourse is to all or
a portion of the assets of the Company and whether or not contingent, (i) every
obligation of the Company for money borrowed; (ii) every obligation of the
Company evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of the Company with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of the Company; (iv) every obligation of the Company issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of the Company; (vi) every
obligation of the Company for claims (as defined in Section 101(4) of the
United States Bankruptcy Code of 1978, as amended) in respect of derivative
products such as interest and foreign exchange rate contracts, commodity
contracts and similar arrangements; and (vii) every obligation of the type
referred to in clauses (i) through (vi) of another person the payment of which
the Company has guaranteed or is responsible or liable, directly or indirectly,
as obligor or otherwise; without limiting the generality of the foregoing.
"Senior Indebtedness" shall not include (i) any obligations which, by their
terms, are expressly stated to rank PARI PASSU in right of payment with, or to
not be superior in right of payment to, the Junior Subordinated Debentures,
(ii) any Senior Indebtedness of the Company which when incurred and without
respect to any election under Section 111 1(b) of the United States Bankruptcy
Code of 1978, as amended, was without recourse to the Company, (iii) any Senior
Indebtedness of the Company to any of its subsidiaries, (iv) Senior
Indebtedness to any executive officer or director of the Company, or (v) any
indebtedness in respect of debt securities issued to any trust, or a trustee of
such trust, partnership or other entity affiliated with the Company that is a
financing entity of the Company in connection with the issuance of such
financing entity of securities that are similar to the Capital Securities.
In the event of (i) certain events of bankruptcy, dissolution or
liquidation of the Company or the holder of the Common Securities, (ii) any
proceeding for the liquidation, dissolution or other winding up of the Company,
voluntary or involuntary, whether or not involving insolvency or bankruptcy
proceedings, (iii) any assignment by the Company for the benefit of creditors
or (iv) any other marshalling of the assets of the Company, all Senior
Indebtedness (including any interest thereon accruing after the commencement of
any such proceedings) shall first be paid in full before any payment or
distribution, whether in cash, securities or other property, shall be made on
account of the Junior Subordinated Debentures. In such event, any payment or
distribution on account of the Junior Subordinated Debentures, whether in cash,
securities or other property, that would otherwise (but for the subordination
provisions) be payable or deliverable in respect of the Junior Subordinated
Debentures will be paid or delivered directly to the holders of Senior
Indebtedness in accordance with the priorities then existing among such holders
until all Senior Indebtedness (including any interest thereon accruing after
the commencement of any such proceedings) has been paid in full.
In the event of any such proceeding, after payment in full of all sums
owing with respect to Senior Indebtedness, the holders of Junior Subordinated
Debentures, together with the holders of any obligations of the Company ranking
on a parity with the Junior Subordinated Debentures, will be entitled to be
paid from the remaining assets of the Company the amounts at the time due and
owing on the Junior Subordinated Debentures and such other obligations before
any payment or other distribution, whether in cash, property or otherwise, will
be made on account of any capital stock or obligations of the Company ranking
junior to the Junior Subordinated Debentures and such other obligations. If any
payment or distribution on account of the Junior Subordinated Debentures of any
character or any security, whether in cash, securities or other property is
received by any holder of any Junior Subordinated Debentures in contravention
of any of the terms hereof and before all the Senior Indebtedness has been paid
in full, such payment or distribution or security will be received in trust for
the benefit of, and must be paid over or delivered and transferred to, the
holders of the Senior Indebtedness at the time outstanding in accordance with
the priorities then existing among such holders for application to the payment
of all Senior Indebtedness remaining unpaid to the extent necessary to pay all
such Senior Indebtedness in full. By reason of such subordination, in the event
of the insolvency of the Company, holders of Senior Indebtedness may receive
more, ratably, and holders of the Junior Subordinated Debentures may receive
less, ratably, than the other creditors of the Company. Such subordination will
not prevent the occurrence of any Event of Default in respect of the Junior
Subordinated Debentures.
The Junior Subordinated Indenture places no limitation on the amount of
additional Senior Indebtedness that may be incurred by the Company. The Company
expects from time to time to incur additional indebtedness constituting Senior
Indebtedness.
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INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee, other than during the occurrence and continuance of
a Debenture Event of Default, undertakes to perform only such duties as are
specifically set forth in the Junior Subordinated Indenture, is under no
obligation to exercise any of the powers vested in it by the Junior
Subordinated Indenture, and, after such Debenture Event of Default, must
exercise the same degree of care and skill as a prudent person would exercise
or use in the conduct of his or her own affairs. The Debenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Debenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
The Chase Manhattan Bank, the Debenture Trustee, may serve from time to
time as trustee under other indentures or trust agreements with the Company or
its subsidiaries relating to other issues of their securities. In addition, the
Company and certain of its affiliates may have other banking relationships with
The Chase Manhattan Bank and its affiliates.
GOVERNING LAW
The Junior Subordinated Indenture and the Junior Subordinated Debentures
will be governed by and construed in accordance with the laws of the State of
New York.
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DESCRIPTION OF GUARANTEE
The Guarantee will be executed and delivered by the Company concurrently
with the issuance of Capital Securities by the Issuer Trust for the benefit of
the holders from time to time of the Capital Securities. The Chase Manhattan
Bank will act as Guarantee Trustee under the Guarantee. This summary of certain
provisions of the Guarantee does not purport to be complete and is subject to,
and qualified in its entirety by reference to, all the provisions of the
Guarantee, including the definitions therein of certain terms. A copy of the
form of Guarantee is available upon request from the Guarantee Trustee. The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the
Capital Securities.
GENERAL
The Company will irrevocably agree to pay in full on a subordinated basis,
to the extent set forth herein, the Guarantee Payments (as defined below) to
the holders of the Capital Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer Trust may have or
assert other than the defense of payment. The following payments with respect
to the Capital Securities, to the extent not paid or made by or on behalf of
the Issuer Trust (the "Guarantee Payments"), will be subject to the Guarantee:
(i) any accumulated and unpaid Distributions required to be paid on such
Capital Securities, to the extent that the Issuer Trust has funds on hand
available therefor at such time; (ii) the Redemption Price with respect to any
Capital Securities called for redemption, to the extent that the Issuer Trust
has funds on hand available therefor at such time; and (iii) upon a voluntary
or involuntary dissolution, winding up or liquidation of the Issuer Trust
(unless the Junior Subordinated Debentures are distributed to holders of the
Capital Securities), the lesser of (a) the aggregate of the Liquidation Amount
and all accumulated and unpaid Distributions to the date of payment, to the
extent that the Issuer Trust has funds on hand available therefor at such time,
and (b) the amount of assets of the Issuer Trust remaining available for
distribution to holders of the Capital Securities on liquidation of the Issuer
Trust. The Company's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Company to the holders of the
Capital Securities or by causing the Issuer Trust to pay such amounts to such
holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis of
the Issuer Trust's obligations under the Capital Securities, but will apply
only to the extent that the Issuer Trust has funds sufficient to make such
payments, and is not a guarantee of collection.
If the Company does not make payments on the Junior Subordinated
Debentures held by the Issuer Trust, the Issuer Trust will not be able to pay
any amounts payable in respect of the Capital Securities and will not have
funds legally available therefor. The Guarantee will rank subordinate and
junior in right of payment to all Senior Indebtedness of the Company. See
" -- Status of the Guarantee." The Guarantee does not limit the incurrence or
issuance of other secured or unsecured debt of the Company, including Senior
Indebtedness, whether under the Junior Subordinated Indenture, any other
indenture that the Company may enter into in the future or otherwise.
The Company has, through the Guarantee, the Trust Agreement, the Junior
Subordinated Debentures and the Junior Subordinated Indenture, taken together,
fully, irrevocably and unconditionally guaranteed all the Issuer Trust's
obligations under the Capital Securities. No single document standing alone or
operating in conjunction with fewer than all the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Issuer Trust's obligations in respect of the Capital Securities. See
"Relationship Among the Capital Securities, the Junior Subordinated Debentures
and the Guarantee."
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior Indebtedness
of the Company in the same manner as the Junior Subordinated Debentures.
The Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). The
Guarantee will be held by the Guarantee Trustee for the benefit of the holders
of the Capital Securities. The Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Issuer
Trust or distributed to the holders of the Capital Securities of the Junior
Subordinated Debentures.
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AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely
affect the rights of holders of the Capital Securities (in which case no vote
will be required), the Guarantee may not be amended without the prior approval
of the holders of not less than a majority of the aggregate Liquidation Amount
of the Capital Securities. The manner of obtaining any such approval will be as
set forth under "Description of Capital Securities -- Voting Rights; Amendment
of Trust Agreement." All guarantees and agreements contained in the Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Company and shall inure to the benefit of the holders of the Capital
Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder, or to
perform any non-payment obligation if such non-payment default remains
unremedied for 30 days. The holders of not less than a majority in aggregate
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of the Guarantee or to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under the Guarantee.
Any registered holder of Capital Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Issuer
Trust, the Guarantee Trustee or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with
all the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after the
occurrence of an event of default with respect to the Guarantee, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by
the Guarantee at the request of any holder of the Capital Securities unless it
is offered reasonable indemnity against the costs, expenses and liabilities
that might be incurred thereby. For information concerning the relationship
between The Chase Manhattan Bank, the Guarantee Trustee, and the Company, see
"Description of Junior Subordinated Debentures -- Information Concerning the
Debenture Trustee."
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the Capital Securities, upon full
payment of the amounts payable with respect to the Capital Securities upon
liquidation of the Issuer Trust, upon distribution of Junior Subordinated
Debentures to the holders of the Capital Securities and under certain
instances, upon the exchange of the Guarantee pursuant to an exchange offer for
the Capital Securities. The Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the Capital
Securities must restore payment of any sums paid under the Capital Securities
or the Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
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RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE JUNIOR
SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Issuer Trust has funds available for such payment) are
irrevocably guaranteed by the Company as and to the extent set forth under
"Description of Guarantee." Taken together, the Company's obligations under the
Junior Subordinated Debentures, the Junior Subordinated Indenture, the Trust
Agreement and the Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the Capital Securities. No single document standing alone or operating in
conjunction with fewer than all the other documents constitutes such guarantee.
It is only the combined operation of these documents that has the effect of
providing a full, irrevocable and unconditional guarantee of the Issuer Trust's
obligations in respect of the Capital Securities. If and to the extent that the
Company does not make payments on the Junior Subordinated Debentures, the
Issuer Trust will not have sufficient funds to pay Distributions or other
amounts due on the Capital Securities. The Guarantee does not cover payment of
amounts payable with respect to the Capital Securities when the Issuer Trust
does not have sufficient funds to pay such amounts. In such event, the remedy
of a holder of the Capital Securities is to institute a legal proceeding
directly against the Company for enforcement of payment of the Company's
obligations under Junior Subordinated Debentures having a principal amount
equal to the Liquidation Amount of the Capital Securities held by such holder.
The obligations of the Company under the Junior Subordinated Debentures
and the Guarantee are subordinate and junior in right of payment to all Senior
Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments are made when due on the Junior Subordinated
Debentures, such payments will be sufficient to cover Distributions and other
payments distributable on the Capital Securities, primarily because: (i) the
aggregate principal amount of the Junior Subordinated Debentures will be equal
to the sum of the aggregate stated Liquidation Amount of the Capital Securities
and Common Securities; (ii) the interest rate and interest and other payment
dates on the Junior Subordinated Debentures will match the Distribution rate,
Distribution Dates and other payment dates for the Capital Securities; (iii)
the Company will pay for all and any costs, expenses and liabilities of the
Issuer Trust except the Issuer Trust's obligations to holders of the Trust
Securities; and (iv) the Trust Agreement further provides that the Issuer Trust
will not engage in any activity that is not consistent with the limited
purposes of the Issuer Trust.
Notwithstanding anything to the contrary in the Junior Subordinated
Indenture, the Company has the right to set-off any payment it is otherwise
required to make thereunder against and to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other person or entity. See "Description of Guarantee."
A default or event of default under any Senior Indebtedness of the Company
would not constitute a default or Event of Default in respect of the Capital
Securities. However, in the event of payment defaults under, or acceleration
of, Senior Indebtedness of the Company, the subordination provisions of the
Junior Subordinated Indenture provide that no payments may be made in respect
of the Junior Subordinated Debentures until such Senior Indebtedness has been
paid in full or any payment default thereunder has been cured or waived. See
"Description of Junior Subordinated Debentures -- Subordination."
LIMITED PURPOSE OF ISSUER TRUST
The Capital Securities represent preferred undivided beneficial interests
in the assets of the Issuer Trust, and the Issuer Trust exists for the sole
purpose of issuing its Capital Securities and Common Securities and investing
the proceeds thereof in Junior Subordinated Debentures. A principal difference
between the rights of a holder of a Capital Security and a holder of a Junior
Subordinated Debenture is that a holder of a Junior Subordinated Debenture is
entitled to receive from the Company payments on Junior Subordinated Debentures
held, while a holder of Capital Securities is entitled to receive Distributions
or other amounts distributable with respect to the Capital Securities from the
Issuer Trust (or from the Company under the Guarantee) only if and to the
extent the Issuer Trust has funds available for the payment of such
Distributions.
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RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution of the Issuer Trust, other
than any such dissolution involving the distribution of the Junior Subordinated
Debentures, after satisfaction of liabilities to creditors of the Issuer Trust
as required by applicable law, the holders of the Capital Securities will be
entitled to receive, out of assets held by the Issuer Trust, the Liquidation
Distribution in cash. See "Description of Capital Securities -- Liquidation
Distribution Upon Dissolution." Upon any voluntary or involuntary liquidation
or bankruptcy of the Company, the Issuer Trust, as registered holder of the
Junior Subordinated Debentures, would be a subordinated creditor of the
Company, subordinated and junior in right of payment to all Senior Indebtedness
as set forth in the Junior Subordinated Indenture, but entitled to receive
payment in full of all amounts payable with respect to the Junior Subordinated
Debentures before any shareholders of the Company receive payments or
distributions. Since the Company is the guarantor under the Guarantee and has
agreed under the Junior Subordinated Indenture to pay for all costs, expenses
and liabilities of the Issuer Trust (other than the Issuer Trust's obligations
to the holders of the Trust Securities), the positions of a holder of the
Capital Securities and a holder of such Junior Subordinated Debentures relative
to other creditors and to shareholders of the Company in the event of
liquidation or bankruptcy of the Company are expected to be substantially the
same.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a summary of the principal United States federal income
tax consequences of the purchase, ownership and disposition of Capital
Securities. The statements of law and legal conclusions set forth in this
summary regarding the tax consequences to the beneficial owners of Capital
Securities (the "Securityholders") represent the opinion of Hunton & Williams,
counsel to the Company. This summary does not address all tax consequences that
may be applicable to a Securityholder, nor does it address the tax consequences
to (i) persons that may be subject to special treatment under United States
federal income tax law, such as banks, insurance companies, thrift
institutions, regulated investment companies, real estate investment trusts,
tax-exempt organizations and dealers in securities or currencies, (ii) persons
that will hold Capital Securities as part of a position in a "straddle" or as
part of a "hedging," "conversion" or other integrated investment transaction
for federal income tax purposes, (iii) except with respect to the discussion
under the caption "United States Alien Securityholders," persons whose
functional currency is not the United States dollar or (iv) persons that do not
hold Capital Securities as capital assets.
This summary is based upon the Code, Treasury Regulations, IRS rulings and
pronouncements and judicial decisions now in effect, all of which are subject
to change at any time. Such changes may be applied retroactively in a manner
that could cause the tax consequences to vary substantially from the
consequences described below, possibly adversely affecting a beneficial owner
of Capital Securities. In addition, the authorities on which this summary is
based (including authorities distinguishing debt from equity) are subject to
various interpretations, and it is therefore possible that the federal income
tax treatment of the Capital Securities may differ from the treatment described
below. No ruling has been received from the IRS regarding the tax consequences
of the Capital Securities. Counsel's opinion regarding such tax consequences
represents only counsel's best legal judgment based on current authorities and
is not binding on the IRS or the courts.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF CAPITAL SECURITIES, AS WELL AS THE
EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are intended to be, in the opinion of
Hunton & Williams should be, and the Company intends to take the position that
the Junior Subordinated Debentures will be, classified for United States
federal income tax purposes as indebtedness under current law. No assurance can
be given, however, that the IRS will not challenge that position. According to
a petition recently filed in the United States Tax Court by a corporation
unrelated to the Company and the Issuer Trust, the IRS has challenged the
status as indebtedness, for United States federal income tax purposes, of
certain purported debt instruments held by entities intended to be taxable as
partnerships for United States federal income tax purposes, where those
entities, in turn, issued preferred securities to investors. Although the
overall structure of the financing arrangement involved in that case is
somewhat similar to the financing structure for the Junior Subordinated
Debentures and the Issuer Trust, the relevant facts involved in that case
appear to differ significantly from those relating to the Junior Subordinated
Debentures and the Issuer Trust. The remainder of this summary assumes that the
Junior Subordinated Debentures will be classified as indebtedness for United
States federal income tax purposes.
CLASSIFICATION OF THE ISSUER TRUST
In the opinion of Hunton & Williams, under current law and assuming
compliance with the terms of the Trust Agreement, the Issuer Trust will be
classified as a grantor trust and not as an association taxable as a
corporation for United States federal income tax purposes. As a result, each
Securityholder will be treated as owning an undivided beneficial interest in
the Junior Subordinated Debentures. Accordingly, each Securityholder will be
required to include in its gross income its PRO RATA share of the interest,
including any original issue discount ("OID"), and any other income received or
accrued with respect to the Junior Subordinated Debentures whether or not cash
is actually distributed to the Securityholders. See " -- Interest Income and
Original Issue Discount." No amount included in income with respect to the
Capital Securities will be eligible for the dividends received deduction.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under Treasury Regulations applicable to debt instruments issued after
August 12, 1996 (the "Regulations"), a "remote" contingency that stated
interest will not be timely paid will be ignored in determining whether a debt
instrument is issued
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with OID. The Company believes that the likelihood of its exercising its option
to defer payments of interest on the Junior Subordinated Debentures is remote.
Based on the foregoing, in the opinion of Hunton & Williams, the Junior
Subordinated Debentures will not be considered to be issued with OID at the
time of their original issuance and, accordingly, a Securityholder should
include in gross income such Securityholder's allocable share of interest on
the Junior Subordinated Debentures (other than any portion of the first
interest payment attributable to pre-issuance accrued interest, which a
Securityholder may treat as a reduction of the issue price of the Junior
Subordinated Debentures rather than as gross income) in accordance with such
Securityholder's method of tax accounting.
Under the Regulations, if the Company should actually exercise its option
to defer any payment of interest, the Junior Subordinated Debentures would at
that time be treated as issued with OID, and all stated interest on the Junior
Subordinated Debentures would thereafter be treated as OID so long as the
Junior Subordinated Debentures remained outstanding. In such event, all of a
Securityholder's taxable interest income with respect to the Junior
Subordinated Debentures would be accounted for as OID on an economic accrual
basis regardless of such Securityholder's method of tax accounting, and actual
payments of stated interest would not be reported as taxable income.
Consequently, a Securityholder would be required to include in gross income OID
even though the Company would not make any cash payments during an Extension
Period.
The Regulations have not been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to the interpretation herein.
MARKET DISCOUNT AND AMORTIZABLE PREMIUM
A secondary market purchaser of Capital Securities at a discount from the
principal amount (or, if the Junior Subordinated Debentures are deemed to be
issued with OID, the issue price plus accrued but unpaid OID) of the PRO RATA
share of Junior Subordinated Debentures represented by the Capital Securities
acquires such Capital Securities with "market discount" if the discount is not
less than the product of (i) 0.25% of the principal amount (or, if the Junior
Subordinated Debentures are deemed to be issued with OID, the issue price plus
accrued but unpaid OID) multiplied by (ii) the number of complete years to
maturity of the Junior Subordinated Debentures after the date of purchase. A
purchaser of Capital Securities with market discount generally will be required
to treat any gain on the sale, redemption or other disposition of all or part
of such Capital Securities as ordinary income to the extent of accrued (but not
previously taxable) market discount. Market discount generally will accrue
ratably during the period from the date of purchase to the maturity date,
unless the Securityholder elects to accrue such market discount on the basis of
a constant interest rate. A Securityholder who acquires Capital Securities at a
market discount may be required to defer some interest deductions attributable
to any indebtedness incurred or continued to purchase or carry the Capital
Securities.
A secondary market purchaser of Capital Securities at a premium over the
stated principal amount of the PRO RATA share of Junior Subordinated Debentures
(plus accrued interest) generally may elect to amortize such premium ("Section
171 premium"), under a constant yield method, as an offset to interest income
on the Junior Subordinated Debentures. If the Junior Subordinated Debentures
are deemed to be issued with OID and Capital Securities are acquired at a
premium, the premium will not be Section 171 premium but will be amortized as a
reduction in the amount of OID includable in the Securityholder's income.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF CAPITAL SECURITIES
Except as noted below, under current law a distribution by the Issuer
Trust of the Junior Subordinated Debentures as described under the caption
"Description of Capital Securities -- Liquidation Distribution Upon
Dissolution," would not be a taxable event to Securityholders for United States
federal income tax purposes; such a distribution would result in a
Securityholder receiving directly its PRO RATA share of the Junior Subordinated
Debentures previously held indirectly through the Issuer Trust, with a holding
period and aggregate tax basis equal to the holding period and aggregate tax
basis such Securityholder had in its Capital Securities before such
distribution; and a Securityholder would account for interest, market discount
and amortizable premium in respect of Junior Subordinated Debentures received
from the Issuer Trust in the manner described above under " -- Interest Income
and Original Issue Discount" and " -- Market Discount and Amortizable Premium."
If, however, the Junior Subordinated Debentures were distributed in connection
with a Tax Event that would cause the Issuer Trust to be subject to United
States federal income tax with respect to income received or accrued on the
Junior Subordinated Debentures, the distribution likely would be a taxable
event to Securityholders. In that case, Securityholders would recognize gain or
loss equal to the difference between their adjusted bases in their Capital
Securities and the fair market value of the Junior Subordinated Debentures
distributed to the Securityholders, and they would obtain new holding periods
and fair market value bases for such Junior Subordinated Debentures.
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SALE OR REDEMPTION OF CAPITAL SECURITIES
Upon a sale (including redemption) of Capital Securities, a Securityholder
will recognize gain or loss equal to the difference between its adjusted tax
basis in the Capital Securities and the amount realized on the sale of such
Capital Securities (excluding any amount attributable to any accrued interest
with respect to such Securityholder's PRO RATA share of the Junior Subordinated
Debentures not previously included in income, which will be taxable as ordinary
income). Provided that the Company does not exercise its option to defer
payment of interest on the Junior Subordinated Debentures and the Capital
Securities are not considered to be issued with OID, a Securityholder's
adjusted tax basis in the Capital Securities generally will be its initial
purchase price, increased by any market discount included in income and reduced
by any amortized Section 171 premium for such Capital Securities. If the Junior
Subordinated Debentures are deemed to be issued with OID as a result of the
Company's deferral of any interest payment, a Securityholder's tax basis in the
Capital Securities generally will be increased by OID previously includable in
such Securityholder's gross income to the date of disposition and decreased by
distributions or other payments received on the Capital Securities since and
including the commencement date of the first Extension Period. Such gain or
loss, except to the extent of any accrued market discount, generally will be a
capital gain or loss and generally will be a long-term capital gain or loss if
the Capital Securities have been held for more than one year.
Should the Company exercise its option to defer any payment of interest on
the Junior Subordinated Debentures, the Capital Securities may trade at a price
that does not accurately reflect the value of accrued but unpaid interest with
respect to the underlying Junior Subordinated Debentures. As a result, and
because a Securityholder will be required to include in income accrued but
unpaid interest on Junior Subordinated Debentures and to add such amount to its
adjusted tax basis, such Securityholder may recognize a capital loss on a sale
of Capital Securities during an Extension Period. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest paid and any OID accrued with respect to the
Capital Securities to Securityholders (other than corporations and other exempt
Securityholders) will be reported to the IRS. It is expected that such income
on the Capital Securities will be reported to Securityholders on Form 1099 and
mailed to Securityholders by January 31 following each calendar year. "Backup"
withholding at a rate of 31% will apply to payments of interest and payments of
disposition (including redemption) proceeds to a non-exempt Securityholder
unless the Securityholder furnishes to the payor its taxpayer identification
number, certifies that such number is correct, and meets certain other
conditions. Any amounts withheld from a Securityholder under the backup
withholding rules will be allowable as a refund or a credit against such
Securityholder's United States federal income tax liability.
UNITED STATES ALIEN SECURITYHOLDERS
For purposes of this discussion, a United States Alien Securityholder is
any corporation, individual, partnership, estate or trust that for United
States federal income tax purposes is a foreign corporation, non-resident alien
individual, foreign partnership, foreign estate or foreign trust. This
discussion assumes that income with respect to the Capital Securities is not
effectively connected with a trade or business in the United States in which
the United States Alien Securityholder is engaged.
Under current United States federal income tax law:
(i) payments by the Issuer Trust or any of its paying agents to any
holder of Capital Securities that is a United States Alien Securityholder
generally will not be subject to withholding or other United States federal
income tax, provided that, in the case of payments with respect to interest
(including OID), (a) the beneficial owner of the Capital Securities does
not actually or constructively own 10% or more of the total combined voting
power of all classes of stock of the Company entitled to vote, (b) the
beneficial owner of the Capital Securities is not a controlled foreign
corporation that is related to the Company through stock ownership, and (c)
either (A) the beneficial owner of the Capital Securities certifies to the
Issuer Trust or its agent, under penalties of perjury, that it is a United
States Alien Securityholder and provides its name and address or (B) a
securities clearing organization, bank or other financial institution that
holds customers' securities in the ordinary course of its trade or business
(a "Financial Institution") and holds the Capital Securities in such
capacity certifies to the Issuer Trust or its agent under penalties of
perjury that such statement has been received from the beneficial owner by
it or by a Financial Institution between it and the beneficial owner and
furnishes the Issuer Trust or its agent with a copy thereof; and
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(ii) a United States Alien Securityholder of Capital Securities generally
will not be subject to withholding or other United States federal income
tax on any gain realized upon the sale or other disposition of Capital
Securities.
POSSIBLE TAX LAW CHANGES
In both 1996 and 1997, the Clinton Administration proposed to amend the
Code to deny deductions of interest and OID on instruments with features
similar to those of the Junior Subordinated Debentures when issued under
arrangements similar to the Issuer Trust. That proposal was not passed by, and
is not currently pending before, Congress. There can be no assurance, however,
that future legislative proposals, future regulations or official
administrative pronouncements, or future judicial decisions will not affect the
ability of the Company to deduct interest on the Junior Subordinated
Debentures. Such a change could give rise to a Tax Event, which may permit the
Company, upon approval of the Federal Reserve if then required under applicable
capital guidelines or policies of the Federal Reserve, to cause a redemption of
the Capital Securities, as described more fully under "Description of Capital
Securities -- Redemption."
CERTAIN ERISA CONSIDERATIONS
Before authorizing an investment in the Capital Securities, fiduciaries of
pension, profit sharing or other employee benefit plans subject to ERISA or
Section 4975 of the Code ("Plans") should consider, among other matters, (a)
ERISA's fiduciary standards (including its prudence and diversification
requirements), (b) whether such fiduciaries have authority to make such
investment in the Capital Securities under the applicable Plan investment
policies and governing instruments, and (c) rules under ERISA and the Code that
prohibit Plan fiduciaries from causing a Plan to engage in a "prohibited
transaction."
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well
as individual retirement accounts and Keogh plans subject to Section 4975 of
the Code (also "Plans"), from, among other things, engaging in certain
transactions involving "plan assets" with persons who are "parties in interest"
under ERISA or "disqualified persons" under the Code ("Parties in Interest")
with respect to such Plan. A violation of these "prohibited transaction" rules
may result in an excise tax or other liabilities under ERISA and/or Section
4975 of the Code for such persons, unless exemptive relief is available under
an applicable statutory or administrative exemption. Employee benefit plans
that are governmental plans (as defined in Section 3(32) of ERISA), certain
church plans (as defined in Section 3(33) of ERISA) and foreign plans (as
described in Section 4(b)(4) of ERISA) are not subject to the requirements of
ERISA or Section 4975 of the Code.
The Department of Labor (the "DOL") has issued a regulation (29 C.F.R.
2510.3-101) (the "Plan Assets Regulation") concerning the definition of what
constitutes the assets of a Plan. The Plan Assets Regulation provides that, as
a general rule, the underlying assets and properties of corporations,
partnerships, trusts and certain other entities in which a Plan makes an
"equity" investment will be deemed, for purposes of ERISA, to be assets of the
investing Plan unless certain exceptions apply.
Pursuant to an exception contained in the Plan Assets Regulation, the
assets of the Issuer Trust would not be deemed to be "plan assets" of investing
Plans if, immediately after the most recent acquisition of any equity interest
in the Issuer Trust, less than 25% of the value of each class of equity
interests in the Issuer Trust were held by Plans, other employee benefit plans
not subject to ERISA or Section 4975 of the Code (such as governmental, church
and foreign plans), individual retirement accounts, Keogh plans and entities
holding assets deemed to be "plan assets" of any Plan (collectively, "Benefit
Plan Investors"). No assurance can be given that the value of the Capital
Securities held by Benefit Plan Investors will be less than 25% of the total
value of such Capital Securities at the completion of the initial offering or
thereafter, and no monitoring or other measures will be taken with respect to
the satisfaction of the conditions to this exception. All the Common Securities
will be purchased and held directly by the Company.
Under another exception contained in the Plan Assets Regulation, if the
New Capital Securities received as a result of an Exchange Offer were to
qualify as "publicly offered securities" under the Plan Assets Regulation, the
assets of the Issuer Trust would not be deemed to be "plan assets" by reason of
a Plan's acquisition or holding of such securities. The New Capital Securities
would qualify as "publicly offered securities" if, among other things, they are
offered pursuant to an effective registration statement, are owned by 100 or
more investors independent of the issuer and each other at the time of the
offering, and are subsequently registered under the Exchange Act. It is
expected that the 100 investor requirement will not be satisfied and that the
New Capital Securities will not be registered under the Exchange Act.
There can be no assurance that any of the exceptions set forth in the Plan
Assets Regulation will apply to the purchase of Capital Securities offered
hereby and, as a result, an investing Plan's assets could be considered to
include an undivided
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interest in the Junior Subordinated Debentures held by the Issuer Trust. In the
event that assets of the Issuer Trust are considered assets of an investing
Plan, the Trustees, the Company and/or other persons, in providing services
with respect to the Junior Subordinated Debentures, could be considered
fiduciaries to such Plan and subject to the fiduciary responsibility provisions
of Title I of ERISA. In addition, certain transactions involving the Issuer
Trust and/or the Capital Securities could be deemed to constitute direct or
indirect prohibited transactions under ERISA and Section 4975 of the Code with
respect to a Plan. For example, if the Company is a Party in Interest with
respect to an investing Plan (either directly or by reason of its ownership of
City National or other subsidiaries), extensions of credit between the Company
and the Issuer Trust (as represented by the Junior Subordinated Debentures and
the Guarantee) would likely be prohibited by Section 406(a)(1)(B) of ERISA and
Section 4975(c)(1)(B) of the Code.
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief for direct or indirect prohibited
transactions resulting from the purchase or holding of the Capital Securities,
assuming that assets of the Issuer Trust were deemed to be "plan assets" of
Plans investing in the Issuer Trust (see above). Those class exemptions are
PTCE 96-23 (for certain transactions determined by in-house asset managers),
PTCE 91-38 (for certain transactions involving bank collective investment
funds), PTCE 95-60 (for certain transactions involving insurance company
general accounts), PTCE 90-1 (for certain transactions involving insurance
company pooled separate accounts), and PTCE 84-14 (for certain transactions
determined by independent qualified asset managers).
Because of ERISA's prohibitions and those of Section 4975 of the Code, the
Capital Securities may not be purchased or held by any Plan, any entity whose
underlying assets include "plan assets" by reason of any Plan's investment in
the entity (a "Plan Asset Entity") or any other person investing "plan assets"
of any Plan, unless such purchase or holding is covered by the exemptive relief
provided by PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable
exemption. If a purchaser or holder of the Capital Securities that is a Plan or
a Plan Asset Entity elects to rely on an exemption other than PTCE 96-23,
95-60, 91-38, 90-1 or 84-14, the Company and the Issuer Trust may require a
satisfactory opinion of counsel or other evidence with respect to the
availability of such exemption for such purchase and holding. Any purchaser or
holder of the Capital Securities that is a Plan or a Plan Asset Entity or that
is purchasing such securities on behalf of or with "plan assets" will be deemed
to have represented by its purchase and holding thereof that (a) the purchase
and holding of the Capital Securities is covered by the exemptive relief
provided by PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable
exemption, (b) the Company and the Administrators are not "fiduciaries," within
the meaning of Section 3(21) of ERISA and the regulations thereunder, with
respect to such person's interest in the Capital Securities or the Junior
Subordinated Debentures, and (c) in purchasing the Capital Securities, such
person approves the purchase of the Junior Subordinated Debentures and the
appointment of the Issuer Trustees.
Any plans or other entities whose assets include Plan assets subject to
ERISA or Section 4975 of the Code proposing to acquire Capital Securities
should consult with their own counsel.
Governmental Plans and certain church plans are not subject to ERISA, and
are also not subject to the prohibited transaction provisions of Section 4975
of the Code. However, state laws or regulations governing the investment and
management of the assets of such plans may contain fiduciary and prohibited
transaction provisions similar to those under ERISA and the Code discussed
above. Accordingly, fiduciaries of governmental and church plans, in
consultation with their advisers, should consider the impact of their
respective state laws on investments in the Capital Securities and the
considerations discussed above to the extent applicable.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company and the Issuer Trust have agreed that the Issuer Trust
will sell 2,000,000 Capital Securities to Wheat First Union, a division of
Wheat First Securities, Inc., and Friedman, Billings, Ramsey & Co., Inc. (the
"Underwriters"), and the Underwriters have agreed to purchase that number of
Capital Securities from the Issuer Trust.
Under the terms and conditions set forth in the Underwriting Agreement,
the Underwriters are committed to take and pay for all such Capital Securities
offered hereby, if any are taken.
The Underwriters propose to offer the Capital Securities in part directly
to the public at the initial public offering price set forth on the cover page
of this Prospectus and in part to certain securities dealers at such price less
a concession of $ per Capital Security. After the Capital Securities are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the Underwriters. The Underwriters may allow,
and such dealers may re-allow, a concession not to exceed $ per Capital
Security to certain brokers or dealers.
56
<PAGE>
The Company and the Issuer Trust have granted to the Underwriters an
option, exercisable at any time (but not more than once) within 30 days after
the first date that any of the Capital Securities are released by the
Underwriters for sale to the public, to purchase up to an additional $7,500,000
aggregate Liquidation Amount of Capital Securities (300,000 Capital Securities)
at the public offering price, less the underwriting discounts and commissions
set forth on the cover page of this Prospectus, plus accumulated distributions,
if any, from , 1998. To the extent that the Underwriters exercise such
option, the Issuer Trust will be obligated, pursuant to the option, to sell
such additional Capital Securities to the Underwriters. The Underwriters may
exercise such option only to cover over-allotments made in connection with the
sale of Capital Securities offered hereby. If purchased, the Underwriters will
offer such additional Capital Securities on the same terms as those on which
the $50,000,000 aggregate Liquidation Amount of the Capital Securities are
being offered.
In connection with the offering of the Capital Securities, the
Underwriters and any selling group members and their respective affiliates may
engage in transactions effected in accordance with Rule 104 of the Commission's
Regulation M that are intended to stabilize, maintain or otherwise affect the
market price of the Capital Securities. Such transactions may include
over-allotment transactions in which the Underwriters create a short position
for their own accounts by selling more Capital Securities than they are
committed to purchase from the Issuer Trust. In such a case, to cover all or
part of the short position, the Underwriters may exercise any over-allotment
option or may purchase Capital Securities in the open market following
completion of the initial offering of Capital Securities. The Underwriters also
may engage in stabilizing transactions in which they bid for, and purchase,
shares of the Capital Securities at a level above that which might otherwise
prevail in the open market for the purpose of preventing or retarding a decline
in the market price of the Capital Securities. The Underwriters also may
reclaim any selling concessions allowed to a dealer if the Underwriters
repurchase shares distributed by that dealer. Any of the foregoing transactions
may result in the maintenance of a price for the Capital Securities at a level
above that which might otherwise prevail in the open market. Neither the
Company nor the Underwriters make any representation or prediction as to the
direction or magnitude of any effect that the transactions described above may
have on the price of the Capital Securities. The Underwriters are not required
to engage in any of the foregoing transactions and, if commenced, such
transactions may be discontinued at any time without notice.
In view of the fact that the proceeds from the sale of the Capital
Securities will be used to purchase the Junior Subordinated Debentures issued
by the Company, the Underwriting Agreement provides that the Company will pay
as Underwriters' compensation for the Underwriters arranging the investment
therein of such proceeds an amount of $ per Capital Security for the accounts
of the Underwriters.
The Company and the Issuer Trust have agreed that, during the period
beginning from the date of the Underwriting Agreement and continuing to and
including 180 days following the Closing Date, they will not offer, sell,
contract to sell or otherwise dispose of any additional securities of the
Issuer Trust or the Company substantially similar to the Capital Securities or
any securities convertible into or exchangeable for or that represent the right
to receive any such similar securities, without the consent of the Underwriter,
which consent shall not be unreasonably withheld.
Prior to this offering, there has been no public market for the Capital
Securities. The Capital Securities have been approved for quotation on the
Nasdaq NMS, subject to notice of issuance, under the symbol "CHCOP." However, no
assurance can be given as to the liquidity of or the existence of the trading
market for the Capital Securities.
The Company and the Issuer Trust have agreed to indemnify the Underwriter
against certain liabilities, including liabilities under the Securities Act of
1933, as amended.
The Underwriters or their affiliates have provided from time to time, and
expect to provide in the future, investment or commercial banking services to
the Company and its affiliates, for which the Underwriters or their affiliates
have received or will receive customary fees and commissions.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Capital
Securities, the enforceability of the Trust Agreement and the creation of the
Issuer Trust will be passed upon by Richards, Layton & Finger, P.A., special
Delaware counsel to the Company and the Issuer Trust. The validity of the
Guarantee and the Junior Subordinated Debentures will be passed upon for the
Company by Hunton & Williams, counsel to the Company, and for the Underwriters
by Alston & Bird LLP, Washington, D.C., counsel to the Underwriters. Hunton &
Williams and Alston & Bird LLP will rely as to certain matters of Delaware law
on the opinion of Richards, Layton & Finger, P.A. and Alston & Bird LLP will
rely as to certain matters of West Virginia law on the opinion of Hunton &
Williams.
57
<PAGE>
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, have been audited by Ernst & Young, LLP, independent
auditors, as set forth in their report thereon, incorporated by reference
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Horizon incorporated by reference
in Horizon's Annual Report on Form 10-K for the fiscal year ended December 31,
1997 and included in the Company's Current Report on Form 8-K filed on
September 14, 1998, have been audited by Ernst & Young, LLP, independent
auditors, as set forth in their report thereon, included therein and
incorporated herein by reference, which as to 1995 are based in part on the
report of Diamond, Leftwich, Goheen & Dunn, P.L.L.C. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of said firms as experts in accounting and
auditing.
58
<PAGE>
(This Page Intentionally Left Blank)
<PAGE>
INDEX TO FINANCIAL INFORMATION
Pro Forma Balance Sheet - City Holding Company
and Horizon Bancorp, Inc. as of June 30, 1998 ..................... F-3
Pro Forma Balance Sheet - City Holding Company
and Horizon Bancorp, Inc. as of June 30, 1997 ..................... F-4
Pro Forma Balance Sheet - City Holding Company
and Horizon Bancorp, Inc. as of December 31, 1997 ................. F-5
Pro Forma Balance Sheet - City Holding Company
and Horizon Bancorp, Inc. as of December 31, 1996 ................. F-6
Pro Forma Statement of Income - City Holding Company
and Horizon Bancorp, Inc. for the six months ended June 30, 1998 .. F-7
Pro Forma Statement of Income - City Holding Company
and Horizon Bancorp, Inc. for the six months ended June 30, 1997 .. F-8
Pro Forma Statement of Income - City Holding Company
and Horizon Bancorp, Inc. for the year ended December 31, 1997 .... F-9
Pro Forma Statement of Income - City Holding Company
and Horizon Bancorp, Inc. for the year ended December 31, 1996 .... F-10
Pro Forma Statement of Income - City Holding Company
and Horizon Bancorp, Inc. for the year ended December 31, 1995 .... F-11
F-1
<PAGE>
UNAUDITED PRO FORMA CONDENSED
FINANCIAL INFORMATION
The following Unaudited Pro Forma Condensed Balance Sheets as of June 30,
1998 and 1997 and December 31, 1997 and 1996 combine the historical consolidated
balance sheets of the Company and Horizon as if the merger with Horizon (the
"Merger") had been in effect on the dates indicated. The Company's historical
financial statements are incorporated by reference from its Annual Report on
Form 10-K for each of the three years in the period ended December 31, 1997 as
filed with the Commission on March 16, 1998. In addition, the Company's
historical interim financial statements for the six months ended June 30, 1998
are incorporated by reference from its Form 10-Q as filed with the Commission on
August 14, 1998. Horizon's historical financial statements are incorporated by
reference from the Company's current report on Form 8-K, as filed with the
Commission on September 14, 1998. The unaudited pro forma condensed financial
information should be read in conjunction with the historical financial
statements of the Company and Horizon.
The Unaudited Pro Forma Condensed Statements of Income for the six months
ended June 30, 1998 and 1997 and the years ended December 31, 1997, 1996 and
1995 present the combined results of operations of the Company and Horizon as if
the Merger had been in effect on the dates indicated.
The unaudited pro forma condensed financial information reflect the
application of the pooling of interests method of accounting for the Merger.
Under this method of accounting, the recorded assets, liabilities, shareholders'
equity, income and expenses of the Company and Horizon are combined and
reflected at their historical amounts.
The Company expects to achieve certain benefits from the Merger in the form
of operating cost savings that may be significant. The pro forma earnings, which
do not reflect any direct costs or potential savings that are expected to result
from the consolidation of operations of the Company and Horizon, may not be
indicative of the results of future operations. No assurance can be given with
respect to the ultimate level of expense savings.
On March 31, 1998, the Company sold $30,000,000 of Corporation-obligated
Manditorily Redeemable Capital Securities of a subsidiary trust that holds only
subordinated debentures of the Company ("Trust Preferred Securities"). Pro forma
amounts, assuming that the Trust Preferred Securities had been outstanding
during all periods presented herein and the Company had incurred the expense of
and realized the income from the proceeds of such securities, would not be
materially different from those presented herein.
F-2
<PAGE>
PRO FORMA BALANCE SHEET - CITY HOLDING COMPANY AND HORIZON BANCORP, INC.
AS OF JUNE 30, 1998 (IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
CITY HOLDING HORIZON BANCORP ADJUSTMENTS AND PRO FORMA
AS REPORTED AS REPORTED ELIMINATIONS COMBINED
--------------- ----------------- ------------------------ ---------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from bank ............................ $ 62,111 $ 25,721 $ $ $ 87,832
Federal funds sold ................................ 570 12,265 12,835
----------- ----------- ---------- ---------- -----------
CASH AND CASH EQUIVALENTS ......................... 62,681 37,986 100,667
Securities available for sale ..................... 166,994 168,593 335,587
Investment securities ............................. 40,430 40,430
Loans:
Gross loans ...................................... 936,161 764,244 1,700,405
Unearned income .................................. (6,889) (4,328) (11,217)
Allowance for loan losses ........................ (8,680) (9,784) (18,464)
----------- ----------- ----------- ---------- -----------
NET LOANS ......................................... 920,592 750,132 1,670,724
Loans held for sale ............................... 194,959 0 194,959
Bank premises and equipment ....................... 50,371 16,732 67,103
Accrued interest receivable ....................... 10,292 9,305 19,597
Other assets ...................................... 95,611 17,329 112,940
----------- ----------- ----------- ---------- -----------
TOTAL ASSETS ...................................... $ 1,501,500 $ 1,040,507 $ $ $ 2,542,007
=========== =========== ========= ======== ===========
LIABILITIES
Deposits:
Non-interest bearing ............................. $ 174,707 $ 120,301 $ $ $ 295,008
Interest bearing ................................. 957,002 741,205 1,698,207
----------- ----------- ----------- ---------- -----------
TOTAL DEPOSITS .................................... 1,131,709 861,506 1,993,215
Short-term borrowings ............................. 111,974 43,704 155,678
Long-term debt .................................... 81,295 5,972 87,267
Corporation-obligated mandatorily redeemable
capital securities of subsidiary trust holding
solely subordinated debentures of City
Holding Company ("Trust Preferred
Securities") ..................................... 30,000 0 30,000
Other liabilities ................................. 20,414 13,413 33,827
----------- ----------- ------------- ----------- -----------
TOTAL LIABILITIES ................................. 1,375,392 924,595 2,299,987
STOCKHOLDERS' EQUITY
Common stock ...................................... 16,874 9,312 25,864 (9,312) 42,738
Capital surplus ................................... 63,734 19,814 (30,916) 9,312 61,944
Retained earnings ................................. 44,280 90,616 134,896
Cost of common stock in treasury .................. (591) (5,052) 5,052 (591)
Accumulated other comprehensive income ............ 1,811 1,222 3,033
----------- ----------- ----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY ........................ 126,108 115,912 242,020
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ............................. $ 1,501,500 $ 1,040,507 $ $ $ 2,542,007
=========== =========== ========= ======== ===========
</TABLE>
F-3
<PAGE>
PRO FORMA BALANCE SHEET - CITY HOLDING COMPANY AND HORIZON BANCORP, INC.
AS OF JUNE 30, 1997 (IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
CITY HOLDING HORIZON BANCORP ADJUSTMENTS AND PRO FORMA
AS REPORTED AS REPORTED ELIMINATIONS COMBINED
--------------- ----------------- ------------------------ ---------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from bank ..................... $ 45,011 $ 35,990 $ $ $ 81,001
Federal funds sold ......................... 532 980 1,512
----------- --------- -------- --------- -----------
CASH AND CASH EQUIVALENTS .................. 45,543 36,970 82,513
Securities available for sale .............. 182,393 184,062 366,455
Investment securities ...................... 41,898 41,898
Loans:
Gross loans ............................... 768,553 671,307 1,439,860
Unearned income ........................... (8,150) (6,151) (14,301)
Allowance for loan losses ................. (7,864) (10,756) (18,620)
----------- --------- --------- ---------- -----------
NET LOANS .................................. 752,539 654,400 1,406,939
Loans held for sale ........................ 110,342 0 110,342
Bank premises and equipment ................ 30,848 16,627 47,475
Accrued interest receivable ................ 8,317 8,615 16,932
Other assets ............................... 17,702 12,129 29,831
----------- --------- --------- ----------- -----------
TOTAL ASSETS ............................... $ 1,147,684 $ 954,701 $ $ $ 2,102,385
=========== ========= ========= ======== ===========
LIABILITIES
Deposits:
Non-interest bearing ...................... $ 138,037 $ 121,503 $ $ $ 259,540
Interest bearing .......................... 763,050 679,852 1,442,902
----------- --------- --------- ------------ -----------
TOTAL DEPOSITS ............................. 901,087 801,355 1,702,442
Short-term borrowings ...................... 101,832 28,659 130,491
Long-term debt ............................. 39,400 0 39,400
Other liabilities .......................... 17,882 12,805 30,687
----------- --------- --------- ------------ -----------
TOTAL LIABILITIES .......................... 1,060,201 842,819 1,903,020
STOCKHOLDERS' EQUITY
Common stock ............................... 15,207 9,309 25,856 (9,309) 41,063
Capital surplus ............................ 35,795 19,768 (26,950) 9,309 37,922
Retained earnings .......................... 36,214 83,474 119,688
Cost of common stock in treasury ........... (310) (1,094) 1,094 (310)
Accumulated other comprehensive income ..... 577 425 1,002
----------- --------- ---------- ------------ -----------
TOTAL STOCKHOLDERS' EQUITY ................. 87,483 111,882 199,365
----------- --------- ---------- ------------ -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ...................... $ 1,147,684 $ 954,701 $ $ $ 2,102,385
=========== ========= ========= ======== ===========
</TABLE>
F-4
<PAGE>
PRO FORMA BALANCE SHEET - CITY HOLDING COMPANY AND HORIZON BANCORP, INC.
AS OF DECEMBER 31, 1997 (IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
CITY HOLDING HORIZON BANCORP ADJUSTMENTS AND PRO FORMA
AS REPORTED AS REPORTED ELIMINATIONS COMBINED
-------------- ----------------- ------------------------ ---------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from bank ..................... $ 47,207 $ 31,262 $ $ $ 78,469
Federal funds sold ......................... 40,028 14,035 54,063
---------- ----------- --------- --------- -----------
CASH AND CASH EQUIVALENTS .................. 87,235 45,297 132,532
Securities available for sale .............. 162,912 173,864 336,776
Investment securities ...................... 41,554 41,554
Loans:
Gross loans ............................... 787,716 734,145 1,521,861
Unearned income ........................... (7,354) (5,906) (13,260)
Allowance for loan losses ................. (7,673) (10,517) (18,190)
---------- ----------- --------- ---------- -----------
NET LOANS .................................. 772,689 717,722 1,490,411
Loans held for sale ........................ 134,990 0 134,990
Bank premises and equipment ................ 36,635 17,123 53,758
Accrued interest receivable ................ 8,677 8,876 17,553
Other assets ............................... 63,005 15,845 78,850
---------- ----------- --------- ----------- -----------
TOTAL ASSETS ............................... $1,266,143 $ 1,020,281 $ $ $ 2,286,424
========== =========== ========= ======== ===========
LIABILITIES
Deposits:
Non-interest bearing ...................... $ 136,842 $ 113,415 $ $ $ 250,257
Interest bearing .......................... 801,656 727,892 1,529,548
---------- ----------- --------- ----------- -----------
TOTAL DEPOSITS ............................. 938,498 841,307 1,779,805
Short-term borrowings ...................... 130,191 42,642 172,833
Long-term debt ............................. 68,400 7,102 75,502
Other liabilities .......................... 22,799 15,208 38,007
---------- ----------- --------- ----------- -----------
TOTAL LIABILITIES .......................... 1,159,888 906,259 2,066,147
STOCKHOLDERS' EQUITY
Common stock ............................... 16,067 9,310 25,859 (9,310) 41,926
Capital surplus ............................ 48,769 19,784 (28,797) 9,310 49,066
Retained earnings .......................... 40,374 86,768 127,142
Cost of common stock in treasury ........... (310) (2,938) 2,938 (310)
Accumulated other comprehensive income ..... 1,355 1,098 2,453
---------- ----------- ---------- ------------ -----------
TOTAL STOCKHOLDERS' EQUITY ................. 106,255 114,022 220,277
---------- ----------- ---------- ------------ -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ....................... $1,266,143 $ 1,020,281 $ $ $ 2,286,424
========== =========== ========= ======== ===========
</TABLE>
F-5
<PAGE>
PRO FORMA BALANCE SHEET - CITY HOLDING COMPANY AND HORIZON BANCORP, INC.
AS OF DECEMBER 31, 1996 (IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
CITY HOLDING HORIZON BANCORP ADJUSTMENTS AND PRO FORMA
AS REPORTED AS REPORTED ELIMINATIONS COMBINED
-------------- ----------------- ------------------------ ---------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from bank ..................... $ 47,351 $ 36,503 $ $ $ 83,854
Federal funds sold ......................... 413 2,455 2,868
---------- --------- -------- -------- -----------
CASH AND CASH EQUIVALENTS .................. 47,764 38,958 86,722
Securities available for sale .............. 122,944 205,923 328,867
Investment securities ...................... 40,978 42,741 83,719
Loans:
Gross loans ............................... 704,775 640,352 1,345,127
Unearned income ........................... (6,793) (6,368) (13,161)
Allowance for loan losses ................. (7,281) (9,607) (16,888)
---------- --------- -------- -------- -----------
NET LOANS .................................. 690,701 624,377 1,315,078
Loans held for sale ........................ 92,472 0 92,472
Bank premises and equipment ................ 30,025 16,580 46,605
Accrued interest receivable ................ 7,510 7,940 15,450
Other assets ............................... 16,416 10,549 26,965
---------- --------- -------- -------- -----------
TOTAL ASSETS ............................... $1,048,810 $ 947,068 $ $ $ 1,995,878
========== ========= ========= ======== ===========
LIABILITIES
Deposits:
Non-interest bearing ...................... $ 118,976 $ 119,831 $ $ $ 238,807
Interest bearing .......................... 709,694 678,165 1,387,859
---------- --------- -------- -------- -----------
TOTAL DEPOSITS ............................. 828,670 797,996 1,626,666
Short-term borrowings ...................... 90,298 29,154 119,452
Long-term debt ............................. 34,250 0 34,250
Other liabilities .......................... 16,219 10,507 26,726
---------- --------- -------- -------- -----------
TOTAL LIABILITIES .......................... 969,437 837,657 1,807,094
STOCKHOLDERS' EQUITY
Common stock ............................... 13,998 9,308 25,853 (9,308) 39,851
Capital surplus ............................ 35,426 19,757 (26,028) 9,308 38,463
Retained earnings .......................... 30,246 79,876 110,122
Cost of common stock in treasury ........... (300) (175) 175 (300)
Accumulated other comprehensive income ..... 3 645 648
---------- --------- ---------- --------- -----------
TOTAL STOCKHOLDERS' EQUITY ................. 79,373 109,411 188,784
---------- --------- ---------- --------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ....................... $1,048,810 $ 947,068 $ $ $ 1,995,878
========== ========= ========= ======== ===========
</TABLE>
F-6
<PAGE>
PRO FORMA STATEMENT OF INCOME - CITY HOLDING COMPANY AND HORIZON BANCORP, INC.
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
CITY HOLDING HORIZON BANCORP PRO FORMA
AS REPORTED AS REPORTED COMBINED
-------------- ----------------- --------------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans .......................... $ 48,982 $ 33,936 $ 82,918
Interest on investment securities:
Taxable ............................................ 4,133 4,804 8,937
Tax-exempt ......................................... 828 1,581 2,409
Other interest income ............................... 783 707 1,490
--------- -------- --------
TOTAL INTEREST INCOME ............................... 54,726 41,028 95,754
INTEREST EXPENSE ....................................
Interest on deposits ................................ 19,374 16,885 36,259
Interest on short-term borrowings ................... 3,475 1,086 4,561
Interest on long-term debt .......................... 3,409 0 3,409
--------- -------- --------
TOTAL INTEREST EXPENSE .............................. 26,258 17,971 44,229
--------- -------- --------
NET INTEREST INCOME ................................. 28,468 23,057 51,525
PROVISION FOR POSSIBLE LOAN LOSSES .................. 1,201 1,266 2,467
--------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR POSSIBLE LOAN
LOSSES .............................................. 27,267 21,791 49,058
OTHER INCOME
Investment securities gains (losses) ................ 16 (22) (6)
Service charges ..................................... 2,392 2,149 4,541
Mortgage loan servicing fees ........................ 8,009 0 8,009
Net origination fees on junior lien mo rtgages ...... 6,217 0 6,217
Gain on sale of loans ............................... 7,333 0 7,333
Other income ........................................ 8,029 1,212 9,241
--------- -------- ---------
TOTAL OTHER INCOME .................................. 31,996 3,339 35,335
OTHER EXPENSES
Salaries and employee benefits ...................... 19,402 6,470 25,872
Occupancy, excluding depreciation ................... 2,644 853 3,497
Depreciation ........................................ 3,661 1,364 5,025
Advertising ......................................... 9,119 162 9,281
Other expenses ...................................... 14,375 5,117 19,492
--------- -------- ---------
TOTAL OTHER EXPENSES ................................ 49,201 13,966 63,167
--------- -------- ---------
INCOME BEFORE INCOME TAXES .......................... 10,062 11,164 21,226
INCOME TAXES ........................................ 3,650 3,840 7,490
--------- -------- ---------
NET INCOME .......................................... $ 6,412 $ 7,324 $ 13,736
========= ======== =========
Basic earnings per common share ..................... $ 0.97 $ 0.80 $ 0.82
Diluted earnings per common share ................... $ 0.96 $ 0.80 $ 0.81
Average common shares outstanding:
Basic .............................................. 6,589 10,171 16,760
Diluted ............................................ 6,640 10,226 16,866
</TABLE>
F-7
<PAGE>
PRO FORMA STATEMENT OF INCOME - CITY HOLDING COMPANY AND HORIZON BANCORP, INC.
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
CITY HOLDING HORIZON BANCORP PRO FORMA
AS REPORTED AS REPORTED COMBINED
-------------- ----------------- ------------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans ...................... $ 40,563 $ 29,525 $ 70,088
Interest on investment securities:
Taxable ........................................ 4,456 5,696 10,152
Tax-exempt ..................................... 974 1,615 2,589
Other interest income ........................... 59 114 173
--------- -------- --------
TOTAL INTEREST INCOME ........................... 46,052 36,950 83,002
INTEREST EXPENSE
Interest on deposits ............................ 15,851 14,248 30,099
Interest on short-term borrowings ............... 3,479 477 3,956
Interest on long-term debt ...................... 1,252 0 1,252
--------- -------- --------
TOTAL INTEREST EXPENSE .......................... 20,582 14,725 35,307
--------- -------- --------
NET INTEREST INCOME ............................. 25,470 22,225 47,695
PROVISION FOR POSSIBLE LOAN LOSSES .............. 828 1,100 1,928
--------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR POSSIBLE
LOAN LOSSES ..................................... 24,642 21,125 45,767
OTHER INCOME
Investment securities gains (losses) ............ 11 (36) (25)
Service charges ................................. 2,086 1,864 3,950
Mortgage loan servicing fees .................... 5,352 0 5,352
Gain on sale of loans ........................... 993 0 993
Other income .................................... 1,457 934 2,391
--------- -------- --------
TOTAL OTHER INCOME .............................. 9,899 2,762 12,661
OTHER EXPENSES
Salaries and employee benefits .................. 13,991 6,304 20,295
Occupancy, excluding depreciation ............... 1,753 925 2,678
Depreciation .................................... 2,253 1,128 3,381
Advertising ..................................... 724 294 1,018
Other expenses .................................. 6,471 4,802 11,273
--------- -------- --------
TOTAL OTHER EXPENSES ............................ 25,192 13,453 38,645
--------- -------- --------
INCOME BEFORE INCOME TAXES ...................... 9,349 10,434 19,783
INCOME TAXES .................................... 3,345 3,680 7,025
--------- -------- --------
NET INCOME ...................................... $ 6,004 $ 6,754 $ 12,758
========= ======== ========
Basic earnings per common share ................. $ 0.99 $ 0.73 $ 0.78
Diluted earnings per common share ............... $ 0.99 $ 0.73 $ 0.78
Average common shares outstanding:
Basic .......................................... 6,069 10,313 16,382
Diluted ........................................ 6,080 10,333 16,413
</TABLE>
F-8
<PAGE>
PRO FORMA STATEMENT OF INCOME - CITY HOLDING COMPANY AND HORIZON BANCORP, INC.
FOR THE YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
CITY HOLDING HORIZON BANCORP PRO FORMA
AS REPORTED AS REPORTED COMBINED
-------------- ----------------- --------------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans ...................... $ 85,844 $ 61,916 $ 147,760
Interest on investment securities:
Taxable ........................................ 9,005 10,835 19,840
Tax-exempt ..................................... 1,877 3,200 5,077
Other interest income ........................... 70 419 489
--------- -------- ----------
TOTAL INTEREST INCOME ........................... 96,796 76,370 173,166
INTEREST EXPENSE
Interest on deposits ............................ 33,117 29,969 63,086
Interest on short-term borrowings ............... 8,546 1,352 9,898
Interest on long-term debt ...................... 3,028 3,028
--------- -------- ----------
TOTAL INTEREST EXPENSE .......................... 44,691 31,321 76,012
--------- -------- ----------
NET INTEREST INCOME ............................. 52,105 45,049 97,154
PROVISION FOR POSSIBLE LOAN LOSSES .............. 1,662 2,402 4,064
--------- -------- ----------
NET INTEREST INCOME AFTER PROVISION FOR POSSIBLE
LOAN LOSSES ..................................... 50,443 42,647 93,090
OTHER INCOME
Investment securities gains (losses) ............ 26 (18) 8
Service charges ................................. 4,307 3,938 8,245
Mortgage loan servicing fees .................... 11,933 0 11,933
Gain on sale of loans ........................... 4,392 0 4,392
Other income .................................... 6,058 1,977 8,035
--------- -------- ----------
TOTAL OTHER INCOME .............................. 26,716 5,897 32,613
OTHER EXPENSES
Salaries and employee benefits .................. 28,747 12,845 41,592
Occupancy, excluding depreciation ............... 3,914 2,436 6,350
Depreciation .................................... 4,837 1,760 6,597
Advertising ..................................... 4,402 533 4,935
Other expenses .................................. 15,770 9,655 25,425
--------- -------- ----------
TOTAL OTHER EXPENSES ............................ 57,670 27,229 84,899
--------- -------- ----------
INCOME BEFORE INCOME TAXES ...................... 19,489 21,315 40,804
INCOME TAXES .................................... 7,025 7,488 14,513
--------- -------- ----------
NET INCOME ...................................... $ 12,464 $ 13,827 $ 26,291
========= ======== ==========
Basic earnings per common share ................. $ 2.03 $ 1.49 $ 1.60
Diluted earnings per common share ............... $ 2.02 $ 1.49 $ 1.60
Average common shares outstanding:
Basic .......................................... 6,147 10,281 16,428
Diluted ........................................ 6,166 10,308 16,474
</TABLE>
F-9
<PAGE>
PRO FORMA STATEMENT OF INCOME - CITY HOLDING COMPANY AND HORIZON BANCORP, INC.
FOR THE YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
CITY HOLDING HORIZON BANCORP PRO FORMA
AS REPORTED AS REPORTED COMBINED
-------------- ----------------- --------------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans ...................... $ 75,888 $ 57,577 $ 133,465
Interest on investment securities:
Taxable ........................................ 8,139 12,579 20,718
Tax-exempt ..................................... 2,012 2,673 4,685
Other interest income ........................... 30 810 840
--------- -------- ----------
TOTAL INTEREST INCOME ........................... 86,069 73,639 159,708
INTEREST EXPENSE
Interest on deposits ............................ 29,238 28,424 57,662
Interest on short-term borrowings ............... 8,138 846 8,984
Interest on long-term debt ...................... 1,688 0 1,688
--------- -------- ----------
TOTAL INTEREST EXPENSE .......................... 39,064 29,270 68,334
--------- -------- ----------
NET INTEREST INCOME ............................. 47,005 44,369 91,374
PROVISION FOR POSSIBLE LOAN LOSSES .............. 1,678 3,334 5,012
--------- -------- ----------
NET INTEREST INCOME AFTER PROVISION FOR POSSIBLE
LOAN LOSSES ..................................... 45,327 41,035 86,362
OTHER INCOME
Investment securities gains (losses) ............ 87 (79) 8
Service charges ................................. 3,700 3,432 7,132
Mortgage loan servicing fees .................... 2,958 0 2,958
Gain on sale of loans ........................... 1,260 0 1,260
Other income .................................... 3,118 1,997 5,115
--------- -------- ----------
TOTAL OTHER INCOME .............................. 11,123 5,350 16,473
OTHER EXPENSES
Salaries and employee benefits .................. 21,593 12,878 34,471
Occupancy, excluding depreciation ............... 2,736 2,099 4,835
Depreciation .................................... 3,466 1,525 4,991
Advertising ..................................... 914 585 1,499
Other expenses .................................. 12,273 11,997 24,270
--------- -------- ----------
TOTAL OTHER EXPENSES ............................ 40,982 29,084 70,066
--------- -------- ----------
INCOME BEFORE INCOME TAXES 15,468 17,301 32,769
INCOME TAXES .................................... 5,338 6,150 11,488
--------- -------- ----------
NET INCOME ...................................... $ 10,130 $ 11,151 $ 21,281
========= ======== ==========
Basic earnings per common share ................. $ 1.81 $ 1.20 $ 1.34
Diluted earnings per common share ............... $ 1.81 $ 1.20 $ 1.34
Average common shares outstanding:
Basic .......................................... 5,586 10,328 15,914
Diluted ........................................ 5,587 10,341 15,928
</TABLE>
F-10
<PAGE>
PRO FORMA STATEMENT OF INCOME - CITY HOLDING COMPANY AND HORIZON BANCORP, INC.
FOR THE YEAR ENDED DECEMBER 31, 1995 (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
CITY HOLDING HORIZON BANCORP PRO FORMA
AS REPORTED AS REPORTED COMBINED
-------------- ----------------- ------------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans ...................... $ 61,124 $ 54,921 $ 116,045
Interest on investment securities:
Taxable ........................................ 11,612 12,185 23,797
Tax-exempt ..................................... 2,300 2,355 4,655
Other interest income ........................... 89 1,157 1,246
--------- -------- ---------
TOTAL INTEREST INCOME ........................... 75,125 70,618 145,743
INTEREST EXPENSE
Interest on deposits ............................ 27,149 26,869 54,018
Interest on short-term borrowings ............... 5,675 731 6,406
Interest on long-term debt ...................... 756 0 756
--------- -------- ---------
TOTAL INTEREST EXPENSE .......................... 33,580 27,600 61,180
--------- -------- ---------
NET INTEREST INCOME ............................. 41,545 43,018 84,563
PROVISION FOR POSSIBLE LOAN LOSSES .............. 1,104 2,505 3,609
--------- -------- ---------
NET INTEREST INCOME AFTER PROVISION FOR POSSIBLE
LOAN LOSSES ..................................... 40,441 40,513 80,954
OTHER INCOME
Investment securities gains (losses) ............ 2 (131) (129)
Service charges ................................. 3,347 3,256 6,603
Mortgage loan servicing fees .................... 350 0 350
Gain on sale of loans ........................... 581 0 581
Other income .................................... 2,066 1,872 3,938
--------- -------- ---------
TOTAL OTHER INCOME .............................. 6,346 4,997 11,343
OTHER EXPENSES
Salaries and employee benefits .................. 17,815 12,567 30,382
Occupancy, excluding depreciation ............... 2,555 2,180 4,735
Depreciation .................................... 2,534 1,642 4,176
Advertising ..................................... 889 758 1,647
Other expenses .................................. 10,094 10,874 20,968
--------- -------- ---------
TOTAL OTHER EXPENSES ............................ 33,887 28,021 61,908
--------- -------- ---------
INCOME BEFORE INCOME TAXES ...................... 12,900 17,489 30,389
INCOME TAXES .................................... 4,182 6,007 10,189
--------- -------- ---------
NET INCOME ...................................... $ 8,718 $ 11,482 $ 20,200
========= ======== =========
Basic earnings per common share ................. $ 1.55 $ 1.23 $ 1.26
Diluted earnings per common share ............... $ 1.55 $ 1.23 $ 1.26
Average common shares outstanding:
Basic .......................................... 5,642 10,330 15,972
Diluted ........................................ 5,642 10,333 15,975
</TABLE>
F-11
<PAGE>
(This Page Intentionally Left Blank)
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY OR THE ISSUER TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
-----------------------
TABLE OF CONTENTS
PAGE
----
Available Information .................................. 4
Incorporation of Certain Documents
by Reference ........................................ 4
Summary ................................................ 6
Risk Factors ........................................... 12
City Holding Company ................................... 20
City Holding Capital Trust II .......................... 23
Accounting Treatment ................................... 23
Use of Proceeds ........................................ 23
Consolidated Ratios of Earnings
to Fixed Charges .................................... 24
Capitalization ......................................... 25
Selected Consolidated Financial Data and Other
Information ......................................... 26
Selected Pro Forma Financial Data of the
Company and Horizon Combined ........................ 27
Selected Historical Financial Data of Horizon .......... 28
Description of Capital Securities ...................... 29
Description of Junior Subordinated Debentures .......... 40
Description of Guarantee ............................... 48
Relationship Among the Capital Securities, the
Junior Subordinated Debentures and the
Guarantee ........................................... 50
Certain Federal Income Tax Consequences ................ 52
Certain ERISA Considerations ........................... 55
Underwriting ........................................... 56
Legal Matters .......................................... 57
Experts ................................................ 58
Index to Financial Information ......................... F-1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$50,000,000
CAPITAL SECURITIES
CITY HOLDING CAPITAL TRUST II
% CAPITAL SECURITIES FULLY AND
UNCONDITIONALLY GUARANTEED, TO THE
EXTENT DESCRIBED HEREIN, BY
[CITY HOLDING COMPANY LOGO]
----------
PROSPECTUS
----------
WHEAT FIRST UNION
FRIEDMAN, BILLINGS,
RAMSEY & CO., INC.
, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and distribution of
the Securities covered by this Registration Statement, other than underwriting
discounts and commissions, are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee (actual) ......... $ 16,963.00
Printing fees and expenses ........................................... 17,000.00
Legal fees and expenses .............................................. 150,000.00
Accounting fees and expenses ......................................... 75,000.00
Blue Sky fees and expenses ........................................... 5,000.00
Trustees' Fees and expenses .......................................... 16,500.00
Other ................................................................ 19,537.00
-------------
Total ............................................................... $ 300,000.00
=============
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 31-1-9 of the West Virginia Corporation Act provides in part that
each West Virginia corporation shall have power to indemnify any director,
officer, employee or agent or former director, officer, employee or agent
against expenses actually and reasonably incurred by him in connection with the
defense of any claim, action, suit or proceeding against him by reason of being
or having been such director, officer, employee or agent other than an action
by or in the right of the corporation if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interest of the
corporation. With respect to an action by or in the right of the corporation
the director, officer, employee or agent or former director, officer, employee
or agent may be indemnified if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
corporation, except in relation to matters as to which he shall be finally
adjudged in such action, suit or proceeding against him by reason of being or
having been such director, officer, employee or agent to be liable for
negligence or misconduct in the performance of duty; and to make any other or
further indemnity to any such persons that may be authorized by the articles of
incorporation or any by-law made by the stockholders or any resolution adopted,
before or after the event, by the stockholders. The By-laws of the Company
contain provisions pursuant to the foregoing section of the West Virginia
Corporation Act indemnifying the directors, officers, employees and agents of
the Company in certain cases against expenses and liabilities under judgments
and reimbursements of amounts paid in settlement.
The Company has purchased directors and officers' liability insurance
policies. Within the limits of their coverage, the policies insure (l) the
directors and officers of the Company against certain losses, to the extent
such losses are not indemnified by the Company, and (2) the Company, to the
extent it indemnifies such directors and officers for losses as permitted under
the laws of West Virginia.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
1.1 Proposed form of Underwriting Agreement for Capital Securities
4.1 Indenture of City Holding Company, with The Chase Manhattan Bank, as Trustee, relating to the
Junior Subordinated Debentures
4.2 Form of Certificate of Junior Subordinated Debenture (included in Exhibit 4.1)
4.3 Certificate of Trust of City Holding Capital Trust II
4.4 Form of Amended and Restated Trust Agreement for City Holding Capital Trust II
4.5 Form of Capital Security Certificate for City Holding Capital Trust II (included as Exhibit D to
Exhibit 4.4)
4.6 Form of Guarantee of City Holding Company relating to the Capital Securities
5.1 Opinion and consent of Hunton & Williams to City Holding Company as to validity of the Debentures
and the Guarantee to be issued by City Holding Company
5.2 Opinion of Richards, Layton & Finger, P.A., special Delaware counsel, as to validity of the Capital
Securities to be issued by City Holding Capital Trust II
8 Opinion of Hunton & Williams as to certain federal income tax matters
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
12 Computation of ratio of earnings to fixed charges*
23.1 Consent of Hunton & Williams (included in Exhibit 5.1)
23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2)
23.3 Consent of Ernst & Young LLP
23.4 Consent of Ernst & Young LLP
23.5 Consent of Diamond, Leftwich, Goheen & Dunn, P.L.L.C.
24 Power of Attorney of certain officers and directors of City Holding Company*
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee as to the Capital
Securities
25.2 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee as to the Junior
Subordinated Debentures
25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee as to the Guarantee
for the benefit of the holders of Capital Securities of City Holding Capital Trust II
</TABLE>
- ---------
* Previously filed.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof; and
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that the in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted against the
registrant by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
(b) The undersigned registrant further hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of Charleston, State of West Virginia, on the 21st
day of October, 1998.
CITY HOLDING COMPANY
(Registrant)
By: /s/ STEVEN J. DAY
________________________________
Steven J. Day
President/Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below on the 21st day of October,
1998 by the following persons in the capacities indicated.
<TABLE>
<S> <C>
/s/ ROBERT A. HENSON* /s/ MICHAEL D. DEAN*
______________________________________ ______________________________________
Robert A. Henson Michael D. Dean
Chief Financial Officer Senior Vice President - Finance
Principal Financial Officer) (Principal Accounting Officer)
/s/ SAMUEL M. BOWLING* /s/ C. SCOTT BRIERS*
______________________________________ ______________________________________
Samuel M. Bowling C. Scott Briers
Director Director
/s/ DR. D. K. CALES* /s/ STEVEN J. DAY
______________________________________ ______________________________________
Dr. D. K. Cales Steven J. Day
Director Director/President
/s/ ROBERT D. FISHER* /s/ JACK E. FRUTH*
______________________________________ ______________________________________
Robert D. Fisher Jack E. Fruth
Director Director
/s/ JAY GOLDMAN* /s/ CARLIN K. HARMON*
______________________________________ ______________________________________
Jay Goldman Carlin K. Harmon
Director Director/Executive Vice President
/s/ C. DALLAS KAYSER* /s/ BOB F. RICHMOND*
______________________________________ ______________________________________
C. Dallas Kayser Bob F. Richmond
Director Director
/s/ OTIS L. O'CONNOR* /s/ VAN R. THORN*
______________________________________ ______________________________________
Otis L. O'Connor Van R. Thorn
Director Director
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C>
/s/ HUGH R. CLONCH*
______________________________________ ______________________________________
Mark H. Schaul Hugh R. Clonch
Director Director
______________________________________ ______________________________________
William M. Frazier Leon K. Oxley
Director Director
/s/ DAVID E. HADEN*
______________________________________
David E. Haden
Director
*By: /s/ STEVEN J. DAY
_________________________________
Steven J. Day
Attorney-in-fact
</TABLE>
II-4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, City Holding
Capital Trust II certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Charleston, West Virginia, on October
21, 1998.
CITY HOLDING CAPITAL TRUST II
(Registrant)
By: /S/ ROBERT A. HENSON
_____________________________
ROBERT A. HENSON
ADMINISTRATOR
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
1.1 Proposed form of Underwriting Agreement for Capital Securities
4.1 Indenture of City Holding Company, with The Chase Manhattan Bank, as Trustee, relating to the
Junior Subordinated Debentures
4.2 Form of Certificate of Junior Subordinated Debenture (included in Exhibit 4.1)
4.3 Certificate of Trust of City Holding Capital Trust II
4.4 Form of Amended and Restated Trust Agreement for City Holding Capital Trust II
4.5 Form of Capital Security Certificate for City Holding Capital Trust II (included as Exhibit D to
Exhibit 4.4)
4.6 Form of Guarantee of City Holding Company relating to the Capital Securities
5.1 Opinion and consent of Hunton & Williams to City Holding Company as to validity of the
Debentures and the Guarantee to be issued by City Holding Company
5.2 Opinion of Richards, Layton & Finger, P.A., special Delaware counsel, as to validity of the Capital
Securities to be issued by City Holding Capital Trust II
8 Opinion of Hunton & Williams as to certain federal income tax matters
12 Computation of ratio of earnings to fixed charges*
23.1 Consent of Hunton & Williams (included in Exhibit 5.1)
23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2)
23.3 Consent of Ernst & Young LLP
23.4 Consent of Ernst & Young LLP
23.5 Consent of Diamond, Leftwich, Goheen & Dunn, P.L.L.C.
24 Power of Attorney of certain officers and directors of City Holding Company*
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee as to the Capital
Securities
25.2 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee as to the Junior
Subordinated Debentures
25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee as to the Guarantee
for the benefit of the holders of Capital Securities of City Holding Capital Trust II
</TABLE>
- ---------
* Previously filed.
-------------
Capital Securities
City Holding Capital Trust II
UNDERWRITING AGREEMENT
October __, 1998
Wheat First Securities, Inc.
as Representative of the Several Underwriters
c/o Wheat First Securities, Inc.
901 East Byrd Street
Richmond, Virginia 23219
Ladies and Gentlemen:
City Holding Capital Trust II (the "Trust"), a statutory business trust
created under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. (Sections 3801, et
seq.)) and City Holding Company, a West Virginia chartered, registered bank
holding company (the "Company" and together with the Trust, the "Offerors"),
confirm their agreement (the "Agreement") with Wheat First Securities, Inc..
("Wheat First") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof) for whom Wheat First
is acting as representative (in such capacity, Wheat First will be referred to
as the "Representative"), with respect to the issue and sale by the Trust and
the purchase by the Underwriters, acting severally and not jointly, of the
respective number set forth in Schedule A of 2,000,000 ____% Capital Securities
(liquidation amount of $25.00 per security) of the Trust. Said aggregate of
2,000,000 Capital Securities are herein referred to as the "Firm Capital
Securities." In addition, the Company proposes to grant to the Underwriters an
option to purchase up to 300,000 additional ______% Capital Securities (the
"Optional Capital Securities"), as provided in Section 2 hereof. The Firm
Capital Securities and, to the extent such option is exercised, the Optional
Capital Securities are hereinafter collectively referred to as the "Capital
Securities." The Capital Securities will be guaranteed by the Company, to the
extent described in the Prospectus, with respect to distributions and payments
upon liquidation, redemption and otherwise pursuant to the Guarantee Agreement
<PAGE>
(the "Guarantee"), to be dated as of October __, 1998, between the Company and
The Chase Manhattan Bank, as Trustee (the "Guarantee Trustee"). The Capital
Securities issued in book-entry form will be issued to Cede & Co. as nominee of
The Depository Trust Company ("DTC") pursuant to a letter agreement, to be dated
as of the First Closing Date (as defined herein) or the Second Closing Date (as
defined herein), as the case may be, (the "DTC Agreement"), among the Trust, the
Property Trustee (as defined below) and DTC.
The entire proceeds from the sale of the Capital Securities in the
Offering will be combined with the entire proceeds from the sale by the Trust to
the Company of its common securities (the "Common Securities") to purchase
$50,000,000 aggregate principal amount (plus up to an additional $7,500,000
aggregate principal amount if the Underwriters' over-allotment option is
exercised) of _____% Junior Subordinated Debentures due _________, 2028 (the
"Subordinated Debentures") issued by the Company. The Capital Securities and the
Common Securities will be issued pursuant to the Amended and Restated Trust
Agreement, to be dated as of October __, 1998 (the "Trust Agreement"), among the
Company, as depositor , and Michael D. Dean, and Robert A. Henson. as
administrators (the "Administrators"), The Chase Manhattan Bank, as property
trustee (the "Property Trustee"), and The Chase Manhattan Bank Delaware, as
Delaware trustee (the "Delaware Trustee," and, together with the Property
Trustee and the Administrators, 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 an indenture, dated as of
March 31, 1998 (the "Indenture"), between the Company and The Chase Manhattan
Bank, , as trustee (the "Debenture Trustee").
The Capital Securities, the Guarantee and the Subordinated Debentures
are hereinafter collectively referred to as the "Securities."
The Indenture, the Trust Agreement, the Guarantee, the DTC Agreement,
and this Agreement are hereinafter referred to collectively as the "Operative
Documents."
The Offerors have filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File No. 333 64809)
containing a preliminary prospectus relating to the Offering under the
Securities Act of 1933, as amended (the "1933 Act"), and have filed such
amendments thereto and such amended preliminary prospectuses as may have been
required by the Commission on or prior to the date hereof and will file such
additional amendments to the registration statement and such amended
prospectuses relating to the Offering (pursuant to the Securities Exchange Act
of 1934, as amended (the "1934 Act"), the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), the 1933 Act, the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations") or
otherwise) as may hereafter be required by the Commission or pursuant to the
terms of this Agreement. Such registration statement, as amended, at the time
such registration statement becomes effective and, in the event any
post-effective amendment thereto becomes effective prior to the First Closing
Date (as hereinafter defined), at the time such post-effective amendment becomes
effective, and the prospectus relating to the Offering constituting a part
thereof (including, in the case of such registration statement, as amended, and
in the case of such prospectus, all financial statements, schedules and exhibits
thereto and all documents incorporated or deemed incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, all exhibits to such
documents and the information, if any, deemed to be a part thereof pursuant to
2
<PAGE>
Rule 430A(b) of the 1933 Act Regulations), as from time to time amended or
supplemented pursuant to the 1934 Act, the 1934 Act Regulations, the 1933 Act,
the 1933 Act Regulations or otherwise, are referred to herein as the
"Registration Statement" and the "Prospectus," respectively, except that if any
revised prospectus relating to the Offering shall be provided to the
Underwriters by the Offerors for use in the Offering which differs from the
prospectus relating to the Offering on file at the Commission at the time of
such use (whether or not such revised prospectus is required to be filed by the
Offerors pursuant to Rule 424(b) of the 1933 Act Regulations), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Underwriters for such use. The term "Preliminary
Prospectus" means the preliminary prospectus dated, October 13,, 1998
distributed by the Underwriters prior to the date hereof.
The Offerors understand that the Underwriters propose to make the
Offering of the Securities as soon as the Representative deems advisable after
the Registration Statement becomes effective and after the Trust Agreement, the
Indenture and the Guarantee have been qualified under the Trust Indenture Act of
1939, as amended (the "1939 Act").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in 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
are incorporated by reference in the Prospectus; and all references in this
Agreement to amendments or supplements to the Prospectus shall be deemed to mean
and include the filing of any document under the 1934 Act which is incorporated
by reference in the Prospectus.
SECTION 1. Representations and Warranties.
(a) The Offerors jointly and severally represent and warrant to each
Underwriter as of the date hereof and as of each of the First Closing Date and
the Second Closing Date, and agree with each Underwriter as follows:
(i) The Company meets the requirements for use of Form S-3
under the 1933 Act.
(ii) The Registration Statement and any Rule 462(b)
Registration Statement have been declared effective by the Commission
under the Securities Act. The Company has complied with the
Commission's satisfaction with all requests of the Commission for
additional and supplemental information. No stop order suspending the
effectiveness of the Registration Statement, or any other amendment
thereto and no cease and desist order or temporary order under Section
8A of the 1933 Act has been issued, and no proceeding for such purpose
has been instituted or is pending or threatened by the Commission. No
order preventing or suspending the use of any Prospectus or any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
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material respects to the requirements of the 1933 Act and the 1933 Act
Regulations and 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 made, 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
the "Underwriter Information" (as defined in Section 6(a) hereof)
relating to the Underwriters furnished in writing to the Company by or
on behalf of the Underwriters expressly for use therein.
(iii) At the time the Registration Statement and any amendment
thereto becomes effective, the Registration Statement and any amendment
thereto, and the Prospectus and any further amendment or supplement
thereto, will conform in all material respects to the requirements of
the 1933 Act and the 1933 Act Regulations and will not, as of effective
date of each of the Registration Statement, and any amendment thereto,
and as of the applicable filing date of the Prospectus and any
amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
the Underwriter Information.
(iv) Each document incorporated or deemed incorporated by
reference into the Prospectus pursuant to Item 12 of Form S-3 under the
1933 Act, at the time it was or hereafter is filed with the Commission,
conformed or will conform, as the case may be, in all material respects
with the requirements of the 1934 Act and the 1934 Act Regulations,
and, when read together and with the other information in the
Prospectus at each time the Registration Statement and any amendment
thereto is declared effective, during the time the Prospectus is
required to be delivered by the 1933 Act, and at the First Closing Date
and at the Second Closing Date, as the case may be, do not 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, in light of the circumstances under which they are
made, not misleading.
(v) Ernst & Young LLP, which has audited certain financial
statements of the Company and Horizon, are independent public
accountants with respect to the Company and its subsidiaries and
Horizon and its subsidiaries, as required by the 1933 Act, the 1933
Regulations, the 1934 Regulations and Commission Regulation S-X.
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(vi) The consolidated financial statements, together with the
related schedules and notes, included in the Registration Statement and
the Prospectus present fairly the consolidated financial position of
the Company and its subsidiaries at the dates indicated and the
consolidated results of operations and cash flows of the Company and
its subsidiaries for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the
periods involved, except as disclosed in the notes to such financial
statements. The supporting schedules, if any, included in the
Registration Statement and the Prospectus present fairly, in all
material respects, the information required to be stated therein. The
summary financial data included in the Registration Statement and the
Prospectus present fairly, in all material respects, the information
shown therein and have been compiled on a basis consistent with that of
the audited financial statements included in the Registration Statement
and the Prospectus. To the knowledge of the Offerors, after due
inquiry, the audited financial statements of Horizon Bancorp., Inc.
("Horizon"), together with related notes, as set forth in the
Registration Statement present fairly the financial position, the
results of operations and the cash flows of Horizon at the indicated
dates and for the indicated periods; such financial statements of
Horizon have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved, except as disclosed
in the notes to such financial statements, and all adjustments
necessary for a fair presentation of results for such periods have been
made; the selected financial information relating to Horizon included
in the Prospectus presents fairly the information shown therein and has
been compiled on a basis consistent with the financial statements
presented therein; the supporting schedules and pro forma financial
information included in the Registration Statement and the Prospectus
present fairly the information required to be stated therein.
(vii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein or contemplated thereby and, except for normal
recurring dividends on the capital stock of the Company or Horizon,
there has not been (in the case of Horizon, to the knowledge of the
Company, after due inquiry,) (A) any material adverse change in the
condition (financial or otherwise), earnings, business affairs or
business prospects of the Trust, or the Company and its subsidiaries or
Horizon and its subsidiaries, considered as one enterprise, whether or
not arising in the ordinary course of business, (B) any transaction
entered into by the Trust, the Company or any subsidiary, or Horizon or
any subsidiary, other than in the ordinary course of business, that is
material to the Trust, or the Company and its subsidiaries, considered
as one enterprise, or to Horizon and its subsidiaries, considered as
one enterprise, or (C) any dividend or distribution of any kind
declared, paid or made by the Company or Horizon on either of its
capital stock.
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(viii) Each of the Company and Horizon is a corporation duly
organized, validly existing and in good standing under the laws of the
State of West Virginia and has the corporate power and authority under
such laws to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus;
and each of the Company and, to the knowledge of the Company, after due
inquiry, Horizon is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which it owns
or leases property of a nature, or transacts business of a type, that
would make such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have a material
adverse effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise, or Horizon and its
subsidiaries, considered as one enterprise.
(ix) City National Bank of West Virginia ("City National") is
a duly organized and validly existing national banking association and
continues to hold a valid certificate to do business as such and has
full power and authority to conduct its business as such. City National
is referred to herein as the "Significant Subsidiary". The Significant
Subsidiary has the authority under its jurisdiction of organization to
own, lease and operate its properties and to conduct its business and
is duly authorized to transact business and is in good standing in each
jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or to be
in good standing would not have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as
one enterprise.
(x) The Company does not have any subsidiaries which are
material to its business, except to the extent that the Significant
Subsidiary may be deemed to be so material.
(xi) (a) Each of the Company and Horizon had at the date
indicated a duly authorized and outstanding capitalization as set forth
in the Registration Statement and the Prospectus, (b) all of the
outstanding shares of capital stock of the Company and, to the
knowledge of the Company, after due inquiry, Horizon have been duly
authorized and validly issued and are fully paid and non-assessable,
and (c) none of the outstanding shares of capital stock of the Company
or, to the knowledge of the Company, after due inquiry, Horizon was
issued in violation of the preemptive rights of any stockholder of the
Company or Horizon, respectively.
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(xii) The Trust has been duly created and is validly existing
in good standing as a business trust under 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 the Operative Documents, as
applicable, and the Capital Securities; the Trust is not a party to or
otherwise bound by any material agreement other than those described in
the Registration Statement and the Prospectus; and based on an opinion
of counsel, the Company believes 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.
(xiii) The Common Securities have been duly authorized by the
Trust Agreement and, when issued and delivered by the Trust to the
Company against payment therefor as described in the Registration
Statement and the Prospectus, will be validly issued and will represent
undivided beneficial interests in the assets of the Trust; the issuance
of the Common Securities is not subject to preemptive or other similar
rights; and at the First Closing Date and at the Second Closing Date,
as the case may be, 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.
(xiv) As of the First Closing Date and at the Second Closing
Date, as the case may be, the Capital Securities will have been duly
authorized by the Trust Agreement and, when issued and delivered
against payment therefor in accordance with the Trust Agreement, as
provided herein, will be validly issued and fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust and will conform in all material respects to the description
thereof contained in the Prospectus and the issuance of the Capital
Securities will not be subject to preemptive or other similar rights.
(xv) This Agreement has been duly authorized, executed and
delivered by the Offerors.
(xvi) The Trust Agreement has been duly authorized by the
Company and, at the First Closing Date and at the Second Closing Date,
will have been duly executed and delivered by the Company and the
Trustees, and assuming due authorization, execution and delivery of the
Trust Agreement by the Trustees, the Trust Agreement will, at the First
Closing Date and at the Second Closing Date, be a 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 receivership, conservatorship and
supervisory powers of bank regulatory agencies generally as well as to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally or by general principles of
equity (regardless of whether enforcement is considered in a proceeding
at law or in equity) and the availability of equitable remedies
(collectively, the "Enforceability Exceptions").
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(xvii) The Guarantee has been duly authorized by the Company
and, at the First Closing Date and at the Second Closing Date, the
Guarantee will have been duly executed and delivered by the Company,
and will constitute 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
Enforceability Exceptions.
(xviii) The Indenture has been duly authorized by the Company
and, at the First Closing Date and at the Second Closing Date, will
have been duly executed and delivered by the Company and will
constitute 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 Enforceability
Exceptions; and at the First Closing Date, the Indenture will have been
duly qualified under the 1939 Act.
(xix) The Subordinated Debentures have been duly authorized by
the Company and, at the First Closing Date and at the Second Closing
Date, will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered
against payment therefor as described in the Registration Statement and
the Prospectus, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except as enforcement thereof may be limited by the
Enforceability Exceptions; and the Subordinated Debentures will be in
the form contemplated by, and entitled to the benefits of, the
Indenture and will conform in all material respects to the description
thereof in the Prospectus.
(xx) Each of the Administrators of the Trust is an officer of
the Company and has been duly authorized by the Company to execute and
deliver the Trust Agreement.
(xxi) The Trust is not, and following consummation of the
transactions contemplated hereby will not be, an "investment company"
or a company "controlled" by an "investment company" which is required
to be registered under the Investment Company Act of 1940, as amended
(the "1940 Act").
(xxii) The Operative Documents described in the Registration
Statement and the Prospectus conform in all material respects to the
summary descriptions thereof contained in the Registration Statement
and the Prospectus.
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(xxiii) None of the Trust, the Company nor the Significant
Subsidiary is in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which it is a party or by which it may be bound or to
which any of its properties may be subject, except for such defaults
that would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise; the execution and delivery of the Operative Documents by
the Trust or the Company, as the case may be, the issuance and delivery
of the Securities, the consummation by the Offerors of the transactions
contemplated in the Operative Documents, and compliance by the Offerors
with the terms of the Operative Documents to which they are a party
have been duly authorized by all necessary corporate action on the part
of the Company, and do not and will not result in any violation of the
charter or by-laws of the Company or of the Significant Subsidiary or
the Trust Agreement or the certificate of trust of the Trust filed with
the State of Delaware on September 17, 1998 (the "Trust Certificate"),
and do not and will not conflict with, or result in a breach of any of
the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Trust, the Company or any of the Significant
Subsidiary under (A) any indenture, mortgage, loan agreement, note,
lease or other agreement or instrument to which the Trust, the Company
or the Significant Subsidiary is a party or by which it may be bound or
to which any of its properties may be subject, except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Trust, or the Company and its subsidiaries considered as one enterprise
or (B) any existing applicable law, rule, regulation, judgment, order
or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Trust, the Company or
the Significant Subsidiary or any of its properties, except for such
defaults that would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise.
(xxiv) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, other than those that have been made
or obtained, is necessary or required for the performance by the
Company or the Trust of their obligations hereunder, in connection with
the issuance and sale of the Capital Securities or the consummation of
the transactions contemplated by the Operative Documents, except such
as may be required by the securities as "Blue Sky" laws of the various
states in connection with the offer and sale of the Capital Securities.
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(xxv) Except as disclosed in the Registration Statement and
the Prospectus, there is no action, suit or proceeding before or by any
government, governmental instrumentality or court, domestic or foreign,
now pending or, to the knowledge of the Company or the Trust,
threatened against or affecting the Trust, or the Company, the
Significant Subsidiary or Horizon that is required to be disclosed in
the Registration Statement and the Prospectus or that, in the final
outcome, could, in the judgment of the Company, result in any material
adverse effect on the condition (financial or otherwise), earnings or
business of the Trust, the Company and its subsidiaries considered as
one enterprise, or Horizon and its subsidiaries considered as one
enterprise, or that could materially and adversely affect the
properties or assets of the Trust, the Company and its subsidiaries
considered as one enterprise or Horizon and its subsidiaries considered
as one enterprise, or that could adversely affect the consummation of
the transactions contemplated in the Operative Documents; the aggregate
liability or loss, if any, resulting from the final outcome of all
pending legal or governmental proceedings to which the Trust, the
Company, any of the Significant Subsidiaries or Horizon and its
subsidiaries is a party or which affect any of its properties that are
not described in the Registration Statement and the Prospectus,
including ordinary routine litigation incidental to its business, would
not have a material adverse effect on the condition (financial or
otherwise), earnings or business affairs of the Trust, the Company and
its subsidiaries considered as one enterprise, or Horizon and its
subsidiaries, considered as one enterprise.
(xxvi) There are no contracts or documents of a character
required to be described in the Registration Statement and the
Prospectus that are not described as required.
(xxvii) The Offerors, Horizon, to the knowledge of the
Offerors, after due inquiry, and the Significant Subsidiary each owns
or possesses, or can acquire on reasonable terms, adequate patents,
patent licenses, trademarks, service marks and trade names necessary to
carry on their businesses as presently conducted, except where the
failure to own, procure or obtain any of the foregoing would not have a
material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise, or Horizon and its
subsidiaries, considered as one enterprise, and none of the Offerors
nor the Significant Subsidiary has received any notice of infringement
of or conflict with asserted rights of others with respect to any
patents, patent licenses, trademarks, service marks or trade names
that, in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the
condition (financial or otherwise), earnings or business of the Trust,
or the Company and its subsidiaries considered as one enterprise, or
Horizon and its subsidiaries considered as one enterprise.
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(xxviii) The Offerors and the Significant Subsidiary and
Horizon and its subsidiaries, to the knowledge of the Offerors, after
due inquiry, each owns, possesses or has obtained all material
governmental licenses, permits, certificates, consents, orders,
approvals and other authorizations necessary to own or lease, as the
case may be, and to operate its properties and to carry on its business
as presently conducted, and neither the Offerors nor any of the
Significant Subsidiary has received any notice of proceedings relating
to revocation or modification of any such licenses, permits,
certificates, consents, orders, approvals or authorizations that, in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, could materially adversely affect the condition (financial or
otherwise), earnings or business of the Trust, or the Company and its
subsidiaries considered as one enterprise or Horizon and its,
subsidiaries, considered as one enterprise.
(xxix) Each of the Offerors, the Significant Subsidiary and
Horizon, to the knowledge of the Offerors, has good and marketable
title to all properties and assets described in the Registration
Statement and the Prospectus as owned by it, free and clear of all
liens, charges, encumbrances or restrictions, except such as (A) are
described in the Registration Statement and the Prospectus or (B) are
neither material in amount nor materially significant in relation to
the business of the Trust, or the Company and its subsidiaries
considered as one enterprise or Horizon and its subsidiaries,
considered as one enterprise; and all of the leases and subleases
material to the business of the Trust, and the Company and its
subsidiaries considered as one enterprise, or (to the knowledge of the
Offerors) Horizon and its subsidiaries considered as one enterprise,
and under which the Offerors or the Significant Subsidiary holds
properties described in the Registration Statement and the Prospectus,
are in full force and effect, and neither the Offerors nor the
Significant Subsidiary has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Offerors
or such Significant Subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of such
corporation to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xxx) The Company has not taken and will not take, directly or
indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Capital Securities or the Common Stock.
(xxxi) None of the Trust, the Company, or any of their
affiliates, as such term is defined in Rule 501(b) under the 1933 Act
("Affiliates"), or any person acting on its or any of their behalf
(other than the Underwriters, as to whom the Offerors make no
representation) has engaged or will engage, in connection with the
offering of the Capital Securities, in any form of general solicitation
or general advertising within the meaning of Rule 502(c) under the 1933
Act.
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(xxxii) There are no persons with registration or
other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
(xxxiii) To the knowledge of the Company all of the
representations and warranties made by Horizon in that certain
Agreement and Plan of Reorganization by and between the Company and
Horizon dated as of August 7, 1998 are true and correct as of the date
of this Agreement.
(b) Any certificate signed by any Trustee of the Trust or any duly
authorized officer of the Company or the Significant Subsidiary and delivered to
the Representative or to counsel for the Underwriters shall be deemed only a
representation and warranty by the Trust or the Company, as the case may be, to
each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Trust agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Trust, at a price of $25
per Security, the number of Firm Capital Securities set forth in Schedule A
opposite the name of such Underwriter, plus any additional Capital Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(b) Deliveries of certificates for the Firm Capital Securities shall be
made at the office of Wheat First in Richmond, Virginia, and payment of the
purchase price for the Firm Capital Securities shall be made by Wheat First, on
behalf of the several Underwriters, to the Trust by wire transfer of immediately
available funds contemporaneous with closing at such place as shall be agreed
upon by Wheat First and the Offerors, at 10:00 A.M. on ________________, 1998
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by Wheat First and the Offerors (such time and date of payment and delivery
being herein called the "First Closing Date").
(c) Payment for the Firm Capital Securities purchased by the
Underwriters shall be made to the Trust by wire transfer of immediately
available funds, against delivery for the respective accounts of the
Underwriters of certificates for the Firm Capital Securities. Certificates for
the Firm Capital Securities shall be in such denominations and registered in
such names as the Underwriters may request in writing at least one business day
before the First Closing Date. It is understood that each Underwriter has
authorized Wheat First, for its account, to accept delivery of, receipt for, and
make payment of the purchase price for, the Firm Capital Securities which it has
agreed to purchase. Wheat First, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Firm Capital Securities, if any, to be purchased by any
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Underwriter whose funds have not been received by the First Closing Date, but
such payment shall not relieve such Underwriter from its obligations hereunder.
The certificates representing the Firm Capital Securities shall be made
available for examination and packaging by the Underwriters in Richmond,
Virginia not later than 10:00 A.M. on the last business day prior to the First
Closing Date.
(d) In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 300,000 Optional
Capital Securities at the purchase price per security to be paid for the Firm
Capital Securities, plus accumulated distributions thereon from _________, 1998,
for use solely in covering any over-allotments made by the Representative for
the account of the Underwriters in the sale and distribution of the Firm Capital
Securities. The option granted hereunder may be exercised at any time (but not
more than once) within 30 days after the first date that any of the Capital
Securities are released by the Representative for sale to the public, upon
notice by the Representative to the Company setting forth the aggregate number
of Optional Capital Securities as to which the Underwriters are exercising the
option, the names and denominations in which the certificates for such
securities are to be registered and the time and place at which such
certificates will be delivered. Such time of delivery (which may not be earlier
than the First Closing Date), being herein referred to as the "Second Closing
Date," shall be determined by the Representative, but if at any time other than
the First Closing Date shall not be earlier than three nor later than five full
business days after delivery of such notice of exercise. The number of Optional
Capital Securities to be purchased by each Underwriter shall be determined by
multiplying the number of Optional Capital Securities to be sold by the Company
pursuant to such notice of exercise by a fraction, the numerator of which is the
number of Firm Capital Securities to be purchased by such Underwriter as set
forth opposite its name in Schedule A and the denominator of which is 2,000,000
(subject to such adjustments to eliminate any fractional share purchases as the
Representative in its discretion may make). The manner of payment for and
delivery of the Capital Securities shall be the same as for the Firm Capital
Securities purchased from the Company as specified in the three preceding
paragraphs. At any time before lapse of the option, you may cancel such option
by giving written notice of such cancellation to the Company. If the option is
cancelled or expires unexercised in whole or in part, the Company will
deregister under the 1933 Act the number of Optional Capital Securities as to
which the option has not been exercised.
(e) As compensation to the Underwriters for their commitments hereunder
and in view of the fact that the proceeds of the sale of the Capital Securities
will be used to purchase Subordinated Debentures of the Company, the Company
hereby agrees to pay at the First Closing Date or the Second Closing Date, as
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the case may be, to Wheat First in immediately available funds, for the accounts
of the several Underwriters, $____ per Capital Security to be delivered by the
Trust hereunder at the First Closing Date or the Second Closing Date, as the
case may be.
(f) The Underwriter will comply with all material applicable laws and
rules in connection with the sale of the Securities and the Underwriters are not
acting as an agent for the Company.
SECTION 3. Covenants of the Offerors. The Offerors covenant with each
Underwriter as follows:
(a) The Company will use its best efforts to cause the Registration
Statement and any post-effective amendments to the Registration Statement to be
declared effective by the Commission (as and when specified in the reasonable
request of the Representative) and will prepare the Prospectus in a form
reasonably approved by the Representative and file such Prospectus pursuant to
Rule 424(b) under the 1933 Act not later than the Commission's close of business
on the second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by Rule
430A(a)(3) under the 1933 Act. The Company will make no further amendment or any
supplement to the Registration Statement or the Prospectus prior to any First
Closing Date which shall be reasonably disapproved by the Representative after
reasonable notice thereof. The Company will notify the Representative
immediately and confirm the notice in writing (i) when the Registration
Statement or any post-effective amendment thereto (and any other amendment
thereto) has been declared effective by the Commission, (ii) of the transmittal
to the Commission for filing of any amendment or supplement to the Prospectus,
(iii) of the receipt by the Company of any comments from the Commission or any
state securities commission with respect to the transactions contemplated by
this Agreement, (iv) of any request by the Commission or any state securities
commission for any amendment or supplement to the Registration Statement or the
Prospectus, or for additional information, (v) of the issuance by the
Commissioner or any state securities commission or court of competent
jurisdiction of any order suspending either the Offering or the use of either
the Preliminary Prospectus or the Prospectus or of the threat of any such action
by any such entity, (vi) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any amendment
thereto or of the receipt by the Company of any notification with respect to the
suspension of the registration, qualification or exemption of the Capital
Securities for offering or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose. In the event of the issuance of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus or suspending any such registration,
qualification or exemption, the Company promptly will use its best efforts to
obtain its withdrawal.
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(b) The Company will give the Representative notice of its intention to
file or prepare any amendment or supplement to the Registration Statement or any
amendment or supplement to the Prospectus (whether, in the case of the
Registration Statement and the Prospectus, by the filing of documents pursuant
to the 1934 Act, the 1933 Act or otherwise and, in the case of the Prospectus,
by amending or supplementing the Prospectus then being used by the
Underwriters).
(c) The Company has furnished or will deliver to the Representative and
counsel for the Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including exhibits
filed therewith) and signed copies of all consents and certificates of experts,
and will also deliver to the Representative a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without exhibits)
for each of the Underwriters.
(d) The Company will deliver to each Underwriter, without charge, from
time to time until the effective date of the Registration Statement, as many
copies of each Preliminary Prospectus as such Underwriter may reasonably
request, and the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each Underwriter, without
charge, from time to time during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request for the purposes contemplated by the 1933 Act or the 1934 Act or the
respective applicable rules and regulations of the Commission thereunder.
(e) If any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or the Prospectus
in order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) If, at the time that the Registration Statement or a post-effective
amendment thereto becomes effective, any information shall have been omitted
therefrom in reliance upon Rule 430A of the 1933 Act Regulations, then
immediately following effectiveness, the Company will prepare, and file or
transmit for filing with the Commission in accordance with such Rule 430A and
Rule 424(b) of the 1933 Act Regulations, copies of an amended Prospectus, or, if
required by such Rule 430A, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted and will use its best efforts to cause any such post-effective amendment
to be declared effective as promptly as practicable.
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(g) The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Capital Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the United
States as the Representative may designate and to maintain such qualifications
in effect for a period of not less than one year from the effective date of the
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Capital Securities have been so qualified the Company
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement.
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the 1933 Act Regulations) covering a 12-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.
(i) The Offerors will cooperate with the Underwriters and use their
best efforts to permit the Capital Securities to be eligible for clearance and
settlement through the facilities of DTC.
(j) The Trust will use the net proceeds received by it from the sale of
the Capital Securities, and the Company will use the proceeds received by it
from the sale of the Subordinated Debentures, in the manners specified in the
Prospectus under "Use of Proceeds."
(k) Prior to _____________, 1998, neither the Trust nor the Company
will, without the prior written consent of Wheat First, directly or indirectly,
issue, sell, offer or agree to sell, grant any option for the sale of, or
otherwise dispose of, any securities that are substantially similar to the
Capital Securities, any security convertible into exchangeable or exercisable
for Capital Securities or any equity security substantially similar to the
Capital Securities (except for the Securities issued pursuant to this Agreement
or with the prior written consent of Wheat First).
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SECTION 4. Payment of Expenses.
The Company will pay all costs and expenses incident to the performance
of its obligations under this Agreement, whether or not the transactions
contemplated herein are consummated or this Agreement is terminated pursuant to
Section 9 hereof, including all costs and expenses incident to (i) the printing
or other production of documents, including the Operative Documents, with
respect to the transactions, including any costs of printing the Registration
Statement originally filed with respect to the Capital Securities and any
amendment thereto, any Rule 462(b) Registration Statement, and the Prospectus
and any amendment or supplement thereto, this Agreement and any blue sky
memoranda, (ii) all arrangements relating to the delivery to the Underwriters of
copies of the foregoing documents, (iii) the fees and disbursements of the
counsel, the accountants and any other experts or advisors retained by the
Company, (iv) preparation, issuance and delivery to the Underwriters of any
certificates evidencing the Capital Securities, including transfer agent's and
registrar's fees, (v) the qualification of the Capital Securities under state
securities and blue sky laws, including filing fees and fees and disbursements
of counsel for the Underwriters relating thereto, (vi) the filing fees of the
Commission and the National Association of Securities Dealers, Inc. relating to
the Capital Securities, and (vii) the fees and expenses of any trustee appointed
under any of the Operative Documents, including the fees and disbursements of
counsel for such trustees in connection with the Operative Document. If the sale
of the Capital Securities provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 5 hereof
is not satisfied, because this Agreement is terminated pursuant to Section 9
hereof or because of any failure, refusal or inability on the part of the
Company to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder other than by reason of a default by any of the
Underwriters, the Company will reimburse the Representative upon demand for all
reasonable out-of-pocket expenses (including counsel fees and disbursements)
that shall have been incurred by it in connection with the proposed purchase and
sale of the Capital Securities. The Company shall not in any event be liable to
any of the Underwriters for the loss of anticipated profits from the
transactions covered by this Agreement.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Offerors contained in Section 1 hereof or
in certificates of any Trustee of the Trust, officer of the Company or any of
its subsidiaries delivered pursuant to the provisions hereof, to the performance
by the Offerors of their obligations hereunder, and to the following further
conditions:
(a) If the Registration Statement or any post-effective amendment to
the Registration Statement filed prior to the First Closing Date has not been
declared effective as of the time of execution hereof, the Registration
Statement or any such post-effective amendment, and, if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement, shall have
been declared effective not later than the earlier of (i) 11:00 A.M., Eastern
Standard Time, on the first business day following the date on which this
Agreement is executed, and (ii) the time confirmations are sent or given as
specified by Rule 462(b) or, with respect to the Registration Statement, such
later time and date as shall have been consented to by the Representative; if
required, the Prospectus or any term sheet that constitutes a part thereof and
any amendment or supplement thereto shall have been filed with the Commission in
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the manner and within the time period required by Rules 434 and 424(b) under the
Act; no stop order suspending the effectiveness of the Registration Statement or
any amendment thereto shall have been issued, and no proceedings for that
purpose shall have been instituted or threatened or, to the knowledge of the
Company or Wheat First, shall be contemplated by the Commission; and the Company
shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise).
(b) Opinion of Outside Counsel for Offerors. At the Closing Date, the
Underwriters shall have received the favorable opinion, dated as of the Closing
Date, of Hunton & Williams, counsel for the Company, to the effect set forth in
Exhibit A hereto. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of Trustees and Administrators of the Trust, officers of the
Company and its subsidiaries and certificates of public officials.
(c) Opinion of Special Delaware Counsel for Offerors. If the opinion
referred to in Section 5(b) does not cover applicable matters of Delaware law,
at the Closing Date, the Underwriters shall have received the favorable opinion,
dated as of the Closing Date, of special Delaware counsel to the Offerors, to
the effect set forth in Exhibit B hereto.
(d) Opinion of Counsel for The Chase Manhattan Bank. At the Closing
Date, the Underwriters shall have received the favorable opinion, dated as of
the Closing Date, of Cravath, Swaine & Moore, counsel to The Chase Manhattan
Bank, as Property Trustee under the Trust Agreement, and Guarantee Trustee under
the Guarantee Agreement, to the effect set forth in Exhibit C hereto.
(e) Opinion of Tax Counsel for the Offerors. At the Closing Date, the
Underwriters shall have received an opinion, dated as of the Closing Date, of
Hunton & Williams, tax counsel to the Offerors, to the effect that (i) the Trust
will be classified for United States federal income tax purposes as a grantor
trust and not as an association taxable as a corporation and (ii) although the
discussion set forth in the Prospectus under the heading "Certain Federal Income
Tax Consequences" does not purport to discuss all possible United States federal
income tax consequences of the purchase, ownership and disposition of the
Capital Securities, such discussion constitutes, in all material respects, a
fair and accurate summary of the United States federal income tax consequences
of the purchase, ownership and disposition of the Capital Securities under
current law. Such opinion may be conditioned on, among other things, the initial
and continuing accuracy of the facts, financial and other information, covenants
and representations set forth in certificates of officers of the Company and
other documents deemed necessary for such opinion.
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(f) Opinion of Counsel for Underwriters. At the Closing Date, the
Underwriters shall have received the favorable opinion, dated as of the Closing
Date, of Alston & Bird LLP, counsel for the Underwriters, with respect to the
incorporation and legal existence of the Company, the Capital Securities, the
Indenture, the Guarantee, this Agreement, and the Prospectus and other related
matters as the Underwriters may require. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of Trustees of the Trust, officers of
the Company and its subsidiaries and certificates of public officials. Such
counsel may rely as to matters of West Virginia, Virginia, New York and Delaware
law on the opinions of counsel furnished pursuant to subsections (b), (c) and
(d) of this Section.
(g) Certificates. At the Closing Date, there shall not have been, since
the date hereof or since the respective dates as of which information is given
in the Prospectus, any material adverse change 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 arising in the ordinary course of business, and the Underwriters shall
have received a certificate of the Chairman, any Vice Chairman, the Chief
Executive Officer, the President or any Vice President of the Company and of the
chief financial officer or the chief accounting officer of the Company and a
certificate of an Administrative Trustee of the Trust, dated as of the Closing
Date, to the effect that (i) there has been no such material adverse change,
(ii) the representations and warranties in Section 1 hereof were true and
correct, in all material respects, when made and are true and correct, in all
material respects, with the same force and effect as though expressly made at
and as of the Closing Date, and (iii) the Offerors have complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Date.
(h) Accountant's Comfort Letter. 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 reasonably satisfactory to the
Underwriters, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to Underwriters with respect to the
financial statements and certain financial information contained in the
Prospectus.
(i) Bring-down Comfort Letter. At the Closing Date, the Underwriters
shall have received from Ernst & Young LLP a letter, dated as of the Closing
Date, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (h) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to the
Closing Date.
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(j) On or before the Closing Date, the Representative and counsel for
the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company.
(k) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Underwriters by notice to the Offerors at any
time at or prior to the Closing Date, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 6, 7 and 8 and this Section 5(l) shall survive any such
termination and remain in full force and effect.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representative and
counsel for the Underwriters. The Company shall furnish to the Representative
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representative and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Optional Capital Securities shall be subject, in their discretion,
to each of the foregoing conditions to purchase the Firm Capital Securities,
except that all references to the Firm Capital Securities and the First Closing
Date shall be deemed to refer to such Optional Capital Securities and the
related Second Closing Date, respectively.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Offerors agree to jointly and
severally indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact included in the
Registration Statement or any amendment to the Registration Statement,
including the information deemed to be part of the Registration
Statement pursuant to Rule 430A(b) of the 1933 Act Regulations, if
applicable, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any
preliminary prospectus or prospectus, including the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
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(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Offerors; and
(iii) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by
Wheat First), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above; provided, however, that
this Section 6(a) shall not apply to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon
and in conformity with written information furnished to the Offerors by
any Underwriter through Wheat First expressly for use in the
Registration Statement or any amendment to the Registration Statement
or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto). Such written information provided by the
Underwriters is referred to as "Underwriter Information."
The foregoing indemnification with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom
the person asserting any such losses, claims, damages or liabilities
purchased Capital Securities, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Offerors shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if such is required by law, at or prior to
the written confirmation of the sale of such shares to such person and
if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage or liability.
(b) Indemnification of Offerors, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors and officers, the Trust, each of the Trustees and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
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(or any amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Offerors by such Underwriter through the
Representative expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Wheat First, and, in the
case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Offerors. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) 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 prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances under which the indemnification provided for in
Section 6 hereof is for any reason held to be unenforceable by an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Offerors on the one
hand and the Underwriters on the other hand from the offering of the Capital
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant considerations.
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The relative benefits received by the Offerors on the one hand and the
Underwriters on the other hand in connection with the offering of the Capital
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Capital Securities pursuant to this Agreement (before deducting expenses)
received by the Offerors and the total commission received by the Underwriters
in the Offering, bear to the aggregate initial offering price of the Capital
Securities. The relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or the Underwriters, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Capital Securities purchased 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each officer and director of the Company, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
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the 1934 Act shall have the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or trustees of the Trust
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Trust or the Company, and shall
survive delivery of the Capital Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriters may terminate this Agreement
with respect to the Firm Capital Securities or any Optional Capital Securities,
by notice to the Offerors, at any time at or prior to the First Closing Date or
the Second Closing Date, respectively (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change 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 arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States or any outbreak of hostilities or escalation thereof or
other calamity or crisis, in each case the effect of which is such as to make
it, in the judgment of the Underwriters, impracticable to market the Capital
Securities or to enforce contracts for the sale of the Capital Securities, or
(iii) if trading in any securities of the Company has been suspended or limited
by the Commission, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market System has been
suspended or limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal or West Virginia
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
6, 7, and 8 and this Section 9 shall survive such termination and remain in full
force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the First Closing Date or at the Second
Closing Date to purchase the First Capital Securities or the Optional Capital
Securities, as the case may be, which it or they are obligated to purchase under
this Agreement (the "Defaulted Securities"), the Underwriters shall have the
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right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other Underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Underwriters shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
total number of Securities to be purchased hereunder, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective purchasing obligations
hereunder bear to the purchasing obligations of all non-defaulting Underwriters,
or
(b) if the number of Defaulted Securities exceeds 10% of the Securities
to be purchased hereunder, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Underwriters or the Company shall have the right
to postpone the First Closing Date or the Second Closing Date, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Prospectus or in any other documents or arrangements. As used
herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters c/o Wheat First at 901 East
Byrd Street, Richmond, Virginia 23219, attention of Scott R. Anderson with a
copy to Alston & Bird LLP, 601 Pennsylvania Avenue, N.W., North Building, 11th
Floor, Washington, D.C. 20004, attention of Frank M. Conner III; notices to the
Offerors shall be directed to City Holding Company, 25 Gatewater Road, Cross
Lanes, West Virginia 25313, Attention: Robert A. Henson with a copy to Hunton &
Williams, 951 East Byrd Street, Richmond Virginia, 23219-4074, attention of
Lathan M. Ewers, Jr.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters and the Offerors and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Offerors and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
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or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters and the Offerors
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Capital Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Offerors in accordance with its terms.
Very truly yours,
CITY HOLDING COMPANY.
By:
---------------------------------
Robert A. Henson
Chief Financial Officer
CITY HOLDING CAPITAL TRUST II
By: City Holding Company
By:
---------------------------------
Robert A. Henson
Administrator
CONFIRMED AND ACCEPTED, as
of the date first above
written:
WHEAT FIRST SECURITIES, INC.
By:
---------------------------------
Scott R. Anderson
Managing Director
27
<PAGE>
SCHEDULE A
Number of
Capital Securities
------------------
Name of Underwriters
- --------------------
Wheat First Securities, Inc.
Friedman, Billings, Ramsey & Co., Inc.
---------
Total 2,000,000
=========
<PAGE>
EXHIBIT A
Form of Opinion of Hunton & Williams , Counsel for the Company, to be
delivered pursuant to Section 5(b) of this Agreement:
1. The Company is validly existing and in good standing as a
corporation under the laws of West Virginia.
2. The Company is registered as a bank holding company under the Bank
Holding Act of 1956, as amended.
3. City National Bank of West Virginia is validly existing as a
national banking association under the laws of the United States and continues
to hold a valid bank charter and has full power and authority to conduct its
business as such.
4. Each of the subsidiaries of City National Bank of West Virginia is
validly existing as a corporation under the laws of its jurisdiction of
incorporation and has full power and authority to conduct its business as such.
5. Under the West Virginia Business and Nonprofit Corporation Law, the
Company has the corporate power and authority to (a) own, lease and operate its
properties and to conduct its business as described in the Prospectus, (b)
execute and deliver, and to perform its obligations under, the Operative
Documents to which it is a party and (c) issue and perform its obligations under
the Junior Subordinated Debentures.
6. Except as disclosed in the Prospectus, there is no action, suit or
proceeding before or by any government, governmental instrumentality or court,
domestic or foreign, now pending or, to our knowledge, threatened against or
affecting the Company or any subsidiary that in the final outcome could in our
judgment result in any material adverse change in the condition (financial or
otherwise), earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, or that could materially and
adversely affect the properties or assets of the Company and its subsidiaries
considered as one enterprise, or that could adversely affect the consummation of
the transactions contemplated in the Operative Documents. The aggregate
liability or loss, if any, resulting from the final outcome of all pending legal
or governmental proceedings to which the Company or any subsidiary is a party or
which affect any of its properties that are not described in the Prospectus,
including ordinary routine litigation incidental to its business, would not have
a material adverse effect on the condition, financial or otherwise, earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
7. Neither the Company nor any subsidiary is in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which it is a party or by which it may be bound
A-1
<PAGE>
or to which any of its properties may be subject, except for such defaults that
would not have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
8. The execution and delivery by the Company of the Operative Documents
to which it is a party, the issuance and delivery of the Securities and the
Common Securities and the consummation by the Company of the transactions
contemplated by the Operative Documents do not and will not violate or conflict
with the Articles of Incorporation or the By-laws of the Company.
9. The execution and delivery by the Company of the Operative Documents
to which it is a party, the issuance and delivery of the Capital Securities, the
Common Securities, the issuance and delivery of the Junior Subordinated
Debentures and the consummation by the Company of the transactions contemplated
by the Operative Documents do not and will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary under (a) any indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to which
the Company or any subsidiary is a party or by which it may be bound or to which
any of its properties may be subject, or (b) to our knowledge any existing
applicable law, rule, regulation, qualification, judgment, order or decree of
any governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of its properties except
for such conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the Company or
its subsidiaries considered as one enterprise. While the Company has a
$35,000,000 revolving credit loan agreement with SunTrust Bank, Nashville, N.A.
("SunTrust") that restricts the ability of the Company to create certain
subsidiaries or become liable for certain debts, the Company and SunTrust have
signed a letter agreement dated as of October 9, 1998, that waives these
restrictions for purposes of the formation of the Trust and the issuance of the
Capital Securities and the Subordinated Debentures.
10. No consent, approval, authorization or order of, or filing or
registration or qualification with, any court or governmental agency or body, is
required on the part of the Company for the authorization, issuance, sale and
delivery of the Securities.
11. No approval of any governmental agency which has not been made or
obtained is required for the execution or delivery by the Company of the
Operative Documents to which it is a party, or the consummation by the Company
of the transactions contemplated thereby.
12. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
A-2
<PAGE>
13. The Trust Agreement has been duly authorized, executed and
delivered by the Company and has been duly qualified under the Trust Indenture
Act of 1939 as amended.
14. The Guarantee has been duly authorized, executed and delivered by
the Company, and 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 Enforceability Exceptions,
and the Guarantee has been duly qualified under the Trust Indenture Act of 1939,
as amended.
15. The Junior Subordinated Indenture has been duly authorized,
executed and delivered by the Company and 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
Enforceability Exceptions, and the Junior Subordinated Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended.
16. The Junior Subordinated Debentures have been duly authorized for
issuance by the Company, and the Junior Subordinated Debentures, when executed,
authenticated and delivered in the manner provided for in the Junior
Subordinated Indenture and paid for in accordance with the Junior Subordinated
Debenture Purchase Agreement, will constitute valid and binding obligations of
the Company entitled to the benefits of the Junior Subordinated Indenture and
enforceable against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by the Enforceability Exceptions.
17. The statements in the Prospectus under the captions "Description
of Capital Securities," "Description of Guarantee," "Description of Junior
Subordinated Debentures" and "Relationship Among the Capital Securities, the
Junior Subordinated Debentures and the Guarantee," to the extent that such
statements purport to summarize certain provisions of the Capital Securities,
the Junior Subordinated Debentures, the Guarantee and the Junior Subordinated
Indenture have been reviewed by us and fairly summarize such provisions in all
material respects and conform in all material respects to the instruments
defining the same.
18. Neither the Company nor the Issuer Trust is, or immediately
following consummation of the transactions contemplated by the Underwriting
Agreement will be, required to be registered under the Investment Company Act of
1940, as amended.
19. Based on the foregoing and such other information as we have
considered necessary for the purposes hereof, we confirm that the statements of
law or legal conclusions and opinions set forth under the section entitled
"Certain Federal Income Tax Consequences" in the Prospectus, subject to the
assumptions and conditions described therein, constitute our opinion. Our
opinion is based on the case law, Internal Revenue Service rulings and
pronouncements and judicial decisions as they exist at the date hereof. The
authorities are all subject to change, and such change may be made with
retroactive effect. We can give no assurances that, after such change, our
opinion would not be different.
A-3
<PAGE>
20. The Registration Statement and any post-effective amendments
thereto have become effective under the 1933 Act and, to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement or such amendments thereto has been issued under the 1933 Act, and no
proceeding therefor has been instituted or is pending or threatened by the
Commission.
21. The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to the Closing Date
(other than the financial statements and related notes thereto, related
schedules and financial and statistical data, and descriptions of accounting
treatment included therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations.
22. In addition, such counsel shall state that they have participated
in the preparation of the Registration Statement and the Prospectus and, while
they are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (except as specified above), or the basis of the
foregoing, no facts have come to the attention of such counsel to lead them to
believe that, as of the effective date of the Registration Statement or any
post-effective amendment thereto or the date of the Prospectus or as of the
Closing Date, either the Registration Statement, any post-effective amendment
thereto, or the Prospectus (or, as of its date, any further amendment or
supplement thereto made by the Company prior to the Closing Date) 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, in the light
of the circumstances under which they were made, not misleading (except for the
financial statements and related notes thereto, related schedules and financial
and statistical data, and descriptions of accounting treatment included therein,
as to which such counsel need express no belief).
23. Such counsel does not know of any amendment or supplement to the
Registration Statement or any post-effective amendment thereto required to be
filed or of any contract, agreement, instrument, lease, license, arrangement or
understanding of a character required to be filed as an exhibit to, described
in, the Registration Statement, post-effective amendment thereto, or the
Prospectus, as amended or supplemented, which is not filed or described as
required.
A-4
<PAGE>
EXHIBIT B
Form of Opinion of Richards, Layton & Finger, Special Delaware Counsel
to the Offerors, to be delivered pursuant to Section 5(c) of this Agreement:
1. The Trust has been duly created and is validly existing in good
standing as a statutory business trust under the Delaware Business Trust Act.
2. Under the Delaware Business Trust Act and the Trust Agreement, the
Trust has the trust power and authority to (a) execute and deliver, and to
perform its obligations under, the Operative Documents to which it is a party,
(b) issue and perform its obligations under the Capital Securities and the
Common Securities, and (c) conduct its business as described in the Registration
Statement, or the Prospectus.
3. The Trust Agreement constitutes a valid and binding obligation of the
Company and the Administrators, and is enforceable against the Company and the
Administrators, in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent conveyance or transfer and
other similar laws relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a proceeding
in equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution.
4. The Capital Securities have been duly authorized by the Trust
Agreement, and the Capital Securities, when duly issued, executed and
authenticated in accordance with the Trust Agreement and delivered and paid for
in accordance with the Agreement, will be, subject to the qualifications set
forth in paragraph 6 below, fully paid and nonassessable undivided beneficial
interests in the assets of the Trust and will be entitled to the benefits of the
Trust Agreement, except to the extent that enforcement thereof may be limited by
(i) bankruptcy, insolvency, moratorium, receivership, reorganization,
liquidation, fraudulent conveyance or transfer and other similar laws relating
to or affecting the rights and remedies of creditors generally, (ii) principles
of equity, including applicable law relating to fiduciary duties (regardless of
whether considered and applied in a proceeding in equity or at law), and (iii)
the effect of applicable public policy on the enforceability of provisions
relating to indemnification or contribution.
5. The Common Securities have been duly authorized for issuance by the
Trust Agreement and, when issued, executed and authenticated in accordance with
the Trust Agreement and delivered and paid for in accordance with the Common
Security Purchase Agreement, will be validly issued undivided beneficial
interests in the assets of the Trust. The issuance of the Common Securities is
not subject to preemptive rights under the Delaware Business Trust Act or the
Trust Agreement.
B-1
<PAGE>
6. The holders of the Capital Securities will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the Delaware General Corporation Law. We
bring to your attention, however, that the holders of the Capital 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 exchange of Capital Securities and the issuance of replacement
Capital Securities Certificates and (b) provide security or indemnity in
connection with requests of or directions to the Property Trustee to exercise
its rights and powers under the Trust Agreement.
7. No authorization, approval, consent or order of any Delaware court
or any Delaware governmental authority or Delaware agency is required to be
obtained by the Trust solely in connection with the execution, delivery or
performance by the Trust of the Operative Documents to which it is a party, or
the consummation by the Trust of the transactions contemplated thereby or the
issuance and sale of the Capital Securities. We express no opinion in this
paragraph 7, however, as to any governmental approvals which may be required
under state securities or "blue sky" laws.
8. None of the execution and delivery by the Trust of the Operative
Documents, or the issuance and sale of the Capital Securities by the Trust in
accordance with the terms of the Agreement or the consummation by the Trust of
the other transactions contemplated thereby, (a) violate any applicable Delaware
laws, or (b) conflict with the Certificate of Trust or the Trust Agreement,
except that we express no opinion in this paragraph 8 with respect to (i) the
rights to indemnity and contribution contained in the Trust Agreement which may
be limited by state securities laws or the public policy underlying such laws or
(ii) any state securities or "blue sky" laws.
B-2
<PAGE>
EXHIBIT C
Form of Opinion of Cravath, Swaine & Moore, Special Counsel for the
Property Trustee, Guarantee Trustee, and Debenture Trustee to be delivered
pursuant to Section 5(d) of this Agreement:
1. The Chase Manhattan Bank has been duly incorporated and is validly
existing as a banking corporation in good standing under the laws of the State
of New York.
2. The Chase Manhattan Bank has the corporate trust power and authority
to execute, deliver and perform its duties under the Junior Subordinated
Indenture, the Guarantee and the Trust Agreement, has duly executed and
delivered the Junior Subordinated Indenture, the Guarantee and the Trust
Agreement, and insofar as the laws governing the trust powers of The Chase
Manhattan Bank are concerned, and assuming due authorization, execution and
delivery thereof by the other parties thereto, each of the Junior Subordinated
Indenture, the Guarantee and the Trust Agreement constitutes a legal, valid and
binding agreement of The Chase Manhattan Bank, enforceable against The Chase
Manhattan Bank in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other laws
affecting creditors' rights generally from time to time in effect and to general
principles of equity (including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing), regardless of whether considered
in a proceeding in equity or at law.
3. The execution, delivery and performance by The Chase Manhattan Bank
of the Junior. Subordinate Indenture, the Guarantee and the Trust Agreement do
not conflict with or constitute a breach of the charter or bylaws of The Chase
Manhattan Bank.
4. No approval, authorization or other action by, or filing with, any
governmental authority of the United States of America or the State of New York
having jurisdiction over the trust powers of The Chase Manhattan Bank is
required in connection with the execution and delivery by The Chase Manhattan
Bank of the Junior Subordinated Indenture, the Guarantee or the Trust Agreement
or the performance by The Chase Manhattan Bank of its duties thereunder, except
such as have been obtained, taken or made.
C-1
EXHIBIT 4.1
JUNIOR SUBORDINATED INDENTURE
Between
CITY HOLDING COMPANY
and
THE CHASE MANHATTAN BANK
(as Trustee)
dated as of
March 31, 1998
<PAGE>
CITY HOLDING CAPITAL TRUST
Certain Sections of this Junior Subordinated Indenture relating
to Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Junior Subordinated
Act Section Indenture Section
- --------------- --------------------
Section 310 (a)(1)............................... 6.9
(a)(2)............................... 6.9
(a)(3)............................... Not Applicable
(a)(4)............................... Not Applicable
(a)(5)............................... 6.9
(b).................................. 6.8, 6.10
Section 311 (a).................................. 6.13
(b).................................. 6.13
(b)(2)............................... 7.3(a)
Section 312 (a).................................. 7.1, 7.2(a)
(b).................................. 7.2(b)
(c).................................. 7.2(c)
Section 313 (a).................................. 7.3(a)
(a)(4)............................... 7.3(a)
(b).................................. 7.3(b)
(c).................................. 7.3(a)
(d).................................. 7.3(c)
Section 314 (a).................................. 7.4
(b).................................. 7.4
(c)(1)............................... 1.2
(c)(2)............................... 1.2
(c)(3)............................... Not Applicable
(e).................................. 1.2
Section 315 (a).................................. 6.1(a)
(b).................................. 6.2, 7.3
(c).................................. 6.1(b)
(d).................................. 6.1(c)
(e).................................. 5.14
Section 316 (a).................................. 5.12
(a)(1)(A)............................ 5.12
(a)(1)(B)............................ 5.13
(a)(2)............................... Not Applicable
(b).................................. 5.8
(c).................................. 1.4(f)
Section 317 (a)(1)............................... 5.3
(a)(2)............................... 5.4
(b).................................. 10.3
Section 318 (a).................................. 1.7
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
------------------
Page
----
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION............................... 1
SECTION 1.1. Definitions....................................... 1
SECTION 1.2. Compliance Certificate and Opinions............... 12
SECTION 1.3. Forms of Documents Delivered to
Trustee........................................... 13
SECTION 1.4. Acts of Holders................................... 13
SECTION 1.5. Notices, Etc. to Trustee and Company.............. 16
SECTION 1.6. Notice to Holders; Waiver......................... 16
SECTION 1.7. Conflict with Trust Indenture Act................. 16
SECTION 1.8. Effect of Headings and Table of
Contents.......................................... 17
SECTION 1.9. Successors and Assigns............................ 17
SECTION 1.10. Separability Clause............................... 17
SECTION 1.11. Benefits of Indenture............................. 17
SECTION 1.12. Governing Law..................................... 17
SECTION 1.13. Non-Business Days................................. 18
ARTICLE II SECURITY FORMS.................................... 18
SECTION 2.1. Forms Generally................................... 18
SECTION 2.2. Form of Face of Security.......................... 19
SECTION 2.3. Form of Reverse of Security....................... 23
SECTION 2.4. Additional Provisions Required in
Global Security................................... 29
SECTION 2.5. Form of Trustee's Certificate
of Authentication................................. 29
ARTICLE III THE SECURITIES.................................... 30
SECTION 3.1. Title and Terms................................... 30
SECTION 3.2. Denominations..................................... 33
SECTION 3.3. Execution, Authentication, Delivery
and Dating........................................ 33
SECTION 3.4. Temporary Securities.............................. 35
SECTION 3.5. Global Securities................................. 35
SECTION 3.6. Registration, Transfer and Exchange
Generally; Certain Transfers and
Exchanges; Securities Act Legends................. 36
SECTION 3.7. Mutilated, Lost and Stolen Securities............. 40
SECTION 3.8. Payment of Interest and Additional
Interest; Interest Rights Preserved............... 41
<PAGE>
SECTION 3.9. Persons Deemed Owners............................. 43
SECTION 3.10. Cancellation...................................... 43
SECTION 3.11. Computation of Interest........................... 43
SECTION 3.12. Deferrals of Interest Payment Dates............... 44
SECTION 3.13. Right of Set-Off.................................. 45
SECTION 3.14. Agreed Tax Treatment.............................. 45
SECTION 3.15. Shortening or Extension of Stated
Maturity.......................................... 45
SECTION 3.16. CUSIP Numbers..................................... 46
ARTICLE IV SATISFACTION AND DISCHARGE........................ 46
SECTION 4.1. Satisfaction and Discharge of Indenture........... 46
SECTION 4.2. Application of Trust Money........................ 47
ARTICLE V REMEDIES.......................................... 48
SECTION 5.1. Events of Default................................. 48
SECTION 5.2. Acceleration of Maturity; Rescission
and Annulment..................................... 49
SECTION 5.3. Collection of Indebtedness and Suits
for Enforcement by Trustee........................ 51
SECTION 5.4. Trustee May File Proofs of Claim.................. 51
SECTION 5.5. Trustee May Enforce Claim Without
Possession of Securities.......................... 52
SECTION 5.6. Application of Money Collected.................... 52
SECTION 5.7. Limitation on Suits............................... 53
SECTION 5.8. Unconditional Right of Holders to
Receive Principal, Premium and
Interest; Direct Action by Holders
of Capital Securities............................. 54
SECTION 5.9. Restoration of Rights and Remedies................ 54
SECTION 5.10. Rights and Remedies Cumulative.................... 54
SECTION 5.11. Delay or Omission Not Waiver...................... 55
SECTION 5.12. Control by Holders................................ 55
SECTION 5.13. Waiver of Past Defaults........................... 55
SECTION 5.14. Undertaking for Costs............................. 56
SECTION 5.15. Waiver of Usury, Stay or Extension Laws........... 57
<PAGE>
ARTICLE VI THE TRUSTEE....................................... 57
SECTION 6.1. Certain Duties and Responsibilities............... 57
SECTION 6.2. Notice of Defaults................................ 58
SECTION 6.3. Certain Rights of Trustee......................... 58
SECTION 6.4. Not Responsible for Recitals or
Issuance of Securities............................ 59
SECTION 6.5. May Hold Securities............................... 60
SECTION 6.6. Money Held in Trust............................... 60
SECTION 6.7. Compensation and Reimbursements................... 60
SECTION 6.8. Disqualification; Conflicting
Interests......................................... 61
SECTION 6.9. Corporate Trustee Required;
Eligibility....................................... 61
SECTION 6.10. Resignation and Removal; Appointment
of Successor...................................... 62
SECTION 6.11. Acceptance of Appointment by
Successor......................................... 64
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business............................ 65
SECTION 6.13. Preferential Collection of Claims
Against Company................................... 65
SECTION 6.14. Appointment of Authenticating Agent............... 65
ARTICLE VII HOLDER'S LISTS AND REPORTS BY TRUSTEE,
PAYING AGENT AND COMPANY.......................... 67
SECTION 7.1. Company to Furnish Trustee Names and
Addresses of Holders.............................. 67
SECTION 7.2. Preservation of Information;
Communications to Holders......................... 67
SECTION 7.3. Reports by Trustee and Paying Agent............... 68
SECTION 7.4. Reports by Company................................ 68
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE................................. 69
SECTION 8.1. Company May Consolidate, Etc., Only
on Certain Terms.................................. 69
SECTION 8.2. Successor Company Substituted..................... 70
ARTICLE IX SUPPLEMENTAL INDENTURES........................... 70
SECTION 9.1. Supplemental Indentures Without Consent
of Holders........................................ 71
<PAGE>
SECTION 9.2. Supplemental Indentures with Consent
of Holders........................................ 72
SECTION 9.3. Execution of Supplemental Indentures.............. 73
SECTION 9.4. Effect of Supplemental Indentures................. 74
SECTION 9.5. Conformity with Trust Indenture Act............... 74
SECTION 9.6. Reference in Securities to
Supplemental Indentures........................... 74
ARTICLE X COVENANTS......................................... 74
SECTION 10.1. Payment of Principal, Premium and
Interest.......................................... 74
SECTION 10.2. Maintenance of Office or Agency................... 75
SECTION 10.3. Money for Security Payments to be
Held in Trust..................................... 75
SECTION 10.4. Statement as to Compliance........................ 77
SECTION 10.5. Waiver of Certain Covenants....................... 77
SECTION 10.6. Additional Sums................................... 77
SECTION 10.7. Additional Covenants.............................. 78
SECTION 10.8. Furnishing Annual Information..................... 79
ARTICLE XI REDEMPTION OF SECURITIES.......................... 79
SECTION 11.1. Applicability of This Article..................... 79
SECTION 11.2 Election to Redeem; Notice of Trustee............. 80
SECTION 11.3. Selection of Securities to be Redeemed............ 80
SECTION 11.4. Notice of Redemption.............................. 80
SECTION 11.5. Deposit of Redemption Price....................... 82
SECTION 11.6. Payment of Securities Called for
Redemption........................................ 82
SECTION 11.7. Right of Redemption of Securities
Initially Issued to an Issuer Trust............... 82
ARTICLE XII SINKING FUNDS..................................... 83
ARTICLE XIII SUBORDINATION OF SECURITIES....................... 83
SECTION 13.1. Securities Subordinate to Senior
Indebtedness...................................... 83
SECTION 13.2. No Payment When Senior Indebtedness
in Default; Payment Over of Proceeds
Upon Dissolution, Etc............................. 83
SECTION 13.3. Payment Permitted If No Default................... 85
SECTION 13.4. Subrogation to Rights of Holders of
Senior Indebtedness............................... 85
<PAGE>
SECTION 13.5. Provisions Solely to Define Relative
Rights............................................ 86
SECTION 13.6. Trustee to Effectuate Subordination............... 86
SECTION 13.7. No Waiver of Subordination Provisions............. 87
SECTION 13.8. Notice to Trustee................................. 87
SECTION 13.9. Reliance on Judicial Order or
Certificate of Liquidating Agent.................. 88
SECTION 13.10. Trustee Not Fiduciary for Holders of
Senior Indebtedness............................... 88
SECTION 13.11. Rights of Trustee as Holder of Senior
Indebtedness; Preservation of
Trustee's Rights.................................. 88
SECTION 13.12. Article Applicable to Paying Agents............... 89
SECTION 13.13. Certain Conversions or Exchanges
Deemed Payment.................................... 89
ANNEX A FORM OF RESTRICTED SECURITIES
CERTIFICATE
<PAGE>
JUNIOR SUBORDINATED INDENTURE
THIS JUNIOR SUBORDINATED INDENTURE, dated as of March 31,1998, is between
CITY HOLDING COMPANY, a West Virginia bank holding company (the "Company"),
having its principal office at 25 Gatewater Road, Cross Lanes, West Virginia
25313, and THE CHASE MANHATTAN BANK, as Trustee, having its principal corporate
trust office at 450 West 33rd Street, 15th Floor, New York, New York 10001 (the
"Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
junior subordinated debt securities in series (hereinafter called the
"Securities") of substantially the tenor hereinafter provided, including
Securities issued to evidence loans made to the Company from the proceeds from
the issuance from time to time by one or more business trusts (each an "Issuer
Trust") of undivided preferred beneficial interests in the assets of such Issuer
Trusts (the "Capital Securities") and common undivided interests in the assets
of such Issuer Trusts (the "Common Securities" and, collectively with the
Capital Securities, the "Trust Securities"), and to provide the terms and
conditions upon which the Securities are to be authenticated, issued and
delivered; and
WHEREAS, all things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders (as such term is defined in Section 1.1 hereof)
thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Securities or of any series thereof, and intending
to be legally bound hereby, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
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(1) The terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
(2) All other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) The words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation";
(4) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect at the time of computation;
(5) Whenever the context may require, any gender shall be deemed to
include the other;
(6) 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
Indenture; and
(7) The words "hereby", "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.4(a).
"Additional Interest" means the interest, if any, that shall accrue on any
interest on the Securities of any series the payment of which has not been made
on the applicable Interest Payment Date and which shall accrue at the rate per
annum specified or determined as specified in such Security.
"Additional Sums" has the meaning specified in Section 10.6.
"Additional Taxes" means any additional taxes, duties and other
governmental charges to which an Issuer Trust has become subject from time to
time as a result of a Tax Event.
"Administrator" means, in respect of any Issuer Trust, each Person
appointed in accordance with the related Trust Agreement, solely in such
Person's capacity as Administrator of such Issuer Trust and not in such Person's
individual capacity, or any successor Administrator appointed as therein
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.
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"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Global Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.14 to act on behalf of the Trustee to authenticate Securities of
one or more series.
"Board of Directors" means the board of directors of the Company or the
Executive Committee of the board of directors of the Company (or any other
committee of the board of directors of the Company performing similar functions)
or, for purposes of this Indenture, a committee designated by the board of
directors of the Company (or such committee), comprised of two or more members
of the board of directors of the Company or officers of the Company, or both.
"Board Resolution" means a copy of a resolution certified by the Secretary
or any Assistant Secretary of the Company to have been duly adopted by the Board
of Directors, or such committee of the Board of Directors or officers of the
Company to which authority to act on behalf of the Board of Directors has been
delegated, and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii) a
day on which banking institutions in the City of New York, New York, or the City
of Charleston, West Virginia, 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, with respect to the Securities of a series initially issued to
an Issuer Trust, the "Corporate Trust Office" (as defined in the related Trust
Agreement) of the Property Trustee or the Delaware Trustee under the related
Trust Agreement, is closed for business.
"Capital Securities" has the meaning specified in the first recital of
this Indenture.
"Capital Treatment Event" means, in respect of any Issuer Trust, the
reasonable determination by the Company that, as a result of the occurrence of
any amendment to, or change (including any announced prospective change) in, the
laws (or any rules or regulations thereunder) of the United States or any
political subdivision thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement, action or decision is announced on or after the date of the
issuance of the Capital Securities of such Issuer Trust, there is more than an
insubstantial risk that the Company will not be entitled to treat an amount
equal to the Liquidation Amount of such Capital Securities as "Tier 1 Capital"
(or the then equivalent thereof) for purposes of the risk-based capital adequacy
guidelines of the Board of Governors of the Federal Reserve System, as then in
effect and applicable to the Company.
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"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution 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 on such date.
"Common Securities" has the meaning specified in the first recital of this
Indenture.
"Common Stock" means the common stock, $2.50 par value per share of the
Company.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor entity shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor entity.
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by its Chairman of the Board
of Directors, any Vice Chairman of the Board of Directors, its President or a
Senior Vice President or Vice President, and by its Chief Financial Officer, its
Treasurer or an Assistant Treasurer, or its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered.
"Creditor" has the meaning specified in Section 6.7(c).
"Defaulted Interest" has the meaning specified in Section 3.8.
"Delaware Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Delaware Trustee" in the related Trust Agreement, solely in
its capacity as Delaware Trustee of such Issuer Trust under such Trust Agreement
and not in its individual capacity, or its successor in interest in such
capacity, or any successor Delaware trustee appointed as therein provided.
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"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary by the Company pursuant to Section 3.1 with
respect to such series (or any successor thereto).
"Discount Security" means any security that provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Dollar" or "$" means the currency of the United States of America that,
as at the time of payment, is legal tender for the payment of public and private
debts.
The term "entity" includes a bank, corporation, association, company,
limited liability company, joint-stock company or business trust.
"Event of Default," unless otherwise specified in the supplemental
indenture or specified in or pursuant to the Board Resolution creating a series
of Securities, has the meaning specified in Article V.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Exchange Securities" means a new series of Securities issued by the
Company in a mandatory exchange offer for the Private Securities, such exchange
offer being registered under the Securities Act.
"Expiration Date" has the meaning specified in Section 1.4(f).
"Extension Period" has the meaning specified in Section 3.12.
"Global Security" means a Security in the form prescribed in Section 2.4
evidencing all or part of a series of Securities, issued to the Depositary or
its nominee for such series, and registered in the name of such Depositary or
its nominee.
"Guarantee" means, with respect to any Issuer Trust, the Guarantee
Agreement executed by the Company for the benefit of the Holders of the Capital
Securities issued by such Issuer Trust as modified, amended or supplemented from
time to time.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
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"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of each particular series of Securities established as
contemplated by Section 3.1.
"Institutional Accredited Investor" means an institutional accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act.
"Interest Payment Date" means, as to each series of Securities, the Stated
Maturity of an installment of interest on such Securities.
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
"Investment Company Event" means the receipt by an Issuer Trust of an
Opinion of Counsel (as defined in the relevant Trust Agreement) experienced in
such matters to the effect that, as a result of the occurrence of a change in
law or regulation or a written change (including any announced prospective
change) in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority, there is more than an
insubstantial risk that such Issuer Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act, which change or prospective change becomes effective or would
become effective, as the case may be, on or after the date of the issuance of
the Capital Securities of such Issuer Trust.
"Issuer Trust" has the meaning specified in the first recital of this
Indenture.
"Liquidation Amount" shall have the meaning assigned in the applicable
related Trust Agreement.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 5.1(3).
"Officers' Certificate" means a certificate signed by the Chief Executive
Officer, the President or a Vice President, and by the Chief Financial Officer,
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the party provided herein. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Indenture (other than pursuant to Section 10.4) shall
include:
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(a) a statement by each officer signing the Officers' Certificate that
such officer 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 such officer in rendering the Officers' Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company or any Affiliate of the Company.
"Original Issue Date" means the date of issuance specified as such in a
Security or, if not so specified, the date of original issuance of such Security
(including any Predecessor Security).
"Outstanding" means, when used in reference to any Securities, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities for whose payment money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent in trust for the
Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other Securities
have been authenticated and delivered or that have been paid pursuant to Section
3.7, unless proof satisfactory to the Trustee is presented that any such
Securities are held by Holders in whose hands such Securities are valid, binding
and legal obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor (other than, for the avoidance of doubt, the
Issuer Trust to which Securities of the applicable series were initially issued)
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities that the Trustee knows to be so owned shall be so disregarded.
Securities so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or such other obligor (other than, for the avoidance of doubt, such
Issuer Trust). Upon the written request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Securities, if any, known by the Company to be owned or held by or for the
account of the Company, or any other obligor on the Securities or any Affiliate
of the Company or such obligor (other than, for the avoidance of doubt, such
Issuer Trust), and, subject to the provisions of Section 6.1, the Trustee shall
be entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination.
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"Paying Agent" means the Trustee or any Person authorized by the Company
to pay the principal of (or premium, if any) or interest on, or other amounts in
respect of any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means, with respect to the Securities of any series,
the place or places where the principal of (and premium, if any) and interest on
the Securities of such series are payable pursuant to Section 3.1.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security. For the purposes of this definition, any security
authenticated and delivered under Section 3.7 in lieu of a mutilated, destroyed,
lost or stolen Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.
"Principal Subsidiary Bank" means each of (i) City National Bank of
Charleston, a national banking association, (ii) any other banking subsidiary of
the Company the consolidated assets of which constitute 20% or more of the
consolidated assets of the Company and its consolidated subsidiaries, (iii) any
other banking subsidiary designated as a Principal Subsidiary Bank pursuant to a
Board Resolution and set forth in an Officers' Certificate delivered to the
Trustee, and (iv) any banking subsidiary of the Company that owns, directly or
indirectly, any voting securities, or options, warrants or rights to subscribe
for or purchase voting securities, of any Principal Subsidiary Bank under clause
(i), (ii) or (iii), and in the case of clause (i), (ii), (iii) or (iv) their
respective successors (whether by consolidation, merger, conversion, transfer of
substantially all their assets and business or otherwise) so long as any such
successor is a banking subsidiary (in the case of clause (i), (ii) or (iii) or a
subsidiary (in the case of clause (iv))) of the Company.
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"Private Security" means a Restricted Security.
"Proceeding" has the meaning specified in Section 13.2.
"Property Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Property Trustee" in the related Trust Agreement, solely in
its capacity as Property Trustee of such Issuer Trust under such Trust Agreement
and not in its individual capacity, or its successor in interest in such
capacity, or any successor property trustee appointed as therein provided.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture or the
terms of such Security.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of such series, the close of
business on the fifteenth day of the month next preceding such Interest Payment
Date (whether or not a Business Day).
"Responsible Officer", when used with respect to the Property Trustee
means any officer assigned to the Corporate Trust Office, including any managing
director, vice president, assistant vice president, assistant treasurer,
assistant secretary, trust officer, senior trust officer or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers and having direct responsibility for the
administration of this Indenture, and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Restricted Security" means each Security required pursuant to Section
3.6(c) to bear a Restricted Securities Legend.
"Restricted Securities Certificate" means a certificate substantially in
the form set forth in Annex A.
"Restricted Securities Legend" means a legend substantially in the form of
the legend required in the form of Security set forth in Section 2.2 to be
placed upon a Restricted Security.
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"Rights Plan" means any plan of the Company providing for the issuance by
the Company to all holders of its Common Stock, of rights entitling the holders
thereof to subscribe for or purchase shares of any class or series of capital
stock of the Company which rights (i) are deemed to be transferred with such
shares of such Common Stock, (ii) are not exercisable, and (iii) are also issued
in respect of future issuances of such Common Stock, in each case until the
occurrence of a specified event or events.
"Securities" or "Security" means any debt securities or debt security, as
the case may be, authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as modified, amended or
supplemented from time to time.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.6(a).
"Senior Indebtedness" means, whether recourse is to all or a portion of
the assets of the Company and whether or not contingent: (i) every obligation of
the Company for money borrowed; (ii) every obligation of the Company evidenced
by bonds, debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or businesses;
(iii) every reimbursement obligation of the Company with respect to letters of
credit, bankers' acceptances or similar facilities issued for the account of the
Company; (iv) every obligation of the Company issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business); (v) every
capital lease obligation of the Company; (vi) every obligation of the Company
for claims (as defined in Section 101(4) of the United States Bankruptcy Code of
1978, as amended) in respect of derivative products such as interest and foreign
exchange rate contracts, commodity contracts and similar arrangements; and (vii)
every obligation of the type referred to in clauses (i) through (vi) of another
Person the payment of which the Company has guaranteed or is responsible or
liable, directly or indirectly, as obligor or otherwise; without limiting the
generality of the foregoing, Senior Indebtedness shall include the Company's
$35,000,000 revolving creidt loan with SunTrust Bank, Nashville N.A. "Senior
Indebtedness" shall not include (i) any obligations which, by their terms, are
expressly stated to rank pari passu in right of payment with, or to not be
superior in right of payment to, the Junior Subordinated Debentures, (ii) any
Senior Indebtedness of the Company which when incurred and without respect to
any election under Section 1111(b) of the United States Bankruptcy Code of 1978,
as amended, was without recourse to the Company, (iii) any indebtedness of the
Company to any of its subsidiaries, (iv) indebtedness to any executive officer
or director of the Company, or (v) any indebtedness in respect of debt
securities issued to any trust, or a trustee of such trust, partnership or other
entity affiliated with the Company that is a financing entity of the Company in
connection with the issuance of such financing entity of securities that are
similar to the Capital Securities.
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"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.8.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
pursuant to the terms of such Security as the fixed date on which the principal
of such Security or such installment of principal or interest is due and
payable, as such date may, in the case of such principal, be shortened or
extended as provided pursuant to the terms of such Security and this Indenture.
"Subsidiary" means an entity more than 50% of the outstanding voting stock
of which is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries, or by the Company and one or more other Subsidiaries. For
purposes of this definition, "voting stock" means stock that ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.7 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Tax Event" means the receipt by an Issuer Trust of an Opinion of Counsel
(as defined in the relevant Trust Agreement) 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 or administrative pronouncement or action or
judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or decision is announced
on or after the date of issuance of the Capital Securities of such Issuer Trust,
there is more than an insubstantial risk that (i) such Issuer Trust is, or will
be within 90 days of the delivery of such Opinion of Counsel, subject to United
States Federal income tax with respect to income received or accrued on the
corresponding series of Securities issued by the Company to such Issuer Trust,
(ii) interest payable by the Company on such corresponding series of Securities
is not, or within 90 days of the delivery of such Opinion of Counsel will not
be, deductible by the Company, in whole or in part, for United States Federal
income tax purposes, or (iii) such Issuer Trust is, or will be within 90 days of
the delivery of such Opinion of Counsel, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
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"Trust Agreement" means, with respect to any Issuer Trust, the trust
agreement or other governing instrument of such Issuer Trust.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this Indenture, solely in its capacity as such and not in its individual
capacity, until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder and, if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as modified,
amended or supplemented from time to time, except as provided in Section 9.5.
"Trust Securities" has the meaning specified in the first recital of this
Indenture.
"Vice President," when used with respect to the Company, means any duly
appointed 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 Certificate and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent
(including covenants compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent (including covenants compliance with
which constitutes a condition 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
Indenture 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 Indenture (other than the certificates provided
pursuant to Section 10.4) shall include:
(1) a statement by each individual signing such certificate or opinion
that such individual has read such covenant or condition and the definitions
herein relating thereto;
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(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions of such individual contained
in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or she has
made such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether, in the opinion of such individual, such
condition or covenant has been complied with.
SECTION 1.3. Forms of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his or her certificate or opinion is based
are erroneous. Any such certificate or Opinion of Counsel may be based, insofar
as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given to or taken by Holders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments is or are delivered to the
Trustee, and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
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(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any 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 or her the execution thereof.
Where such execution is by a Person acting in other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be provided in any other manner that the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities
Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
(f) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next succeeding paragraph.
If any record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, 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
(as defined below) by Holders of the requisite principal amount of Outstanding
Securities of such series 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 canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series 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 Trustee in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 1.6.
<PAGE>
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2), or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, 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 principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee 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 canceled and of no effect) and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the party
hereto that sets such record date may designate any day 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 other party hereto in writing, and
to each Holder of Securities of the relevant series 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 party hereto that set such record date 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.
<PAGE>
(g) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such 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 principal amount.
SECTION 1.5. Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, any holder of Capital Securities or the
Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
Office, Attention: Global Trust Services, or
(2) the Company by the Trustee, any Holder or any holder of Capital
Securities shall be sufficient for every purpose (except as otherwise provided
in Section 5.1) hereunder if in writing and mailed, first class, postage
prepaid, to the Company addressed to it at the address of its principal office
specified in the first paragraph of this instrument, Attention: John W.
Alderman, III or at any other address previously furnished in writing to the
Trustee by the Company.
SECTION 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to each Holder affected
by such event, at the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. If, by reason of the suspension
of or irregularities in regular mail services or for any other reason, it shall
be impossible or impracticable to mail notice of any event to Holders when said
notice is required to be given pursuant to any provision of this Indenture or of
the relevant Securities, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
<PAGE>
SECTION 1.7. Conflict with Trust Indenture Act.
This Indenture is intended to be in conformity with the provisions of the
Trust Indenture Act that would be required to be part of this Indenture were
this Indenture to be qualified under the Trust Indenture Act and shall, to the
extent applicable, be governed by such provisions. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control. If any provision hereof limits, qualifies or
conflicts with a provision of the Trust Indenture Act that is required under
such Act to be a part of and govern this Indenture, the provision of the Trust
Indenture Act shall control. If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
SECTION 1.8. 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 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
If any provision in this Indenture or in the Securities shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Indebtedness, the Holders of the Securities and,
to the extent expressly provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.1 and
9.2, the holders of Capital Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
<PAGE>
SECTION 1.12. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 1.13. Non-Business Days.
If any Interest Payment Date, Redemption Date or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or the Securities) payment of interest or principal (and
premium, if any) or other amounts in respect of such Security need not be made
on such date, but may be made on the next succeeding Business Day (and no
interest shall accrue in respect of the amounts whose payment is so delayed for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, until such next succeeding Business Day) 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 Interest Payment Date or Redemption Date
or at the Stated Maturity).
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with applicable tax laws or the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 3.3 with respect to the authentication and
delivery of such Securities.
The Trustee's certificates of authentication shall be substantially in the
form set forth in this Article.
<PAGE>
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Securities distributed to holders of Global Capital Securities (as defined
in the applicable Trust Agreement) upon the dissolution of an Issuer Trust shall
be distributed in the form of one or more Global Securities registered in the
name of a Depositary or its nominee, and deposited with the Securities
Registrar, as custodian for such Depositary, or with such Depositary, for credit
by the Depositary to the respective accounts of the beneficial owners of the
Securities represented thereby (or such other accounts as they may direct).
Securities distributed to holders of Capital Securities other than Global
Capital Securities upon the dissolution of an Issuer Trust shall not be issued
in the form of a Global Security or any other form intended to facilitate
book-entry trading in beneficial interests in such Securities.
SECTION 2.2. Form of Face of Security.
CITY HOLDING COMPANY
[Title of Security]
[If the Security is a Restricted Security, insert -- THE SECURITIES
EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A) BY ANY INITIAL INVESTOR THAT IS NOT A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT,
(I) TO A PERSON WHOM THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (II) IN AN OFFSHORE TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 903
OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (III) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), OR (B) BY AN INITIAL INVESTOR THAT IS A QUALIFIED
INSTITUTIONAL BUYER OR BY ANY SUBSEQUENT INVESTOR, AS SET FORTH IN (A) ABOVE
AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND, IN EACH
CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER
JURISDICTIONS OF THE UNITED STATES. THE HOLDER OF THIS SECURITY AGREES THAT IT
WILL COMPLY WITH THE FOREGOING RESTRICTIONS. SECURITIES OWNED BY AN INITIAL
INVESTOR THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN GLOBAL
FORM AND MAY NOT BE TRANSFERRED WITHOUT CERTIFICATION THAT THE TRANSFER COMPLIES
WITH THE FOREGOING RESTRICTIONS, AS PROVIDED IN THE INDENTURE REFERRED TO BELOW.
NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED
BY RULE 144 FOR RESALES OF THE SECURITIES.]
No. $
<PAGE>
CITY HOLDING COMPANY, a West Virginia bank holding company (hereinafter
called the "Company", which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to , or registered assigns, the principal sum of Dollars on , [if the Security
is a Global Security, then insert, if applicable--, or such other principal
amount represented hereby as may be set forth in the records of the Securities
Registrar hereinafter referred to in accordance with the Indenture, or the
principal sum specified in the Schedule annexed hereto] [; provided that the
Company may (i) shorten the Stated Maturity of the principal of this Security to
a date not earlier than , and (ii) extend the Stated Maturity of the principal
of this Security at any time on one or more occasions, subject to certain
conditions specified in Section 3.15 of the Indenture, but in no event to a date
later than ]. The Company further promises to pay interest on said principal
from , or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, [monthly] [quarterly] [semi-annually] [if
applicable, insert--(subject to deferral as set forth herein)] in arrears on
[insert applicable Interest Payment Dates] of each year, commencing at the
[variable rate equal to [insert applicable interest rate formula]] [rate of
____%] per annum, [if applicable insert--together with Additional Sums, if any,
as provided in Section 10.6 of the Indenture,] until the principal hereof is
paid or duly provided for or made available for payment [if applicable,
insert--; provided that any overdue principal, premium or Additional Sums and
any overdue installment of interest shall bear Additional Interest at the
[variable rate equal to [insert applicable interest rate formula]] [rate of
____%] per annum (to the extent that the payment of such interest shall be
legally enforceable), compounded [monthly] [quarterly] [semi-annually], from the
dates such amounts are due until they are paid or made available for payment,
and such interest shall be payable on demand]. The amount of interest payable
for any period less than a full interest period shall be computed on the basis
of a 360-day year of twelve 30-day months and the actual days elapsed in a
partial month in such period. The amount of interest payable for any full
interest period shall be computed by dividing the applicable rate per annum by
[twelve/four/two]. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest installment [if applicable, insert--, which shall be the [ or ]
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date]. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee (notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date) or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
<PAGE>
[If applicable, insert--So long as no Event of Default has occurred and is
continuing, the Company shall have the right, at any time during the term of
this Security, from time to time to defer the payment of interest on this
Security for up to consecutive [monthly] [quarterly] [semi-annual] interest
payment periods with respect to each deferral period (each an "Extension
Period") [if applicable, insert--, 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 including Additional Interest, as provided below; provided,
however, that no Extension Period shall extend beyond the Stated Maturity of the
principal of this Security [If Stated Maturity can be shortened or extended,
insert--, as then in effect,] and no such Extension Period may end on a date
other than an Interest Payment Date; and provided, further, however, that during
any such Extension Period, the Company shall not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock, or (ii)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in
all respects with or junior in interest to this Security (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or shareholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Company's capital stock (or any capital stock of a
Subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class or
series of the Company's capital stock, (c) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(d) any declaration of a dividend in connection with any Rights Plan, or the
issuance of rights, stock or other property under any Rights Plan, or the
redemption or repurchase of rights pursuant thereto, or (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks pari passu with
or junior to such stock). Prior to the termination of any such Extension Period,
the Company may further defer the payment of interest, provided that no
Extension Period shall exceed consecutive [monthly] [quarterly] [semi-annual]
interest payment periods, extend beyond the Stated Maturity of the principal of
this Security or end on a date other than an Interest Payment Date. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due on any Interest Payment
Date, the Company may elect to begin a new Extension Period, subject to the
above conditions. No interest shall be due and payable during an Extension
Period, except at the end thereof, but each installment of interest that would
otherwise have been due and payable during such Extension Period shall bear
Additional Interest (to the extent that the payment of such interest shall be
legally enforceable) at the [variable rate equal to [insert applicable interest
rate formula]] [rate of ____%] per annum, compounded [monthly] [quarterly]
[semi-annually] and calculated as set forth in the first paragraph of this
Security, from the date on which such amounts would otherwise have been due and
payable until paid or made available for payment. The Company shall give the
Holder of this Security and the Trustee notice of its election to begin any
Extension Period at least one Business Day prior to the next succeeding Interest
Payment Date on which interest on this Security would be payable but for such
deferral [if applicable, insert--or so long as this Security is held by [insert
name of applicable Issuer Trust], at least one Business Day prior to the earlier
of (i) the next succeeding date on which Distributions on the Capital Securities
of such Issuer Trust would be payable but for such deferral, and (ii) the date
on which the Property Trustee of such Issuer Trust is required to give notice to
holders of such Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day prior
to such record date.]
<PAGE>
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in New York, New York, 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 [if applicable, insert--; 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) if to a Holder of $1,000,000 or more in aggregate principal
amount of this Security, by wire transfer in immediately available funds upon
written request to the Trustee not later than 15 calendar days prior to the date
on which the interest is payable].
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and subject in right of payments to the prior payment
in full of all Senior Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such actions as
may be necessary or appropriate to effectuate the subordination so provided, and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
<PAGE>
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
CITY HOLDING COMPANY
By: ____________________________
Name:
Title:
Attest:
________________________________
Secretary or Assistant Secretary
SECTION 2.3. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under the Junior Subordinated Indenture, dated as of March 31, 1998
(herein called the "Indenture"), between the Company and The Chase Manhattan
Bank, as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee, the holders of Senior Indebtedness and the Holders of the Securities,
and of the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof [if
applicable, insert--, limited in aggregate principal amount to $________ ].
<PAGE>
All terms used in this Security that are defined in the Indenture [if
applicable, insert-- or in [insert name of trust agreement], dated as of_______
(as modified, amended or supplemented from time to time the "Trust Agreement"),
relating to [insert name of Issuer Trust] (the "Issuer Trust") among the
Company, as Depositor, the Trustees named therein and the Holders from time to
time of the Trust Securities issued pursuant thereto] [if applicable, insert --
or in the Registration Rights Agreement, dated as of _________ (the
"Registration Rights Agreement"), among the Company, [insert name of Issuer
Trust] and [insert name of initial purchaser]], shall have the meanings assigned
to them in the Indenture [if applicable, insert--or the Trust Agreement [if
applicable, insert -- or the Registration Rights Agreement], as the case may
be].
[If applicable, insert--The Company has the right to redeem this Security
(i) on or after _________, in whole at any time or in part from time to time, or
(ii) in whole (but not in part), at any time within 90 days following the
occurrence and during the continuation of a Tax Event, Investment Company Event,
or Capital Treatment Event, in each case at the Redemption Price described
below, and subject to possible regulatory approval.]
[If applicable, insert--In the case of a redemption on or after
___________, the Redemption Price shall equal the following prices, expressed in
percentages of the principal amount hereof, together with accrued interest to
but excluding the date fixed for redemption, if redeemed during the 12-month
period beginning ___________:
Redemption
Year Price
---- -----
and 100% on or after __________.
In the case of a redemption on or after __________ following a Tax Event,
Investment Company Event or Capital Treatment Event, the Redemption Price shall
equal the Redemption Price then applicable to a redemption under the preceding
paragraph.
In the case of a redemption prior to _________ following a Tax Event,
Investment Company Event or Capital Treatment Event in respect of the Issuer
Trust, the Redemption Price shall equal the Make-Whole Amount for a
corresponding $_________ principal amount hereof, together with accrued interest
to but excluding the date fixed for redemption, which Make-Whole Amount will be
equal to the greater of (i) 100% of the principal amount hereof, and (ii) as
determined by a Quotation Agent (as defined in the Trust Agreement), the sum of
the present values of the principal amount hereof and premium, if any, payable
as part of the Redemption Price with respect to an optional redemption hereof on
___________, together with the present values of scheduled payments of interest
(not including the portion of any such payments of interest accrued as of the
Redemption Date) from the date fixed for redemption to ___________, in each case
discounted to the date fixed for redemption on a [monthly] [quarterly]
[semi-annual] basis (assuming a 360-day year consisting of 30-day months) at the
Adjusted Treasury Rate (as defined in the Trust Agreement).]
<PAGE>
[If the Security is subject to redemption of any kind, insert--In the
event of redemption of this Security in part only, a new Security or Securities
of this series for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.]
[If applicable, insert--Pursuant to the Registration Rights Agreement, in
the event that: (i) (A) neither the Exchange Offer Registration Statement nor a
Shelf Registration Statement is filed with the Commission on or prior to the
150th day after the Issue Date or (B) notwithstanding that the Company and the
Issuer Trust have consummated or will consummate an Exchange Offer, the Company
and the Issuer Trust are required to file a Shelf Registration Statement and
such Shelf Registration Statement is not filed on or prior to the date required
by the Registration Rights Agreement, then commencing on the day after the
applicable required filing date, liquidated damages shall accrue on the
principal amount of the Junior Subordinated Debentures and, if the Exchange
Offer has been consummated, the New Junior Subordinated Debentures, each at a
rate of ____% per annum; or (ii) (A) neither the Exchange Offer Registration
Statement nor a Shelf Registration Statement is declared effective by the
Commission on or prior to the _______ day after the Issue Date or (B)
notwithstanding that the Company and the Issuer Trust have consummated or will
consummate an Exchange Offer, the Company and the Issuer Trust are required to
file a Shelf Registration Statement and such Shelf Registration Statement is not
declared effective by the Commission on or prior to the _____ day after the date
such Shelf Registration Statement was required to be filed, then, commencing on
the _____ day after the Issue Date, liquidated damages shall accrue on the
principal amount of the Junior Subordinated Debentures and, if the Exchange
Offer has been consummated, the New Junior Subordinated Debentures, each at a
rate of ____% per annum; or (iii) (A) the Issuer Trust has not exchanged New
Capital Securities for all Capital Securities validly tendered for exchange by
their respective Holders or the Company has not exchanged the New Guarantee or
New Junior Subordinated Debentures for the Guarantee or Junior Subordinated
Debentures validly tendered, in accordance with the terms of the Exchange Offer
on or prior to the _____ day after the date on which the Exchange Offer
Registration Statement was declared effective or (B) if applicable, the Shelf
Registration Statement has been declared effective and such Shelf Registration
Statement ceases to be effective at any time prior to the expiration of the Rule
144(K) Period (other than after such time as all Capital Securities have been
disposed of thereunder or otherwise cease to be Registrable Securities), then
liquidated damages shall accrue on the principal amount of the Junior
Subordinated Debentures and, if the Exchange Offer has been consummated, the New
Junior Subordinated Debentures, each at a rate of ____% per annum commencing on
(x) the ____ day after such effective date, in the case of (A) above, or (y) the
day such Shelf Registration Statement ceases to be effective in the case of (B)
above; provided, however, that the liquidated damages on the Junior Subordinated
Debentures and, if the Exchange Offer has been consummated, the New Junior
Subordinated Debentures, may not exceed in the aggregate ____% per annum;
provided, further, however, that (1) upon the filing of the Exchange Offer
Registration Statement or a Shelf Registration Statement (in the case of clause
(i) above), (2) upon the effectiveness of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (ii) above),
or (3) upon the exchange of New Capital Securities, the New Guarantee and New
Junior Subordinated Debentures for all Capital Securities, the Guarantee and all
Junior Subordinated Debentures validly tendered (in the case of clause (iii)(A)
above), or upon the effectiveness of the Shelf Registration Statement which had
ceased to remain effective (in the case of clause (iii)(B) above) liquidated
damages on the Junior Subordinated Debentures and, if the Exchange Offer has
been consummated, the New Junior Subordinated Debentures, shall cease to accrue
and accumulate.
<PAGE>
Any amounts of liquidated damages due pursuant to the preceding paragraph,
will be payable in cash on the next succeeding Interest Payment Date to Holders
on the relevant Regular Record Date.]
[If applicable, insert--The Indenture contains provisions for defeasance
at any time [of the entire indebtedness of this Security] [or] [certain
restrictive covenants and Events of Default with respect to this Security] [, in
each case] upon compliance by the Company with certain conditions set forth in
the Indenture.]
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of each series to be affected by such supplemental indenture. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
<PAGE>
[If the Security is not a Discount Security, insert--As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then, and in every such case, the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series may declare the principal amount of all the Securities of this series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders) [if applicable, insert--, provided that, if
upon an Event of Default, the Trustee or such Holders fail to declare the
principal of all the Outstanding Securities of this series to be immediately due
and payable, the Holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities then outstanding shall have the right to make such
declaration by a notice in writing to the Company and the Trustee]; and upon any
such declaration the principal amount of and 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 XIII of the Indenture.]
[If the Security is a Discount Security, insert--As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series may declare an amount of principal of the Securities of this series to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders) [if applicable, insert--, provided that, if upon an
Event of Default, the Trustee or such Holders fail to declare such principal
amount of the Outstanding Securities of this series to be immediately due and
payable, the Holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities then outstanding shall have the right to make such
declaration by a notice in writing to the Company and the Trustee. The principal
amount payable upon such acceleration shall be equal to--insert formula for
determining the amount]. Upon any such declaration, such amount of the principal
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 such principal and interest (including any Additional
Interest) on all the Securities of this series shall remain subordinated to the
extent provided in Article XIII of the Indenture. Upon payment (i) of the amount
of principal so declared due and payable and (ii) of interest on any overdue
principal, premium and interest (in each case to the extent that the payment of
such interest shall be legally enforceable), all of the Company's obligations in
respect of the payment of the principal of and premium and interest, if any, on
this Security shall terminate.]
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest (including Additional Interest) on this Security at the times, place
and rate, and in the coin or currency, herein prescribed.
<PAGE>
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained under Section 10.2 of the Indenture
for such purpose, 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 such Holder's attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of like tenor,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of [$100,000 and any integral multiple of $1,000 in
excess thereof]. [if applicable, insert -- Securities or portions thereof may be
transferred or exchanged only in principal amounts of not less than $100,000.
Any transfer, exchange or other disposition of Securities in contravention of
Section 3.6(b)(v) of the Indenture shall be deemed to be void and of no legal
effect whatsoever, any such transferee shall be deemed not to be the Holder or
owner of any beneficial interest in such Securities for any purpose, including
but not limited to the receipt of interest payable on such Securities, and such
transferee shall be deemed to have no interest whatsoever in such Securities.]
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agrees that for United States Federal, state and
local tax purposes it is intended that this Security constitute indebtedness.
<PAGE>
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
THIS SECURITY IS A DIRECT AND UNSECURED OBLIGATION OF THE COMPANY, DOES
NOT EVIDENCE DEPOSITS AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER INSURER OR GOVERNMENT AGENCY.
SECTION 2.4. Additional Provisions Required in Global Security.
Unless otherwise specified as contemplated by Section 3.1, any Global
Security issued hereunder shall, in addition to the provisions contained in
Sections 2.2 and 2.3, bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.
SECTION 2.5. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated: THE CHASE MANHATTAN BANK,
as Trustee
By: _____________________
Authorized Officer
<PAGE>
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities that may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.3,
set forth or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities as a series:
(a) the title of the securities of such series, which shall distinguish
the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the
Securities of such series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.6 and except for any
Securities that, pursuant to Section 3.3, are deemed never to have been
authenticated and delivered hereunder); provided, however, that the authorized
aggregate principal amount of such series may be increased above such amount by
a Board Resolution to such effect;
(c) the Person to whom any interest on a Security of the series shall be
payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;
(d) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination thereof, and
any dates on which or circumstances under which, the Company shall have the
right to extend or shorten such Stated Maturity or Maturities;
(e) the rate or rates, if any, at which the Securities of such series
shall bear interest, if any, the rate or rates and extent to which Additional
Interest, if any, shall be payable with respect to any Securities of such
series, the date or dates from which any such interest or Additional Interest
shall accrue, the Interest Payment Dates on which such interest shall be
payable, the right, pursuant to Section 3.12 or as otherwise set forth therein,
of the Company to defer or extend an Interest Payment Date, and the Regular
Record Date for the interest payable on any Interest Payment Date or the method
by which any of the foregoing shall be determined;
<PAGE>
(f) the place or places where the principal of (and premium, if any) and
interest or Additional Interest on the Securities of such series shall be
payable, the place or places where the Securities of such series may be
presented for registration of transfer or exchange, any restrictions that may be
applicable to any such transfer or exchange in addition to or in lieu of those
set forth herein and the place or places where notices and demands to or upon
the Company in respect of the Securities of such series may be made;
(g) the period or periods within or the date or dates on which, if any,
the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the option of
the Company, and if other than by a Board Resolution, the manner in which any
election by the Company to redeem such Securities shall be evidenced;
(h) the obligation or the right, if any, of the Company to redeem, repay
or purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions, or at the option of a Holder thereof, and
the period or periods within which, the price or prices at which, the currency
or currencies (including currency unit or units) in which and the other terms
and conditions upon which Securities of the series shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
(i) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $100,000 and any integral multiple of
$1,000 in excess thereof;
(j) if other than Dollars, the currency or currencies (including any
currency unit or units) in which the principal of (and premium, if any) and
interest and Additional Interest, if any, on the Securities of the series shall
be payable, or in which the Securities of the series shall be denominated and
the manner of determining the equivalent thereof in Dollars for purposes of
determining the Dollar equivalent of the principal amount of Outstanding
Securities;
(k) the additions, modifications or deletions, if any, in the Events of
Default or covenants of the Company set forth herein with respect to the
Securities of such series;
(l) if, other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
(m) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more dates
prior to the Stated Maturity, the amount which shall be deemed to be the
principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall be
due and payable upon any Maturity other than the Stated Maturity or which shall
be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in
any such case, the manner in which such amount deemed to be the principal amount
shall be determined);
<PAGE>
(n) if applicable, that the Securities of the series, in whole or in any
specified part, shall be defeasible and, if other than by a Board Resolution,
the manner in which any election by the Company to defease such Securities shall
be evidenced;
(o) the additions or changes, if any, to this Indenture with respect to
the Securities of such series as shall be necessary to permit or facilitate the
issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;
(p) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the manner
in which such amounts will be determined;
(q) if applicable, that any Securities of the series shall be issuable in
whole or in part in the form of one or more Global Securities and, in such case,
the respective Depositaries for such Global Securities, the form of any legend
or legends that shall be borne by any such Global Security in addition to or in
lieu of that set forth in Section 2.4 and any circumstances in addition to or in
lieu of those set forth in Section 3.5 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any transfer of
such Global Security in whole or in part may be registered, in the name or names
of Persons other than the Depositary for such Global Security or a nominee
thereof;
(r) the appointment of any Paying Agent or agents for the Securities of
such series;
(s) the terms of any right to convert or exchange Securities of such
series into any other securities or property of the Company, and the additions
or changes, if any, to this Indenture with respect to the Securities of such
series to permit or facilitate such conversion or exchange;
(t) if such Securities are to be issued to an Issuer Trust, the form or
forms of the Trust Agreement and Guarantee relating thereto;
(u) if, other than as set forth herein, the relative degree, if any, to
which the Securities or the series shall be senior to or be subordinated to
other series of Securities in right of payment, whether such other series of
Securities are Outstanding or not;
<PAGE>
(v) any change in the right of the Trustee or the requisite Holders of
such Securities to declare the principal amount thereof due and payable pursuant
to Section 5.2;
(w) any other terms of the Securities of such series (which terms shall
not be inconsistent with the provisions of this Indenture, except as permitted
by Section 9.1(3)).
All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided herein or in or
pursuant to such Board Resolution and set forth, or determined in the manner
provided, in such Officers' Certificate or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
The securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XIII.
SECTION 3.2. Denominations.
The Securities of each series shall be in registered form without coupons
and shall be issuable in minimum denominations of $100,000 and any integral
multiples of $1,000 in excess thereof, unless otherwise specified as
contemplated by Section 3.1(i).
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board of Directors, its President, its
Chief Financial Officer or one of its Vice Presidents, under its corporate seal
reproduced or impressed thereon and attested by its Secretary, or one of its
Assistant Secretaries or Vice Presidents. The signature of any of these officers
on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver
Securities of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established by or pursuant to one or more
Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an Opinion of
Counsel stating,
<PAGE>
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 2.1, that such form
has been established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 3.1, that such terms
have been established in conformity with the provisions of this Indenture;
and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner that
is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and the preceding paragraph,
if all Securities of a series are not to be originally issued at one time, it
shall not be necessary to deliver the Officers' Certificate otherwise required
pursuant to Section 3.1 or the Company Order and Opinion of Counsel otherwise
required pursuant to such preceding paragraph at or prior to the authentication
of each Security of such series if such documents are delivered at or prior to
the authentication upon original issuance of the first Security of such series
to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers or signatories, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 3.10, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
<PAGE>
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon receipt of a Company Order the Trustee shall
authenticate and deliver, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities of such series in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary Securities shall
be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for that purpose
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more definitive Securities
of the same series, of any authorized denominations having the same Original
Issue Date and Stated Maturity and having the same terms as such temporary
Securities. Until so exchanged, the temporary Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.
SECTION 3.5. Global Securities.
(a) Each Global Security issued under this Indenture shall be registered
in the name of the Depositary designated by the Company for such Global Security
or a nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor, and each such Global Security shall constitute a single
Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary advises the Trustee in writing that such
Depositary is no longer willing or able to properly discharge its
responsibilities as Depositary with respect to such Global Security, and the
Company is unable to locate a qualified successor, (ii) the Company executes and
delivers to the Trustee a Company Order stating that the Company elects to
terminate the book-entry system through the Depositary, or (iii) there shall
have occurred and be continuing an Event of Default.
<PAGE>
(c) If any Global Security is to be exchanged for other Securities or
canceled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Securities Registrar for exchange or cancellation as provided
in this Article III. If any Global Security is to be exchanged for other
Securities or canceled in part, or if another Security is to be exchanged in
whole or in part for a beneficial interest in any Global Security, then either
(i) such Global Security shall be so surrendered for exchange or cancellation as
provided in this Article III or (ii) the principal amount thereof shall be
reduced, subject to Section 3.6(b)(v), or increased by an amount equal to the
portion thereof to be so exchanged or canceled, or equal to the principal amount
of such other Security to be so exchanged for a beneficial interest therein, as
the case may be, by means of an appropriate adjustment made on the records of
the Securities Registrar or an appropriate notation made on the Global Security,
whereupon the Trustee, in accordance with the Applicable Procedures, shall
instruct the Depositary or its authorized representative to make a corresponding
adjustment to its records. Upon any such surrender or adjustment of a Global
Security by the Depositary, accompanied by registration instructions, the
Trustee shall, subject to Section 3.6(b) and as otherwise provided in this
Article III, authenticate and deliver any Securities issuable in exchange for
such Global Security (or any portion thereof) in accordance with the
instructions of the Depositary. The Trustee shall not be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be fully
protected in relying on, such instructions.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article III, Section 9.6 or 11.6 or otherwise,
shall be authenticated and delivered in the form of, and shall be, a Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof.
(e) The Depositary or its nominee, as the registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security shall be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or agent. Neither the
Trustee nor the Securities Registrar shall have any liability in respect of any
transfers effected by the Depositary.
(f) The rights of owners of beneficial interests in a Global Security
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its Agent Members.
<PAGE>
SECTION 3.6. Registration, Transfer and Exchange Generally; Certain
Transfers and Exchanges; Securities Act Legends.
(a) (i) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Securities and
transfers of Securities. Such register is herein sometimes referred to as the
"Securities Register." The Trustee is hereby appointed "Securities Registrar"
for the purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the offices
or agencies of the Company designated for that purpose, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of the same
series of any authorized denominations of like tenor and aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of like tenor and
aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities that the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall (if
so required by the Company or the Trustee) be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Securities Registrar, duly executed by the Holder thereof or such Holder's
attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or exchange
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Securities.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (i) to issue, register the transfer of or exchange
any Security of any series during a period beginning at the opening of business
15 days before the day of selection for redemption of Securities of that series
pursuant to Article XI and ending at the close of business on the day of mailing
of the notice of redemption, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except, in the case of
any such Security to be redeemed in part, any portion thereof not to be
redeemed.
<PAGE>
(ii)(A) In addition to the restrictions on transfer set forth in
Section 3.6(a)(i) and 3.6(a)(ii)(B), beneficial ownership of every Private
Security is subject to the restrictions on transfer imposed by the Securities
Act and rules and regulations promulgated by the Commission thereunder and each
certificate representing Private Securities shall bear the Restrictive
Securities Legend, unless such restrictions on transfer shall be terminated in
accordance with the provisions of this Section 3.6. The Holder of each Private
Security, by such Holder's acceptance thereto, agrees to be bound by such
restrictions on transfer.
(B) The restrictions imposed by the Securities Act and this
Indenture upon the transferability of any particular Private Security shall
cease and terminate upon delivery by the Company to the Trustee of an Officers'
Certificate and Opinion of Counsel stating that such Private Security has been
sold pursuant to an effective registration statement under the Securities Act,
exchanged for a corresponding aggregate principal amount of Exchange Securities
of like tenor pursuant to an effective registration statement under the
Securities Act, or transferred in compliance with Rule 144 under the Securities
Act (or any successor provision thereto). Any Private Security as to which the
Company has delivered to the Trustee an Officers' Certificate and Opinion of
Counsel that such restrictions on transfer shall have expired in accordance with
their terms or shall have terminated may, upon surrender of such Private
Security for exchange to the Securities Registrar or any transfer agent in
accordance with the provisions of this paragraph (ii)(B), be exchanged for a new
Security, of like tenor and aggregate principal amount, which shall not bear the
Restrictive Securities Legend. The Company shall inform the Trustee in writing
of the effective date of any registration statement registering the Private
Securities or the Exchange Securities under the Securities Act. The Trustee
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the aforementioned registration statement.
As used in paragraphs (A) and (B) of this paragraph (ii), the term
"transfer" encompasses any sale, pledge, transfer, or other disposition of any
Private Security.
(b) Certain Transfers and Exchanges. Notwithstanding any other provision
of this Indenture, transfers and exchanges of Securities and beneficial
interests in a Global Security shall be made only in accordance with this
Section 3.6(b).
(i) Restricted Non-Global Security to Global Security. If the Holder
of a Restricted Security (other than a Global Security) wishes at any time
to transfer all or any portion of such Security to a Person who wishes to
take delivery thereof in the form of a beneficial interest in a Global
Security, such transfer may be effected only in accordance with the
provisions of this clause (b)(i) and subject to the Applicable Procedures.
Upon receipt by the Securities Registrar of (A) such Security as provided
in Section 3.6(a) and instructions satisfactory to the Securities
Registrar directing that a beneficial interest in the Global Security in a
specified principal amount not greater than the principal amount of such
Security be credited to a specified Agent Member's account and (B) a
Restricted Securities Certificate duly executed by such Holder or such
Holder's attorney duly authorized in writing accompanied by a
certification that such transfer is being affected in accordance with Rule
144A, then the Securities Registrar shall cancel such Security (and issue
a new Security in respect of any untransferred portion thereof) as
provided in Section 3.6(a) and increase the aggregate principal amount of
the Global Security by the specified principal amount as provided in
Section 3.5(c).
<PAGE>
(ii) Non-Global Security to Non-Global Security. A Security that is
not a Global Security may be transferred, in whole or in part, to a Person
who takes delivery in the form of another Security that is not a Global
Security as provided in Section 3.6(a), provided that if the Security to
be transferred in whole or in part is a Restricted Security, the
Securities Registrar shall have received a Restricted Securities
Certificate duly executed by the transferor Holder or such Holder's
attorney duly authorized in writing.
(iii) Exchanges Between Global Security and Non-Global Security. A
beneficial interest in a Global Security may be exchanged for a Security
that is not a Global Security as provided in Section 3.5.
(iv) Certain Initial Transfers of Non-Global Securities. In the case
of Securities initially issued other than in global form, an initial
transfer or exchange of such Securities that does not involve any change
in beneficial ownership may be made to an Institutional Accredited
Investor or Investors as if such transfer or exchange were not an initial
transfer or exchange; provided that written certification shall be
provided by the transferee and transferor of such Securities to the
Securities Registrar that such transfer or exchange does not involve a
change in beneficial ownership.
(v) Limitations Relating to Principal Amount. Notwithstanding any
other provision of this Indenture and unless otherwise specified as
permitted by Section 3.1; Securities or portions thereof may be
transferred or exchanged only in principal amounts of not less than
$100,000. Any transfer, exchange or other disposition of Securities in
contravention of this Section 3.6(b)(v) shall be deemed to be void and of
no legal effect whatsoever, any such transferee shall be deemed not to be
the Holder or owner of any beneficial interest in such Securities for any
purpose, including but not limited to the receipt of interest payable on
such Securities, and such transferee shall be deemed to have no interest
whatsoever in such Securities.
<PAGE>
(c) Restricted Securities Legend. Except as set forth below and in Section
3.6(a)(ii)(B), all Securities shall bear a Restricted Securities Legend:
(i) subject to the following clauses of this Section 3.6(c), a
Security or any portion thereof that is exchanged, upon transfer or
otherwise, for a Global Security or any portion thereof shall bear the
Restricted Securities Legend while represented thereby;
(ii) subject to the following clauses of this Section 3.6(c), a new
Security which is not a Global Security and is issued in exchange for
another Security (including a Global Security) or any portion thereof,
upon transfer or otherwise, shall, if such new Security is required
pursuant to Section 3.6(b)(ii) or (iii) to be issued in the form of a
Restricted Security, bear a Restricted Securities Legend;
(iii) a new Security (other than a Global Security) that does not
bear a Restricted Securities Legend may be issued in exchange for or in
lieu of a Restricted Security or any portion thereof that bears such a
legend if, in the Company's judgment, placing such a legend upon such new
Security is not necessary to ensure compliance with the registration
requirements of the Securities Act, and the Trustee, at the written
direction of the Company in the form of an Officers' Certificate, shall
authenticate and deliver such a new Security as provided in this Article
III;
(iv) notwithstanding the foregoing provisions of this Section
3.6(c), a Successor Security of a Security that does not bear a Restricted
Securities Legend shall not bear such form of legend unless the Company
has reasonable cause to believe that such Successor Security is a
"restricted security" within the meaning of Rule 144, in which case the
Trustee, at the written direction of the Company in the form of an
Officers' Certificate, shall authenticate and deliver a new Security
bearing a Restricted Securities Legend in exchange for such Successor
Security as provided in this Article III; and
(v) Securities distributed to a holder of Capital Securities upon
dissolution of an Issuer Trust shall bear a Restricted Securities Legend
if the Capital Securities so held bear a similar legend.
SECTION 3.7. Mutilated, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee together with such
security or indemnity as may be required by the Company or the Trustee to save
each of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same series,
of like tenor and aggregate principal amount, bearing the same legends, and
bearing a number not contemporaneously outstanding.
<PAGE>
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security, and
(ii) such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute
and upon its request the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security, a new Security of the same series, of
like tenor and aggregate principal amount and bearing the same legends as such
destroyed, lost or stolen Security, and bearing a number not contemporaneously
Outstanding.
If any such mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section 3.7, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of such series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.8. Payment of Interest and Additional Interest; Interest
Rights Preserved.
Unless otherwise provided in the Securities of such series, interest and
Additional Interest on any Security of any series that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date, shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest in respect of Securities of such series, except that, unless
otherwise provided in the Securities of such series, interest payable on the
Stated Maturity of the principal of a Security shall be paid to the Person to
whom principal is paid. The initial payment of interest on any Security of any
series that is issued between a Regular Record Date and the related Interest
Payment Date shall be payable as provided in such Security or in the Board
Resolution pursuant to Section 3.1 with respect to the related series of
Securities.
<PAGE>
Any interest on any Security that is due and payable, but is not timely
paid or duly provided for, on any Interest Payment Date for Securities of such
series (herein called "Defaulted Interest"), shall forthwith cease to be payable
to the registered Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series in respect of
which interest is in default (or their respective Predecessor Securities)
are registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date of
the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon, the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest, which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first class,
postage prepaid, to each Holder of a Security of such series at the
address of such Holder as it appears in the Securities Register not less
than 10 days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in a newspaper, customarily published
in the English language on each Business Day and of general circulation in
the Borough of Manhattan, The City of New York, New York, but such
publication shall not be a condition precedent to the establishment of
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Securities of such series (or their respective Predecessor
Securities) are registered on such Special Record Date and shall no longer
be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of the series in respect of
which interest is in default may be listed and, upon such notice as may be
required by such exchange (or by the Trustee if the Securities are not
listed), if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause 2, such payment shall be deemed
practicable by the Trustee.
<PAGE>
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in
lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue interest, that were carried by such other Security.
SECTION 3.9. Persons Deemed Owners.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee shall treat
the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 3.8) any interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by a Depositary or impair, as between a Depositary and
such holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depositary (or its nominee) as
Holder of any Security.
SECTION 3.10. Cancellation.
All Securities surrendered for payment, redemption, transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee, and any such Securities and Securities surrendered directly to the
Trustee for any such purpose shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder that the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities shall be disposed of by the
Trustee in accordance with its customary procedures and the Trustee shall
deliver to the Company a certificate of such disposition.
<PAGE>
SECTION 3.11. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series for any
period shall be computed on the basis of a 360-day year of twelve 30-day months
and the actual number of days elapsed in any partial month in such period, and
interest on the Securities of each series for a full period shall be computed by
dividing the rate per annum by the number of interest periods that together
constitute a full twelve months.
SECTION 3.12. Deferrals of Interest Payment Dates.
If specified as contemplated by Section 2.1 or Section 3.1 with respect to
the Securities of a particular series, so long as no Event of Default has
occurred and is continuing, the Company shall have the right, at any time during
the term of such series, from time to time to defer the payment of interest on
such Securities for such period or periods (each an "Extension Period") not to
exceed the number of consecutive quarterly, semi-annual or other periods that
equal five years with respect to each Extension Period, during which Extension
Periods the Company shall, if so specified as contemplated by Section 3.1, have
the right to make partial payments of interest on any Interest Payment Date. No
Extension Period shall end on a date other than an Interest Payment Date. At the
end of any such Extension Period, the Company shall pay all interest then
accrued and unpaid on the Securities (together with Additional Interest thereon,
if any, at the rate specified for the Securities of such series to the extent
permitted by applicable law); provided, however, that no Extension Period shall
extend beyond the Stated Maturity of the principal of the Securities of such
series; and provided further, however, that, during any such Extension Period,
the Company shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's capital stock, or (ii) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu in all respects with or junior in
interest to the Securities of such series (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
shareholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Company's capital stock (or any capital stock of a
Subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class or
series of the Company's capital stock, (c) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(d) any declaration of a dividend in connection with any Rights Plan, or the
issuance of rights, stock or other property under any Rights Plan, or the
redemption or repurchase of rights
<PAGE>
pursuant thereto, or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock). Prior
to the termination of any such Extension Period, the Company may further defer
the payment of interest, provided that no Event of Default has occurred and is
continuing and provided further, that no Extension Period shall exceed the
period or periods specified in such Securities, extend beyond the Stated
Maturity of the principal of such Securities or end on a date other than an
Interest Payment Date. Upon the termination of any such Extension Period and
upon the payment of all accrued and unpaid interest and any Additional Interest
then due on any Interest Payment Date, the Company may elect to begin a new
Extension Period, subject to the above conditions. No interest or Additional
Interest shall be due and payable during an Extension Period, except at the end
thereof, but each installment of interest that would otherwise have been due and
payable during such Extension Period shall bear Additional Interest as and to
the extent as may be specified as contemplated by Section 3.1. The Company shall
give the Holders of the Securities of such series and the Trustee notice of its
election to begin any such Extension Period at least one Business Day prior to
the next succeeding Interest Payment Date on which interest on Securities of
such series would be payable but for such deferral or, with respect to any
Securities of a series issued to an Issuer Trust, so long as any such Securities
are held by such Issuer Trust, at least one Business Day prior to the earlier of
(i) the next succeeding date on which Distributions on the Capital Securities of
such Issuer Trust would be payable but for such deferral, and (ii) the date on
which the Property Trustee of such Issuer Trust is required to give notice to
holders of such Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day prior
to such record date.
The Trustee shall promptly give notice of the Company's election to begin
any such Extension Period to the Holders of the Outstanding Securities of such
series.
SECTION 3.13. Right of Set-Off.
With respect to the Securities of a series initially issued to an Issuer
Trust, notwithstanding anything to the contrary herein, the Company shall have
the right to set off any payment it is otherwise required to make in respect of
any such Security to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a payment under the Guarantee
relating to such Security or to a holder of Capital Securities pursuant to an
action undertaken under Section 5.8 of this Indenture.
SECTION 3.14. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the Company and, by its
acceptance of a Security or a beneficial interest therein, the Holder of, and
any Person that acquires a beneficial interest in, such Security agree that for
United States Federal, state and local tax purposes it is intended that such
Security constitutes indebtedness.
<PAGE>
SECTION 3.15. Shortening or Extension of Stated Maturity.
If specified as contemplated by Section 2.1 or Section 3.1 with respect to
the Securities of a particular series, the Company shall have the right to (i)
shorten the Stated Maturity of the principal of the Securities of such series at
any time to any date and (ii) extend the Stated Maturity of the principal of the
Securities of such series at any time at its election for one or more periods,
provided that, if the Company elects to exercise its right to extend the Stated
Maturity of the principal of the Securities of such series pursuant to clause
(ii) above, at the time such election is made and at the time of extension, such
conditions as may be specified in such Securities shall have been satisfied.
SECTION 3.16. CUSIP Numbers.
The Company, in issuing the Securities, may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notice
of redemption and other similar or related materials as a convenience to
Holders; provided that any such notice or other materials may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of redemption or other materials
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Company Request, cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for and as otherwise provided in this
Section 4.1) and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section 3.7 and
(ii) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust,
as provided in Section 10.3) have been delivered to the Trustee for
cancellation; or
<PAGE>
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year of the date of deposit, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of subclause (B)(i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount in the currency or currencies in which
the Securities of such series are payable sufficient to pay and discharge
the entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for the principal (and premium, if any) and
interest (including any Additional Interest) to the date of such deposit
(in the case of Securities that have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of
clause (1) of this Section, the obligations of the Trustee under Section
4.2 and the last paragraph of Section 10.3 shall survive.
Notwithstanding the foregoing, in any case where the Securities are not
due and payable and have not been called for redemption, such Securities
shall remain recourse obligations of the Company.
<PAGE>
SECTION 4.2 Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all money
deposited with the Trustee pursuant to Section 4.1 shall be held in trust and
applied by the Trustee, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest and Additional Interest for the payment of which such money or
obligations have been deposited with or received by the Trustee. Money held by
the Trustee under this Section shall not be subject to the claims of the holders
of Senior Indebtedness under Article XIII.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein with respect to the Securities of
any series, 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 Article XIII or by law or pursuant to any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of any interest upon any Security of that
series, including any Additional Interest in respect thereof, when it
becomes due and payable, and continuance of such default for a period of
30 days (subject to the deferral of any due date in the case of any
Extension Period); or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) failure on the part of the Company duly to observe or perform
any other of the covenants or agreements on the part of the Company in the
Securities of that series or in this Indenture for a period of 90 days
after the date on which written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the
Trustee by registered or certified mail or to the Company and the Trustee
by the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series; or
<PAGE>
(4) entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable federal
or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of
substantially all of the property of the Company, or ordering the
winding-up or liquidation of its affairs, and the continuance of any such
decree of order for relief or any such other decree or order unstayed and
in effect for a period of 90 consecutive days; or
(5) (A) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or (B) the consent by the Company
or the entry of a decree of order for relief in respect of itself in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
the Company, or (C) the filing by the Company of a petition or answer or
consent seeking reorganization or relief under any applicable federal or
state law or (D) the consent by the Company to the filing of such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or of all or substantially all of the property of the Company,
or (E) the making by the Company of an assignment for the benefit of
creditors; or
(6) any other Event of Default provided with respect to Securities
of that series.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 5.1(4) or 5.1(5)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then, and in every such case, the Trustee
or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Securities of that 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 an Issuer 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 such series fail to declare the
principal of all the Outstanding Securities of such series to be immediately due
and payable, the holders of at least 25% in aggregate Liquidation Amount of the
related series of Capital Securities issued by such Issuer Trust then
outstanding shall have the right to make such declaration by a notice in writing
to the Company and the Trustee; and upon any such declaration such principal
amount (or specified portion thereof) of and the accrued interest (including any
Additional Interest) on all the Securities of such series shall become
immediately due and payable. If an Event of Default specified in Section 5.1(4)
or 5.1(5) with respect to Securities of any series at the time Outstanding
occurs, the principal amount of all the Securities of such series (or, if the
Securities of such series are Discount Securities, such portion of the principal
amount of such Securities as may be specified by the terms of that series) shall
automatically, and without any declaration or other action on the part of the
Trustee or any Holder, become immediately due and payable. Payment of principal
and interest (including any Additional Interest) on such Securities shall remain
subordinated to the extent provided in Article XIII notwithstanding that such
amount shall become immediately due and payable as herein provided.
<PAGE>
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest on all Securities of
such series;
(B) any accrued Additional Interest on all Securities of such
series;
(C) the principal of (and premium, if any, on) any Securities
of such series that have become due otherwise than by such
declaration of acceleration and interest and Additional Interest
thereon at the rate borne by the Securities; and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
that has become due solely by such acceleration, have been cured or waived
as provided in Section 5.13.
In the case of Securities of a series initially issued to an Issuer Trust,
if the Holders of such Securities fail to annul such declaration and waive such
default, the holders of a majority in aggregate Liquidation Amount of the
related series of Capital Securities issued by such Issuer Trust then
outstanding shall also have the right to rescind and annul such declaration and
its consequences by written notice to the Company and the Trustee, subject to
the satisfaction of the conditions set forth in clauses (1) and (2) above of
this section 5.2.
<PAGE>
No such rescission shall affect any subsequent default or Event of Default
or impair any right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if:
(1) default is made in the payment of any installment of interest
(including any Additional Interest) on any Security of any series when
such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (and premium,
if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal (and premium, if any) and
interest (including any Additional Interest), and, in addition thereto,
all amounts owing the Trustee under Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities and collect the
monies adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial or
administrative proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors,
<PAGE>
(a) the Trustee (irrespective of whether the principal of the Securities
of any series shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal (and premium, if
any) or interest (including any Additional Interest)) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest (including any Additional Interest) owing
and unpaid in respect to the Securities and to file such other papers or
documents as may be necessary or advisable and to take any and all actions
as are authorized under the Trust Indenture Act in order to have the
claims of the Holders and the Trustee and any predecessor to the Trustee
under Section 6.7 allowed in any such judicial or administrative
proceedings; and
(ii) in particular, the Trustee shall be authorized to collect and
receive any monies or other property payable or deliverable on any such
claims and to distribute the same in accordance with Section 5.6; and
(b) any custodian, receiver, assignee, trustee, liquidator, sequestrator,
conservator (or other similar official) in any such judicial or administrative
proceeding is hereby authorized by each Holder to make such payments to the
Trustee for distribution in accordance with Section 5.6, and in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it and any predecessor Trustee
under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, subject to
Article XIII and after provision for the payment of all the amounts owing the
Trustee and any predecessor Trustee under Section 6.7, its agents and counsel,
be for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
<PAGE>
SECTION 5.6 Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal (or premium,
if any) or interest (including any Additional Interest), upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 6.7;
SECOND: Subject to Article XIII, to the payment of the amounts then due
and unpaid upon Securities of such series for principal (and premium, if any)
and interest (including any Additional Interest) in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such series of
Securities for principal (and premium, if any) and interest (including any
Additional Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 5.7 Limitation on Suits.
Subject to Section 5.8, no Holder of any Securities of any series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture or for the appointment of a receiver, assignee, trustee,
liquidator, sequestrator (or other similar official) or for any other remedy
hereunder, unless:
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in aggregate principal amount
of the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such Event
of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
<PAGE>
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities of
that series;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing itself
of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holders of Securities, or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce
any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all such Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium
and Interest; Direct Action by Holders of Capital
Securities.
Notwithstanding any other provision in this Indenture, the Holder of any
Security of any series shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Sections 3.8 and 3.12) interest (including any Additional Interest)
on such Security on the respective Stated Maturities expressed in such Security
(or in the case of redemption, on the Redemption Date) and to institute suit for
the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder. In the case of Securities of a series issued
to an Issuer Trust, any registered holder of the series of Capital Securities
issued by such Issuer Trust shall have the right, upon the occurrence of an
Event of Default described in Section 5.1(1) or 5.1(2), to institute a suit
directly against the Company for enforcement of payment to such holder of
principal of (premium, if any) and (subject to Sections 3.8 and 3.12) interest
(including any Additional Interest) on the Securities having a principal amount
equal to the aggregate Liquidation Amount of such Capital Securities held by
such holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee, any Holder or any holder of Capital Securities issued by
any Issuer Trust has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee, such Holder or such
holder of Capital Securities, then, and in every such case, the Company, the
Trustee, such Holders and such holder of Capital Securities shall, subject to
any determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee, such Holder and such holder of Capital Securities shall continue as
though no such proceeding had been instituted.
<PAGE>
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of Section 3.7, no
right or remedy herein conferred upon or reserved to the Trustee or 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 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee, any Holder of any Security with
respect to the Securities of the related series or any holder of any Capital
Security to exercise any right or remedy accruing upon any Event of Default with
respect to the Securities of the related series shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein.
Every right and remedy given by this Article or by law to the Trustee or
to the Holders and the right and remedy given to the holders of Capital
Securities by Section 5.8 may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee, the Holders or the holders of Capital
Securities, as the case may be.
SECTION 5.12. Control by Holders.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of any series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or
with this Indenture;
(2) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction; and
(3) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow such direction if a Responsible Officer or
Officers of the Trustee shall, in good faith, determine that the
proceeding so directed would be unjustly prejudicial to the Holders not
joining in any such direction or would involve the Trustee in personal
liability.
<PAGE>
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of any series affected thereby and, in the case of
any Securities of a series initially issued to an Issuer Trust, the holders of a
majority in aggregate Liquidation Amount of the Capital Securities issued by
such Issuer Trust may waive any past default hereunder and its consequences with
respect to such series except a default:
(1) in the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on any Security of such
series (unless such default has been cured and the Company has paid to or
deposited with the Trustee a sum sufficient to pay all matured
installments of interest (including Additional Interest) and all principal
of (and premium, if any, on) all Securities of that series due otherwise
than by acceleration); or
(2) in respect of a covenant or provision hereof that under Article
IX cannot be modified or amended without the consent of each Holder of any
Outstanding Security of such series affected.
Any such waiver shall be deemed to be on behalf of the Holders of all the
Securities of such series, or in the case of waiver by holders of Capital
Securities issued by such Issuer Trust, by all holders of Capital Securities
issued by such Issuer Trust.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may, in
its discretion, require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may, in its
discretion, assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant, but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the Outstanding
Securities of any series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on any Security on or after the respective
Stated Maturities expressed in such Security.
<PAGE>
SECTION 5.15. Waiver of Usury, 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 usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture, but
in the case of any such certificates or opinions that by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
<PAGE>
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct except that
(1) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of Holders pursuant to Section 5.12 relating to the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of a series.
(4) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 6.2. Notice of Defaults.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest (including any Additional
Interest) on any Security of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of Securities of such series; and provided further,
that, in the case of any default of the character specified in Section 5.1(3),
no such notice to Holders of Securities of such series shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section, the
term "default" means any event that is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.
<PAGE>
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, Security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
<PAGE>
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of the Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Securities
Registrar or such other agent.
SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 6.7. Compensation and Reimbursement.
(a) The Company agrees to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder in such amounts as the
Company and the Trustee shall agree from time to time (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust).
(b) The Company agrees to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith.
<PAGE>
(c) Since the Issuer Trust is being formed solely to facilitate an
investment in the Trust Securities, the Company, as Holder of the Common
Securities, hereby covenants to pay all debts and obligations (other than with
respect to the Capital Securities and the Common Securities) and all reasonable
costs and expenses of the Issuer Trust (including without limitation all
reasonable costs and expenses relating to the organization of the Issuer Trust,
the fees and expenses of the trustees and all costs and expenses relating to the
operation of the Issuer Trust) and to pay any and all taxes, duties, assessments
or governmental charges of whatever nature (other than withholding taxes)
imposed on the Issuer Trust by the United States, or any taxing authority, so
that the net amounts received and retained by the Issuer Trust and the Property
Trustee after paying such expenses will be equal to the amounts the Issuer Trust
and the Property Trustee would have received had no such costs or expenses been
incurred by or imposed on the Issuer Trust. The foregoing obligations of the
Company are for the benefit of, and shall be enforceable by, any person to whom
any such debts, obligations, costs, expenses and taxes are owed (each, a
"Creditor") whether or not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations directly against the Company, and the
Company irrevocably waives any right or remedy to require that any such Creditor
take any action against the Issuer Trust or any other person before proceeding
against the Company. The Company shall execute such additional agreements as may
be necessary or desirable to give full effect to the foregoing.
(d) The Company shall indemnify the Trustee for, and hold it harmless
against, any loss, liability or expense (including the reasonable compensation
and the expenses and disbursements of its agents and counsel) incurred without
negligence or bad faith, arising out of or in connection with the acceptance or
administration of this trust or the performance of its duties hereunder,
including the reasonable 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. This indemnification shall survive the termination
of this Indenture or the resignation or removal of the Trustee.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services after an
Event of Default specified in Section 5.1(4) or 5.1(5) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or any successor statute.
SECTION 6.8. Disqualification; Conflicting Interests.
The Trustee for the Securities of any series issued hereunder shall be
subject to the provisions of Section 310(b) of the Trust Indenture Act. Nothing
herein shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of said Section 310(b). Each
Guarantee with respect to an Issuer Trust shall be deemed to be sufficiently
described in this Indenture for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
<PAGE>
SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be:
(a) an entity organized and doing business under the laws of the United
States of America or of any state or territory thereof or of the District of
Columbia, authorized under such laws to exercise corporate trust powers and
subject to supervision or examination by Federal, state, territorial or District
of Columbia authority; or
(b) an entity or other Person organized and doing business under the laws
of a foreign government that is permitted to act as Trustee pursuant to a rule,
regulation or order of the Commission, authorized under such laws to exercise
corporate trust powers, and subject to supervision or examination by authority
of such foreign government or a political subdivision thereof substantially
equivalent to supervision or examination applicable to United States
institutional trustees;
in either case having a combined capital and surplus of at least $50,000,000,
and subject to supervision or examination by Federal or state authority. If such
entity publishes reports of condition at least annually, pursuant to law or to
the requirements of the aforesaid supervising or examining authority, then, for
the purposes of this Section, the combined capital and surplus of such entity
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article. Neither the Company nor any Person directly or indirectly
controlling, controlled by or under common control with the Company shall serve
as Trustee for the Securities of any series issued hereunder.
SECTION 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
<PAGE>
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in aggregate principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months; or
(2) the Trustee shall cease to be eligible under Section 6.9 and
shall fail to resign after written request therefor by the Company or by
any such Holder; or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (i) the Company, acting pursuant to the authority of a
Board Resolution, may remove the Trustee with respect to the Securities of all
series issued hereunder, or (ii) subject to Section 5.14, any Holder who has
been a bona fide Holder of a Security for at least six months may, on behalf of
such Holder and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to the Securities of
all series issued hereunder and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee with respect to the Securities of
that or those series. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in aggregate principal amount of the Outstanding Securities of
such series delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Trustee with respect to the Securities of such series and
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
hereinafter provided, any Holder who has been a bona fide Holder of a Security
of such series for at least six months may, subject to Section 5.14, on behalf
of such Holder and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
<PAGE>
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Securities Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees or co-trustees of
the same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts, and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
<PAGE>
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all rights, powers and trusts referred to in paragraph
(a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless, at the time
of such acceptance, such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any entity into which the Trustee may be merged or converted or with which
it may be consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any entity succeeding to
all or substantially all of the corporate trust business of the Trustee, shall
be the successor of the Trustee hereunder, provided such entity shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
In case any Securities shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated, and in case any Securities shall not have been
authenticated, any successor to the Trustee may authenticate such Securities
either in the name of any predecessor Trustee or in the name of such successor
Trustee, and in all cases the certificate of authentication shall have the full
force which it is provided anywhere in the Securities or in this Indenture that
the certificate of the Trustee shall have.
SECTION 6.13. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
<PAGE>
SECTION 6.14. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities, which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be an entity organized and doing business under
the laws of the United States of America, or of any state or territory thereof
or of the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or state
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any entity into which an Authenticating Agent may be merged or converted
or with which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which such Authenticating Agent shall be a party,
or any entity succeeding to all or substantially all of the corporate trust
business of an Authenticating Agent shall be the successor Authenticating Agent
hereunder, provided such entity shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent, which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance hereunder shall become vested
with all the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provision of
this Section.
<PAGE>
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated: ________________ THE CHASE MANHATTAN BANK,
as Trustee
By: ______________________
As Authenticating Agent
Name:
Title:
By: ____________________
Authorized Signatory
Name:
Title:
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE,
PAYING AGENT AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after March 15 and September 15
in each year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such date; and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished, excluding from any such list names and addresses received by the
Trustee in its capacity as Securities Registrar.
<PAGE>
SECTION 7.2. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.3. Reports by Trustee and Paying Agent.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act, at the times and in the manner provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of not more
than 12 months shall be transmitted no later than January 15 in each calendar
year, commencing with the first January 15 after the first issuance of
Securities under this Indenture, such reports to be dated as of the preceding
November 15.
(c) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each securities exchange upon which any
Securities are listed and also with the Commission. The Company will notify the
Trustee when any Securities are listed on any securities exchange.
(d) The Paying Agent shall comply with all withholding, backup
withholding, tax and information reporting requirements under the Internal
Revenue Code of 1986, as amended, and the Treasury Regulations issued thereunder
with respect to payments on, or with respect to, the Securities.
<PAGE>
SECTION 7.4. Reports by Company.
The Company shall file or cause to be filed with the Trustee and with the
Commission, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided in the Trust Indenture
Act. In the case of information, documents or reports required to be filed with
the Commission pursuant to Section 13(a) or Section 15(d) of the Exchange Act,
the Company shall file or cause the filing of such information documents or
reports with the Trustee within 15 days after the same are required to be filed
with the Commission.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and no Person shall consolidate with or merge into the Company or
convey, transfer or lease its properties and assets substantially as an entirety
to the Company, unless:
(1) If the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the entity formed by such
consolidation or into which the Company is merged or the Person that
acquires by conveyance or transfer, or that leases, the properties and
assets of the Company substantially as an entirety shall be an entity
organized and existing under the laws of the United States of America or
any state thereof or the District of Columbia and shall expressly assume,
by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of (and premium, if any), and interest (including any
Additional Interest) on all the Securities of every series and the
performance of every covenant of this Indenture on the part of the Company
to be performed or observed; provided, however, that nothing herein shall
be deemed to restrict or prohibit, and no supplemental indenture shall be
required in the case of, the merger of a Principal Subsidiary Bank with
and into a Principal Subsidiary Bank or the Company, the consolidation of
Principal Subsidiary Banks into a Principal Subsidiary Bank or the
Company, or the sale or other disposition of all or substantially all of
the assets of any Principal Subsidiary Bank to another Principal
Subsidiary Bank or the Company, if, in any such case in which the
surviving, resulting or acquiring entity is not the Company, the Company
would own, directly or indirectly, at least 80% of the voting securities
of the Principal Subsidiary Bank (and of any other Principal Subsidiary
Bank any voting securities of which are owned, directly or indirectly, by
such Principal Subsidiary Bank) surviving such merger, resulting from such
consolidation or acquiring such assets;
<PAGE>
(2) immediately after giving effect to such transaction, no Event of
Default, and no event that, after notice or lapse of time, or both, would
constitute an Event of Default, shall have occurred and be continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and any such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with and, in the case of a transaction subject to this Section
8.1 but not requiring a supplemental indenture under paragraph (1) of this
Section 8.1, an Officer's Certificate or Opinion of Counsel to the effect
that the surviving, resulting or successor entity is legally bound by the
Indenture and the Securities; and the Trustee, subject to Section 6.1, may
rely upon such Officers' Certificates and Opinions of Counsel as
conclusive evidence that such transaction complies with this Section 8.1.
SECTION 8.2. Successor Company Substituted.
Upon any consolidation or merger by the Company with or into any other
Person, or any conveyance, transfer or lease by the Company of its properties
and assets substantially as an entirety to any Person in accordance with Section
8.1, the successor entity formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein; and in the event of any such conveyance or
transfer (but not in the case of any such lease) the Company shall be discharged
from all obligations and covenants under the Indenture and the Securities.
Such successor Person may cause to be executed, and may issue either in
its own name or in the name of the Company, any or all of the Securities
issuable hereunder that theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor Person
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities that previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication pursuant to such
provisions and any Securities that such successor Person thereafter shall cause
to be executed and delivered to the Trustee on its behalf for the purpose
pursuant to such provisions. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture.
<PAGE>
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form may be made in the Securities thereafter to be
issued as may be appropriate.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may amend
any provision of this Indenture or may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company
herein and in the Securities contained; or
(2) to convey, transfer, assign, mortgage or pledge any property to
or with the Trustee or to surrender any right or power herein conferred
upon the Company; or
(3) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 or 3.1; or
(4) to facilitate the issuance of Securities of any series in
certificated or other definitive form; or
(5) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of the
series specified) or to surrender any right or power herein conferred upon
the Company; or
(6) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Defaults are to be for the benefit of less than all series of
Securities, stating that such additional Events of Default are expressly
being included solely for the benefit of the series specified); or
(7) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall (a) become effective
only when there is no Security Outstanding of any series created prior to
the execution of such supplemental indenture that is entitled to the
benefit of such provision or (b) not apply to any Outstanding Securities;
or
<PAGE>
(8) to cure any ambiguity, to correct or supplement any provision
herein that may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this clause (8) shall not adversely affect the interest of the Holders
of Securities of any series in any material respect or, in the case of the
Securities of a series issued to an Issuer Trust and for so long as any of
the corresponding series of Capital Securities issued by such Issuer Trust
shall remain outstanding, the holders of such Capital Securities; or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 6.11(b); or
(10) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security of each series affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest (including any Additional Interest) on, any
Security, or reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, or reduce the
amount of principal of a Discount Security that would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.2, or change the place of payment where, or the coin or currency
in which, any Security or interest thereon is payable, or impair the right
to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or
<PAGE>
(2) reduce the percentage in aggregate principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 5.13 or
Section 10.5, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Security affected thereby;
provided, further, that, in the case of the Securities of a series issued
to an Issuer Trust, so long as any of the corresponding series of Capital
Securities issued by such Issuer Trust remains outstanding, (i) no such
amendment shall be made that adversely affects the holders of such Capital
Securities in any material respect, and no termination of this Indenture
shall occur, and no waiver of any Event of Default or compliance with any
covenant under this Indenture shall be effective, without the prior
consent of the holders of at least a majority of the aggregate Liquidation
Amount of such Capital Securities then outstanding unless and until the
principal of (and premium, if any, on) the Securities of such series and
all accrued and (subject to Section 3.8) unpaid interest (including any
Additional Interest) thereon have been paid in full or provision therefor
shall have been made in accordance with Article IV, and (ii) no amendment
shall be made to Section 5.8 of this Indenture that would impair the
rights of the holders of Capital Securities issued by an Issuer Trust
provided therein without the prior consent of the holders of each such
Capital Security then outstanding unless and until the principal of (and
premium, if any, on) the Securities of such series and all accrued and
(subject to Section 3.8) unpaid interest (including any Additional
Interest) thereon have been paid in full or provision therefor shall have
been made in accordance with Article IV.
A supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture that has expressly been included solely for the
benefit of one or more particular series of Securities or any corresponding
series of Capital Securities of an Issuer Trust that holds the Securities of any
series, or that modifies the rights of the Holders of Securities of such series
or holders of such Capital Securities of such corresponding series with respect
to such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series or holders
of Capital Securities of any other such corresponding series.
<PAGE>
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture, and
that all conditions precedent herein provided for relating to such action have
been complied with. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.
<PAGE>
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest (including any Additional Interest) on the Securities of
that series in accordance with the terms of such Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company initially appoints the Trustee, acting through its
Corporate Trust Office, as its agent for said purposes. The Company will give
prompt written notice to the Trustee of any change in the location of any such
office or agency. If at any time the Company shall fail to maintain such office
or agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands. Unless otherwise provided in the Securities of a series, the Place of
Payment for the Securities of each series shall be the Borough of Manhattan, The
City of New York, State of New York.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
of 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 each Place of
Payment for Securities of any series for such purposes. The Company will give
prompt written notice to the Trustee of any such designation and any change in
the location of any such office or agency.
SECTION 10.3. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest (including Additional Interest)
on any of the Securities of such series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest (including Additional Interest) so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its failure so to act.
<PAGE>
Whenever the Company shall have one or more Paying Agents, it will, prior
to 10:00 a.m., New York City time, on each due date of the principal of (or
premium, if any) or interest, including Additional Interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest, including Additional Interest so becoming due, such sum to
be held in trust for the benefit of the Persons entitled to such principal (and
premium, if any) or interest, including Additional Interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of its
failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest (including Additional Interest) on the Securities
of a series in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon such Securities) in the making of any payment of principal (and
premium, if any) or interest (or Additional Interest) in respect of any Security
of any Series;
(3) at any time during the continuance of any default with respect to a
series of Securities, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent with respect to such
series; and
(4) comply with the provisions of the Trust Indenture Act applicable to it
as a Paying Agent.
The Company may, at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company in trust for the payment of the principal of (and premium, if any)
or interest (including Additional Interest) on any Security and remaining
unclaimed for two years after such principal (and premium, if any) or interest
(including Additional Interest) has become due and payable shall (unless
otherwise required by mandatory provision of applicable escheat or abandoned or
unclaimed property law) be paid on Company Request to the Company, or (if then
held by the Company) shall (unless otherwise required by mandatory provision of
applicable escheat or abandoned or unclaimed property law) be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, the City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
<PAGE>
SECTION 10.4. Statement as to Compliance.
The Company shall deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate covering the preceding calendar year, stating whether or not to the
best knowledge of the signers thereof the Company is in default in the
performance, observance or fulfillment of any, or is in compliance with, the
terms, provisions, covenants and conditions of this Indenture, and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge. For the purpose of this Section
10.4, compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture. One of
the signatories to such Officers' Certificate shall be the Company's principal
executive officer, principal financial officer or principal accounting officer.
SECTION 10.5. Waiver of Certain Covenants.
Subject to the rights of holders of Capital Securities specified in
Section 9.2, if any, the Company may omit in any particular instance to comply
with any covenant or condition provided pursuant to Section 3.1 with respect to
the Securities of any series, if before or after the time for such compliance
the Holders of at least a majority in aggregate principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company in respect of any
such covenant or condition shall remain in full force and effect.
<PAGE>
SECTION 10.6. Additional Sums.
In the case of the Securities of a series initially issued to an Issuer
Trust, so long as no Event of Default has occurred and is continuing and except
as otherwise specified as contemplated by Section 2.1 or Section 3.1, if (i) an
Issuer Trust is the Holder of all of the Outstanding Securities of such series,
and (ii) a Tax Event has occurred and is continuing in respect of such Issuer
Trust, the Company shall pay to such Issuer Trust (and its permitted successors
or assigns under the related Trust Agreement) for so long as such Issuer Trust
(or its permitted successor or assignee) is the registered holder of the
Outstanding Securities of such series, such additional sums as may be necessary
in order that the amount of Distributions (including any Additional Amounts (as
defined in such Trust Agreement)) then due and payable by such Issuer Trust on
the related Capital Securities and Common Securities that at any time remain
outstanding in accordance with the terms thereof shall not be reduced as a
result of such Additional Taxes (the "Additional Sums"). Whenever in this
Indenture or the Securities there is a reference in any context to the payment
of principal of or interest on the Securities, such mention shall be deemed to
include mention of the payments of the Additional Sums provided for in this
paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express mention of the payment of Additional Sums (if applicable) in any
provisions hereof shall not be construed as excluding Additional Sums in those
provisions hereof where such express mention is not made; provided, however,
that the deferral of the payment of interest pursuant to Section 3.12 on the
Securities shall not defer the payment of any Additional Sums that may be due
and payable.
SECTION 10.7. Additional Covenants.
The Company covenants and agrees with each Holder of Securities of each
series that it shall not (x) declare or pay any dividends or distributions on,
or redeem, purchase, acquire or make a liquidation payment with respect to, any
shares of the Company's capital stock, or (y) make any payment of principal of
or interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu in all respects with or junior in
interest to the Securities of such series (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
shareholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period or other event referred to below, (b) as a
result of an exchange or conversion of any class or series of the Company's
capital stock (or any capital stock of a Subsidiary of the Company) for any
class or series of the Company's capital stock or of any class or series of the
Company's indebtedness for any class or series of the Company's capital stock,
(c) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (d) any declaration of a dividend in
connection with any Rights Plan, or the issuance of rights, stock or other
property under any Rights Plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock) if at
such time (i) there shall have occurred any event (A) of which the Company has
actual knowledge that with the giving of notice or the lapse of time, or both,
would constitute an Event of Default with respect to the Securities of such
series, and (B) which the Company shall not have taken reasonable steps to cure,
(ii) if the Securities of such series are held by an Issuer Trust, the Company
shall be in default with respect to its payment of any obligations under the
Guarantee relating to the Capital Securities issued by such Issuer Trust, or
(iii) the Company shall have given notice of its election to begin an Extension
Period with respect to the Securities of such series as provided herein and
shall not have rescinded such notice, or such Extension Period, or any extension
thereof, shall be continuing.
<PAGE>
The Company also covenants with each Holder of Securities of a series
issued to an Issuer Trust (i) to hold, directly or indirectly, 100% of the
Common Securities of such Issuer Trust, provided that any permitted successor of
the Company as provided under Section 8.2 may succeed to the Company's ownership
of such Common Securities, (ii) as holder of such Common Securities, not to
voluntarily terminate, windup or liquidate such Issuer Trust, other than (a) in
connection with a distribution of the Securities of such series to the holders
of the related Capital Securities in liquidation of such Issuer Trust, or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the related Trust Agreement, and (iii) to use its reasonable efforts, consistent
with the terms and provisions of such Trust Agreement, to cause such Issuer
Trust to continue to be taxable as a grantor trust for United States Federal
income tax purposes.
SECTION 10.8. Furnishing Annual Information.
On or before December 15 of each year during which any Securities are
outstanding, the Company shall furnish to each Paying Agent such information as
may be reasonably requested by each Paying Agent in order that each Paying Agent
may prepare the information which it is required to report for such year on
Internal Revenue Service Forms 1096 and 1099 pursuant to Section 6049 of the
Internal Revenue Code of 1986, as amended. Such information shall include the
amount of original issue discount includible in income for each authorized
minimum denomination of principal amount at Stated Maturity of outstanding
Securities during such year.
<PAGE>
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of This Article.
Redemption of Securities of any series as permitted or required by any
form of Security issued pursuant to this Indenture shall be made in accordance
with such form of Security and this Article; provided, however, that, if any
provision of any such form of Security shall conflict with any provision of this
Article, the provision of such form of Security shall govern. Except as
otherwise set forth in the form of Security for such series, each Security of a
series shall be subject to partial redemption only in the amount of $100,000 or
any integral multiples of $1,000 in excess thereof.
SECTION 11.2. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption at the election of
the Company, the Company shall, not less than 45 nor more than 60 days prior to
the Redemption Date (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee and, in the case of Securities of a series held by
an Issuer Trust, the Property Trustee under the related Trust Agreement, of such
date and of the principal amount of Securities of the applicable series to be
redeemed and provide the additional information required to be included in the
notice or notices contemplated by Section 11.4; provided that, in the case of
any series of Securities initially issued to an Issuer Trust, for so long as
such Securities are held by such Issuer Trust, such notice shall be given not
less than 45 nor more than 75 days prior to such Redemption Date (unless a
shorter notice shall be satisfactory to the Property Trustee under the related
Trust Agreement). In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or subject to compliance with any conditions precedent provided in
such terms, the Company shall furnish the Trustee with an Officers' Certificate
and an Opinion of Counsel evidencing compliance with such restriction or
conditions.
SECTION 11.3. Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security.
The Trustee shall promptly notify the Company in writing of the Securities
selected for partial redemption and the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security that has been or is to be redeemed.
<PAGE>
SECTION 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not later than the thirtieth day, and not earlier than the sixtieth day,
prior to the Redemption Date, to each Holder of Securities to be redeemed, at
the address of such Holder as it appears in the Securities Register.
With respect to Securities of such series to be redeemed, each notice of
redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price or, if the Redemption Price cannot be calculated
prior to the time the notice is required to be sent, the manner of calculation
thereof, or if the terms of such Securities provides for an estimate of the
Redemption Price, the estimate of the Redemption Price provided pursuant to such
terms together with a statement that it is an estimate and that the actual
Redemption Price will be calculated on the third Business Day prior to the
Redemption Date (if such an estimate of the Redemption Price is given, a
subsequent notice shall be given as set forth above setting forth the Redemption
Price promptly following the calculation thereof);
(c) if less than all Outstanding Securities of such particular series are
to be redeemed, the identification (and, in the case of partial redemption, the
respective principal amounts) of the particular Securities to be redeemed;
(d) that, on the Redemption Date, the Redemption Price will become due and
payable upon each such Security or portion thereof, and that interest thereon,
if any, shall cease to accrue on and after said date;
(e) the place or places where such Securities are to be surrendered for
payment of the Redemption Price;
(f) such other provisions as may be required in respect of the terms of a
particular series of Securities; and
(g) that the redemption is for a sinking fund, if such is the case.
<PAGE>
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
The notice, if mailed in the manner provided above, shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, a failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.
With respect to any redemption, the Redemption Price for which cannot be
calculated prior to the giving of the notice of redemption, the Company shall
notify the Trustee of the Redemption Price promptly after the calculation
thereof.
SECTION 11.5. Deposit of Redemption Price.
Prior to 10:00 a.m., New York City time, on the Redemption Date specified
in the notice of redemption given as provided in Section 11.4, the Company will
deposit with the Trustee or with one or more Paying Agents (or if the Company is
acting as its own Paying Agent, the Company will segregate and hold in trust as
provided in Section 10.3) an amount of money sufficient to pay the Redemption
Price of, and any accrued interest (including Additional Interest) on, all the
Securities (or portions thereof) that are to be redeemed on that date.
SECTION 11.6. Payment of Securities Called for Redemption.
If any notice of redemption has been given as provided in Section 11.4,
the Securities or portion of Securities with respect to which such notice has
been given shall become due and payable on the date and at the place or places
stated in such notice at the applicable Redemption Price, together with accrued
interest (including any Additional Interest) to the Redemption Date. On
presentation and surrender of such Securities at a Place of Payment in said
notice specified, the said Securities or the specified portions thereof shall be
paid and redeemed by the Company at the applicable Redemption Price, together
with accrued interest (including any Additional Interest) to the Redemption
Date; provided, however, that, unless otherwise specified as contemplated by
Section 3.1, installments of interest (including Additional Interest) whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant record dates according to their
terms and the provisions of Section 3.8.
Upon presentation of any Security redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder thereof, at
the expense of the Company, a new Security or Securities of the same series, of
authorized denominations, in aggregate principal amount equal to the unredeemed
portion of the Security so presented and having the same Original Issue Date,
Stated Maturity and terms.
<PAGE>
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal of and premium, if any, on such Security
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 11.7. Right of Redemption of Securities Initially Issued to an
Issuer Trust.
In the case of the Securities of a series initially issued to an Issuer
Trust, except as otherwise specified as contemplated by Section 3.1, the
Company, at its option, may redeem such Securities (i) on or after the date
specified in such Security, in whole at any time or in part from time to time,
or (ii) upon the occurrence and during the continuation of a Tax Event, an
Investment Company Event or a Capital Treatment Event, at any time within 90
days following the occurrence and during the continuation of such Tax Event,
Investment Company Event or Capital Treatment Event, in whole (but not in part),
in each case at a Redemption Price specified in such Security, together with
accrued interest (including Additional Interest) to the Redemption Date.
If less than all the Securities of any such series are to be redeemed, the
aggregate principal amount of such Securities remaining Outstanding after giving
effect to such redemption shall be sufficient to satisfy any provisions of the
Trust Agreement related to the Issuer Trust to which such Securities were
issued.
ARTICLE XII
SINKING FUNDS
Except as may be provided in any supplemental or amended indenture, no
sinking fund shall be established or maintained for the retirement of Securities
of any series.
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the payment of the principal
of (and premium, if any) and interest (including any Additional Interest) on
each and all of the Securities of each and every series are hereby expressly
made subordinate and subject in right of payment to the prior payment in full of
all Senior Indebtedness.
<PAGE>
SECTION 13.2. No Payment When Senior Indebtedness in Default; Payment
Over of Proceeds Upon Dissolution, Etc.
If the Company shall default in the payment of any principal of (or
premium, if any) or interest on any Senior Indebtedness when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment or by
declaration of acceleration or otherwise, then, upon written notice of such
default to the Company by the holders of Senior Indebtedness or any trustee
therefor, unless and until such default shall have been cured or waived or shall
have ceased to exist, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) shall be made or agreed to be made on
account of the principal of (or premium, if any) or interest (including
Additional Interest) on any of the Securities, or in respect of any redemption,
repayment, retirement, purchase or other acquisition of any of the Securities.
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Company, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding-up of the Company, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Company for the benefit of creditors or (iv) any
other marshalling of the assets of the Company (each such event, if any, herein
sometimes referred to as a "Proceeding"), all Senior Indebtedness (including any
interest thereon accruing after the commencement of any such proceedings) shall
first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made to any Holder of any of the
Securities on account thereof. Any payment or distribution, whether in cash,
securities or other property (other than securities of the Company or any other
entity provided for by a plan of reorganization or readjustment, the payment of
which is subordinate, at least to the extent provided in these subordination
provisions with respect to the indebtedness evidenced by the Securities, to the
payment of all Senior Indebtedness at the time outstanding and to any securities
issued in respect thereof under any such plan of reorganization or
readjustment), which would otherwise (but for these subordination provisions) be
payable or deliverable in respect of the Securities of any series shall be paid
or delivered directly to the holders of Senior Indebtedness in accordance with
the priorities then existing among such holders until all Senior Indebtedness
(including any interest thereon accruing after the commencement of any
Proceeding) shall have been paid in full.
<PAGE>
In the event of any Proceeding, after payment in full of all sums owing
with respect to Senior Indebtedness, the Holders of the Securities, together
with the holders of any obligations of the Company ranking on a parity with the
Securities, shall be entitled to be paid from the remaining assets of the
Company the amounts at the time due and owing on account of unpaid principal of
(and premium, if any) and interest on the Securities and such other obligations
before any payment or other distribution, whether in cash, property or
otherwise, shall be made on account of any capital stock or any obligations of
the Company ranking junior to the Securities, and such other obligations. If,
notwithstanding the foregoing, any payment or distribution of any character or
any security, whether in cash, securities or other property (other than
securities of the Company or any other entity provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in these subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any plan of reorganization or readjustment), shall be received by
the Trustee or any Holder in contravention of any of the terms hereof and before
all Senior Indebtedness shall have been paid in full, such payment or
distribution or security shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Indebtedness at the time outstanding in accordance with the priorities then
existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full. In the event of the failure of the Trustee or any Holder
to endorse or assign any such payment, distribution or security, each holder of
Senior Indebtedness is hereby irrevocably authorized to endorse or assign the
same.
The Trustee and the Holders shall take such action (including, without
limitation, the delivery of this Indenture to an agent for the holders of Senior
Indebtedness or consent to the filing of a financing statement with respect
hereto) as may, in the opinion of counsel designated by the holders of a
majority in principal amount of the Senior Indebtedness at the time outstanding,
be necessary or appropriate to assure the effectiveness of the subordination
effected by these provisions.
The provisions of this Section 13.2 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Company in respect
of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
The securing of any obligations of the Company, otherwise ranking on a
parity with the Securities or ranking junior to the Securities shall not be
deemed to prevent such obligations from constituting, respectively, obligations
ranking on a parity with the Securities or ranking junior to the Securities.
SECTION 13.3. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or in any
of the Securities shall prevent (a) the Company, at any time, except during the
pendency of the conditions described in the first paragraph of Section 13.2 or
of any Proceeding referred to in Section 13.2, from making payments at any time
of principal of (and premium, if any) or interest (including Additional
Interest) on the Securities, or (b) the application by the Trustee of any monies
deposited with it hereunder to the payment of or on account of the principal of
(and premium, if any) or interest (including any Additional Interest) on the
Securities or the retention of such payment by the Holders, if, two Business
Days prior to the time of such application by the Trustee, it did not have
knowledge that such payment would have been prohibited by the provisions of this
Article.
<PAGE>
SECTION 13.4. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all amounts due or to become due on all
Senior Indebtedness, or the provision for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the extent of
the payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article (equally and ratably with the holders
of all indebtedness of the Company that by its express terms is subordinated to
Senior Indebtedness of the Company to substantially the same extent as the
Securities are subordinated to the Senior Indebtedness and is entitled to like
rights of subrogation by reason of any payments or distributions made to holders
of such Senior Indebtedness) to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of (and
premium if any) and interest (including Additional Interest) on the Securities
shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article, and no payments over
pursuant to the provisions of this Article to the holders of Senior Indebtedness
by Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.
SECTION 13.5. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall: (a) impair, as between the Company and the Holders of the Securities,
the obligations of the Company, which are absolute and unconditional, to pay to
the Holders of the Securities the principal of (and premium, if any) and
interest (including any Additional Interest) on the Securities as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the Holders of the Securities and
creditors of the Company other than their rights in relation to the holders of
Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security
(or to the extent expressly provided herein, the holder of any Capital Security)
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, including filing and voting claims in any Proceeding,
subject to the rights, if any, under this Article of the holders of Senior
Indebtedness to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.
<PAGE>
SECTION 13.6. Trustee to Effectuate Subordination.
Each Holder of a Security by his or her acceptance thereof authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination provided in this
Article and appoints the Trustee his or her attorney-in-fact for any and all
such purposes.
SECTION 13.7. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder may have or
be otherwise charged with.
Without in any way limiting the generality of the immediately preceding
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities of any series, without incurring responsibility to such Holders of
the Securities and without impairing or releasing the subordination provided in
this Article or the obligations hereunder of such Holders of the Securities to
the holders of Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any
manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (iii) release any Person liable in any manner for
the collection of Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 13.8. Notice to Trustee.
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 to or by the Trustee in respect of the Securities. Notwithstanding
the provisions of this Article or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment to or by the Trustee in respect of the
Securities, unless and until the Trustee shall have received written notice
thereof in accordance with Section 1.5 from the Company or a holder of Senior
Indebtedness or from any trustee, agent or representative therefor; provided,
however, that if the Trustee shall not have received the notice provided for in
this Section at least two Business Days prior to the date upon which by the
terms hereof any monies may become payable for any purpose (including, the
payment of the principal of (and premium, if any, on) or interest (including any
Additional Interest) on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
<PAGE>
Subject to the provisions of Section 6.1, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing itself
to be a holder of Senior Indebtedness (or a trustee, agent or representati
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee, agent or representati therefor). In the event that
the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article, and if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
SECTION 13.9. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 6.1, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, conservator,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders of Securities, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
<PAGE>
SECTION 13.10. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee, in its capacity as trustee under this Indenture, shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall
not be liable to any such holders if it shall in good faith mistakenly pay over
or distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article or otherwise.
SECTION 13.11. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness that may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
The rights of the Trustee under Section 6.7 shall not be subject to the
claims of the holders of Senior Indebtedness under this Article XIII.
SECTION 13.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee (unless such
Paying Agent shall be the Company or an Affiliate thereof).
SECTION 13.13. Certain Conversions or Exchanges Deemed Payment.
For purposes of this Article only, (a) the issuance and delivery of junior
securities upon conversion or exchange of Securities of any series shall not be
deemed to constitute a payment or distribution on account of the principal of
(or premium, if any, on) or interest (including any Additional Interest) on such
Securities or on account of the purchase or other acquisition of such
Securities, and (b) the payment, issuance or delivery of cash, property or
securities (other than junior securities) upon conversion or exchange of a
Security of any series shall be deemed to constitute payment on account of the
principal of such security. For the purposes of this Section, the term "junior
securities" means (i) shares of any stock of any class of the Company, and (ii)
securities of the Company that are subordinated in right of payment to all
Senior Indebtedness that may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article.
<PAGE>
* * * *
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.
[Remainder of page left intentionally blank; signatures appear on following
page.]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
CITY HOLDING COMPANY
By: /s/ Robert A. Henson
--------------------------
Name: Robert A. Henson
Title: Chief Financial Officer
Attest: /s/ Michael D. Dean
---------------------
Michael D. Dean
THE CHASE MANHATTAN BANK,
as Trustee, and not in its
individual capacity
By: /s/ Anne G. Brenner
---------------------------
Name: Anne G. Brenner
Title: Vice President
Attest: /s/ James P. Freeman
---------------------
James P. Freeman
<PAGE>
ANNEX A
FORM OF RESTRICTED SECURITIES CERTIFICATE
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 3.6(b) of
the Indenture referred to below)
[ ],
as Securities Registrar
[address]
Re: [Title of Securities] of City Holding Company (the "Securities")
Reference is made to the Junior Subordinated Indenture, dated as of
____________, 1998 (the "Indenture"), between City Holding Company, a West
Virginia bank holding company, and The Chase Manhattan Bank, as Trustee. Terms
used herein and defined in the Indenture or in Regulation S, Rule 144A or Rule
144 under the U.S. Securities Act of 1933 (the "Securities Act") are used here
as so defined.
This certificate relates to $_______________ aggregate principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
CERTIFICATE No(s).
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
The Owner has requested that the Specified Securities be transferred to a
person (the "Transferee") who will take delivery in the form of a Restricted
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
144A, Rule 904 of Regulation S or Rule 144 under the Securities Act and all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies that
<PAGE>
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to a person
that the Owner and any person acting on its behalf reasonably
believe is a "qualified institutional buyer" within the meaning of
Rule 144A, acquiring for its own account or for the account of a
qualified institutional buyer; and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the
Owner may be relying on Rule 144A in connection with the transfer;
and
(2) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities, an
affiliate of the Company or any such distributor or a person acting
in behalf of any of the foregoing;
(B) the offer of the Specified Securities was not made to a
person in the United States;
(C) either;
(i) at the time the buy order was originated, the
Transferee was outside the United States or the Owner and any
person acting on its behalf reasonably believed that the
Transferee was outside the United States, or
(ii) the transaction is being executed in, on or
through the facilities of the Eurobond market, as regulated by
the Association of International Bond Dealers, or another
designated offshore securities market and neither the Owner
nor any person acting on its behalf know that the transaction
has been prearranged with a buyer in the United States;
(D) no directed selling efforts within the meaning of Rule 902
of Regulation S have been made in the United States by or on behalf
of the Owner or any affiliate thereof; and
(E) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
<PAGE>
(3) Rule 144 Transfers. If the transfer is being effected pursuant
to Rule 144:
(A) the transfer is occurring after a holding period of at
least two years (computed in accordance with paragraph (d) of Rule
144) has elapsed since the date the Specified Securities were
acquired from the Company or from an affiliate (as such term is
defined in Rule 144), or such shorter period as Rule 144 may
hereinafter require, of the Company, whichever is later, and is
being effected in accordance with the applicable amount, manner of
sale and notice requirements of paragraphs (e), (f) and (h) of Rule
144;
(B) the transfer is occurring after a holding period of at
least three years has elapsed since the date the Specified
Securities were acquired from the Company or from an affiliate (as
such term is defined in Rule 144) of the Company, whichever is
later, and the Owner is not, and during the preceding three months
has not been, an affiliate of the Company; or
(C) the Owner is a Qualified Institutional Buyer under Rule
144A or has acquired the Securities otherwise in accordance with
Sections (1), (2) or (3) hereof and is transferring the Securities
to an institutional accredited investor in a transaction exempt from
the requirements of the Securities Act.
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers (as defined in
the Trust Agreement relating to the Issuer Trust to which the Securities were
initially issued).
(Print the name of the Undersigned, as such term is
defined in the second paragraph of this certificate.)
Dated:___________ __________________________________________________
(Print the name of the Undersigned, as such term is
defined in the second paragraph of this certificate.)
By: ______________________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf of
the Undersigned must be stated.)
Exhibit 4.3
CERTIFICATE OF TRUST OF
CITY HOLDING CAPITAL TRUST II
THIS CERTIFICATE OF TRUST of City Holding Capital Trust II (the "Trust"),
dated September 17, 1998, is being duly executed and filed by Chase Manhattan
Bank Delaware, a Delaware banking corporation, as trustee, to create a business
trust under the Delaware Business Trust Act (12 Del. C. ss. 3801 et seq.).
1. Name. The name of the business trust created hereby is City Holding
Capital Trust II.
2. Delaware Trustee. The name and address of the trustee of the Trust in
the State of Delaware is:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
3. Effective Date. This Certificate of Trust shall be effective on
September 17, 1998.
IN WITNESS whereof, the undersigned trustee of the Trust has executed this
Certificate of Trust as of the date first written above.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity, but solely as trustee
By: /s/ Denis Kelly
---------------
Name: Denis Kelly
Title: Trust Officer
Exhibit 4.4
AMENDED AND RESTATED
TRUST AGREEMENT
among
CITY HOLDING COMPANY
as Depositor,
THE CHASE MANHATTAN BANK
as Property Trustee,
and
CHASE MANHATTAN BANK DELAWARE
as Delaware Trustee
Dated as of _________, 1998
---------------------------
CITY HOLDING CAPITAL TRUST II
---------------------------
<PAGE>
CITY HOLDING CAPITAL TRUST II
Certain Sections of this Trust Agreement relating, to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Act
Section Trust 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, 10.10(b)
Section 311 (a)..............................8.13, 10.10(b)
(b)..............................8.13, 10.10(b)
Section 312 (a)..............................10.10(b)
(b)..............................10.10(b), (f)
(c)..............................5.7
Section 313 (a)..............................8.15(a)
(a)(4)...........................10.10(c)
(b)..............................8.15(c), 10.10(c)
(c)..............................10.8, 10.10(c)
(d)..............................10.10(c)
Section 314 (a)..............................8.16, 10.10(d)
(b)..............................Not Applicable
(c)(1)...........................8.17, 10.10(d), (e)
(c)(2)...........................8.17, 10.10(d), (e)
(c)(3)...........................8.17, 10.10(d), (e)
(e)..............................8.17, 10.10(e)
Section 315 (a)..............................8.1(d)
(b)..............................8.2
(c)..............................8.1(c)
(d)..............................8.1(d)
(e)..............................Not Applicable
Section 316 (a)..............................Not Applicable
(a)(1)(A)........................Not Applicable
(a)(1)(B)........................Not Applicable
(a)(2)...........................Not Applicable
(b)..............................5.13
(c)..............................6.7
Section 317 (a)(1)...........................Not Applicable
(a)(2)...........................8.14
(b)..............................5.10
Section 318 (a)..............................10.10(a)
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Trust Agreement.
<PAGE>
TABLE OF CONTENTS
ARTICLE I....................................................................6
DEFINED TERMS................................................................6
Section 1.1. Definitions...............................................6
ARTICLE II..................................................................16
CONTINUATION OF THE ISSUER TRUST............................................16
Section 2.1. Name.....................................................16
Section 2.2. Office of the Delaware Trustee; Principal Place of
Business...............................................16
Section 2.3. Initial Contribution of Trust Property;
Organizational Expenses................................16
Section 2.4. Issuance of the Capital Securities.......................17
Section 2.5. Issuance of the Common Securities; Subscription and
Purchase of Junior Subordinated Debentures.............17
Section 2.6. Declaration of Trust.....................................18
Section 2.7. Authorization to Enter into Certain Transactions.........18
Section 2.8. Assets of Trust..........................................22
Section 2.9. Title to Trust Property..................................22
ARTICLE III.................................................................22
PAYMENT ACCOUNT.............................................................22
Section 3.1. Payment Account..........................................22
ARTICLE IV..................................................................23
DISTRIBUTION; REDEMPTION....................................................23
Section 4.1. Distributions............................................23
Section 4.2. Redemption...............................................24
Section 4.3. Subordination of Common Securities.......................27
Section 4.4. Payment Procedures.......................................28
Section 4.5. Tax Returns and Reports..................................28
Section 4.6. Payment of Taxes, Duties, Etc. of the Issuer Trust.......28
Section 4.7. Payments under Indenture or Pursuant to Direct Actions...28
Section 4.8. Liability of the Holder of Common Securities.............29
ARTICLE V...................................................................29
TRUST SECURITIES CERTIFICATES...............................................29
Section 5.1. Initial Ownership........................................29
Section 5.2. The Trust Securities Certificates........................29
Section 5.3. Execution and Delivery of Trust Securities Certificates..30
Section 5.4. Global Capital Securities................................30
Section 5.5. Registration of Transfer and Exchange Generally;
Certain Transfers and Exchanges; Capital
Securities Certificates.................................31
Section 5.6. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates.................................33
<PAGE>
Section 5.7. Persons Deemed Holders...................................33
Section 5.8. Access to List of Holders'Names and Addresses............33
Section 5.9. Maintenance of Office or Agency..........................34
Section 5.10. Appointment of Paying Agent.............................34
Section 5.11. Ownership of Common Securities by Depositor.............34
Section 5.12. Notices to Clearing Agency..............................35
Section 5.13. Rights of Holders.......................................35
ARTICLE VI..................................................................38
ACTS OF HOLDERS; MEETINGS; VOTING...........................................38
Section 6.1. Limitations on Holder's Voting Rights....................38
Section 6.2. Notice of Meetings.......................................39
Section 6.3. Meetings of Holders......................................39
Section 6.4. Voting Rights............................................39
Section 6.5. Proxies, etc.............................................40
Section 6.6. Holder Action by Written Consent.........................40
Section 6.7. Record Date for Voting and Other Purposes................40
Section 6.8. Acts of Holders..........................................40
Section 6.9. Inspection of Records....................................41
ARTICLE VII.................................................................42
REPRESENTATIONS AND WARRANTIES..............................................42
Section 7.1. Representations and Warranties of the Property
Trustee and the Delaware Trustee.......................42
Section 7.2. Representations and Warranties of Depositor..............43
ARTICLE VIII................................................................43
THE ISSUER TRUSTEES; THE ADMINISTRATORS.....................................43
Section 8.1. Certain Duties and Responsibilities......................43
Section 8.2. Events of Default; Waiver................................46
Section 8.2. Certain Notices..........................................46
Section 8.3. Certain Rights of Property Trustee.......................47
Section 8.4. Not Responsible for Recitals or Issuance of Securities...49
Section 8.5. May Hold Securities......................................49
Section 8.6. Compensation; Indemnity; Fees............................49
Section 8.7. Corporate Property Trustee Required; Eligibility
of Trustees and Administrators.........................50
Section 8.8. Conflicting Interests....................................51
Section 8.9. Co-Trustees and Separate Trustee.........................51
Section 8.10. Resignation and Removal; Appointment of Successor.......53
Section 8.11. Acceptance of Appointment by Successor..................54
Section 8.12. Merger, Conversion, Consolidation or Succession
to Business............................................55
Section 8.13. Preferential Collection of Claims Against
Depositor or Issuer Trust..............................55
Section 8.14. Trustee May File Proofs of Claim........................55
Section 8.15. Reports by Property Trustee.............................56
<PAGE>
Section 8.16. Reports to the Property Trustee.........................56
Section 8.17. Evidence of Compliance with Conditions Precedent........56
Section 8.18. Number of Issuer Trustees...............................57
Section 8.19. Delegation of Power.....................................57
Section 8.20. Appointment of Administrators...........................57
Section 8.22. Delaware Trustee........................................58
ARTICLE IX..................................................................59
DISSOLUTION, LIQUIDATION AND MERGER.........................................59
Section 9.1. Dissolution Upon Expiration Date.........................59
Section 9.2. Early Dissolution........................................59
Section 9.3. Termination..............................................59
Section 9.4. Liquidation..............................................60
Section 9.5. Mergers, Consolidations, Amalgamations or
Replacements of the Issuer Trust........................61
ARTICLE X...................................................................62
MISCELLANEOUS PROVISIONS....................................................62
Section 10.1. Limitations of Rights of Holders........................62
Section 10.2. Amendment...............................................62
Section 10.3. Separability............................................64
Section 10.4. Governing Law...........................................64
Section 10.5. Payments Due on Non-Business Day........................65
Section 10.6. Successors..............................................65
Section 10.7. Headings................................................65
Section 10.8. Reports, Notices and Demands............................65
Section 10.9. Agreement Not to Petition...............................66
Section 10.10. Trust Indenture Act; Conflict with Trust
Indenture Act........................................66
Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee
and Indenture........................................68
<PAGE>
Exhibit A Certificate of Trust
Exhibit B [Intentionally Omitted]
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Capital Securities Certificate
<PAGE>
AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of ___________,
1998, by and among (i) City Holding Company, a West Virginia corporation
(including any successors or assigns, the "Depositor"), (ii) The Chase Manhattan
Bank, a New York banking corporation, as property trustee (in such capacity, the
"Property Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), (iii) Chase Manhattan Bank Delaware,
a Delaware banking corporation, as Delaware trustee (the "Delaware Trustee")
(the Property Trustee and the Delaware Trustee are referred to collectively
herein as the "Issuer Trustees"), and (iv) the several Holders, as hereinafter
defined.
WITNESSETH
WHEREAS, the Depositor and the Delaware Trustee have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by entering into a certain Trust Agreement, dated as of September 17,
1998 (the "Original Trust Agreement"), and by the execution and filing by the
Delaware Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, filed on September 17, 1998 (the "Certificate of Trust"),
attached as Exhibit A; and
WHEREAS, the Depositor and the Delaware Trustee 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 Issuer Trust to the Depositor, (ii) the issuance and sale of the Capital
Securities by the Issuer Trust pursuant to the Underwriting Agreement, (iii) the
acquisition by the Issuer Trust from the Depositor of all of the right, title
and interest in the Junior Subordinated Debentures, (iv) the appointment of the
Administrators and (v) the addition of the Property Trustee as a party to this
Trust Agreement.
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party, for the benefit of the
other parties and for the benefit of the Holders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees, intending to be legally
bound, as follows:
<PAGE>
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;
(c) The words "include," "includes" and "including" shall be deemed
to be followed by the phrase "without limitation";
(d) All accounting terms used but not defined herein have the
meanings assigned to them in accordance with United States
generally accepted accounting principles as in effect at the
time of computation;
(e) 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;
(f) 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; and
(g) All references to the date the Capital Securities were
originally issued shall refer to the date the _____% Capital
Securities were originally issued.
"Act" has the meaning specified in Section 6.8.
"Additional Amounts" means, with respect to Trust Securities of a
given Liquidation Amount and/or a given period, the amount of Additional
Interest (as defined in the Indenture) paid by the Depositor on a Like Amount of
Junior Subordinated Debentures for such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Administrators" means each Person appointed in accordance with
Section 8.20 solely in such Person's capacity as Administrator of the Issuer
Trust continued hereunder and not in such Person's individual capacity, or any
successor Administrator appointed as herein provided; with the initial
Administrators being Robert A. Henson and Michael D. Dean.
<PAGE>
"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 Procedures" means, with respect to any transfer or
transaction involving a Global Capital Security or beneficial interest therein,
the rules and procedures of the Depository for such Capital Security, in each
case to the extent applicable to such transaction and as in effect from time to
time.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises judging such Person a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjudication or composition of or in respect of
such Person under any applicable federal or State bankruptcy,
insolvency, reorganization or other similar law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of such Person or of any substantial part of
its property or ordering the winding-up or liquidation of its
affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(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 of Directors" means the board of directors of the Depositor or
the Executive Committee of the board of directors of the Depositor (or any other
committee of the board of directors of the Depositor performing similar
functions) or a committee designated by the board of directors of the Depositor
(or any such committee), comprised of two or more members of the board of
directors of the Depositor or officers of the Depositor, or both.
<PAGE>
"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 Issuer Trustees.
"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, New York, or the City
of Charleston, West Virginia 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 Delaware Trustee's corporate trust office or the corporate
trust office of the Debenture Trustee is closed for business.
"Capital Securities Certificate" means a certificate evidencing
ownership of Capital Securities, substantially in the form attached as Exhibit
D.
"Capital Security" means a preferred undivided beneficial interest in
the assets of the Issuer Trust, having a Liquidation Amount of $25.00 and having
the rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution as provided herein.
"Capital Treatment Event" means, in respect of the Issuer Trust, the
reasonable determination by the Depositor that, as a result of the occurrence of
any amendment to, or change (including any announced prospective change) in, the
laws (or any rules or regulations thereunder) of the United States or any
political subdivision thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement, action or decision is announced on or after the date of the
issuance of the Capital Securities of the Issuer Trust, there is more than an
insubstantial risk that the Depositor will not be entitled to treat an amount
equal to the Liquidation Amount of such Capital Securities as "Tier 1 Capital"
(or the then equivalent thereof) for purposes of the risk-based capital adequacy
guidelines of the Board of Governors of the Federal Reserve System, as then in
effect and applicable to the Depositor.
"Cede" means Cede & Co.
"Certificate of Trust" has the meaning specified in the preamble
to this Trust Agreement.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. The Depository shall be the
initial Clearing Agency.
<PAGE>
"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 Closing Time, which date is also the date of
execution and delivery of this Trust Agreement.
"Closing Time" means the First Closing Date, as that term is used
throughout the Underwriting 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 Exchange Act, 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 Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Common Securities Purchase Agreement" means the Common Securities
Purchase Agreement dated as of ___________, 1998 between the Issuer Trust and
the Depositor, as the same may be amended from time to time.
"Common Security" means an undivided beneficial interest in the
assets of the Issuer Trust, having a Liquidation Amount of $25.00 and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Corporate Trust Office" means the principal corporate trust office
of the Property Trustee located in the City of New York which at the time of the
execution of this Trust Agreement is located at 450 West 33rd Street, 15th
Floor, New York, New York 10001.
"Debenture Event of Default" means an "Event of Default" as defined
in the Indenture.
"Debentures Purchase Agreement" means the Junior Subordinated
Deferrable Interest Debentures Purchase Agreement dated as of ____________, 1998
between the Depositor and the Issuer Trust, as the same may be amended from time
to time.
"Debenture Redemption Date" means, with respect to any Junior
Subordinated Debentures to be redeemed under the Junior Subordinated Indenture,
the date fixed for redemption of such Debentures under the Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, a New York
banking corporation and any successor.
<PAGE>
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. ss. 3801, et seq., as it may be amended from time to
time.
"Delaware Trustee" means the corporation identified as the "Delaware
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Issuer Trust continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Depository" means The Depository Trust Company or any successor
thereto.
"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.
"Early Termination Event" has the meaning specified in Section 9.2.
"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 Issuer Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such
default for a period of 30 days; or
(c) default by the Issuer Trust 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 Issuer Trustees in this Trust
Agreement (other than a covenant or warranty a default in the
performance of which or the breach of which is dealt with in
clause (b) or (c) above) and continuation of such default or
breach for a period of 60 days after there has been given, by
registered or certified mail, to the Issuer Trustees and the
Depositor by the Holders of at least 25% in aggregate
Liquidation Amount of the Outstanding Capital 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
<PAGE>
(e) the occurrence of any Bankruptcy Event with respect to the
Property Trustee or all or substantially all of its property if
a successor Property Trustee has not been appointed within a
period of 90 days thereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and any successor statute thereto, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Global Capital Securities Certificate" means a Capital Securities
Certificate evidencing ownership of Global Capital Securities.
"Global Capital Security" means a Capital Security, the ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 5.4.
"Guarantee" means the Guarantee Agreement executed and delivered by
the Depositor and The Chase Manhattan Bank, as trustee, contemporaneously with
the execution and delivery of this Trust Agreement, for the benefit of the
Holders of the Capital Securities, as amended from time to time.
"Holder" means a Person in whose name a Trust Security or Trust
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.
"Indenture" means the Junior Subordinated Indenture, dated as of
March 31, 1998, between the Depositor and the Debenture Trustee (as amended or
supplemented from time to time) relating to the issuance of the Junior
Subordinated Debentures.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Investment Company Event" means the receipt by the Issuer Trust of
an Opinion of Counsel experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or a written change
(including any announced prospective change) in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority, there is more than an insubstantial risk that the Issuer
Trust is or will be considered an "investment company" that is required to be
registered under the Investment Company Act, which change or prospective change
becomes effective or would become effective, as the case may be, on or after the
date of the issuance of the Capital Securities.
"Issuer Trust" means City Holding Capital Trust II.
"Issuer Trustees" means, collectively, the Property Trustee and the
Delaware Trustee.
<PAGE>
"Junior Subordinated Debentures" means the aggregate principal amount
of the Depositor's _____% Junior Subordinated Deferrable Interest Debentures,
Series B due ______, 2028, issued pursuant to the Indenture.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Capital Securities pro rata based upon the relative
Liquidation Amounts of such classes and (b) with respect to a distribution of
Junior Subordinated Debentures to Holders of Trust Securities in connection with
a dissolution or liquidation of the Issuer Trust, Junior Subordinated Debentures
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the Holder to whom such Junior Subordinated Debentures are
distributed.
"Liquidation Amount" means the stated amount of $25.00 per Trust
Security.
"Liquidation Date" means the date on which Junior Subordinated
Debentures are to be distributed to Holders of Trust Securities in connection
with a dissolution and liquidation of the Issuer Trust pursuant to Section 9.4.
"Liquidation Distribution" has the meaning specified in Section
9.4(d).
"Majority in Liquidation Amount of the Capital Securities" or
"Majority in Liquidation Amount of the Common Securities" means, except as
provided by the Trust Indenture Act, Capital Securities or Common Securities, as
the case may be, representing more than 50% of the aggregate Liquidation Amount
of all then Outstanding Capital Securities or Common Securities, as the case may
be.
"Officers' Certificate" means a certificate signed by the Chief
Executive Officer, President or an Executive Vice President, a Senior Vice
President or Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Depositor, and delivered to the
party provided herein. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Trust Agreement
(other than pursuant to Section 8.17) shall include:
(a) a statement by each officer signing the Officers' Certificate
that such officer 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 such officer in rendering the
Officers' Certificate;
<PAGE>
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Depositor or any Affiliate of the Depositor or
any Issuer Trustee.
"Original Trust Agreement" has the meaning specified in the preamble
to this Trust Agreement.
"Outstanding," with respect to Trust Securities, means, as of the
date of determination, all Trust Securities theretofore executed and delivered
under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Property Trustee or
delivered to the Property Trustee for cancellation;
(b) Trust 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
Capital Securities, provided that if such Trust Securities are
to be redeemed, notice of such redemption has been duly given
pursuant to this Trust Agreement; and
(c) Trust Securities which have been paid, or in exchange for, or in
lieu of which, other Trust Securities have been executed and
delivered pursuant to Sections 5.4, 5.5 and 5.6;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by the Depositor, any Issuer Trustee, any Administrator or any
Affiliate of the Depositor, shall be disregarded and deemed not to be
Outstanding, except that (a) in determining whether any Issuer Trustee or any
Administrator shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Capital Securities
that such Issuer Trustee or such Administrator, as the case may be, knows to be
so owned shall be so disregarded and (b) the foregoing shall not apply at any
time when all of the Outstanding Capital Securities are owned by the Depositor,
one or more of the Issuer Trustees, one or more of the Administrators and/or any
such Affiliate. Capital Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Administrators the pledgee's right so to act with respect to
such Capital 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 Global
Capital Securities 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.
<PAGE>
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.10 and shall initially be the Property Trustee.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained with the Property Trustee in its corporate trust
department for the benefit of the Holders in which all amounts paid in respect
of the Junior Subordinated Debentures will be held and from which the Property
Trustee, through the Paying Agent, shall make payments to the Holders in
accordance with Sections 4.1 and 4.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, company,
limited liability company, trust, unincorporated organization or government or
any agency or political subdivision thereof, or any other entity of whatever
nature.
"Property Trustee" means the Person identified as the "Property
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Property Trustee of the Issuer Trust 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.
"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 Junior Subordinated Debentures shall be a Redemption Date for a Like
Amount of Trust Securities, including but not limited to any date of redemption
pursuant to the occurrence of any Special Event.
"Redemption Price" means a price equal to 100% of the Liquidation
Amount of the Trust Security to be redeemed, together with accumulated
Distributions to but excluding the date fixed for redemption and the related
amount of the premium, if any, paid by the Depositor upon the concurrent
redemption of the Junior Subordinated Debentures.
"Relevant Trustee" has the meaning specified in Section 8.10.
"Responsible Officer" when used with respect to the Property Trustee
means any officer assigned to the Corporate Trust Office, including any managing
director, vice president, assistant vice president, assistant treasurer,
assistant secretary, trust officer, senior trust officer or any other officer of
the Property Trustee customarily performing functions similar to those performed
by any of the above designated officers and having direct responsibility for the
administration of the Indenture, and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended, and
any successor statute thereto, in each case as amended from time to time.
<PAGE>
"Senior Indebtedness" has the meaning specified in the Indenture.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.5.
"Special Event" means any Tax Event, Capital Treatment Event or
Investment Company Event.
"Successor Capital Securities Certificate" of any particular Capital
Securities Certificate means every Capital Securities Certificate issued after,
and evidencing all or a portion of the same beneficial interest in the Issuer
Trust as that evidenced by, such particular Capital Securities Certificate; and,
for the purposes of this definition, any Capital Securities Certificate executed
and delivered under Section 5.6 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Capital Securities Certificate shall be deemed to
evidence the same beneficial interest in the Issuer Trust as the mutilated,
destroyed, lost or stolen Capital Securities Certificate.
"Successor Capital Security" has the meaning specified in Section
9.5.
"Tax Event" means the receipt by the Issuer 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 or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement, action or decision is announced on or after
the date of issuance of the Capital Securities (including, without limitation,
any of the foregoing arising with respect to, or resulting from, any proceeding
or other action commencing on or before such date), there is more than an
insubstantial risk that (i) the Issuer Trust is, or will be within 90 days of
the delivery of such Opinion of Counsel, subject to United States federal income
tax with respect to income received or accrued on the Junior Subordinated
Debentures, (ii) interest payable by the Depositor on the Junior Subordinated
Debentures is not, or within 90 days of the delivery 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 Issuer Trust is, or will be within 90
days of the delivery of such Opinion of Counsel, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"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 (i) all exhibits hereto, and (ii) for
all purposes of this Amended and Restated 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 Amended and Restated Trust
Agreement and any modification, amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 or any
successor statute, in each case as amended from time to time.
<PAGE>
"Trust Property" means (a) the Junior Subordinated Debentures, (b)
any cash on deposit in, or owing to, the Payment Account, (c) all proceeds and
rights in respect of the foregoing and (d) 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 Securities Certificate" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
"Trust Security" means any one of the Common Securities or the
Capital Securities.
"Underwriters" has the meaning specified in the Underwriting
Agreement.
"Underwriting Agreement" means the Underwriting Agreement, dated as
of ______________, 1998, among the Issuer Trust, the Depositor and the
Underwriters, as the same may be amended from time to time.
ARTICLE II
CONTINUATION OF THE ISSUER TRUST
Section 2.1. Name.
The Issuer Trust continued hereby shall be known as "City Holding
Capital Trust II", as such name may be modified from time to time by the
Administrators following written notice to the Holders of Trust Securities and
the Issuer Trustees, in which name the Administrators and the Issuer Trustees
may engage in the transactions contemplated hereby, make and execute contracts
and other instruments on behalf of the Issuer 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 Chase
Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware, 19801,
Attention: Corporate Trustee Administration Department, or such other address in
the State of Delaware as the Delaware Trustee may designate by written notice to
the Holders and the Depositor. The principal executive office of the Issuer
Trust is in care of City Holding Company, 25 Gatewater Road, Charleston, West
Virginia, Attention: Robert A. Henson.
Section 2.3. Initial Contribution of Trust Property; Organizational
Expenses.
The Property Trustee acknowledges receipt in trust from the Depositor
in connection with this Trust Agreement of the sum of $25.00, which constitutes
the initial Trust Property. The Depositor shall pay all organizational expenses
of the Issuer Trust as they arise or shall, upon request of any Issuer Trustee,
promptly reimburse such Issuer Trustee for any such expenses paid by such Issuer
Trustee. The Depositor shall make no claim upon the Trust Property for the
payment of such expenses.
<PAGE>
Section 2.4. Issuance of the Capital Securities.
The Depositor and the Issuer Trust executed and delivered the
Underwriting Agreement as of _________, 1998, pursuant to the Original Trust
Agreement. Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrator, on behalf of the Issuer Trust, shall by manual or
facsimile signature execute in accordance with Section 5.3 and the Property
Trustee shall authenticate in accordance with Section 5.3 and deliver to the
Underwriters, Capital Securities Certificates, registered in the names requested
by the Underwriters, in an aggregate amount of $__________ Capital Securities
having an aggregate Liquidation Amount of $____________, against receipt of the
aggregate purchase price of such Capital Securities of $____________, by the
Property Trustee.
If the Underwriters exercise their option to purchase all or any
portion of an additional _________ Capital Securities pursuant to the terms of
the Underwriting Agreement, then an Administrator, on behalf of the Issuer
Trust, shall by manual or facsimile signature execute in accordance with Section
5.3 and the Property Trustee shall authenticate in accordance with Section 5.3
and deliver to the Underwriters, additional Capital Securities Certificates,
registered in the names requested by the Underwriters, in an aggregate amount of
up to _________ additional Capital Securities having an aggregate Liquidation
Amount of up to $_________, against receipt of the aggregate purchase price of
such additional Capital Securities of up to $__________, (plus accumulated
Distributions) by the Property Trustee.
The certificates of authentication to be executed by the Property
Trustee shall be substantially in the forms as set forth on Exhibits C and D
attached hereto.
Section 2.5. Issuance of the Common Securities; Subscription and
Purchase of Junior Subordinated Debentures.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrator, on behalf of the Issuer Trust, shall by manual or
facsimile signature execute or cause to be executed in accordance with Section
5.3 and the Property Trustee shall authenticate in accordance with Section 5.3
and shall deliver to the Depositor Common Securities Certificates, registered in
the name of the Depositor, in an aggregate amount of ______ Common Securities
having an aggregate Liquidation Amount of $________ against receipt of the
aggregate purchase price of such Common Securities of $_________ by the Property
Trustee. Contemporaneously therewith, an Administrator, on behalf of the Issuer
Trust, shall subscribe for and purchase from the Depositor the Junior
Subordinated Debentures, registered in the name of the Property Trustee and
having an aggregate principal amount equal to $__________, and, in satisfaction
of the purchase price for such Junior Subordinated Debentures, the Property
Trustee, on behalf of the Issuer Trust, shall deliver to the Depositor the sum
of $__________, (being the sum of the amounts delivered to the Property Trustee
pursuant to (i) the second sentence of Section 2.4, and (ii) the first sentence
of this Section 2.5) and receive on behalf of the Issuer Trust the Junior
Subordinated Debentures.
If the Underwriters exercise their option to purchase additional
Capital Securities pursuant to the terms of the Underwriting Agreement, then an
Administrator, on behalf of the Issuer Trust, shall by manual or facsimile
signature execute in accordance with Section 5.3 and the Property Trustee shall
<PAGE>
authenticate and deliver to the Depositor additional Common Securities
Certificates, registered in the name of the Depositor, in an aggregate amount of
up to ______ additional Common Securities having an aggregate Liquidation Amount
of up to $_______ against receipt of the aggregate purchase price of such
additional Common Securities of up to $________ (plus accumulated Distributions)
by the Property Trustee. Contemporaneously therewith, an Administrator, on
behalf of the Issuer Trust, shall subscribe for and purchase from the Depositor
the Junior Subordinated Debentures, registered in the name of the Property
Trustee and having an aggregate principal amount of up to $_________, and, in
satisfaction of the purchase price for such Junior Subordinated Debentures, the
Property Trustee, on behalf of the Issuer Trust, shall deliver to the Depositor
an aggregate amount equal to the sum of the amounts delivered to the Property
Trustee pursuant to (i) the third sentence of Section 2.4, and (ii) the third
sentence of this Section 2.5.
Section 2.6. Declaration of Trust.
The exclusive purposes and functions of the Issuer Trust are to (a)
issue and sell Trust Securities and use the proceeds from such sale to acquire
the Junior Subordinated Debentures, and (b) engage in only those other
activities necessary, convenient or incidental thereto. The Depositor hereby
appoints the Issuer Trustees as trustees of the Issuer Trust, to have all the
rights, powers and duties to the extent set forth herein, and the Issuer
Trustees hereby accept such appointment. The Property Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the benefit of the Issuer Trust and the Holders. The
Depositor hereby appoints the Administrators, with such Administrators having
all rights, powers and duties set forth herein with respect to accomplishing the
purposes of the Issuer Trust, and the Administrators hereby accept such
appointment; provided, however, that it is the intent of the parties hereto that
such Administrators shall not be trustees or, to the fullest extent permitted by
law, fiduciaries with respect to the Issuer Trust and this Trust Agreement shall
be construed in a manner consistent with such intent. The Delaware Trustee shall
not be entitled to exercise any powers, nor shall the Delaware Trustee have any
of the duties and responsibilities, of the Property Trustee or the
Administrators set forth herein. The Delaware Trustee shall be one of the
trustees of the Issuer Trust for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Delaware Business Trust Act and for taking
such actions as are required to be taken by a Delaware trustee under the
Delaware Business Trust Act.
Section 2.7. Authorization to Enter into Certain Transactions..
(a) The Issuer Trustees and the Administrators shall conduct the
affairs of the Issuer 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 Issuer Trustees and the
Administrators shall act as follows:
(i) Each Administrator, acting jointly or singly, shall:
(1) comply with the Underwriting Agreement regarding
the issuance and sale of the Trust Securities;
<PAGE>
(2) assist in compliance with the Securities Act,
applicable state securities or blue sky laws,
and the Trust Indenture Act;
(3) assist in the listing of the Capital Securities
upon such securities exchange or exchanges as
shall be determined by the Depositor, with the
registration of the Capital Securities under the
Exchange Act, if required, and the preparation
and filing of all periodic and other reports and
other documents pursuant to the foregoing;
(4) execute the Trust Securities on behalf of the
Issuer Trust in accordance with this Trust
Agreement;
(5) execute and deliver an application for a
taxpayer identification number for the Issuer
Trust;
(6) assist in the filing with the Commission, at
such time as determined by the Depositor, any
registration statement under the Securities Act,
including any amendments thereto;
(7) unless otherwise required by the Trust Indenture
Act, execute on behalf of the Issuer Trust any
documents that the Administrators have the power
to execute pursuant to this Trust Agreement,
including without limitation, the Debentures
Purchase Agreement and the Common Securities
Purchase Agreement and send notices (other than
notices of default) and other information
regarding the Trust Securities and the Junior
Subordinated Debentures to the Holders in
accordance with this Trust Agreement; and
(8) take any action incidental to the foregoing as
necessary or advisable to give effect to the
terms of this Trust Agreement.
(ii) The Property Trustee shall have the power and authority
to act on behalf of the Issuer Trust with respect to the
following matters:
(1) the establishment of the Payment Account;
(2) the receipt of the Junior Subordinated
Debentures;
(3) the receipt and collection of interest,
principal and any other payments made in respect
of the Junior Subordinated Debentures in the
Payment Account;
<PAGE>
(4) the distribution, through the Paying Agent, of
amounts owed to the Holders in respect of the
Trust Securities;
(5) the exercise of all of the rights, powers and
privileges of a holder of the Junior
Subordinated Debentures (subject to the terms of
this Trust Agreement);
(6) the sending of notices of default and other
information regarding the Trust Securities and
the Junior Subordinated Debentures to the
Holders in accordance with this Trust Agreement;
(7) the distribution of the Trust Property in
accordance with the terms of this Trust
Agreement;
(8) to the extent provided in this Trust Agreement,
the winding-up of the affairs of and liquidation
of the Issuer Trust and the preparation,
execution and filing of the certificate of
cancellation with the Secretary of State of the
State of Delaware; and
(9) after an Event of Default (other than under
paragraph (b), (c), (d), or (e) of the
definition of such term if such Event of Default
is by or with respect to the Property Trustee),
comply with the provisions of this Trust
Agreement and take any action to give effect to
the terms of this Trust Agreement and protect
and conserve the Trust Property for the benefit
of the Holders (without consideration of the
effect of any such action on any particular
Holder);
provided, however, that nothing in this Section 2.7(a)(ii) shall
require the Property Trustee to take any action that is not
otherwise required in this Trust Agreement.
(iii) the Property Trustee shall have none of the duties,
liabilities, powers or the authority of the
Administrators as set forth in Section 2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Issuer
Trust (or the Issuer Trustees or Administrators acting on behalf
of the Issuer Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or
contemplated hereby. In particular, neither the Issuer Trustees
nor the Administrators shall (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 Holders, except as expressly provided
herein, (iii) take any action that would cause the Issuer Trust
to become taxable other than 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 Property Trustee shall
defend all claims and demands of all Persons at any time
claiming any Lien on any of the Trust Property adverse to the
interest of the Issuer Trust or the Holders in their capacity as
Holders.
<PAGE>
(c) In connection with the issue and sale of the Capital Securities,
the Depositor shall have the right and responsibility to assist
the Issuer Trust with respect to, or effect on behalf of the
Issuer 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, execution and filing with the
Commission of a registration statement on the
appropriate form under the Securities Act with respect
to the Capital Securities;
(ii) the determination of the states in which to take
appropriate action to qualify or register for sale all
or part of the Capital Securities and the determination
of any and all such acts, other than actions that must
be taken by or on behalf of the Issuer Trust, and the
advice to the Administrators of actions they must take
on behalf of the Issuer Trust, and the preparation for
execution and filing of any documents to be executed and
filed by the Issuer Trust or on behalf of the Issuer
Trust, as the Depositor deems necessary or advisable in
order to comply with the applicable laws of any such
States in connection with the sale of the Capital
Securities;
(iii) the negotiation of the terms of, and the execution and
delivery of, the Underwriting Agreement providing for
the sale of the Capital Securities; and
(iv) the taking of any other actions necessary or desirable
to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrators and the Property Trustee are authorized and
directed to conduct the affairs of the Issuer Trust and to
operate the Issuer Trust so that the Issuer Trust will not be
deemed to be an "investment company" required to be registered
under the Investment Company Act, and will not be taxable other
than as a grantor trust for the United States Federal income tax
purposes and so that the Junior Subordinated Debentures will be
treated as indebtedness of the Depositor for United States
Federal income tax purposes. In this connection, the
Administrators, the Property Trustee and the Holders of Common
Securities are authorized to take any action, not inconsistent
with applicable law, the Certificate of Trust or this Trust
Agreement, that the Administrators, Property Trustee and Holders
of Common Securities determine 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 Outstanding Capital Securities. In no
event shall the Administrators or the Issuer Trustees be liable
to the Issuer Trust or the Holders for any failure to comply
with this Section that results from a change in law or
regulations or in the interpretation thereof. It is understood
that (i) by performing its duties and obligations as are
specifically set forth in this Trust Agreement, the Property
Trustee shall be deemed to have complied with the provisions of
the first sentence of this Section 2.7(d) and (ii) nothing in
this Section 2.7(d) shall require the Property Trustee to take
any actions other that those specifically required by this
Trustee Agreement to be taken by it.
<PAGE>
Section 2.8. Assets of Trust.
The assets of the Issuer Trust shall consist solely 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 Issuer Trust and the Holders 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 its
agents 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 Holders and for
distribution as herein provided, including (and subject to) any
priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest
on, and any other payments or proceeds with respect to, the
Junior Subordinated Debentures. Amounts held in the Payment
Account shall not be invested by the Property Trustee pending
distribution thereof.
<PAGE>
ARTICLE IV
DISTRIBUTION; REDEMPTION
Section 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in
the Trust Property, and Distributions (including of Additional
Amounts) will be made on the Trust Securities at the rate and on
the dates that payments of interest (including of Additional
Interest, as defined in the Indenture) are made on the Junior
Subordinated Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be
cumulative and will accumulate whether or not there are
funds of the Issuer Trust available for the payment of
Distributions. Distributions shall accumulate from
__________, 1998, and, except in the event (and to the
extent) that the Depositor exercises its right to defer
the payment of interest on the Junior Subordinated
Debentures pursuant to the Indenture, shall be payable
quarterly in arrears on _______________ of each year,
commencing on ____________, 1998. If any date on which a
Distribution is otherwise payable on the Trust
Securities is not a Business Day, then the payment of
such Distribution shall be made on the next succeeding
day that is a Business Day (without any additional
Distributions or other payment in respect of any such
delay), with the same force and effect as if made on the
date on which such payment was originally payable (each
date on which distributions are payable in accordance
with this Section 4.1(a), a "Distribution Date").
(ii) The Trust Securities shall be entitled to Distributions
payable at a rate of ______% per annum of the
Liquidation Amount of the Trust Securities. The amount
of Distributions payable for any period less than a full
Distribution period shall be computed on the basis of a
360-day year of twelve 30-day months and the actual
number of days elapsed in a partial month in a period.
Distributions payable for each full Distribution period
will be computed by dividing the rate per annum by four.
The amount of Distributions payable for any period shall
include any Additional Amounts in respect of such
period.
(iii) So long as no Debenture Event of Default has occurred
and is continuing, the Depositor has the right under the
Indenture to defer the payment of interest on the Junior
Subordinated Debentures at any time and from time to
time for a period not exceeding 20 consecutive quarterly
periods (an "Extension Period"), during which Extension
Periods the Depositor shall have the right to make
partial payments of interest on any Interest Payment
Date (as defined in the Indenture) and at the end of
which the Depositor shall pay all interest then accrued
and unpaid, provided that no Extension Period may extend
beyond ___________, 2028 or end on a day other than an
Interest Payment Date. As a consequence of any such
deferral, quarterly Distributions on the Trust
Securities by the Issuer Trust will also be deferred
(and the amount of Distributions to which Holders of the
Trust Securities are entitled will accumulate additional
Distributions thereon at a rate of _____% per annum,
compounded quarterly from the relevant payment date for
such Distributions, computed on the basis of a 360-day
year of twelve 30-day months and the actual days elapsed
in a partial month in such period). Additional
Distributions payable for each full Distribution period
will be computed by dividing the rate per annum by four.
The term "Distributions" as used in Section 4.1 shall
include any such additional Distributions provided
pursuant to this Section 4.1(a)(iii).
<PAGE>
(iv) 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 Issuer Trust has funds then on hand and
available in the Payment Account for the payment of such
Distributions.
(b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as
they appear on the Securities Register for the Trust Securities
at the close of business on the relevant record date, which
shall be at the close of business on the fifteenth day (whether
or not a Business Day) next preceding the relevant Distribution
Date.
Section 4.2. Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of
the Junior Subordinated Debentures, the Issuer Trust will be
required to redeem a Like Amount of Trust Securities at the
Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor
more than 60 days prior to the Redemption Date to each Holder of
Trust Securities to be redeemed, at such Holder's address
appearing in the Security Register. All notices of redemption
shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number or CUSIP numbers of the Capital
Securities affected;
<PAGE>
(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;
(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
accumulate on and after said date, except as provided in
Section 4.2(d) below; and
(vi) the place or places where Trust Securities are to be
surrendered for the payment of the Redemption Price.
The Issuer Trust in issuing the Trust Securities may use "CUSIP" or
"private placement" numbers (if then generally in use), and, if so, the Property
Trustee shall indicate the "CUSIP" or "private placement" numbers of the Trust
Securities in notices of redemption and related materials as a convenience to
Holders; provided, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Trust Securities
or as contained in any notice of redemption and related material.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the applicable proceeds
from the contemporaneous redemption of Junior Subordinated
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 Issuer Trust has funds then on
hand and available in the Payment Account for the payment of
such Redemption Price.
(d) If the Issuer Trust gives a notice of redemption in respect of
any Capital Securities, then, by 10:00 a.m., New York City time,
on the Redemption Date, the Depositor shall deposit sufficient
funds with the Property Trustee to pay the Redemption Price. If
such deposit has been made, then by 12:00 noon, New York City
time, on the Redemption Date, subject to Section 4.2(c), the
Property Trustee will, with respect to Capital Securities held
in global form, irrevocably deposit with the Clearing Agency for
such Capital Securities, to the extent available therefor, 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 of the Capital
Securities. With respect to Capital Securities that are not held
in global form, the Property Trustee, subject to Section 4.2(c),
will irrevocably deposit with the Paying Agent, to the extent
available therefor, funds sufficient to pay the applicable
Redemption Price and will give the Paying Agent irrevocable
instructions and authority to pay the Redemption Price to the
Holders of the Capital Securities upon surrender of their
Capital 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
Securities Register for the Trust Securities on the relevant
<PAGE>
record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as
required, then, upon the date of such deposit, all rights of
Holders holding Trust Securities so called for redemption will
cease, except the right of such Holders to receive the
Redemption Price and any Distribution payable in respect of the
Trust Securities on or prior to the Redemption Date, but without
interest, and such Trust Securities will cease to be
Outstanding. In the event that any date on which any applicable
Redemption Price is payable is not a Business Day, then payment
of the applicable 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 Issuer Trust or by the Depositor pursuant to the
Guarantee, Distributions on such Trust Securities will continue
to accumulate, as set forth in Section 4.1 and in accordance
with the continued accrual of interest on the Junior
Subordinated Debentures, from the Redemption Date originally
established by the Issuer Trust for such Trust Securities to the
date such applicable Redemption Price is actually paid, in which
case the actual payment date will be the date fixed for
redemption for purposes of calculating the applicable Redemption
Price.
(e) 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 such Trust Securities to be
redeemed shall be allocated pro rata to the Common Securities
and the Capital Securities based on the relative Liquidation
Amounts of such classes. The amount of premium, if any, paid by
the Depositor upon the redemption of all or any part of the
Junior Subordinated Debentures to be repaid or redeemed on a
Redemption Date shall be allocated to the redemption pro rata of
the Capital Securities and the Common Securities. The particular
Capital Securities to be redeemed shall be selected by the
Property Trustee by such method (including, without limitation,
on a pro rata basis based on their respective Liquidation
Amounts or by lot) as the Property Trustee shall deem fair and
appropriate, which may provide for the selection for redemption
of portions (equal to $25.00 or integral multiples thereof) of
the Liquidation Amount of Capital Securities of a denomination
larger than $25.00, not more than 60 days prior to the
Redemption Date from the Outstanding Capital Securities not
previously called for redemption, or if the Capital Securities
are then held in the form of a Global Capital Security, by the
Clearing Agency in accordance with the customary procedures for
the Clearing Agency. In any such proration, the Property Trustee
shall make such adjustments so that any Capital Security to be
redeemed shall, after such redemption, be in an authorized
denomination. The Property Trustee shall promptly notify the
Securities Registrar in writing of the Capital Securities
selected for redemption and, in the case of any Capital
Securities selected for partial redemption, the Liquidation
Amount thereof to be redeemed. For all purposes of this Trust
Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Capital Securities shall relate,
in the case of any Capital Securities redeemed or to be redeemed
only in part, to the portion of the aggregate Liquidation Amount
of Capital Securities that has been or is to be redeemed.
<PAGE>
Section 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, the Redemption Price of, and the Liquidation
Distribution in respect of, the Trust Securities, as applicable,
shall be made, subject to Section 4.2(e), pro rata among the
Common Securities and the Capital Securities based on the
Liquidation Amount of such Trust Securities; provided, however,
that if on any Distribution Date or Redemption Date any Event of
Default resulting from a Debenture Event of Default in Section
5.1(1) or 5.1(2) of the Indenture shall have occurred and be
continuing, no payment of any Distribution (including any
Additional Amounts) on, Redemption Price of, or Liquidation
Distribution in respect of, any Common Security, and no other
payment on account of the redemption, liquidation or other
acquisition of Common Securities, shall be made unless payment
in full in cash of all accumulated and unpaid Distributions
(including any Additional Amounts) on all Outstanding Capital
Securities for all Distribution periods terminating on or prior
thereto, or, in the case of payment of the Redemption Price, the
full amount of such Redemption Price on all Outstanding Capital
Securities then called for redemption, or in the case of payment
of the Liquidation Distribution, the full amount of such
Liquidation Distribution on all Outstanding Capital Securities,
shall have been made or provided for, and all funds immediately
available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions (including any
Additional Amounts) on, or the Redemption Price of, or
Liquidation Distribution in respect of, Capital Securities then
due and payable. The existence of an Event of Default does not
entitle the Holders of Capital Securities to accelerate the
maturity thereof.
(b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holders of the Common
Securities shall be deemed to have waived any right to act with
respect to any such Event of Default under this Trust Agreement
until the effects of all such Events of Default with respect to
the Capital Securities have been cured, waived or otherwise
<PAGE>
eliminated. Until all such Events of Default under this Trust
Agreement with respect to the Capital Securities have been so
cured, waived or otherwise eliminated, the Property Trustee
shall act solely on behalf of the Holders of the Capital
Securities and not on behalf of the Holder of the Common
Securities, and only the Holders of the Capital Securities will
have the right to direct the Property Trustee to act on their
behalf.
Section 4.4. Payment Procedures.
Payments of Distributions (including any Additional Amounts) in respect of
the Capital 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 Capital Securities are held by a Clearing Agency, such Distributions
shall be made to the Clearing Agency in immediately available funds, which will
credit the relevant accounts 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 Holder of the Common
Securities.
Section 4.5. Tax Returns and Reports.
The Administrators 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
Issuer Trust. In this regard, the Administrators shall (a) prepare and file (or
cause to be prepared and filed) all Internal Revenue Service forms required to
be filed in respect of the Issuer Trust in each taxable year of the Issuer Trust
and (b) prepare and furnish (or cause to be prepared and furnished) to each
Holder all Internal Revenue Service forms required to be provided by the Issuer
Trust. The Administrators shall provide the Depositor and the Property Trustee
with a copy of all such returns and reports promptly after such filing or
furnishing. The Property Trustee shall comply with United States Federal
withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Holders under the Trust Securities.
On or before December 15 of each year during which any Capital Securities
are outstanding, the Administrators shall furnish to the Paying Agent such
information as may be reasonably requested by the Property Trustee in order that
the Property Trustee may prepare the information which it is required to report
for such year on Internal Revenue Service Forms 1096 and 1099 pursuant to
Section 6049 of the Code. Such information shall include the amount of original
issue discount includable in income for each outstanding Capital Security during
such year, if any.
Section 4.6. Payment of Taxes, Duties, Etc. of the Issuer Trust.
Upon receipt under the Junior Subordinated Debentures of Additional Sums
and the written direction of any of the Administrators, the Property Trustee
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Issuer Trust by the United
States or any other taxing authority.
Section 4.7. Payments under Indenture or Pursuant to Direct Actions.
<PAGE>
Any amount payable hereunder to any Holder of Capital Securities shall be
reduced by the amount of any corresponding payment such Holder has directly
received pursuant to Section 5.8 of the Indenture or Section 5.13 of this Trust
Agreement.
Section 4.8. Liability of the Holder of Common Securities.
The Holder of Common Securities shall be liable for the debts and
obligations of the Issuer Trust as set forth in Section 6.7 of the Indenture
regarding allocation of expenses.
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 5.1. Initial Ownership.
Upon the creation of the Issuer 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 Issuer Trust.
Section 5.2. The Trust Securities Certificates.
(a) The Capital Securities Certificates shall be issued in fully
registered form in denominations of $25.00 Liquidation Amount or
integral multiples thereof. The Trust Securities Certificates
shall be executed on behalf of the Issuer Trust by manual or
facsimile signature of at least one Administrator. Trust
Securities Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf
of the Issuer 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 Holder, and shall be entitled to the
rights and subject to the obligations of a Holder hereunder,
upon due registration of such Trust Securities Certificate in
such transferee's name pursuant to Section 5.5.
(b) Upon their original issuance, Capital Securities Certificates
shall be issued in the form of one or more Global Capital
Securities Certificates registered in the name of Cede as the
Depository's nominee and deposited with or on behalf of the
Depository for credit by the Depository to the respective
accounts of the Owners thereof (or such other accounts as they
may direct). Except as set forth herein, record ownership of the
Global Capital Securities may be transferred, in whole or in
part, only to the Depository, another nominee of Depository or
to a successor of Depository or its nominee.
<PAGE>
(c) 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 5.3. Execution and Delivery of Trust Securities Certificates.
At the Closing Time, and on the date, if any, on which the Underwriters
exercises its option to purchase additional Capital Securities pursuant to the
terms of the Underwriting Agreement, as applicable, an Administrator 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 Issuer Trust and delivered
to the Property Trustee and upon such delivery the Property Trustee shall
authenticate such Trust Securities Certificates and deliver such Trust
Securities Certificates upon the written order of the Trust, executed by an
Administrator thereof, without further corporate action by the Depositor, in
authorized denominations. Only such Trust Securities Certificates as shall bear
thereon a certificate of authentication substantially in the form provided for
herein executed by the Property Trustee by manual signature of an authorized
officer thereof shall be entitled to the benefits of this Trust Agreement or be
valid or obligatory for any purpose.
Section 5.4. Global Capital Securities.
(a) The Global Capital Securities issued under this Trust Agreement
shall be registered in the name of the nominee of the Clearing
Agency and delivered to the Property Trustee as custodian
therefor, and such Global Capital Security shall constitute a
single Capital Security for all purposes of this Trust
Agreement.
(b) Notwithstanding any other provision in this Trust Agreement, the
Global Capital Securities may not be exchanged in whole or in
part for Capital Securities registered, and no transfer of the
Global Capital Securities in whole or in part may be registered,
in the name of any Person other than the Clearing Agency for
such Global Capital Security, Cede, or other nominee thereof
("Definitive Capital Securities") unless (i) such Clearing
Agency advises the Depositor and the Property Trustee in writing
that such Clearing Agency is no longer willing or able to
properly discharge its responsibilities as Clearing Agency with
respect to such Global Capital Security, and the Depositor is
unable to locate a qualified successor, (ii) the Issuer Trust
(by an Administrator) at its option advises the Depository in
writing that it elects to terminate the book-entry system
through the Clearing Agency, or (iii) there shall have occurred
and be continuing an Event of Default. If the Global Capital
Security is to be exchanged for Definitive Capital Securities or
canceled in whole, it shall be surrendered by or on behalf of
the Clearing Agency or its nominee to the Securities Registrar
for exchange or cancellation as provided in this Article V. If
the Global Capital Security is to be exchanged in whole or in
part for Definitive Capital Securities, then either (i) such
Global Capital Security shall be so surrendered for exchange or
cancellation as provided in this Article V or (ii) the
Liquidation Amount thereof shall be reduced by an amount equal
to the portion thereof to be exchanged or canceled, by means of
an appropriate adjustment made on the records of the Security
Registrar, whereupon the Property Trustee shall instruct the
Clearing Agency or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender
or adjustment of the Global Capital Security by the Clearing
Agency, accompanied by registration instructions, the Property
Trustee shall, subject to this Section 5.4(b) and as otherwise
provided in this Article V, authenticate and deliver any Capital
Securities issuable in exchange for such Global Capital Security
(or any portion thereof) in accordance with the instructions of
the Clearing Agency. The Property Trustee shall not be liable
for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying
on, such instructions.
<PAGE>
(c) Every Capital Security executed, authenticated and delivered
upon registration of transfer of, or in exchange for or in lieu
of, a Global Capital Security or any portion thereof, whether
pursuant to this Article V or Article IV or otherwise, shall be
authenticated and delivered in the form of, and shall be, a
Global Capital Security, unless such Global Capital Security is
registered in the name of a Person other than the Clearing
Agency for such Global Capital Security or a nominee thereof.
(d) The Clearing Agency or its nominee, as the registered owner of
the Global Capital Security, shall be considered the Holder of
the Capital Securities represented by the Global Capital
Security for all purposes under this Trust Agreement and the
Capital Securities, and owners of beneficial interests in the
Global Capital Security shall hold such interests pursuant to
the Applicable Procedures and, except as otherwise provided
herein, shall not be entitled to have any of the individual
Capital Securities represented by the Global Security registered
in their names, shall not receive nor be entitled to receive
physical delivery of any such Capital Securities in definitive
form and shall not be considered the Holders thereof under this
Trust Agreement. Accordingly, any such owner's beneficial
interest in the Global Capital Security shall be shown only on,
and the transfer of such interest shall be effected only
through, records maintained by the Clearing Agency or its
nominee. Neither the Property Trustee nor the Securities
Registrar shall have any liability in respect of any transfers
effected by the Clearing Agency.
(e) The rights of owners of beneficial interests in the Global
Capital Security 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.
Section 5.5. Registration of Transfer and Exchange Generally;
Certain Transfers and Exchanges; Capital Securities Certificates
<PAGE>
The Property Trustee shall keep or cause to be kept at its Corporate Trust
Office a register or registers for the purpose of registering Capital Securities
Certificates and transfers and exchanges of Capital Securities Certificates in
which the registrar and transfer agent with respect to the Capital Securities
(the "Securities Registrar"), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Capital Securities Certificates
and Common Securities Certificates (subject to Section 5.11 in the case of
Common Securities Certificates) and registration of transfers and exchanges of
Capital Securities Certificates as herein provided. Such register is herein
sometimes referred to as the "Securities Register." The Property Trustee is
hereby appointed Securities Registrar for the purpose of registering Capital
Securities and transfers of Capital Securities as herein provided.
Upon surrender for registration of transfer of any Capital Security
Certificate at the offices or agencies of the Property Trustee designated for
that purpose an Administrator shall execute, and the Property Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Capital Securities Certificates of any authorized
denominations of like tenor and aggregate Liquidation Amount and bearing such
restrictive legends as may be required by this Trust Agreement.
At the option of the Holder, Capital Securities Certificates may be
exchanged for other Capital Securities Certificates of any authorized
denominations, of like tenor and aggregate Liquidation Amount and bearing such
restrictive legends as may be required by this Trust Agreement, upon surrender
of the Capital Securities to be exchanged at such office or agency. Whenever any
Capital Securities are so surrendered for exchange, an Administrator shall
execute and the Property Trustee shall authenticate and deliver the Capital
Securities that the Holder making the exchange is entitled to receive.
All Capital Securities Certificates issued upon any transfer or exchange
of Capital Securities shall be the valid obligations of the Issuer Trust,
evidencing the same debt, and entitled to the same benefits under this Trust
Agreement, as the Capital Securities Certificates surrendered upon such transfer
or exchange.
Every Capital Securities Certificate presented or surrendered for transfer
or exchange shall (if so required by the Property Trustee) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Property Trustee and the Securities Registrar, duly executed by the Holder
thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or exchange
of Capital Securities, but the Property Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Capital Securities.
Neither the Issuer Trust nor the Property Trustee shall be required,
pursuant to the provisions of this Section, (x) to issue, register the transfer
of or exchange any Capital Security during a period beginning at the opening of
business 15 days before the day of selection for redemption of Capital
Securities pursuant to Article IV and ending at the close of business on the day
of mailing of the notice of redemption, or (y) to register the transfer of or
exchange any Capital Security so selected for redemption in whole or in part,
except, in the case of any such Capital Security to be redeemed in part, any
portion thereof not to be redeemed.
<PAGE>
Section 5.6. 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
Administrators 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
Administrators, or any one of them, on behalf of the Issuer Trust shall execute
and make available for delivery, and the Property Trustee shall authenticate, 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 Administrators 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
Issuer Trust corresponding to that evidenced by the lost, stolen or destroyed
Trust Securities Certificate, as if originally issued, whether or not the lost,
stolen or destroyed Trust Securities Certificate shall be found at any time. The
provisions of this Section 5.6 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement of
mutilated, destroyed, lost or stolen Trust Securities Certificates.
Section 5.7. Persons Deemed Holders.
The Issuer Trustees, the Administrators or the Securities Registrar shall
treat the Person in whose name any Trust Securities are issued as the owner of
such Trust Securities for the purpose of receiving Distributions and for all
other purposes whatsoever (subject to the record date provisions hereof), and
none of the Issuer Trustees, the Administrators nor the Securities Registrar
shall be bound by any notice to the contrary.
Section 5.8. Access to List of Holders' Names and Addresses.
At any time when the Property Trustee is not also acting as the Securities
Registrar, the Depositor shall furnish or cause to be furnished to the Property
Trustee, semiannually not more than 15 days after March 15 and September 15, of
each year beginning with March 15, 1999, and at such other times as the Property
Trustee may request in writing within 30 days after receipt by the Depositor of
any such request, a list, in such form as the Property Trustee may reasonably
require containing all information in the possession or control of the
Depositor, or any Paying Agent or any registrar of the Trust Securities other
than the Property Trustee, as to the names and addresses of the Holders obtained
(in the case of each list other than the first list) since the date as of which
the next previous list was furnished. Any such list may be dated as of a date
not more than fifteen days prior to the time such information is furnished or
caused to be furnished, and need not include information received after such
date. The rights of Holders to communicate with other Holders with respect to
their rights under this Trust Agreement or under the Trust Securities, and the
corresponding obligations and rights of the Property Trustee, shall be as
provided in the Trust Indenture Act. Each Holder and each Owner shall be deemed
to have agreed not to hold the Depositor, the Property Trustee, or the
Administrators accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
<PAGE>
Section 5.9. Maintenance of Office or Agency.
The Property Trustee shall designate, with the consent of the
Administrators, which consent shall not be unreasonably withheld, an office or
offices or agency or agencies where Capital Securities Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Issuer Trustees in respect of the Trust Securities
Certificates may be served. The Property Trustee initially designates its
Corporate Trust Office 450 West 33rd Street, 15th Floor, New York, New York
10001, Attention: Corporate Trustee Administration Department, as its corporate
trust office for such purposes. The Property Trustee shall give prompt written
notice to the Depositor, the Administrators and to the Holders of any change in
the location of the Securities Register or any such office or agency.
Section 5.10. Appointment of Paying Agent.
The Paying Agent shall make Distributions to Holders from the Payment
Account and shall report the amounts of such Distributions to the Property
Trustee and the Administrators. Any Paying Agent shall have the revocable power
to withdraw funds from the Payment Account solely for the purpose of making the
Distributions referred to above. The Property Trustee may revoke such power and
remove any Paying Agent in its sole discretion. The Paying Agent shall initially
be the Property Trustee. Any Person acting as Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Administrators, and
the Property Trustee. In the event that the Property Trustee shall no longer be
the Paying Agent or a successor Paying Agent shall resign or its authority to
act be revoked, the Property Trustee shall appoint a successor (which shall be a
bank or trust company) that is reasonably acceptable to the Administrators to
act as Paying Agent. Such successor Paying Agent or any additional Paying Agent
appointed by the Property Trustee shall execute and deliver to the Issuer
Trustees an instrument in which such successor Paying Agent or additional Paying
Agent shall agree with the Issuer 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 Holders in trust for the benefit of the Holders entitled
thereto until such sums shall be paid to such Holders. The Paying Agent shall
return all unclaimed funds to the Property Trustee and upon removal of a Paying
Agent such Paying Agent shall also return all funds in its possession to the
Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 herein shall 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 Trust Agreement to the Paying Agent
shall include any co-paying agent chosen by the Property Trustee unless the
context requires otherwise.
<PAGE>
Section 5.11. Ownership of Common Securities by Depositor.
At each Closing Time, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. Neither the Depositor nor any
successor Holder of the Common Securities may transfer less than all the Common
Securities, and the Depositor or any such successor Holder may transfer the
Common Securities only (i) in connection with a consolidation or merger of the
Depositor into another entity 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, or (ii) to an Affiliate of the
Depositor in compliance with applicable law (including the Securities Act and
applicable state securities and blue sky laws); provided that any such transfer
shall be subject to the condition that the transferor shall have obtained (A)
either a ruling from the Internal Revenue Service or an unqualified written
opinion addressed to the Issuer Trust and delivered to the Issuer Trustees of
nationally recognized independent tax counsel experienced in such matters to the
effect that such transfer will not (1) cause the Issuer Trust to be treated as
issuing a class of interests in the Issuer Trust differing from the class of
interests represented by the Common Securities originally issued to the
Depositor, (2) result in the Issuer Trust acquiring or disposing of, or being
deemed to have acquired or disposed of, an asset, or (3) result in or cause the
Issuer Trust to be treated as anything other than a grantor trust for United
States Federal income tax purposes and (B) an unqualified written opinion
addressed to the Issuer Trust and delivered to the Issuer Trustees of a
nationally recognized independent counsel experienced in such matters that such
transfer will not cause the Issuer Trust to be an "investment company" or
controlled by an "investment company" that is required to be registered under
the Investment Company Act. To the fullest extent permitted by law, any
attempted transfer of the Common Securities, other than as set forth in the
immediately preceding sentence, shall be void. The Administrators shall cause
each Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN
AFFILIATE OF THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF
THE TRUST AGREEMENT."
Section 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Holders is
required under this Trust Agreement, with respect to Capital Securities
represented by Global Capital Securities Certificates, the Administrators and
the Issuer Trustees shall give all such notices and communications specified
herein to be given to the Clearing Agency, and shall have no obligations to the
Owners.
Section 5.13. Rights of Holders.
(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 Holders shall not have any right or
title therein other than the undivided beneficial ownership
interest in the assets of the Issuer 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
Issuer 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 Holders against payment of the purchase
price therefor, as provided herein, will be fully paid and
nonassessable by the Issuer Trust. Except as otherwise provided
in Section 4.8, 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.
<PAGE>
(b) For so long as any Capital 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 Junior Subordinated Debentures fail to declare the
principal of all of the Junior Subordinated Debentures to be
immediately due and payable, the Holders of at least 25% in
Liquidation Amount of the Capital Securities then Outstanding
shall have such right to make such declaration by a notice in
writing to the Property Trustee, the Depositor and the Debenture
Trustee.
At any time after such a declaration of acceleration
with respect to the Junior Subordinated Debentures has been
made and before a judgment or decree for payment of the money
due has been obtained by the Debenture Trustee as provided in
the Indenture, the Holders of a Majority in Liquidation Amount
of the Capital Securities, by written notice to the Property
Trustee, the Depositor and the Debenture Trustee, may rescind
and annul such declaration and its consequences if:
(i) the Depositor has paid or deposited with the Debenture
Trustee a sum sufficient to pay
(1) all overdue installments of interest on all of
the Junior Subordinated Debentures,
(2) any accrued Additional Interest on all of the
Junior Subordinated Debentures,
(3) the principal of any Junior Subordinated
Debentures which have become due otherwise than
by such declaration of acceleration and interest
and Additional Interest thereon at the rate
borne by the Junior Subordinated Debentures, and
(4) all sums paid or advanced by the Debenture
Trustee under the Indenture and the reasonable
compensation, expenses, disbursements and
advances of the Debenture Trustee and the
Property Trustee, their agents and counsel; and
(ii) all Debenture Events of Default, other than the
non-payment of the principal of the Junior Subordinated
Debentures which has become due solely by such
acceleration, have been cured or waived as provided in
Section 5.13 of the Indenture.
<PAGE>
The Holders of at least a Majority in Liquidation Amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default under the Indenture, except a default in the payment of
principal or interest (unless such default has been cured and a sum sufficient
to pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Junior
Subordinated Debentures. No such rescission shall affect any subsequent default
or impair any right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Capital
Securities all or part of which is represented by Global Capital Securities, a
record date shall be established for determining Holders of Outstanding Capital
Securities entitled to join in such notice, which record date shall be at the
close of business on the day the Property Trustee receives such notice. The
Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such notice, whether or not such Holders
remain Holders after such record date; provided, that, unless such declaration
of acceleration, or rescission and annulment, as the case may be, shall have
become effective by virtue of the requisite percentage having joined in such
notice prior to the day which is 90 days after such record date, such notice of
declaration of acceleration, or rescission and annulment, as the case may be,
shall automatically and without further action by any Holder be canceled and of
no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.13(b).
(c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this
Trust Agreement and the Indenture, upon a Debenture Event of
Default specified in Section 5.1(1) or 5.1(2) of the Indenture,
any Holder of Capital Securities shall have the right to
institute a proceeding directly against the Depositor, pursuant
to Section 5.8 of the Indenture, for enforcement of payment to
such Holder of the principal amount of or interest on Junior
Subordinated Debentures having an aggregate principal amount
equal to the aggregate Liquidation Amount of the Capital
Securities of such Holder (a "Direct Action"). Except as set
forth in Sections 5.13(b) and 5.13(c), the Holders of Capital
Securities shall have no right to exercise directly any right or
remedy available to the holders of, or in respect of, the Junior
Subordinated Debentures.
The holders of a Majority in Liquidation Amount of the Capital Securities
at the time Outstanding shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred on the Property Trustee with
respect to the Capital Securities; provided, however, that, the Property Trustee
shall have the right to decline to follow any such direction if the Property
Trustee being advised by counsel determines that the action so directed may not
lawfully be taken, or if the Property Trustee in good faith shall determine that
the proceedings so directed would be illegal or involve it in personal liability
or be unduly prejudicial to the rights of Holders of Capital Securities not
parties to such direction, and provided further that nothing in this Trust
Agreement shall impair the right of the Property Trustee to take any action
deemed proper by the Property Trustee and which is not inconsistent with such
direction by such Holders.
<PAGE>
ARTICLE VI
ACTS OF HOLDERS; MEETINGS; VOTING
Section 6.1. Limitations on Holder's Voting Rights.
(a) Except as provided in this Trust Agreement and in the Indenture
and as otherwise required by law, no Holder of Capital
Securities shall have any right to vote or in any manner
otherwise control the administration, operation and management
of the Issuer 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 Holders from time to time as members of an
association.
(b) So long as any Junior Subordinated Debentures are held by the
Property Trustee on behalf of the Issuer Trust, the Property
Trustee shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the
Debenture Trustee, or execute any trust or power conferred on
the Property Trustee with respect to such Junior Subordinated
Debentures, (ii) waive any past default that may be waived under
Section 5.13 of the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the
Junior Subordinated Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debentures, where such
consent shall be required, without, in each case, obtaining the
prior approval of the Holders of at least a Majority in
Liquidation Amount of the Capital Securities, provided, however,
that where a consent under the Indenture would require the
consent of each holder of Junior Subordinated Debentures
affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each Holder of
Capital Securities. The Property Trustee shall not revoke any
action previously authorized or approved by a vote of the
Holders of Capital Securities, except by a subsequent vote of
the Holders of Capital Securities. Subject to Section 8.2, the
Property Trustee shall notify all Holders of the Capital
Securities of any notice of default received with respect to the
Junior Subordinated Debentures. In addition to obtaining the
foregoing approvals of the Holders of the Capital Securities,
prior to taking any of the foregoing actions, the Property
Trustee shall, at the expense of the Depositor, obtain an
Opinion of Counsel experienced in such matters to the effect
that such action will not cause the Issuer Trust to be taxable
other than as a grantor trust for United States Federal income
tax purposes.
<PAGE>
(c) If any proposed amendment to the Trust Agreement provides for,
or the Issuer Trust otherwise proposes to effect, (i) any action
that would adversely affect in any material respect the
interests, powers, preferences or special rights of the Capital
Securities, whether by way of amendment to the Trust Agreement
or otherwise, or (ii) the dissolution, winding-up or termination
of the Issuer Trust, other than pursuant to the terms of this
Trust Agreement, then the Holders of Outstanding Trust
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 Capital Securities; except
as otherwise provided in Section 10.2(c). Notwithstanding any
other provision of this Trust Agreement, no amendment to this
Trust Agreement may be made if, as a result of such amendment,
it would cause the Issuer Trust to be taxable other than as a
grantor trust for United States Federal income tax purposes.
Section 6.2. Notice of Meetings.
Notice of all meetings of the Holders, stating the time, place and purpose
of the meeting, shall be given by the Property Trustee pursuant to Section 10.8
to each Holder 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 Holders.
No annual meeting of Holders is required to be held. The Property Trustee,
however, shall call a meeting of Holders to vote on any matter upon the written
request of the Holders of record of 25% of the aggregate Liquidation Amount of
the Capital Securities and the Administrators or the Property Trustee may, at
any time in their discretion, call a meeting of Holders of Capital Securities to
vote on any matters as to which Holders are entitled to vote.
Holders of at least a Majority in Liquidation Amount of the Capital
Securities, present in person or represented by proxy, shall constitute a quorum
at any meeting of Holders of the Capital Securities.
If a quorum is present at a meeting, an affirmative vote by the Holders of
record present, in person or by proxy, holding Capital Securities representing
at least a Majority in Liquidation Amount of the Capital Securities held by the
Holders present, either in person or by proxy, at such meeting shall constitute
the action of the Holders of Capital Securities, unless this Trust Agreement
requires a greater number of affirmative votes.
<PAGE>
Section 6.4. Voting Rights.
Holders shall be entitled to one vote for each $25.00 of Liquidation
Amount represented by their Outstanding Trust Securities in respect of any
matter as to which such Holders are entitled to vote.
Section 6.5. Proxies, etc..
At any meeting of Holders, any Holder 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 Property Trustee, or with such other officer or
agent of the Issuer Trust as the Property Trustee 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 Holders 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 Holder 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. Holder Action by Written Consent.
Any action which may be taken by Holders at a meeting may be taken without
a meeting if Holders holding at least a Majority in Liquidation Amount of all
Trust Securities entitled to vote in respect of such action (or such larger
proportion thereof as shall be required by any other 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 Holders 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 Administrators or Property Trustee may from time to time fix a date,
not more than 90 days prior to the date of any meeting of Holders 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 Holders of record for such purposes.
Section 6.8. Acts of Holders.
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 Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as otherwise expressly provided herein, such
action shall become effective when such instrument or instruments are delivered
to the Property Trustee. 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 Trust Agreement and (subject to Section 8.1) conclusive
in favor of the Issuer Trustees, if made in the manner provided in this Section.
<PAGE>
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 Issuer Trustee or Administrator receiving the same deems
sufficient.
The ownership of Trust Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Trust Security shall bind every future Holder of
the same Trust Security and the Holder 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 Issuer Trustees,
the Administrators or the Issuer Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Holder 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 among the Holders, the Administrators or the
Issuer Trustees with respect to the authenticity, validity or binding nature of
any request, demand, authorization, direction, consent, waiver or other Act of
such Holder or Issuer Trustee under this Article VI, then the determination of
such matter by the Property Trustee shall be conclusive with respect to such
matter.
A Holder 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 Issuer Trust, any Issuer Trustee, any Administrator or any
person or entity.
Section 6.9. Inspection of Records.
Upon reasonable notice to the Administrators and the Property Trustee, the
records of the Issuer Trust shall be open to inspection by Holders during normal
business hours for any purpose reasonably related to such Holder's interest as a
Holder.
<PAGE>
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1. Representations and Warranties of the Property Trustee
and the Delaware Trustee.
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 Holders that:
(a) The Property Trustee is a banking corporation with corporate
trust powers, duly organized, validly existing and in good
standing under the laws of New York, with corporate trust power
and authority to execute and deliver, and to carry out and
perform its obligations under the terms of this Trust Agreement.
(b) The execution, delivery and performance by the Property Trustee
of this Trust Agreement has been duly authorized by all
necessary corporate action on the part of the Property Trustee;
and this Trust Agreement has been duly executed and delivered by
the Property Trustee, and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles
of equity and the discretion of the court (regardless of whether
the enforcement of such remedies is considered in a proceeding
in equity or at law).
(c) The execution, delivery and performance of this Trust Agreement
by the Property Trustee does not conflict with or constitute a
breach of the certificate of incorporation or by-laws of the
Property Trustee.
(d) At the Closing Time, the Property Trustee has not knowingly
created any Liens on the Trust Securities.
(e) No consent, approval or authorization of, or registration with
or notice to, any New York State or federal banking authority
governing the banking or trust powers of the Property Trustee is
required for the execution, delivery or performance by the
Property Trustee, of this Trust Agreement.
(f) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the State of Delaware, with
corporate trust power and authority to execute and deliver, and
to carry out and perform its obligations under the terms of,
this Trust Agreement.
(g) The execution, delivery and performance by the Delaware Trustee
of this Trust Agreement has been duly authorized by all
necessary corporate action on the part of the Delaware Trustee;
and this Trust Agreement has been duly executed and delivered by
the Delaware Trustee, and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' right generally and to general principles
of equity and the discretion of the court (regardless of whether
the enforcement of such remedies is considered in a proceeding
in equity or at law).
<PAGE>
(h) The execution, delivery and performance of this Trust Agreement
by the Delaware Trustee does not conflict with or constitute a
breach of the certificate of incorporation or by-laws of the
Delaware Trustee.
(i) No consent, approval or authorization of, or registration with
or notice to any Delaware state or federal banking authority
governing the trust powers of the Delaware Trustee is required
for the execution, delivery or performance by the Delaware
Trustee, of this Trust Agreement.
(j) The Delaware Trustee is an entity which has its principal place
of business in the State of Delaware.
Section 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Holders that:
(a) the Trust Securities Certificates issued at the Closing Time on
behalf of the Issuer Trust have been duly authorized and will
have been duly and validly executed, and, subject to payment
therefor, issued and delivered by the Issuer Trust pursuant to
the terms and provisions of, and in accordance with the
requirements of, this Trust Agreement, and the Holders 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 Issuer Trust (or the Administrators or Issuer Trustees on
behalf of the Issuer Trust) under the laws of the State of
Delaware or any political subdivision thereof in connection with
the execution, delivery and performance by either the Property
Trustee or the Delaware Trustee, as the case may be, of this
Trust Agreement.
ARTICLE VIII
THE ISSUER TRUSTEES; THE ADMINISTRATORS
Section 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Issuer Trustees and the
Administrators shall be as provided by this Trust Agreement and,
in the case of the Property Trustee, by the Trust Indenture Act.
Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Issuer Trustees or the
Administrators to expend or risk their own funds or otherwise
incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or
powers, if they shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. Whether or not
therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of
or affording protection to the Issuer Trustees or the
Administrators shall be subject to the provisions of this
Section. Nothing in this Trust Agreement shall be construed to
release an Administrator or an Issuer 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 Issuer Trustee or Administrator has duties and
liabilities relating to the Issuer Trust or to the Holders, such
Issuer Trustee or Administrator shall not be liable to the
Issuer Trust or to any Holder for such Issuer Trustee's or
Administrator'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
Issuer Trustees and Administrators otherwise existing at law or
in equity, are agreed by the Depositor and the Holders to
replace such other duties and liabilities of the Issuer Trustees
and Administrators.
<PAGE>
(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
Holder, 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 neither the Issuer Trustees nor the
Administrators are 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 Issuer Trustees expressly
set forth elsewhere in this Trust Agreement or, in the case of
the Property Trustee, in the Trust Indenture Act.
(c) The Property Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all Events of Default
that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Trust Agreement
(including pursuant to Section 10.10), and no implied covenants
shall be read into this Trust Agreement against the Property
Trustee. If an Event of Default has occurred (that has not been
cured or waived pursuant to this Trust Agreement or Section 5.13
of the Indenture), the Property Trustee shall exercise such of
the rights and powers vested in it by this Trust 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.
<PAGE>
(d) 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) 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:
(1) the duties and obligations of the Property
Trustee shall be determined solely by the
express provisions of this Trust Agreement
(including pursuant to Section 10.10), and the
Property Trustee shall not be liable except for
the performance of such duties and obligations
as are specifically set forth in this Trust
Agreement (including pursuant to Section 10.10);
and
(2) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or
opinions furnished to the Property Trustee and
conforming to the requirements of this Trust
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
Property Trustee, the Property Trustee shall be
under a duty to examine the same to determine
whether or not they conform to the requirements
of this Trust Agreement;
(ii) 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;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of
at least a Majority in Liquidation Amount of the Capital
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;
(iv) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the
Junior Subordinated Debentures and the Payment Account
shall be to deal with such property in a similar manner
as the Property Trustee deals with similar property for
its own account, subject to the protections and
limitations on liability afforded to the Property
Trustee under this Trust Agreement and the Trust
Indenture Act;
<PAGE>
(v) 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;
(vi) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrators or the
Depositor with their respective duties under this Trust
Agreement, nor shall the Property Trustee be liable for
the default or misconduct of any other Issuer Trustee,
the Administrators or the Depositor; and
(vii) no provision of this Trust Agreement shall require the
Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of
any of its rights or powers, if the Property 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 Trust Agreement or
adequate indemnity against such risk or liability is not
reasonably assured to it.
The Administrators shall not be responsible for monitoring the compliance
by the Issuer Trustees or the Depositor with their respective duties under this
Trust Agreement, nor shall either Administrator be liable for the default or
misconduct of any other Administrator, the Issuer Trustees or the Depositor.
Section 8.2. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Capital
Securities may, on behalf of the Holders of all the Capital
Securities, waive any past Event of Default and its
consequences, except a default described in clause (b) or (c) of
the definition of "Event of Default" contained in Section 1.1, a
default in respect of a covenant or provision which under this
Trust Agreement cannot be modified or amended without the
consent of the Holder of each Outstanding Capital Security or a
Debenture Event of Default that the Holders of a Majority in
Liquidation Amount of the Capital Securities would not be
entitled to waive pursuant to Section 5.13(b). 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 Trust Agreement, but no such waiver
shall extend to any subsequent or other default or Event of
Default or impair any right consequent therefrom.
Section 8.3. Certain Notices.
(a) Within five Business Days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Property
Trustee assigned to its Corporate Trust Office, 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 Holders
and the Administrators, unless such Event of Default shall have
been cured or waived.
<PAGE>
(b) 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 Junior Subordinated Debentures pursuant to the
Indenture, the Property Trustee shall transmit, in the manner
and to the extent provided in Section 10.8, notice of such
exercise to the Holders and the Administrators, unless such
exercise shall have been revoked.
Section 8.4. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may conclusively rely and shall be fully
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) any direction or act of the Depositor contemplated by this Trust
Agreement shall be sufficiently evidenced by an Officers'
Certificate;
(c) 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 re-recording, refiling or reregistration
thereof;
(d) the Property Trustee may consult with counsel of its own
choosing (which counsel may be counsel to the Property Trustee,
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;
(e) 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 Holders pursuant to
this Trust Agreement, unless such Holders shall have offered to
the Property Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
provided that, nothing contained in this Section 8.4(e) shall be
taken to relieve the Property Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and
powers vested in it by this Trust Agreement in accordance with
the standard specified in Section 8.1(c);
<PAGE>
(f) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond, debenture, note
or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Holders, but
the Property Trustee may make such further inquiry or
investigation into such facts or matters as it may see fit;
(g) the Property Trustee may execute any of the trusts or powers
hereunder or perform any of its duties hereunder either directly
or by or through its agents or attorneys, provided that the
Property Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with
due care by it hereunder;
(h) 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 (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 fully
protected in acting in accordance with such instructions;
(i) 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.
(j) 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 Administrators; and
(k) the Property Trustee shall not be charged with knowledge of an
Event of Default unless an officer of the Property Trustee
assigned to its Corporate Trust Office obtains actual knowledge
of such event or the Property Trustee receives written notice of
such event from the Depositor, any Administrator or Holders
holding a Majority in Liquidation Amount of the Capital
Securities.
<PAGE>
No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on any Issuer Trustee or Administrator 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 any Issuer Trustee or
Administrator shall be construed to be a duty.
Section 8.5. 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 Issuer Trust, and the Issuer Trustees
and the Administrators do not assume any responsibility for their correctness.
The Issuer Trustees and the Administrators shall not be accountable for the use
or application by the Depositor of the proceeds of the Junior Subordinated
Debentures.
Section 8.6. May Hold Securities.
Except as provided in the definition of the term "Outstanding" in Article
I, the Administrators, any Issuer Trustee or any other agent of any Issuer
Trustee or the Issuer Trust, in its individual or any other capacity, may become
the owner or pledgee of Trust Securities and, subject to Sections 8.9 and 8.14,
may otherwise deal with the Issuer Trust with the same rights it would have if
it were not an Administrator, Issuer Trustee or such other agent.
Section 8.7. Compensation; Indemnity; Fees.
The Depositor, as borrower, agrees:
(a) to pay to the Issuer 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) to reimburse the Issuer Trustees upon request for all reasonable
expenses, disbursements and advances incurred or made by the
Issuer Trustees in accordance with any provision of this Trust
Agreement (including the reasonable compensation, expenses and
disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to their
negligence or willful misconduct; and
(c) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) each Issuer Trustee, (ii) each
Administrator, (iii) any Affiliate of any Issuer Trustee, (iv)
any officer, director, shareholder, employee, representative or
agent of any Issuer Trustee, and (v) any employee or agent of
the Issuer Trust, (referred to herein as an "Indemnified
Person") from and against any loss, damage, liability, tax,
penalty, expense or claim of any kind or nature whatsoever
incurred without negligence or bad faith on its part arising out
of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties
hereunder.
<PAGE>
The provisions of this Section 8.7 shall survive the termination of this
Trust Agreement.
No Issuer Trustee may claim any Lien on any Trust Property as a result of
any amount due pursuant to this Section 8.7.
The Depositor, any Administrator and any Issuer 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
Issuer Trust, and the Issuer Trust and the Holders of Trust Securities 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 Issuer Trust, shall not be
deemed wrongful or improper. Neither the Depositor, any Administrator, nor any
Issuer Trustee shall be obligated to present any particular investment or other
opportunity to the Issuer Trust even if such opportunity is of a character that,
if presented to the Issuer Trust, could be taken by the Issuer Trust, and the
Depositor, any Administrator or any Issuer 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 Issuer
Trustee may engage or be interested 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 8.8. Corporate Property Trustee Required; Eligibility of
Trustees and Administrators.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a
Person that is a national or state chartered bank and 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 VIII. At the time
of appointment, the Property Trustee must have securities rated
in one of the three highest rating categories by a nationally
recognized statistical rating organization.
<PAGE>
(b) There shall at all times be one or more Administrators
hereunder. Each Administrator 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. An
employee, officer or Affiliate of the Depositor may serve as an
Administrator.
(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 8.9. Conflicting Interests.
(a) 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.
(b) The Guarantee, the Indenture, the Guarantee Agreement dated as
of March 31, 1998 between the Depositor and The Chase Manhattan
Bank, as guarantee trustee, relating to City Holding Capital
Trust, and the Amended and Restated Trust Agreement dated as of
March 31, 1998 among the Depositor, as depositor, The Chase
Manhattan Bank, as property trustee, Chase Manhattan Bank
Delaware, as Delaware trustee and the administrators named
therein, relating to City Holding Capital Trust, shall be deemed
to be sufficiently described in this Trust Agreement for the
purposes of clause (i) of the first proviso contained in Section
310(b) of the Trust Indenture Act.
<PAGE>
Section 8.10. Co-Trustees and Separate Trustee.
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 Property Trustee shall have power to
appoint, and upon the written request of the Property Trustee, the Depositor and
the Administrators shall for such purpose join with the Property Trustee in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Depositor or
the Administrators do not join in such appointment within 15 days after the
receipt by them of a request to do so, or in case a Debenture Event of Default
has occurred and is continuing, the Property Trustee alone shall have the power
to make such appointment. Any co-trustee or separate trustee appointed pursuant
to this Section shall either be (i) a natural person who is at least 21 years of
age and a resident of the United States or (ii) a legal entity with its
principal place of business in the United States that shall act through one or
more persons authorized to bind such entity.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Depositor, provided, that if a Debenture Event of Default shall have
occurred and be continuing the Property Trustee may execute any such instrument
on behalf of the Depositor as its agent and attorney in fact therefor.
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 Certificates shall be authenticated by the
Property Trustee and the Trust Securities shall be authenticated
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 Property Trustee specified hereunder, shall be
exercised, solely by the Property Trustee 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 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.
<PAGE>
(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, provided, that, if a Debenture
Event of Default shall have occurred and be continuing the
Property Trustee may execute any such instruments or agreements
on behalf of the Depositor as its agent and attorney-in-fact
therefor. A successor to any co-trustee or separate trustee so
resigned or removed may be appointed in the manner provided in
this Section 8.10.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee
or any other trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act of
a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and
separate trustee.
Section 8.11. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Issuer Trustee (the "Relevant Trustee")
and no appointment of a successor Issuer Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Issuer
Trustee in accordance with the applicable requirements of Section 8.12.
Subject to the immediately preceding paragraph, an Issuer Trustee may
resign at any time by giving written notice thereof to the Holders and the
Depositor. If the instrument of acceptance by the successor Issuer Trustee
required by Section 8.12 shall not have been delivered to the Relevant Trustee
within 60 days after the giving of such notice of resignation, the Relevant
Trustee may petition, at the expense of the Issuer Trust, any competent court of
the State of Delaware for the appointment of a successor Issuer Trustee.
The Property Trustee or the Delaware Trustee may be removed at any time by
Act of the Holders of at least a Majority in Liquidation Amount of the Capital
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Issuer Trust) (i) for cause (including upon the occurrence of an
Event of Default described in subparagraph (e) of the definition thereof with
respect to the Relevant Trustee), or (ii) if a Debenture Event of Default shall
have occurred and be continuing with or without cause at any time.
<PAGE>
If a Relevant Trustee shall resign, be removed or become incapable of
acting as Issuer Trustee, or if any vacancy shall occur in the office of any
Issuer Trustee for any cause, the Depositor shall appoint a successor Relevant
Trustee. Within one year after the appointment by the Depositor of a successor
Relevant Trustee, the Holders of the Capital Securities, by Act of the Holders
of record of not less than 25% in aggregate Liquidation Amount of the Capital
Securities then Outstanding delivered to such Relevant Trustee, may appoint a
successor Relevant Trustee, and such successor Relevant Trustee shall comply
with the applicable requirements of Section 8.12 and the successor Relevant
Trustee appointed by the Depositor shall be superseded. If no successor Trustee
shall have been so appointed by the Depositor or the Holders of the Capital
Securities and accepted appointment in the manner required by Section 8.12, any
Holder, on behalf of himself and all others similarly situated, or any other
Issuer Trustee, may petition any court of competent jurisdiction in the State of
Delaware for the appointment of a successor Trustee.
The Property Trustee shall give notice of each resignation and each
removal of a Relevant Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 10.8 and shall give notice to the
Depositor and to the Administrators. Each notice shall include the name of the
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 Delaware Trustee who is a natural person dies or
becomes, in the opinion of the Holders of the Common Securities, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by (a) the unanimous act of the remaining Administrators 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 the
Delaware Trustee set forth in Section 8.8).
Section 8.12. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee, the
retiring Relevant Trustee and each such successor Relevant Trustee with respect
to the Trust Securities shall execute, acknowledge and deliver an amendment
hereto wherein each successor Relevant Trustee shall accept such appointment and
which shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor Relevant Trustee all the
rights, powers, trusts and duties of the retiring Relevant Trustee with respect
to the Trust Securities and the Issuer Trust, 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; but, on request of the Issuer Trust or any successor Relevant
Trustee such retiring Relevant Trustee shall, upon payment of its charges, 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 Issuer Trust.
Upon request of any such successor Relevant Trustee, the Issuer Trust and
the Depositor 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 above.
<PAGE>
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 VIII.
Section 8.13. Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, provided that such Person shall be otherwise
qualified and eligible under this Article VIII, without the execution or filing
of any paper or any further act on the part of any of the parties hereto.
Section 8.14. Preferential Collection of Claims Against Depositor or
Issuer Trust.
If and when the Property Trustee shall be or become a creditor of the
Depositor (or any other obligor upon the Trust Securities), the Property Trustee
shall be subject to the provisions of the Trust Indenture Act regarding the
collection of claims against the Depositor (or any such other obligor) only if
this Trust Agreement is subject to the Trust Indenture Act.
Section 8.15. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Issuer Trust or any other obligor upon the Trust
Securities or the property of the Issuer Trust or of such other obligor, the
Property Trustee (irrespective of whether any Distributions on the Trust
Securities shall then be due and payable and irrespective of whether the
Property Trustee shall have made any demand on the Issuer Trust for the payment
of any past due Distributions) shall be entitled and empowered, to the fullest
extent permitted by law, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust
Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the
Property Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same; and
any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Property Trustee and, in the event the Property
Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Property Trustee any amount due it
for the reasonable compensation, expenses, disbursements and
advances of the Property Trustee, its agents and counsel, and
any other amounts due the Property Trustee.
<PAGE>
Nothing herein contained shall be deemed to authorize the Property Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or compensation affecting the Trust
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 8.16. Reports by Property Trustee.
(a) Not later than January 15th of each year commencing with January
15, 1999, the Property Trustee shall transmit to all Holders in
accordance with Section 10.8, and to the Depositor, a brief
report dated as of the immediately preceding November 15th
concerning the Property Trustee and its actions under this Trust
Agreement if and as may be required pursuant to Section 313(a)
of the Trust Indenture Act.
(b) In addition the Property Trustee shall transmit to Holders such
reports concerning the Property Trustee and its actions under
this Trust Agreement as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant
thereto.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with
the Depositor.
Section 8.17. Reports to the Property Trustee.
The Depositor and the Administrators on behalf of the Issuer 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. The Depositor and the Administrators shall annually file with the Property
Trustee a certificate specifying whether such Person is in compliance with all
the terms and covenants applicable to such Person hereunder, such compliance
certificate to be delivered annually on or before _____ ___ of each year
beginning in 1999.
Section 8.18. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrators on behalf of the Issuer 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.
<PAGE>
Section 8.19. Number of Issuer Trustees.
(a) The number of Issuer Trustees shall be two. The Property Trustee
and the Delaware Trustee may be the same Person, in which case,
the number of Issuer Trustees may be one.
(b) If an Issuer Trustee ceases to hold office for any reason, a
vacancy shall occur. The vacancy shall be filled with an Issuer
Trustee appointed in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of an Issuer
Trustee shall not operate to dissolve, terminate or annul the
Issuer Trust or terminate this Trust Agreement.
Section 8.20. Delegation of Power.
(a) Any Administrator 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) or making any
governmental filing; and
(b) The Administrators shall have power to delegate from time to
time to such of their number the doing of such things and the
execution of such instruments either in the name of the Issuer
Trust or the names of the Administrators or otherwise as the
Administrators may deem expedient, to the extent such delegation
is not prohibited by applicable law or contrary to the
provisions of this Trust Agreement.
Section 8.21. Appointment of Administrators.
(a) The Administrators shall be appointed by the Holders of a
Majority in Liquidation Amount of the Common Securities and may
be removed by the Holders of a Majority in Liquidation Amount of
the Common Securities or may resign at any time. Upon any
resignation or removal, the Depositor shall appoint a successor
Administrator. Each Administrator shall execute this Trust
Agreement thereby agreeing to comply with, and be legally bound
by, all of the terms, conditions and provisions of this Trust
Agreement. If at any time there is no Administrator, the
Property Trustee or any Holder who has been a Holder of Trust
Securities for at least six months may petition any court of
competent jurisdiction for the appointment of one or more
Administrators.
(b) Whenever a vacancy in the number of Administrators shall occur,
until such vacancy is filled by the appointment of an
Administrator in accordance with this Section 8.21, the
Administrators in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall
have all the powers granted to the Administrators and shall
discharge all the duties imposed upon the Administrators by this
Trust Agreement.
<PAGE>
(c) Notwithstanding the foregoing, or any other provision of this
Trust Agreement, in the event any Administrator who is a natural
person dies or becomes, in the opinion of the Holders of a
Majority in Liquidation Amount of the Common Securities,
incompetent, or incapacitated, the vacancy created by such
death, incompetence or incapacity may be filled by the remaining
Administrators, if there were at least two of them prior to such
vacancy, and by the Depositor, if there were not two such
Administrators immediately prior to such vacancy (with the
successor in each case being a Person who satisfies the
eligibility requirement for Administrators set forth in Section
8.8).
Section 8.22. Delaware Trustee.
(a) Notwithstanding any other provision of this Trust Agreement, 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 Administrators or the Property Trustee
described in this Trust Agreement. The Delaware Trustee shall be
a trustee for the sole and limited purpose of fulfilling the
requirements of ss. 3807 of the Delaware Business Trust Act.
(b) It is expressly understood and agreed by the parties hereto that
in fulfilling its obligations as Delaware Trustee hereunder on
behalf of the Issuer Trust (i) any agreements or instruments
executed and delivered by Chase Manhattan Bank Delaware are
executed and delivered not in its individual capacity but solely
as Delaware Trustee under this Trust Agreement in the exercise
of the powers and authority conferred and vested in it, (ii)
each of the representations, undertakings and agreements herein
made on the part of the Issuer Trust is made and intended not as
representations, warranties, covenants, undertakings and
agreements by Chase Manhattan Bank Delaware in its individual
capacity but is made and intended for the purpose of binding
only the Issuer Trust, and (iii) under no circumstances shall
Chase Manhattan Bank Delaware be personally liable for the
payment of any indebtedness or expenses of the Issuer Trust or
be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the
Issuer Trust under this Trust Agreement, except if such breach
or failure is due to any gross negligence or willful misconduct
of the Delaware Trustee.
<PAGE>
ARTICLE IX
DISSOLUTION, LIQUIDATION AND MERGER
Section 9.1. Dissolution Upon Expiration Date.
Unless earlier dissolved, pursuant to an Early Termination Event, the
Issuer Trust shall automatically dissolve on June 30, 2029 (the "Expiration
Date"), and thereafter the Trust Property shall be distributed in accordance
with Section 9.4.
Section 9.2. Early Dissolution.
The first to occur of any of the following events is an "Early Termination
Event," upon the occurrence of which the Issuer Trust shall dissolve:
(a) the occurrence of the appointment of a receiver or other similar
official in any liquidation, insolvency or similar proceeding
with respect to the Depositor or all or substantially all of its
property, or a court or other governmental agency shall enter a
decree or order relating to the Depositor for relief in a
voluntary or involuntary case under Chapter 7 or Chapter 11 of
the United States Bankruptcy Code or any other similar state or
federal law now or hereafter in effect and such decree or order
shall remain unstayed and undischarged for a period of 60 days,
unless the Depositor shall transfer the Common Securities as
provided by Section 5.11, in which case this provision shall
refer instead to any such successor Holder of the Common
Securities;
(b) the written direction to the Property Trustee from the Holder of
the Common Securities at any time to dissolve the Issuer Trust
and to distribute the Junior Subordinated Debentures to Holders
in exchange for the Capital Securities (which direction, subject
to Section 9.4(a), is optional and wholly within the discretion
of the Holder of the Common Securities);
(c) the repayment of all of the Capital Securities in connection
with the redemption of all the Junior Subordinated Debentures;
and
(d) the entry of an order for dissolution of the Issuer Trust by a
court of competent jurisdiction.
Section 9.3. Termination.
As soon as is practicable after the occurrence of an event referred to in
Section 9.1 or 9.2, and upon the completion of the winding-up and liquidation of
the Issuer Trust, the Administrators and the Issuer Trustees (each of whom is
hereby authorized to take such action) shall file a certificate of cancellation
with the Secretary of State of the State of Delaware terminating the Issuer
Trust and, upon such filing, the respective obligations and responsibilities of
the Issuer Trustees, the Administrators and the Issuer Trust created and
continued hereby shall terminate, except as otherwise required by law or this
Trust Agreement.
<PAGE>
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
Issuer Trust shall be wound-up and liquidated by the Property
Trustee as expeditiously as the Property Trustee determines to
be possible by distributing, after paying or making reasonable
provision to pay all claims and obligations of the Issuer Trust
in accordance with Section 3808(e) of the Delaware Business
Trust Act, to each Holder a Like Amount of Junior Subordinated
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 15 nor more than 45 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 Junior Subordinated Debentures; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Trust Securities
Certificates for Junior Subordinated Debentures, or if
Section 9.4(d) applies receive a Liquidation
Distribution, as the Administrators or the Property
Trustee shall deem appropriate.
(a) Except where Section 9.2(c) or 9.4(d) applies, in order to
effect the liquidation of the Issuer Trust and distribution of
the Junior Subordinated Debentures to Holders, the Property
Trustee shall establish a record date for such distribution
(which shall be not more than 30 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 Junior Subordinated Debentures in exchange for
the Outstanding Trust Securities Certificates.
(b) 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) the Clearing Agency for the
Capital Securities or its nominee, as the registered Holder of
the Global Capital Securities Certificates, shall receive a
registered global certificate or certificates representing the
Junior Subordinated Debentures to be delivered upon such
distribution with respect to Capital Securities held by the
Clearing Agency or its nominee, and, (iii) any Trust Securities
Certificates not held by the Clearing Agency for the Capital
Securities or its nominee as specified in clause (ii) above will
be deemed to represent Junior Subordinated Debentures having a
principal amount equal to the stated Liquidation Amount of the
Trust Securities represented thereby and bearing accrued and
unpaid interest in an amount equal to the accumulated and unpaid
Distributions on such Trust Securities until such certificates
are presented to the Securities Registrar for transfer or
reissuance.
<PAGE>
(c) If, 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
Junior Subordinated Debentures is not practical, or if any Early
Termination Event specified in clause (c) of Section 9.2 occurs,
the Issuer Trust shall be dissolved, and the Trust Property
shall be liquidated, by the Property Trustee in such manner as
the Property Trustee determines. In such event, on the date of
the dissolution of the Issuer Trust, Holders will be entitled to
receive out of the assets of the Issuer Trust available for
distribution to Holders, after paying or making reasonable
provision to pay all claims and obligations of the Issuer Trust
in accordance with Section 3808(e) of the Delaware Business
Trust Act, an amount equal to the aggregate of 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,
the Liquidation Distribution can be paid only in part because
the Issuer 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 Issuer
Trust on the Trust Securities shall be paid on a pro rata basis
(based upon Liquidation Amounts). The Holders of the Common
Securities will be entitled to receive Liquidation Distributions
upon any such dissolution, pro rata (determined as aforesaid)
with Holders of Capital Securities, except that, if a Debenture
Event of Default has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities as
provided in Section 4.3.
<PAGE>
Section 9.5. Mergers, Consolidations, Amalgamations or Replacements
of the Issuer Trust.
The Issuer Trust may not merge with or into, consolidate, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any entity, except pursuant to this Section 9.5
or Section 9.4. At the request of the Holders of the Common Securities, and with
the consent of the Holders of at least a Majority in Liquidation Amount of the
Capital Securities, but without the consent of the Issuer Trustees, the Issuer
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, however,
that (i) such successor entity either (a) expressly assumes all of the
obligations of the Issuer Trust with respect to the Capital Securities or (b)
substitutes for the Capital Securities other securities having substantially the
same terms as the Capital Securities (the "Successor Capital Securities") so
long as the Successor Capital Securities have the same priority as the Capital
Securities with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) a trustee of such successor entity possessing the
same powers and duties as the Property Trustee is appointed to hold the Junior
Subordinated Debentures, (iii) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Capital Securities
(including any Successor Capital Securities) to be downgraded by any nationally
recognized statistical rating organization, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Capital
Securities (including any Successor Capital Securities) in any material respect,
(v) such successor entity has a purpose substantially identical to that of the
Issuer Trust, (vi) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Property Trustee has received an
Opinion of Counsel from independent counsel experienced in such matters to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights preferences
and privileges of the holders of the Capital Securities (including any Successor
Capital Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Issuer Trust nor such successor entity will be required to register as an
"investment company" under the Investment Company Act and (vii) the Depositor or
any permitted transferee to whom it has transferred the Common Securities
hereunder owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor Capital
Securities at least to the extent provided by the Guarantee. Notwithstanding the
foregoing, the Issuer Trust shall not, except with the consent of Holders of
100% in Liquidation Amount of the Capital 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 Issuer Trust or the successor entity to be
taxable other than as a grantor trust for United States Federal income tax
purposes. Any merger or similar agreement shall be executed by the
Administrators on behalf of the Issuer Trust.
<PAGE>
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1. Limitations of Rights of Holders.
Except as set forth in Section 9.2, the bankruptcy, dissolution,
termination, 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 Holder 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
Property Trustee and the Holders of a Majority in Liquidation
Amount of the Common Securities, without the consent of any
Holder of the Capital Securities (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, provided, however, that such
amendment shall not adversely affect in any material respect the
interests of any Holder; (ii) to modify, eliminate or add to any
provisions of this Trust Agreement to such extent as shall be
necessary to ensure that the Issuer Trust will not be taxable
other than as a grantor trust for United States Federal income
tax purposes at any time that any Trust Securities are
Outstanding or to ensure that the Issuer Trust will not be
required to register as an investment company under the
Investment Company Act or (iii) in accordance with the
requirements of Section 8.12.
(b) Except as provided in Section 10.2(c) hereof, any provision of
this Trust Agreement may be amended by the Property Trustee and
the Holders of a Majority in Liquidation Amount of the Common
Securities with (i) the consent of Holders of at least a
Majority in Liquidation Amount of the Capital Securities and
(ii) receipt by the Issuer Trustees of an Opinion of Counsel to
the effect that such amendment or the exercise of any power
granted to the Issuer Trustees in accordance with such amendment
will not affect the Issuer Trust's being taxable as a grantor
trust for United States Federal income tax purposes or the
Issuer Trust's exemption from status of an "investment company"
under the Investment Company Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Holder
(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 (ii) restrict the right of
a Holder to institute suit for the enforcement of any such
payment on or after such date.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Issuer Trustee shall enter into or consent to any amendment to
this Trust Agreement which would cause the Issuer Trust to fail
or cease to qualify for the exemption from status as an
"investment company" under the Investment Company Act or be
taxable other than as a grantor trust for United States Federal
income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor and the
Administrators, this Trust Agreement may not be amended in a
manner which imposes any additional obligation on the Depositor
or the Administrators.
<PAGE>
(f) In the event that any amendment to this Trust Agreement is made,
the Administrators or the Property Trustee 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 or otherwise. 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.
(h) The Administrators shall give notice to the Holders of each
amendment to this Trust Agreement, provided, however, that any
failure by the Administrators to deliver, or any defect in, such
notice, shall not affect the validity or effectiveness of any
such amendment.
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
HOLDERS, THE ISSUER TRUST, THE DEPOSITOR, THE ISSUER TRUSTEES AND THE
ADMINISTRATORS SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH
LAWS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF
DELAWARE OR ANY OTHER JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE
LAW OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER,
THAT THERE SHALL NOT BE APPLICABLE TO THE HOLDERS, THE ISSUER TRUST, THE
DEPOSITOR, THE ISSUER TRUSTEES, THE ADMINISTRATORS OR THIS TRUST AGREEMENT ANY
PROVISION OF THE LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE PERTAINING
TO TRUSTS OTHER THAN THE DELAWARE BUSINESS TRUST ACT THAT RELATE TO OR REGULATE,
IN A MANNER INCONSISTENT WITH THE TERMS HEREOF (A) THE FILING WITH ANY COURT OR
GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND
CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS,
AGENTS OR EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER
GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL
OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS,
AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF RECEIPTS AND EXPENDITURES
TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE
NATURE, AMOUNT OR CONCENTRATION OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO
THE TITLING, STORAGE OR OTHER MANNER OF HOLDING OR INVESTING TRUST ASSETS OR (G)
THE ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR
LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE
LIMITATIONS OR LIABILITIES OR AUTHORITIES AND POWERS OF THE ISSUER TRUSTEES OR
THE ADMINISTRATOR AS SET FORTH OR REFERENCED IN THIS TRUST AGREEMENT. SECTION
3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO THE ISSUER TRUST.
NOTWITHSTANDING THE FOREGOING, THE IMMUNITIES AND STANDARD OF CARE OF THE
PROPERTY TRUSTEE IN CONNECTION WITH THE ADMINISTRATION OF ITS TRUSTS AND DUTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK.
<PAGE>
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 4.2(d)), with the same force and effect as though
made on the date fixed for such payment, and no Distributions shall accumulate
on such unpaid amount for the period after such date.
Section 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Depositor, the Issuer Trust, the Administrators and any
Issuer 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 VIII 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 that by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Holder 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 Holder
of Capital Securities, to such Holder as such Holder's name and address may
appear on the Securities Register; and (b) in the case of the Holder of Common
Securities or the Depositor, to City Holding Company, 25 Gatewater Road,
Charleston, West Virginia 25313, Attention: Robert A. Henson, Facsimile No.
(304) 769-1111 or to such other address as may be specified in a written notice
by the Depositor to the Property Trustee. Such notice, demand or other
communication to or upon a Holder shall be deemed to have been sufficiently
given or made, for all purposes, upon hand delivery, mailing or transmission.
Such notice, demand or other communication to or upon the Depositor shall be
deemed to have been sufficiently given or made only upon actual receipt of the
writing by the Depositor.
<PAGE>
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
Issuer Trust, the Property Trustee, the Delaware Trustee, the Administrators, or
the Issuer Trust shall be given in writing addressed (until another address is
published by the Issuer Trust) as follows: (a) with respect to the Property
Trustee to The Chase Manhattan Bank, 450 West 33rd Street, 15th Floor, New York,
NY 10001, Attention: Corporate Trustee Administration Department (b) with
respect to the Delaware Trustee to Chase Manhattan Bank Delaware, 1201 Market
Street, Wilmington, Delaware 19801, Attention: Corporate Trustee Administration
Department; (c) with respect to the Administrators, to them at the address above
for notices to the Depositor, marked "Attention: Office of the Chief Financial
Officer and (d) with respect to the Issuer Trust to City Holding Capital Trust
II, c/o City Holding Company, 25 Gatewater Road, Charleston, West Virginia
25313, Attention: Robert A. Henson. Such notice, demand or other communication
to or upon the Issuer Trust or the Property Trustee shall be deemed to have been
sufficiently given or made only upon actual receipt of the writing by the Issuer
Trust, the Property Trustee, or such Administrator.
Section 10.9. Agreement Not to Petition.
Each of the Issuer Trustees, the Administrators and the Depositor agree
for the benefit of the Holders that, until at least one year and one day after
the Issuer Trust has been terminated in accordance with Article IX, they shall
not file, or join in the filing of, a petition against the Issuer 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 Issuer 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 Holders, 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 Issuer 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 estopped and precluded therefrom and such
other defenses, if any, as counsel for the Issuer Trustee or the Issuer Trust
may assert. If any Issuer Trustee or Administrator takes action in violation of
this Section 10.9, the Depositor agrees, for the benefit of the Holders, 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 such Person against
the Issuer Trust or the commencement of such action and raise the defense that
such Person has agreed in writing not to take such action and should be estopped
and precluded therefrom and such other defenses, if any, as counsel for the
Depositor may assert. The provisions of this Section 10.9 shall survive the
termination of this Trust Agreement.
<PAGE>
Section 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) Trust Indenture Act; Application. (i) This Trust Agreement is
subject to the provisions of the Trust Indenture Act that are
required to be a part of this Trust Agreement and shall, to the
extent applicable, be governed by such provisions; (ii) if and
to the extent that any provision of this Trust 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; (iii) 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, (iv) for purposes of
this Trust Agreement, the Property Trustee, to the extent
permitted by applicable law and/or the rules and regulations of
the Commission, shall be the only Issuer Trustee which is a
trustee for the purposes of the Trust Indenture Act; and (v) the
application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Capital Securities and the
Common Securities as equity securities representing undivided
beneficial interests in the assets of the Issuer Trust.
(b) Disclosure Information. The disclosure of information as to the
names and addresses of the Holders of Trust Securities in
accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was
derived, shall not be deemed to be a violation of any existing
law or any law hereafter enacted which does not specifically
refer to Section 312 of the Trust Indenture Act, nor shall the
Property Trustee be held accountable by reason of mailing any
material pursuant to a request made under Section 312(b) of the
Trust Indenture Act.
<PAGE>
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 HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY
OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE GUARANTEE AND THE
INDENTURE, AND THE AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF
THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE
ISSUER TRUST, SUCH HOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS
TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE ISSUER
TRUST AND SUCH HOLDER AND SUCH OTHERS.
* * * *
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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed, all as of the day and year first above written.
CITY HOLDING COMPANY
as Depositor
By: ________________________
Name: Robert A. Henson
Title:Chief Financial Officer
THE CHASE MANHATTAN BANK
as Property Trustee, and not in its individual
capacity
By: ________________________
Name: William Keenan
Title:Trust Officer
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee, and not
in its individual capacity
By: ________________________
Name:
Title:
Agreed to and Accepted by,
- ------------------------
Name: Robert A. Henson
Title: Administrator
- ------------------------
Name: Michael D. Dean
Title: Administrator
<PAGE>
EXHIBIT A
[INSERT CERTIFICATE OF TRUST FILED WITH DELAWARE]
<PAGE>
EXHIBIT B
[INTENTIONALLY OMITTED]
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE
DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR
IN COMPLIANCE WITH APPLICABLE LAW AND
SECTION 5.11 OF THE TRUST AGREEMENT
Certificate Number Number of Common Securities
C-1
($____________ Aggregate Liquidation Amount)
Certificate Evidencing Common Securities
of
City Holding Capital Trust II
____% Common Securities
(liquidation amount $25.00 per Common Security)
City Holding Capital Trust II, a statutory business trust created
under the laws of the State of Delaware (the "Issuer Trust"), hereby certifies
that City Holding Company, Inc. (the "Holder") is the registered owner of
______________________ (________ ) common securities of the Issuer Trust
representing undivided beneficial interests in the assets of the Issuer Trust
and designated as the City Holding Capital Trust II _____% Common Securities
(liquidation amount $25.00 per Common Security) (the "Common Securities").
Except in accordance with Section 5.11 of the Trust Agreement (as defined below)
the Common Securities are not transferable and any attempted transfer hereof
other than in accordance therewith 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
Issuer Trust, dated as of ________, 1998, as the same may be amended from time
to time (the "Trust Agreement") among City Holding Company, as Depositor, The
Chase Manhattan Bank, as Property Trustee, Chase Manhattan Bank Delaware, as
Delaware Trustee, the Administrators named therein and the Holders of Trust
Securities, including the designation of the terms of the Common Securities as
set forth therein. The Issuer Trust will furnish a copy of the Trust Agreement
to the Holder without charge upon written request to the Issuer 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>
Terms used but not defined herein have the meanings set forth in the
Trust Agreement.
IN WITNESS WHEREOF, one of the Administrators of the Issuer Trust
has executed this certificate this ___ day of ________, 1998.
CITY HOLDING CAPITAL TRUST II
By:_________________________________
Robert A. Henson
Administrator
Certificate of Authentication:
This is one of the Common Securities referred to in the within mentioned Trust
Agreement.
THE CHASE MANHATTAN BANK,
as Property Trustee
By: ________________________
Authorized Officer
<PAGE>
EXHIBIT D
[IF THE CAPITAL SECURITIES CERTIFICATE IS TO BE A GLOBAL CAPITAL SECURITIES
CERTIFICATE, INSERT:] This Capital Securities Certificate is a Global Capital
Securities Certificate within the meaning of the Trust Agreement hereinafter
referred to and is registered in the name of a Depository or a nominee of a
Depository. This Capital Securities Certificate is exchangeable for Capital
Securities Certificates 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 may not be transferred except 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, except in the limited
circumstances described in the Trust Agreement.
Unless this Capital Securities Certificate is presented by an
authorized representative of The Depository Trust Company, a New York
Corporation ("DTC"), to City Holding Capital Trust II or its agent for
registration of transfer, exchange or payment, and any Capital Securities
Certificate issued is registered in the name of Cede & Co. or 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 A PERSON IS WRONGFUL inasmuch as the registered owner hereof,
Cede & Co., has an interest herein.
NO EMPLOYEE BENEFIT OR OTHER PLAN OR INDIVIDUAL RETIREMENT ACCOUNT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE") (EACH, A "PLAN"), NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE
"PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSET
ENTITY"), AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD
THIS CAPITAL SECURITIES CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASE
OR HOLDING IS COVERED BY THE EXEMPTIVE RELIEF PROVIDED BY U.S. DEPARTMENT OF
LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1
OR 84-14 OR ANOTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THIS CAPITAL SECURITIES CERTIFICATE OR ANY
INTEREST HEREIN THAT IS A PLAN OR A PLAN ASSET ENTITY OR IS PURCHASING SUCH
SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" WILL BE DEEMED TO HAVE REPRESENTED
BY ITS PURCHASE AND HOLDING HEREOF THAT (A) THE PURCHASE AND HOLDING OF THE
CAPITAL SECURITIES IS COVERED BY THE EXEMPTIVE RELIEF PROVIDED BY PTCE 96-23,
95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION, (B) THE DEPOSITOR
AND THE ADMINISTRATORS ARE NOT "FIDUCIARIES" WITHIN THE MEANING OF SECTION 3(21)
OF ERISA AND THE REGULATIONS THEREUNDER, WITH RESPECT TO SUCH PERSON'S INTEREST
IN THE CAPITAL SECURITIES OR THE JUNIOR SUBORDINATED DEBENTURES, AND (C) IN
PURCHASING THE CAPITAL SECURITIES SUCH PERSON APPROVES THE PURCHASE OF THE
JUNIOR SUBORDINATED DEBENTURES AND THE APPOINTMENT OF THE ISSUER TRUSTEES.
<PAGE>
Certificate Number
D-
CUSIP NO.
Certificate Evidencing Capital Securities
of
City Holding Capital Trust II
_____% Capital Securities
(liquidation amount $25.00 per Capital Security)
City Holding Capital Trust II, a statutory business trust created
under the laws of the State of Delaware (the "Issuer Trust"), hereby certifies
that ______________________ (the "Holder") is the registered owner of
_______________________ Dollars ($____________) aggregate liquidation amount of
capital securities of the Issuer Trust representing a preferred undivided
beneficial interest in the assets of the Issuer Trust and designated as the City
Holding Capital Trust II _____% Capital Securities (liquidation amount $25.00
per Capital Security) (the "Capital Securities"). The Capital Securities are
transferable on the books and records of the Issuer 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 5.5 of the Trust Agreement
(as defined below). The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities are set
forth in, and this certificate and the Capital 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 Issuer Trust, dated as of September
___, 1998, as the same may be amended from time to time (the "Trust Agreement"),
among City Holding Company, as Depositor, The Chase Manhattan Bank, as Property
Trustee, Chase Manhattan Bank Delaware, as Delaware Trustee, the Administrators
named herein and the Holders of Trust Securities, including the designation of
the terms of the Capital Securities as set forth therein. The Holder is entitled
to the benefits of the Guarantee Agreement entered into by City Holding Company,
a West Virginia corporation, as Guarantor, and The Chase Manhattan Bank, as
Guarantee Trustee, dated as of September ___, 1998 (the "Guarantee Agreement"),
to the extent provided therein. The Issuer Trust will furnish a copy of the
Trust Agreement and the Guarantee Agreement to the Holder without charge upon
written request to the Issuer Trust at its principal place of business or
registered office.
<PAGE>
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
Terms used but not defined herein have the meanings set forth in the
Trust Agreement.
IN WITNESS WHEREOF, one of the Administrators of the Issuer Trust
has executed this certificate this ____ day of ___________, 1998.
CITY HOLDING CAPITAL TRUST II
By:_________________________________
Name: Robert A. Henson
Administrator
Administrator
This is one of the Capital Securities referred to in the within mentioned Trust
Agreement.
THE CHASE MANHATTAN BANK
as Property Trustee
By: ________________________
Authorized Signatory
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital 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 Capital Securities Certificate on the books of the Issuer
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 Capital Securities Certificate)
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.
Exhibit 4.6
GUARANTEE AGREEMENT
Between
CITY HOLDING COMPANY
as Guarantor,
and
THE CHASE MANHATTAN BANK
as Guarantee Trustee,
Dated as of October ___, 1998
<PAGE>
CITY HOLDING CAPITAL TRUST II
Certain Sections of this Guarantee Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Guarantee Agreement
Act Section Section
- --------------- -------------------
Section 310(a) (1)..........................................4.1 (a)
(a) (2)..........................................4.1 (a)
(a) (3)..........................................Not Applicable
(a) (4)..........................................Not Applicable
(b)..............................................2.8, 4.1 (c)
Section 311(a)..............................................Not Applicable
(b)..............................................Not Applicable
Section 312(a)..............................................2.2 (a)
(b)..............................................2.2 (b)
(c)..............................................Not Applicable
Section 313(a)..............................................2.3
(a) (4)..........................................2.3
(b)..............................................2.3
(c)..............................................2.3
(d)..............................................2.3
Section 314(a)..............................................2.4
(b)..............................................2.4
(c) (1)..........................................2.5
(c) (2)..........................................2.5
(c) (3)..........................................2.5
(e)..............................................1.1, 2.5, 3.2
Section 315(a)..............................................3.1 (d)
(b)..............................................2.7
(c)..............................................3.1 (c)
(d)..............................................3.1 (d)
(e)..............................................Not Applicable
Section 316(a)..............................................1.1, 2.6, 5.4
(a) (1) (A)......................................5.4
(a) (1) (B)......................................5.4
(a) (2)..........................................Not Applicable
(b)..............................................5.3
(c)..............................................Not Applicable
Section 317(a) (1)..........................................Not Applicable
(a) (2)..........................................Not Applicable
(b)..............................................Not Applicable
Section 318(a)..............................................2.1
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Guarantee Agreement.
<PAGE>
TABLE OF CONTENTS
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......................................5
SECTION 2.3. Reports by the Guarantee Trustee.....................5
SECTION 2.4. Periodic Reports to the Guarantee Trustee............5
SECTION 2.5. Evidence of Compliance with Conditions Precedent.....5
SECTION 2.6. Events of Default; Waiver............................6
SECTION 2.7. Event of Default; Notice.............................6
SECTION 2.8. Conflicting Interests................................6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE........7
SECTION 3.1. Powers and Duties of the Guarantee Trustee...........7
SECTION 3.2. Certain Rights of Guarantee Trustee..................8
SECTION 3.3. Indemnity............................................9
ARTICLE IV. GUARANTEE TRUSTEE.........................................10
SECTION 4.1. Guarantee Trustee; Eligibility......................10
SECTION 4.2. Appointment, Removal and Resignation of
the Guarantee Trustee...............................10
ARTICLE V. GUARANTEE...................................................11
SECTION 5.1. Guarantee...........................................11
SECTION 5.2. Waiver of Notice and Demand.........................11
SECTION 5.3. Obligations Not Affected............................12
SECTION 5.4. Rights of Holders...................................13
SECTION 5.5. Guarantee of Payment................................13
SECTION 5.6. Subrogation.........................................13
SECTION 5.7. Independent Obligations.............................13
ARTICLE VI. COVENANTS AND SUBORDINATION...............................14
SECTION 6.1. Subordination.......................................14
SECTION 6.2. Pari Passu Guarantees...............................14
ARTICLE VII. TERMINATION..............................................14
SECTION 7.1. Termination.........................................14
ARTICLE VIII. MISCELLANEOUS...........................................14
SECTION 8.1. Successors and Assigns..............................14
SECTION 8.2. Amendments..........................................15
SECTION 8.3. Notices.............................................15
SECTION 8.4. Benefit.............................................16
SECTION 8.5. Interpretation......................................16
SECTION 8.6. Governing Law.......................................17
SECTION 8.7. Counterparts........................................17
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of October ___, 1998 is executed
and delivered by CITY HOLDING COMPANY, a West Virginia corporation (the
"Guarantor") having its principal office at 25 Gatewater Road, Charleston, West
Virginia 25313, and THE CHASE MANHATTAN BANK, a New York banking corporation, as
trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Capital Securities (as defined herein) of City
Holding Capital Trust II, a Delaware statutory business trust (the "Issuer
Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of __________, 1998, among City Holding Company, as
Depositor, The Chase Manhattan Bank, as Property Trustee (the "Property
Trustee"), Chase Manhattan Bank Delaware, as Delaware Trustee (the "Delaware
Trustee") (collectively, the "Issuer Trustees"), the Administrators named
therein and the Holders from time to time of preferred undivided beneficial
ownership interests in the assets of the Issuer Trust, the Issuer Trust is
issuing up to $50,000,000 aggregate Liquidation Amount (as defined herein) of
its ____% Capital Securities, Liquidation Amount $ 25.00 per capital security
(the "Capital Securities"), representing preferred undivided beneficial
ownership interests in the assets of the Issuer Trust and having the terms set
forth in the Trust Agreement;
WHEREAS, the Capital Securities will be issued by the Issuer Trust
and the proceeds thereof, together with the proceeds from the issuance of the
Issuer Trust's Common Securities (as defined herein), will be used to purchase
the ____% Junior Subordinated Deferrable Interest Debentures Series B due
__________, 2028 (the "Junior Subordinated Debentures") of the Guarantor which
will be deposited with The Chase Manhattan Bank, as Property Trustee under the
Trust Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Capital 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 of the Capital
Securities by each Holder, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, and intending to be legally bound hereby, the
Guarantor executes and delivers this Guarantee Agreement for the benefit of the
Holders from time to time of the Capital 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 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.
<PAGE>
"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.
"Capital Securities" shall have the meaning specified in the first
recital of this Guarantee Agreement.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer Trust.
"Distributions" means preferential cumulative cash distributions
accumulating from October ___, 1998 and payable quarterly in arrears on
____________, ____________, ____________ and ____________ of each year,
commencing ______________, 1998, at an annual rate of _____% of the Liquidation
Amount.
"Event of Default" means (i) a default by the Guarantor in any of
its payment obligations under this Guarantee Agreement, or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30 days.
"Guarantee Agreement" means this Guarantee Agreement, as modified,
amended or supplemented from time to time.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Capital Securities, to the extent the Issuer Trust shall have funds on hand
available therefor at such time, (ii) the Redemption Price, with respect to the
Capital Securities called for redemption by the Issuer Trust to the extent that
the Issuer Trust 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 Trust, unless the Junior Subordinated Debentures are distributed to
the Holders, the lesser of (a) the aggregate of the Liquidation Amount and all
accumulated and unpaid Distributions to the date of payment to the extent the
Issuer Trust shall have funds on hand available to make such payment at such
time and (b) the amount of assets of the Issuer Trust remaining available for
distribution to Holders on liquidation of the Issuer Trust (in either case, the
"Liquidation Distribution").
"Guarantee Trustee" means The Chase Manhattan Bank, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Guarantor" shall have the meaning specified in the first paragraph
of this Guarantee Agreement.
<PAGE>
"Holder" means any holder, as registered on the books and records of
the Issuer Trust, of any Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor, the Guarantee Trustee, or any Affiliate of the
Guarantor or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of
March 31, 1998, between City Holding Company and The Chase Manhattan Bank, as
trustee, as may be modified, amended or supplemented from time to time.
"Issuer Trust" shall have the meaning specified in the first
paragraph of this Guarantee Agreement.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Capital Securities based upon the relative
Liquidation Amounts of such classes and (b) with respect to a distribution of
Junior Subordinated Debentures to Holders of Trust Securities in connection with
a dissolution or liquidation of the Issuer Trust, Junior Subordinated Debentures
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the Holder to whom such Junior Subordinated Debentures are
distributed.
"Liquidation Amount" means the stated amount of $ 25.00 per Capital
Security.
"Majority in Liquidation Amount of the Capital Securities" means,
except as provided by the Trust Indenture Act, Capital Securities representing
more than 50% of the aggregate Liquidation Amount of all then outstanding
Capital Securities issued by the Issuer Trust.
"Officers' Certificate" means a certificate signed by the President,
Executive Vice President or a Senior Vice President or Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary
of the Guarantor, 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 (other than pursuant to Section 2.4)
shall include:
(a) a statement by each officer signing the Officers' Certificate
that such officer 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 such officer in rendering the
Officers' Certificate;
(c) a statement that 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
<PAGE>
(d) a statement as to whether, in the opinion of such 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.
"Redemption Date" means, with respect to any Capital Security to be
redeemed, the date fixed for such redemption by or pursuant to the Trust
Agreement; provided that each Junior Subordinated Debenture Redemption Date and
the stated maturity of the Junior Subordinated Debentures shall be a Redemption
Date for a Like Amount of Capital Securities.
"Redemption Price" shall have the meaning specified in the Trust
Agreement.
"Responsible Officer" means, when used with respect to the Guarantee
Trustee, any officer assigned to the Corporate Trust Office, including any
managing director, vice president, assistant vice president, assistant
treasurer, assistant secretary, Senior Trust Officer, Trust Officer or any other
officer of the Guarantee Trustee customarily performing functions similar to
those performed by any of the above designated officers and having direct
responsibility for the administration of this Guarantee Agreement, and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Senior Indebtedness" shall have the meaning specified in the
Indenture.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Agreement" means the Amended and Restated Trust Agreement,
dated __________, 1998, entered among City Holding Company, as Depositor, Chase
Manhattan Bank Delaware, as Delaware Trustee, The Chase Manhattan Bank, as
Property Trustee, and the Administrators named therein.
"Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S.C. ss.ss. 77aaa-77bbbb), as amended.
"Trust Securities" means the Common Securities and the Capital
Securities.
ARTICLE II. TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application.
This Guarantee Agreement is intended to be in conformity with the
provisions of the Trust Indenture Act that would be required to be part of this
Guarantee Agreement were this Guarantee Agreement to be qualified under the
Trust Indenture Act and shall, to the extent
<PAGE>
applicable, and unless otherwise provided herein, be governed by such
provisions. 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. If any
provision of this Guarantee Agreement modifies or excludes any provision of the
Trust Indenture Act that may be so modified or excluded, the latter provision
shall be deemed to apply to this Guarantee Agreement as so modified or excluded,
as the case may be.
Section 2.2. List of Holders.
(a) The Guarantor will furnish or cause to be furnished to the
Guarantee Trustee a list of Holders at the following times:
(i) semiannually, not more than 15 days after March 15 and
September 15 in each year, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders as of such March
15 or September 15, as applicable; and
(ii) 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 similar form and content as of a date not more than 15 days
prior to the time such list is furnished.
(b) The Guarantee Trustee shall comply with the requirements
of Section 312(b) of the Trust Indenture Act.
Section 2.3. Reports by the Guarantee Trustee.
Not later than 60 days after November 15th of each year, commencing
November 15, 1998, the Guarantee Trustee shall provide to the Holders such
reports, if any, as are required by Section 313(a) of the Trust Indenture Act 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, 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(a)(4) 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.
<PAGE>
Section 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Capital
Securities may, 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 Default, transmit by mail, first class postage
prepaid, to the Holders, notice of all Events of Default known to the Guarantee
Trustee, unless such Events of Default have been cured 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 a Responsible Officer charged with the
administration of this Guarantee Agreement shall have received written notice of
such Event of Default.
Section 2.8. Conflicting Interests.
The Trust Agreement, the Guarantee Agreement dated as of March 31, 1998
between the Guarantor and The Chase Manhattan Bank, as guarantee trustee,
relating to City Holding Capital Trust, and the Amended and Restated Trust
Agreement dated as of March 31, 1998 among the Guarantor, as depositor, The
Chase Manhattan Bank, as property trustee, Chase Manhattan Bank Delaware, as
Delaware trustee and the administrators named therein, relating to City Holding
Capital Trust, 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.
<PAGE>
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 hereunder. The right, title and interest of the
Guarantee Trustee, as such, hereunder 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 of all Events of Default that may have occurred,
shall be obligated to perform only such duties as are specifically set forth in
this Guarantee Agreement (including pursuant to Section 2.1), and no implied
covenants shall be read into this Guarantee Agreement against the Guarantee
Trustee. If 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.
(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
(including pursuant to Section 2.1), 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 (including pursuant to
Section 2.1); 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;
<PAGE>
(ii) The Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) The Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in Liquidation
Amount of the Capital 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 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.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document 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 Officers'
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
conclusively 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 advice or written 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.
<PAGE>
(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 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.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any negligence or willful misconduct on the part of any such
agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the Holders
of a majority in Liquidation amount of the Capital Securities, (B) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received and (C) shall be fully 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. Compensation.
The Guarantor agrees to pay to the Guarantee Trustee from time to
time reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Guarantee Trustee in accordance with any provision of
this Guarantee Agreement.
<PAGE>
Section 3.4. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence, willful misconduct 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.
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(a) 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) 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, subject to the penultimate
paragraph thereof.
Section 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) No resignation or removal of the Guarantee Trustee and no
appointment of a Successor Guarantee Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the Successor Guarantee
Trustee by written instrument executed by the Successor Guarantee Trustee and
delivered to the Holders and the Guarantee Trustee.
(b) Subject to the immediately preceding paragraph, a Guarantee
Trustee may resign at any time by giving written notice thereof to the Guarantor
and the Holders. If the instrument of acceptance by the Successor Guarantee
Trustee shall not have been delivered to the Guarantee Trustee within 60 days
after the giving of such notice of resignation, the Guarantee Trustee may
petition, at the expense of the Guarantor, any court of competent jurisdiction
for the appointment of a Successor Guarantee Trustee.
<PAGE>
(c) The Guarantee Trustee may be removed for cause at any time by
Act (within the meaning of Section 6.8 of the Trust Agreement) of the Holders of
at least a Majority in Liquidation Amount of the Capital Securities, delivered
to the Guarantee Trustee.
(d) If a Guarantee Trustee shall resign, be removed or become
incapable of acting as Guarantee Trustee, or if any vacancy shall occur in the
office of any Guarantee Trustee for any cause, the Guarantor shall appoint a
successor Guarantee Trustee. Within one year after the appointment by the
Guarantor of a successor Guarantee Trustee, the Holders of the Capital
Securities, by Act of the Holders of record of not less than 25% in aggregate
Liquidation Amount of the Capital Securities then outstanding delivered to such
Guarantee Trustee, may appoint a successor Guarantee Trustee and the successor
Guarantee Trustee appointed by the Guarantor shall be superseded. If no
Successor Guarantee Trustee shall have been so appointed by the Guarantor or the
Holders of the Capital Securities and such appointment accepted by the Successor
Guarantee Trustee, any Holder, on behalf of himself and all others similarly
situated, may petition any court of competent jurisdiction for the appointment
of 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 Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer
Trust may have or assert, except the defense of payment. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer Trust
to pay such amounts to the Holders. The Guarantor shall give prompt written
notice to the Guarantee Trustee in the event it makes any direct payment
hereunder.
Section 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer Trust or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.
<PAGE>
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 Trust of any express or implied
agreement, covenant, term or condition relating to the Capital Securities to be
performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust of
all or any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest payment
period on the Junior Subordinated Debentures as so provided in the Indenture),
Redemption Price, Liquidation Distribution or any other sums payable under the
terms of the Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the Capital
Securities;
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Capital Securities,
or any action on the part of the Issuer Trust granting indulgence or extension
of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer Trust or any of the
assets of the Issuer Trust;
(e) any invalidity of, or defect or deficiency in, the Capital
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 (other than
payment of the underlying obligation), 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.
<PAGE>
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 Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement,
provided, however, that, subject to Section 3.1, the Guarantee Trustee shall
have the right to decline to follow any such direction if the Guarantee Trustee
being advised by counsel determines that the action so directed may not lawfully
be taken, or if the Guarantee Trustee in good faith shall, by a Responsible
Officer or Officers of the Guarantee Trustee, determine that the proceedings so
directed would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of the Holders not party to such direction, and
provided further that nothing in this Guarantee Agreement shall impair the right
of the Guarantee Trustee to take any action deemed proper by the Guarantee
Trustee and which is not inconsistent with such direction; and (iv) any Holder
may institute a legal proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Guarantee Trustee, the Issuer Trust or any other Person.
Section 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer Trust) or upon the distribution of Junior Subordinated Debentures
to Holders as provided in the Trust Agreement.
Section 5.6. Subrogation.
The Guarantor shall be subrogated to all rights (if any) of the
Holders against the Issuer Trust in respect of any amounts paid to the Holders
by the Guarantor under this Guarantee Agreement; 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 Trust with respect to the Capital
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.
<PAGE>
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 Indebtedness of the Guarantor to the extent and in the manner set forth
in the Indenture with respect to the Junior Subordinated Debentures, and the
provisions of Article XIII of the Indenture will apply, mutatis mutandis, to the
obligations of the Guarantor hereunder. The obligations of the Guarantor
hereunder do not constitute Senior Indebtedness of the Guarantor.
Section 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement
shall rank pari passu with any similar guarantee agreements issued by the
Guarantor on behalf of the holders of preferred or capital securities issued by
any other trust similar to the Issuer Trust and with any other security,
guarantee or other obligation that is expressly stated to rank pari passu with
the obligations of the Guarantor under this Guarantee Agreement.
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 Capital
Securities, (ii) the distribution of Junior Subordinated Debentures to the
Holders in exchange for all of the Capital Securities or (iii) full payment of
the amounts payable in accordance with Article IX of the Trust Agreement upon
liquidation of the Issuer Trust. 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 is required to restore payment of any sums paid
under the Capital Securities or this Guarantee Agreement.
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 Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII 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, and any purported assignment that is not in accordance
with these provisions shall be void.
<PAGE>
Section 8.2. Amendments.
Except with respect to any changes that do not materially adversely
affect the rights of the Holders (in which case no consent of the Holders will
be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than a Majority in Liquidation Amount of the
Capital Securities. The provisions of Article VI of the Trust Agreement
concerning meetings or consents 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 with receipt confirmed, or mailed by first
class mail as follows:
(a) if given to the Guarantor, to the address or telecopy number
set forth below or such other address or telecopy number or to the attention of
such other Person as the Guarantor may give notice to the Guarantee Trustee and
the Holders:
City Holding Company
25 Gatewater Road
Charleston, West Virginia 25313
Facsimile No.: (304) 769-1111
Attention: Robert A. Henson, Chief Financial Officer
(b) if given to the Issuer Trust, at the Issuer Trust's (and the
Guarantee Trustee's) address or telecopy number set forth below or such other
address or telecopy number or to the attention of such other Person as the
Issuer Trust or Guarantee Trustee may give notice to the Guarantee Trustee (if
given by the Issuer Trust) and the Holders:
City Holding Capital Trust II
c/o City Holding Company
25 Gatewater Road
Charleston, West Virginia 25313
Facsimile No.: (304) 769-1111
Attention: Robert A. Henson, Administrator
with a copy to:
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Facsimile No.: (212) 946-8160
Attention: Corporate Trustee Administration
<PAGE>
(c) if given to the Guarantee Trustee, to the address or telecopy
number set forth below or such other address or telecopy number or to the
attention of such other Person as the Guarantee Trustee may give notice to the
Guarantor and the Holders:
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Facsimile No.: (212) 946-8160
Attention: Corporate Trustee Administration
(d) if given to any Holder, at the address set forth on the books
and records of the Issuer Trust.
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 Capital Securities.
Section 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(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
<PAGE>
(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.
Section 8.7. Counterparts.
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 GUARANTEE AGREEMENT is executed as of the day and year first
above written.
CITY HOLDING COMPANY
as Guarantor
By:
------------------------------------
Name: Robert A. Henson
Title: Chief Financial Officer
THE CHASE MANHATTAN BANK,
as Guarantee Trustee, and not
in its individual capacity
By:
------------------------------------
Name:
Title:
EXHIBIT 5.1
HUNTON & WILLIAMS
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
Telephone (804) 788-8200
Facsimile (804) 788-8218
October 21, 1998
City Holding Capital Trust II
City Holding Company
25 Gatewater Road
Charleston, West Virginia 25313
Registration Statement on Form S-3
Ladies and Gentlemen:
We are counsel to City Holding Capital Trust II (the "Trust") and City
Holding Company (the "Company") in connection with the registration on Form S-3
under the Securities Act of 1933, as amended (the "Registration Statement"), of
up to $50,000,000 in ___% Capital Securities of the Trust (the "Capital
Securities"), Junior Subordinated Debentures, Series B, due _________ __, 2028
of the Company (the "Junior Subordinated Debentures"), and the Guarantee of the
Capital Securities by the Company (the "Guarantee"). In connection with the
filing of the Registration Statement, you have requested our opinion concerning
certain corporate matters:
We are of the opinion that:
(1) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
West Virginia.
(2) The Junior Subordinated Debentures and the Guarantee, when
issued as described in the Registration Statement, will be
duly authorized, legally issued, fully paid and nonassessable,
and the Junior Subordinated Debentures, when issued as
described in the Registration Statement, will be binding
obligations of the Company.
We consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the references to us in the
Prospectus included therein. In giving this consent, we do not admit that we are
within the category of persons whose consent is required by Section 7 of the
Securities Act of 1933 or the rules and regulations promulgated thereunder by
the Securities and Exchange Commission.
Very truly yours,
/s/ Hunton & Williams
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger, P.A.]
October 19, 1998
City Holding Capital Trust II
c/o City Holding Company
25 Gatewater Road
Charleston, West Virginia 25313
Re: City Holding Capital Trust II
Ladies and Gentlemen:
We have acted as special Delaware counsel for City Holding
Company, a West Virginia corporation (the "Company"), and City Holding Capital
Trust II, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. At your request, this opinion is being furnished to
you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of
September 17, 1998 (the "Certificate"), as filed in the office of the Secretary
of State of the State of Delaware (the "Secretary of State") on September 17,
1998;
(b) The Trust Agreement of the Trust, dated as of September
17, 1998, among the Company, as Depositor, and Chase Manhattan Bank Delaware, a
Delaware banking corporation, as trustee of the Trust;
(c) The Registration Statement (the "Initial Registration
Statement") on Form S-3, as filed by the Company, the Trust and others as set
forth therein with the Securities and Exchange Commission (the "SEC") on
September 30, 1998, as amended by Pre-Effective Amendment No. 1 to the Initial
Registration Statement, as proposed to be filed by the Company, the Trust and
others as set forth therein with the SEC on or about October 19, 1998
("Amendment No. 1"), including a preliminary prospectus (the "Prospectus"),
relating to the
<PAGE>
City Holding Capital Trust II
October 19, 1998
Page 2
Capital Securities of the Trust representing preferred undivided beneficial
interests in the assets of the Trust (each, a "Capital Security" and
collectively, the "Capital Securities") (the Initial Registration Statement, as
amended by Amendment No. 1, is hereinafter referred to as the "Registration
Statement");
(d) A form of Amended and Restated Trust Agreement of the
Trust, to be entered into among the Company, as Depositor, the trustees of the
Trust named therein, and the holders, from time to time, of beneficial interests
in the Trust (including Exhibits A, C and D thereto) (the "Trust Agreement"),
attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated
October 19, 1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed above, and we have assumed that there
exists no provision in any document that we have not reviewed that bears upon or
is inconsistent with the opinions stated herein. We have conducted no
independent factual investigation of our own but rather have relied solely upon
the foregoing documents, the statements and information set forth therein and
the additional matters recited or assumed herein, all of which we have assumed
to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Trust Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Capital Security is to be issued by the Trust
<PAGE>
City Holding Capital Trust II
October 19, 1998
Page 3
(collectively, the "Capital Security Holders") of a certificate evidencing the
Capital Security and the payment for the Capital Security acquired by it, in
accordance with the Trust Agreement and the Registration Statement, and (vii)
that the Capital Securities are issued and sold to the Capital Security Holders
in accordance with the Trust Agreement and the Registration Statement. We have
not participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act, 12 Del.
C. ss. 3801, et seq.
2. The Capital Securities will represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Capital Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Capital Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. In
addition, we hereby consent to the use of our name under the heading "Legal
Matters" in the Prospectus. In giving the foregoing consents, we do not thereby
admit that we come within the category of Persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the SEC thereunder. Except as stated above, without our prior
written consent, this opinion may not be furnished or quoted to, or relied upon
by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
Exhibit 8
October 21, 1998
City Holding Company
25 Gatewater Road
Charleston, West Virginia 25313
City Holding Capital Trust II
Certain Federal Income Tax Matters
Ladies and Gentlemen:
We have acted as counsel to City Holding Company (the
"Company") in connection with the preparation of a Registration Statement on
Form S-3 (the "Registration Statement"), which has been filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act"), for the registration under the Act of (1) up to $59,278,351
aggregate principal amount of Junior Subordinated Deferrable Interest Debentures
(the "Junior Subordinated Debentures") to be issued by the Company to City
Holding Capital Trust II, (2) up to 2.3 million Capital Securities (liquidation
amount $25 per Capital Security) to be issued by City Holding Capital Trust II,
and (3) the Company's Guarantee of Capital Securities. The Junior Subordinated
Debentures will be issued pursuant to an indenture between the Company and the
trustee named therein, and the Capital Securities will be issued pursuant to an
amended and restated trust agreement between the Company and the trustees named
therein.
We have reviewed copies of (1) the Registration Statement and
the prospectus included therein (the "Prospectus") and (2) such other documents
as we have deemed necessary or appropriate as a basis for the opinion set forth
below. We have also relied upon, and assumed the accuracy of, certain written
representations made to us by the Company. We have further assumed (i) that all
documents submitted to us as originals are authentic, (ii) with respect to all
documents supplied to us as drafts, that the final, executed versions of such
documents are identical in all material respects to the versions most recently
supplied to us, and (iii) that the Capital Securities will be sold at the
offering price stated on the cover of the Prospectus.
Based on the foregoing, we confirm that the statements of law
and legal conclusions contained in the Prospectus under the caption "Certain
Federal Income Tax Consequences" constitute our opinion, subject to the
assumptions, conditions, and limitations described therein, and that the
discussion thereunder does not omit any material provision with respect to the
matters covered.
We consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the reference to Hunton & Williams
under the caption "Certain Federal Income Tax Consequences" in the Prospectus.
In giving this consent, we do not admit that we are in the category of persons
whose consent is required by Section 7 of the Act or the rules and regulations
promulgated thereunder by the Securities and Exchange Commission.
Very truly yours,
/s/ HUNTON & WILLIAMS
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Experts"
in the Registration Statement (Form S-3 No. 333-64809) and related
Prospectus of City Holding Company for the registration of $57,500,000 of
its ___% Trust Capital Securities, the registration of its Junior
Subordinated Debentures, and the registration of its Guarantee and to the
incorporation by reference therein of our report dated January 30, 1998,
with respect to the consolidated financial statements of City Holding
Company incorporated by reference in its Annual Report (Form 10-K) for the
year ended December 31, 1997, filed with the Securities and Exchange
Commission.
Charleston, West Virginia /s/ Ernst & Young LLP
October 21, 1998
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Experts"
in the Registration Statement (Form S-3 No. 333-64809) and related
Prospectus of City Holding Company for the registration of $57,500,000 of
its ___% Trust Capital Securities, the registration of its Junior
Subordinated Debentures, and the registration of its Guarantee and to the
incorporation by reference therein of our report dated February 13, 1998
with respect to the consolidated financial statements of Horizon Bancorp,
Inc. incorporated by reference in its Annual Report (Form 10-K) for the
year ended December 31, 1997, filed with the Securities and Exchange
Commission.
Charleston, West Virginia /s/ Ernst & Young LLP
October 21, 1998
EXHIBIT 23.5
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-64809) and related Prospectus of
City Holding Company for the registration of $57,500,000 of its ___% Trust
Capital Securities, the registration of its Junior Subordinated
Debentures, and the registration of its Guarantee and to the use of our
report dated February 12, 1996, with respect to the consolidated financial
statements of Twentieth Bancorp, Inc. and Subsidiary incorporated by
reference in Horizon Bancorp, Inc.'s Annual Report (Form 10-K) for the
year ended December 31, 1997, filed with the Securities and Exchange
Commission.
Huntington, West Virginia /s/ Diamond, Leftwich, Goheen & Dunn
October 21, 1998
Exhibit 25.1
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
CITY HOLDING CAPITAL TRUST II
(Exact name of obligor as specified in its charter)
Delaware 55-0760924
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
25 Gatewater Road
Charleston, West Virginia 25313
(Address of principal executive offices) (Zip Code)
-----------------------------------
Capital Securities
(Title of the indenture securities)
-----------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of August, 1998.
THE CHASE MANHATTAN BANK
By ______________________
William G. Keenan
Trust Officer
- 3 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of August, 1998.
THE CHASE MANHATTAN BANK
By /s/William G. Keenan
-----------------------
William G. Keenan
Trust Officer
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1997, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................... $ 12,428
Interest-bearing balances ........................... 3,428
Securities: ...........................................
Held to maturity securities............................. 2,561
Available for sale securities........................... 43,058
Federal funds sold and securities purchased under
agreements to resell ................................ 29,633
Loans and lease financing receivables:
Loans and leases, net of unearned income $129,260
Less: Allowance for loan and lease losses............ 2,783
Less: Allocated transfer risk reserve ............... 0
------------
Loans and leases, net of unearned income,
allowance, and reserve .............................. 126,477
Trading Assets ......................................... 62,575
Premises and fixed assets (including capitalized
leases).............................................. 2,943
Other real estate owned ................................ 295
Investments in unconsolidated subsidiaries and
associated companies................................. 231
Customers' liability to this bank on acceptances
outstanding ......................................... 1,698
Intangible assets ...................................... 1,466
Other assets ...........................................
10,268
--------
TOTAL ASSETS ........................................... $297,061
========
- 4 -
<PAGE>
LIABILITIES
Deposits
In domestic offices ................................................ $94,524
Noninterest-bearing ................................................ 39,487
Interest-bearing ................................................... 55,037
-------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's ............................................. 71,162
Noninterest-bearing ................................................ 3,205
Interest-bearing ................................................... 67,957
Federal funds purchased and securities sold under agreements
to repurchase ........................................................ 43,181
Demand notes issued to the U.S. Treasury .............................. 1,000
Trading liabilities ................................................... 48,903
Other borrowed money (includes mortgage indebtedness and obligations
under capitalized leases):
With a remaining maturity of one year or less ...................... 3,599
With a remaining maturity of more than one year
through three years.............................................. 253
With a remaining maturity of more than three years.................. 132
Bank's liability on acceptances executed and outstanding............... 1,698
Subordinated notes and debentures ..................................... 5,715
Other liabilities ..................................................... 9,896
TOTAL LIABILITIES ..................................................... 280,063
-------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock .......................................................... 1,211
Surplus (exclude all surplus related to preferred stock).............. 10,291
Undivided profits and capital reserves ................................ 5,502
Net unrealized holding gains (losses)
on available-for-sale securities .................................... (22)
Cumulative foreign currency translation adjustments ................... 16
TOTAL EQUITY CAPITAL .................................................. 16,998
-------
TOTAL LIABILITIES AND EQUITY CAPITAL ..................................$297,061
========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
/s/ JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
/s/ WALTER V. SHIPLEY )
/s/ THOMAS G. LABRECQUE ) DIRECTORS
/s/ WILLIAM B. HARRISON, JR.)
-5-
Exhibit 25.2
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
CITY HOLDING COMPANY
(Exact name of obligor as specified in its charter)
Delaware 55-0619957
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
25 Gatewater Road
Charleston, West Virginia 25313
(Address of principal executive offices) (Zip Code)
---------------------------------------------
Junior Subordinated Debentures
(City Holding Capital Trust II)
(Title of the indenture securities)
---------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of August, 1998.
THE CHASE MANHATTAN BANK
By ____________________________
William G. Keenan
Trust Officer
-3-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of August, 1998.
THE CHASE MANHATTAN BANK
By /s/ William G. Keenan
---------------------------
William G. Keenan
Trust Officer
-3-
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1997, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ..................................................... $ 12,428
Interest-bearing balances ............................................. 3,428
Securities: .............................................................
Held to maturity securities............................................... 2,561
Available for sale securities............................................. 43,058
Federal funds sold and securities purchased under
agreements to resell .................................................. 29,633
Loans and lease financing receivables:
Loans and leases, net of unearned income $129,260
Less: Allowance for loan and lease losses.............................. 2,783
Less: Allocated transfer risk reserve ................................. 0
---------
Loans and leases, net of unearned income,
allowance, and reserve ................................................ 126,477
Trading Assets ........................................................... 62,575
Premises and fixed assets (including capitalized
leases)................................................................ 2,943
Other real estate owned .................................................. 295
Investments in unconsolidated subsidiaries and
associated companies................................................... 231
Customers' liability to this bank on acceptances
outstanding ........................................................... 1,698
Intangible assets ........................................................ 1,466
Other assets .............................................................
10,268
--------
TOTAL ASSETS ............................................................. $297,061
========
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ................................................... $ 94,524
Noninterest-bearing ................................................... 39,487
Interest-bearing ...................................................... 55,037
In foreign offices, Edge and Agreement, ----------
subsidiaries and IBF's ................................................ 71,162
Noninterest-bearing ................................................... 3,205
Interest-bearing ...................................................... 67,957
Federal funds purchased and securities sold under agreements
to repurchase .......................................................... 43,181
Demand notes issued to the U.S. Treasury ................................. 1,000
Trading liabilities ...................................................... 48,903
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less ......................... 3,599
With a remaining maturity of more than one year
through three years................................................. 253
With a remaining maturity of more than three years..................... 132
Bank's liability on acceptances executed and outstanding.................. 1,698
Subordinated notes and debentures ........................................ 5,715
Other liabilities ........................................................ 9,896
TOTAL LIABILITIES ........................................................ 280,063
---------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock ............................................................. 1,211
Surplus (exclude all surplus related to preferred stock)................. 10,291
Undivided profits and capital reserves ................................... 5,502
Net unrealized holding gains (losses)
on available-for-sale securities ......................................... (22)
Cumulative foreign currency translation adjustments ...................... 16
TOTAL EQUITY CAPITAL ..................................................... 16,998
---------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................ $297,061
=========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
/s/ JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
/s/ WALTER V. SHIPLEY )
/s/ THOMAS G. LABRECQUE ) DIRECTORS
/s/ WILLIAM B. HARRISON, JR.)
-5-
Exhibit 25.3
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
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CITY HOLDING COMPANY
(Exact name of obligor as specified in its charter)
Delaware 55-0619957
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
25 Gatewater Road
Chatrleston, West Virginia 25313
(Address of principal executive offices) (Zip Code)
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Capital Securities Guarantee
(City Holding Capital Trust II)
(Title of the indenture securities)
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<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
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<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of August, 1998.
THE CHASE MANHATTAN BANK
By _______________________________________
William G. Keenan
Trust Officer
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<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of August, 1998.
THE CHASE MANHATTAN BANK
By /s/William G. Keenan
------------------------
William G. Keenan
Trust Officer
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<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1997, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ..................................................... $ 12,428
Interest-bearing balances ............................................. 3,428
Securities:
Held to maturity securities............................................... 2,561
Available for sale securities............................................. 43,058
Federal funds sold and securities purchased under
agreements to resell .................................................. 29,633
Loans and lease financing receivables:
Loans and leases, net of unearned income $129,260
Less: Allowance for loan and lease losses.............................. 2,783
Less: Allocated transfer risk reserve ................................. 0
------------
Loans and leases, net of unearned income,
allowance, and reserve ................................................ 126,477
Trading Assets ........................................................... 62,575
Premises and fixed assets (including capitalized
leases)................................................................ 2,943
Other real estate owned .................................................. 295
Investments in unconsolidated subsidiaries and
associated companies................................................... 231
Customers' liability to this bank on acceptances
outstanding ........................................................... 1,698
Intangible assets ........................................................ 1,466
Other assets ............................................................. 10,268
----------
TOTAL ASSETS ............................................................. $297,061
===========
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ................................................... $ 94,524
Noninterest-bearing ................................................... 39,487
Interest-bearing ...................................................... 55,037
In foreign offices, Edge and Agreement, ----------
subsidiaries and IBF's ................................................ 71,162
Noninterest-bearing ................................................... 3,205
Interest-bearing ...................................................... 67,957
Federal funds purchased and securities sold under agreements
to repurchase .......................................................... 43,181
Demand notes issued to the U.S. Treasury ................................. 1,000
Trading liabilities ...................................................... 48,903
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less ......................... 3,599
With a remaining maturity of more than one year
through three years................................................. 253
With a remaining maturity of more than three years..................... 132
Bank's liability on acceptances executed and outstanding ................. 1,698
Subordinated notes and debentures ........................................ 5,715
Other liabilities ........................................................ 9,896
TOTAL LIABILITIES ........................................................ 280,063
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EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock ............................................................. 1,211
Surplus (exclude all surplus related to preferred stock)................. 10,291
Undivided profits and capital reserves ................................... 5,502
Net unrealized holding gains (losses)
on available-for-sale securities ........................................ (22)
Cumulative foreign currency translation adjustments ...................... 16
TOTAL EQUITY CAPITAL ..................................................... 16,998
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TOTAL LIABILITIES AND EQUITY CAPITAL ..................................... $297,061
==========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
/s/ JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
/s/ WALTER V. SHIPLEY )
/s/ THOMAS G. LABRECQUE ) DIRECTORS
/s/ WILLIAM B. HARRISON, JR.)
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