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As filed with the Securities and Exchange Commission on March 12, 1997
Registration No. 333-20711
333-20711-01
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
COMMERCIAL FEDERAL CORPORATION
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(Exact name of registrant as specified in its charter)
Nebraska 47-0658852
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
CFC PREFERRED TRUST
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(Exact name of registrant as specified in its Charter)
Delaware [Applied For]
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.)
2120 South 72nd Street, Omaha, Nebraska 68124
(402) 554-9200
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(Address, including zip code and telephone number, including area code of
each of the registrant's principal executive offices)
James A. Laphen, President
Commercial Federal Corporation
2120 South 72nd Street, Omaha, Nebraska 68124
(402) 390-5361
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(Name, address, including zip code, and telephone number, including area code,
of agent for service for each of the registrants)
Copies To:
Gary R. Bronstein, Esq. ----------
Cynthia R. Cross, Esq. Elizabeth C. Hinck, Esq.
Housley Kantarian & Bronstein, P.C. Dorsey & Whitney LLP
1220 19th Street, N.W., Suite 700 220 South Sixth Street
Washington, DC 20036 Minneapolis, MN 55402
(202) 822-9611 (612) 340-2600
Approximate date of commencement of proposed sale to the public:
From time to time after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] ___________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
[_] ___________________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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 the registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES+
+EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE +
+SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS Subject to completion, dated ___________, 1997
$1,800,000 PREFERRED SECURITIES
[LOGO]
CFC PREFERRED TRUST
CUMULATIVE TRUST PREFERRED SECURITIES
(Liquidation Amount $25 Per Preferred Security)
FULLY AND UNCONDITIONALLY GUARANTEED AS DESCRIBED HEREIN
BY
COMMERCIAL FEDERAL CORPORATION
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CFC Preferred Trust, a trust created under the laws of the State of Delaware
(the "Issuer"), may offer, from time to time, preferred securities (the
"Preferred Securities") representing beneficial ownership interests in the
Issuer. Commercial Federal Corporation, a Nebraska corporation (the "Company")
will be the owner of the common securities (the "Common Securities" and,
together with the Preferred Securities, the "Trust Securities") representing
common beneficial ownership interests in the Issuer. The Preferred Securities
will have a preference under certain circumstances with respect to cash
distributions and amounts payable on liquidation, redemption or otherwise over
the Common Securities. See "Description of Preferred Securities -- Subordination
of Common Securities."
Concurrently with the issuance by the Issuer of its Preferred Securities, the
Issuer will invest the proceeds thereof and of contributions received in respect
of the Common Securities in the Company's junior subordinated deferrable
interest debentures (the "Junior Subordinated Debentures") with terms generally
corresponding to the terms of the Issuer's Preferred Securities. Accordingly,
if, as provided in an accompanying Prospectus Supplement, the Company has the
right to defer the payment of interest on the Junior Subordinated Debentures,
then, if interest payments are so deferred, Distributions (as defined herein) on
the Preferred Securities would also be deferred, but would continue to
accumulate at the rate per annum set forth in the related Prospectus Supplement.
See "Description of Preferred Securities -- Distributions."
The Junior Subordinated Debentures will be unsecured and subordinate and junior
in right of payment to Senior Debt (as defined in "Description of Junior
Subordinated Debentures -- Subordination") of the Company. Unless otherwise
specified in the applicable Prospectus Supplement, the Company will have the
right to defer payments of interest on the Junior Subordinated Debentures by
extending the interest payment period thereon at any time or from time to time
for up to such number of consecutive interest payment periods (which shall not
extend beyond the Stated Maturity (as defined herein) of the Junior Subordinated
Debentures) with respect to each deferral period as may be specified in such
Prospectus Supplement (each, an "Extension Period"). In such circumstance,
however, the Company would not be permitted, subject to certain exceptions set
forth herein, to declare or pay any dividends, distributions or other payments
with respect to, or repay, repurchase, redeem or otherwise acquire, the
Company's capital stock or debt securities that rank pari passu with or junior
to such Junior Subordinated Debentures. See "Description of Junior Subordinated
Debentures-- Option to Defer Interest Payments" and "-- Restrictions on Certain
Payments."
(continued on following page)
See "Risk Factors" beginning on page ____ for certain information relevant to an
investment in the securities offered hereby.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, ANY OTHER GOVERNMENTAL AGENCY OR OTHERWISE.
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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(continued from previous page)
The Company has, through the Guarantee, the Guarantee Agreement, the Trust
Agreement, the Junior Subordinated Debentures, the Indenture and the Expense
Agreement (each as defined herein), taken together, fully, irrevocably and
unconditionally guaranteed all of the Issuer's obligations under the Preferred
Securities. See "Relationship Among the Preferred Securities, the Junior
Subordinated Debentures and the Guarantee." The Guarantee of the Company
guarantees the payment of Distributions and payments on liquidation or
redemption of the Preferred Securities, but only in each case to the extent of
funds held by the Issuer, as described herein. See "Description of Guarantee."
If the Company does not make interest payments on the Junior Subordinated
Debentures held by the Issuer, the Issuer will have insufficient funds to pay
Distributions. The Guarantee does not cover payment of Distributions when the
Issuer has insufficient funds to pay such Distributions. In such event, a holder
of Preferred Securities may institute a legal proceeding directly against the
Company pursuant to the terms of the Indenture to enforce payment of amounts
equal to such Distributions to such holder. See "Description of Junior
Subordinated Debentures -- Enforcement of Certain Rights by Holders of Preferred
Securities." The obligations of the Company under the Guarantee and the Junior
Subordinated Debentures are subordinate and junior in right of payment to all
Senior Debt of the Company.
The Junior Subordinated Debentures will be the sole assets of the Issuer, and
payments under the Junior Subordinated Debentures and the related Expense
Agreement will be the only revenue of the Issuer. Unless otherwise specified in
the applicable Prospectus Supplement, the Company may, upon receipt of approval
of the Board of Governors of the Federal Reserve System (the "Federal Reserve")
(if such approval is then required under the applicable capital guidelines or
policies of the Federal Reserve), redeem the Junior Subordinated Debentures (and
thereby cause the redemption of the Trust Securities) or may terminate the
Issuer and, after satisfaction of liabilities to the creditors of the Issuer as
required by applicable law, cause the Junior Subordinated Debentures to be
distributed to the holders of Preferred Securities in exchange therefor upon
liquidation of their interests in the Issuer. See "Description of Preferred
Securities -- Liquidation Distribution Upon Termination."
The Preferred Securities and the Junior Subordinated Debentures may be offered
in amounts, at prices and on terms to be determined at the time of offering;
provided, however, the aggregate initial public offering price of all the
Preferred Securities and the Junior Subordinated Debentures issued pursuant to
the Registration Statement of which this Prospectus forms a part shall not
exceed $45,000,000. Certain specific terms of the Preferred Securities and the
Junior Subordinated Debentures in respect of which this Prospectus is being
delivered will be described in the applicable Prospectus Supplement, including
without limitation and where applicable and to the extent not set forth herein,
(a) in the case of the Preferred Securities, specific title, aggregate stated
liquidation amount (the "Liquidation Amount"), number of securities, the rate or
method of calculating the rate of cumulative cash distributions which accrue
with respect to such Preferred Securities (the "Distributions"), Distribution
payment dates, applicable Distribution deferral terms, if any, place or places
where Distributions will be payable, any terms of redemption, exchange, initial
offering or purchase price, methods of distribution and any other special terms,
and (b) in the case of the Junior Subordinated Debentures, the specific
designation, aggregate principal amount, denominations, Stated Maturity
(including any provisions for the shortening thereof), interest payment dates,
interest rate (which may be fixed or variable) or method of calculating
interest, if any, applicable Extension Period or interest deferral terms, if
any, place or places where principal, premium, if any, and interest, if any,
will be payable, any terms of redemption, any sinking fund provisions, terms for
any conversion or exchange into other securities, initial offering or purchase
price, methods of distribution and any other special terms.
The Preferred Securities and the Junior Subordinated Debentures may be sold to
or through underwriters, through dealers, remarketing firms or agents or
directly to purchasers. See "Plan of Distribution." The names of any
underwriters, dealers, remarketing firms or agents involved in the sale of the
Preferred Securities or the Junior Subordinated Debentures in respect of which
this Prospectus is being delivered and any applicable fee, commission or
discount arrangements with them will be set forth in a Prospectus Supplement.
The Prospectus Supplement will state whether the Preferred Securities or the
Junior Subordinated Debentures will be listed on any national securities
exchange or automated quotation system. If the Preferred Securities or the
Junior Subordinated Debentures are not listed on any national securities
exchange or automated quotation system, there can be no assurance that there
will be a secondary market for the Preferred Securities or the Junior
Subordinated Debentures.
This Prospectus may not be used to consummate sales of the Preferred Securities
or the Junior Subordinated Debentures unless accompanied by a Prospectus
Supplement.
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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 and other information with the Securities
and Exchange Commission (the "Commission"). Copies of reports, proxy statements
and other information filed by the Company with the Commission may be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the following regional offices of the Commission: Citicorp Center, 500 West
Madison, Suite 1400, Chicago, Illinois 60661; and Seven World Trade Center,
13th Floor, New York, New York 10048. Copies of such material also can be
obtained at prescribed rates from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549. Reports, proxy statements
and other information that have been filed electronically with the Commission
may also be obtained from the Commission's Website, the address of which is
http://www.sec.gov. In addition, the Company's common stock is listed and
traded on the New York Stock Exchange. Reports, proxy statements and other
information may be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
No separate financial statements of the Issuer have been included
herein. The Company and the Issuer do not consider that such financial
statements would be material to holders of the Preferred Securities because the
Issuer 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 of the Company and issuing the Trust Securities. See "The Issuer,"
"Description of Preferred Securities," "Description of Junior Subordinated
Debentures" and "Description of Guarantee."
The Company and the Issuer have filed with the Commission a combined
registration statement on Form S-3 (herein, together with all exhibits and
amendments thereto, called the "Registration Statement") under the Securities
Act of 1933, as amended, with respect to the Preferred Securities, the Guarantee
and the Junior Subordinated Debentures. This Prospectus does not contain all of
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission. For
further information, reference is made to the Registration Statement. Copies of
the Registration Statement, including any amendments and exhibits thereto, can
be inspected and copied at the offices of the Commission as set forth above.
Statements contained in this Prospectus as to the contents of any contract or
any other document are not necessarily complete, and in each instance reference
is made to the copy of such contract or other document filed as an exhibit to
the Registration Statement, each such statement being qualified in all respects
by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company which have been previously
filed with the Commission are hereby incorporated by reference in this
Prospectus:
(a) the Company's Annual Report on Form 10-K for the Fiscal Year
Ended June 30, 1996;
(b) the Company's Quarterly Report on Form 10-Q and Quarterly
Report on Form 10-Q/A for the Quarter Ended September 30, 1996
and the Company's Quarterly Report on Form 10-Q for the Quarter
Ended December 31, 1996; and
(c) the Company's Current Reports on Form 8-K dated August 21, 1996
and November 18, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of any offering of securities made by this Prospectus
shall be deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the respective dates of filing such documents. Any statement
contained herein or in a document all or part of which is
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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 subsequently filed document which 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 without charge to any person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference (other than
exhibits to such documents which are not specifically incorporated by reference
in such documents). Requests for such copies should be directed to Commercial
Federal Corporation , Corporate Secretary, 2120 South 72nd Street, Omaha,
Nebraska 68124, telephone number (402) 554-9200.
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RISK FACTORS
Prospective purchasers of the Preferred Securities should carefully
review the information contained elsewhere in this Prospectus and should
particularly consider the following matters. In addition, because holders of
Preferred Securities may receive Junior Subordinated Debentures in exchange
therefor upon liquidation of the Issuer, prospective purchasers of Preferred
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.
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 Preferred Securities and under the
Junior Subordinated Debentures are unsecured and rank subordinate and junior in
right of payment to all Senior Debt (which term includes substantially all
current and future indebtedness of the Company). At December 31, 1996, the
aggregate amount of Senior Debt of the Company outstanding was $28.0 million.
Because the Company is a holding company, the right of the Company to
participate in any distribution of the assets of any subsidiary, including
Commercial Federal Bank, a Federal Savings Bank (the "Bank"), upon such
subsidiary's liquidation or reorganization or otherwise, and thus the ability of
holders of the Preferred Securities to benefit indirectly from such
distribution, is subject to the prior claims of creditors of that subsidiary,
except to the extent that the Company may itself be recognized as a creditor of
that subsidiary. Accordingly, the Junior Subordinated Debentures and all
obligations of the Company relating to the Preferred Securities will be
effectively subordinated to all existing and future liabilities of the Company's
subsidiaries, and holders of Junior Subordinated Debentures should look only to
the assets of the Company for payments on the Junior Subordinated Debentures.
None of the Indenture, the Guarantee Agreement or the Trust Agreement places any
limitation on the amount of secured or unsecured debt, including Senior Debt,
that may be incurred by the Company. See "Description of Guarantee -- Status of
the Guarantee" and "Description of Junior Subordinated Debentures --
Subordination."
Sources of Payment for Amounts Due on Preferred Securities
The ability of the Issuer to pay amounts due on the Preferred
Securities is solely dependent upon the Company making payments on the Junior
Subordinated Debentures as and when required. The Company's principal asset is
its investment in the capital stock of the Bank. Because it does not generate
any significant revenues independent of the Bank, the Company relies primarily
on interest and dividends from the Bank to meet its obligations for payment of
principal and interest on its outstanding debt obligations and corporate
expenses. If the Company were denied access to the earnings of the Bank, whether
by regulatory restriction, inadequate earnings or deterioration in the Bank's
financial condition, the Company's ability to make debt service payments on the
Junior Subordinated Debentures would be significantly impaired.
Option to Defer Interest Payment; Tax Consequences; Market Price Consequences
Unless otherwise specified in the applicable Prospectus Supplement, so
long as no Debenture Event of Default (as defined herein) has occurred and is
continuing, the Company will have the right under the Indenture 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 quarters with respect to each
Extension Period, provided that no Extension Period may extend beyond the Stated
Maturity of the Junior Subordinated Debentures. As a consequence of any such
deferral, quarterly Distributions on the Preferred Securities by the Issuer will
also be deferred (and the amount of Distributions to which holders of the
Preferred Securities are entitled will accumulate additional Distributions
thereon at the rate set forth in the applicable Prospectus Supplement,
compounded quarterly from the relevant payment date for such Distributions)
during any such Extension Period. During any such Extension Period, the Company
will be prohibited from making certain payments and distributions with respect
to the Company's capital stock (including dividends on or redemptions of common
or preferred stock) and from making certain payments with respect to any debt
securities of the Company that rank pari passu with or junior in interest to the
Junior Subordinated Debenture, with
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certain exceptions. See "Description of the Junior Subordinated Debentures --
Restrictions on Certain Payments." Prior to the termination of any such
Extension Period, the Company may further defer the payment of interest,
provided that no Extension Period may exceed 20 consecutive quarters or extend
beyond the Stated Maturity. Upon the termination of any Extension Period and
the payment of all interest then accrued and unpaid (together with interest
thereon at the annual rate set forth in the applicable Prospectus Supplement,
compounded quarterly from the interest payment date for such interest, to the
extent permitted by applicable law), the Company may elect to begin a new
Extension Period subject to the above requirements. There is no limitation on
the number of times that the Company may elect to begin an Extension Period.
See "Description of Preferred Securities -- Distributions" and "Description of
Junior Subordinated Debentures -- Option to Defer Interest Payments."
Should an Extension Period occur, a holder of Preferred Securities
will be required to recognize income (in the form of original issue discount) in
respect of its pro rata share of the Junior Subordinated Debentures held by the
Issuer for United States federal income tax purposes. As a result, a holder of
Preferred Securities will be required to include such income in gross taxable
income for United States federal income tax (and possibly other) 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 if the holder disposes of the
Preferred Securities prior to the record date for the payment of Distributions.
See "Certain Federal Income Tax Consequences -- Interest Income and Original
Issue Discount" and "-- Sales or Redemption of Preferred Securities."
The Company has no current intention of exercising its right to defer
payments of interest on the Junior Subordinated Debentures. However, should the
Company elect to exercise such right in the future, the market price of the
Preferred Securities is likely to be affected. A holder that disposes of its
Preferred Securities during an Extension Period, therefore, might not receive
the same return on its investment as a holder that continues to hold its
Preferred Securities.
Tax Event or Capital Treatment Event -- Redemption
Upon the occurrence and continuation of a Tax Event or Capital
Treatment Event (whether occurring before or after _________________, 2002) the
Company has the right, if certain conditions are met, to redeem the Junior
Subordinated Debentures in whole (but not in part) within 90 days following the
occurrence of such Tax Event or Capital Treatment Event and thereby cause a
mandatory redemption of the Preferred Securities. The exercise of such right is
subject to the Company having received prior approval of the Federal Reserve to
do so if then required under applicable capital guidelines or policies. As of
the date of this Prospectus, the Company, as a savings and loan holding company,
is not subject to the Federal Reserve capital requirements for bank holding
companies. See "Description of Preferred Securities -- Redemption or Exchange."
A "Tax Event" means the receipt by the Company and the Issuer of an
opinion of its tax advisors (which shall be its independent public accountants
or counsel experienced in such matters) to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such prospective change, pronouncement or decision is announced on or after the
date of issuance of the Preferred Securities under the Trust Agreement, there is
more than an insubstantial risk that (i) the Issuer is, or will be within 90
days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on the Junior Subordinated
Debentures, (ii) interest payable by the Company on the Junior Subordinated
Debentures is not, or within 90 days of the date of such opinion, will not be,
deductible by the Company, in whole or in part, for United States federal income
tax purposes or (iii) the Issuer is, or will be within 90 days of the date of
the opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
A "Capital Treatment Event" means the reasonable determination by the
Company that, as a result of any amendment to, or change (including any
prospective change) in, the laws (or any regulations thereunder) of the
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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 prospective change, pronouncement or decision is announced on
or after the date of issuance of the Preferred Securities under the Trust
Agreement, there is more than an insubstantial risk of impairment of the
Company's ability to treat an amount equal to the Liquidation Amount of the
Preferred Securities (or a substantial portion thereof) as "Tier I Capital" (or
the then equivalent thereof) for purposes of the capital adequacy guidelines of
the Federal Reserve, as then in effect and applicable to the Company.
See "Risk Factors -- Possible Tax Law Changes Affecting the Preferred
Securities" for a discussion of certain legislative proposals that, if adopted,
could give rise to a Tax Event, which may permit the Company to cause a
redemption of the Preferred Securities prior to the Stated Maturity as it may be
shortened by the Company.
Possible Tax Law Changes Affecting the Preferred Securities
On February 6, 1997, the Administration's Revenue Proposals (the
"Bill") was introduced in the 105th Congress. If enacted, the Bill would
generally deny interest deductions for interest on an instrument issued by a
publicly traded corporation (a) that has a maximum weighted average maturity of
more than 40 years or (b) has a maximum term of more than 15 years and that is
not shown as indebtedness on the separate balance sheet of the issuer or, where
the instrument is issued to a related party (other than a corporation), where
the holder or some other related party issues a related instrument that is not
shown as indebtedness on the issuer's consolidated balance sheet. For purposes
of determining the weighted average maturity or the term of an instrument, any
right to extend would be treated as exercised. The above-described provisions of
the Bill are proposed to be effective generally for instruments issued on or
after the date of first Congressional committee action on the Bill. If either
provision were to apply to the Junior Subordinated Debentures, the Company would
not be able to deduct interest on the Junior Subordinated Debentures. If the
proposed legislation is ultimately enacted and if the effective date provision
contained in the Bill is followed, such legislation would not apply to the
Junior Subordinated Debentures. There can be no assurance, however, that current
or future legislative proposals or final legislation will not adversely affect
the ability of the Company to deduct interest on the Junior Subordinated
Debentures or otherwise affect the tax treatment of the transaction described
herein. Such a change could give rise to a Tax Event, which would 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 Preferred Securities before, as well as after, the Stated Maturity as it may
be shortened by the Company. See "Description of Preferred Securities --
Redemption or Exchange -- Tax Event Redemption" and "Description of Junior
Subordinated Debentures -- Redemption." See also "Certain Federal Income Tax
Consequences -- Possible Tax Law Changes."
Distribution of Junior Subordinated Debentures to Holders of Preferred
Securities
The Company will have the right at any time to terminate the Issuer
and, after satisfaction of liabilities to creditors of the Issuer as required by
applicable law, cause the Junior Subordinated Debentures to be distributed to
the holders of the Preferred Securities in exchange therefor upon liquidation of
the Issuer. The exercise of such right is subject to the Company having received
prior approval of the Federal Reserve if then required under applicable capital
guidelines or policies. See "Description of Preferred Securities --Redemption or
Exchange -- Distribution of Junior Subordinated Debentures."
Under current United States federal income tax law and interpretations
and assuming, as expected, the Issuer is classified as a grantor trust for such
purposes, a distribution of the Junior Subordinated Debentures upon a
liquidation of the Issuer should not be a taxable event to holders of the
Preferred Securities. However, if a Tax Event were to occur which would cause
the Issuer 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 could be a taxable event to
the Issuer and the holders of the Preferred Securities. See "Certain Federal
Income Tax Consequences -- Distribution of the Junior Subordinated Debentures to
Holders of Preferred Securities."
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Shortening of Stated Maturity of Junior Subordinated Debentures
The Company will have the right at any time to shorten the maturity of
the Junior Subordinated Debentures to a date not earlier than five years from
the date of issuance and thereby cause the Preferred Securities to be redeemed
on such earlier date. The exercise of such right is subject to the Company
having received prior approval of the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve. See
"Description of Junior Subordinated Debentures -- Redemption."
Market Prices
There can be no assurance as to the market prices for Preferred
Securities or Junior Subordinated Debentures that may be distributed in exchange
for Preferred Securities upon liquidation of the Issuer. Accordingly, the
Preferred Securities that an investor may purchase, whether pursuant to the
offer made hereby or in the secondary market, or the Junior Subordinated
Debentures that a holder of Preferred Securities may receive on liquidation of
the Issuer, may trade at a discount to the price that the investor paid to
purchase the Preferred Securities offered hereby. As a result of the existence
of the Company's right to defer interest payments, the market price of the
Preferred Securities (which represent preferred beneficial interests in the
Issuer) may be more volatile than the market prices of other debt securities
that are not subject to such optional deferrals. In addition, because the
Company has the right to shorten the Stated Maturity of the Junior Subordinated
Debentures (subject to prior approval of the Federal Reserve if then required
under applicable capital guidelines or policies of the Federal Reserve), there
can be no assurance that the Company will not exercise its option to change the
maturity of the Junior Subordinated Debentures as permitted by the terms thereof
and of the Indenture. Because holders of Preferred Securities may receive Junior
Subordinated Debentures on liquidation of the Issuer, prospective purchasers of
Preferred 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 and in the
applicable Prospectus Supplement.
Rights Under the Guarantee; Direct Action
The Guarantee guarantees to the holders of the Preferred Securities
the following payments, to the extent not paid by the Issuer: (i) any
accumulated and unpaid Distributions required to be paid on the Preferred
Securities, to the extent that the Issuer has funds on hand available therefor
at such time, (ii) the redemption price with respect to any Preferred Securities
called for redemption, to the extent that the Issuer has funds on hand available
therefor at such time, and (iii) upon a voluntary or involuntary dissolution,
winding-up or liquidation of the Issuer (unless the Junior Subordinated
Debentures are distributed to holders of the Preferred Securities), the lesser
of (a) the aggregate of the Liquidation Amount and all accumulated and unpaid
Distributions to the date of payment, to the extent that the Issuer has funds on
hand available therefor at such time, and (b) the amount of assets of the Issuer
remaining available for distribution to holders of the Preferred Securities
after payment of creditors of the Issuer as required by applicable law. The
Guarantee will be qualified as an indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). Harris Trust & Savings Bank will
act as the Guarantee Trustee for the purpose of compliance with the Trust
Indenture Act and will hold the Guarantee for the benefit of the holders of the
Preferred Securities. Harris Trust & Savings Bank will also act as Debenture
Trustee for the Junior Subordinated Debentures and as Property Trustee and
Wilmington Trust Company will act as Delaware Trustee under the Trust Agreement.
The holders of not less than a majority in aggregate Liquidation
Amount of the Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of the Guarantee or to direct the exercise of any trust power
conferred upon the Guarantee Trustee under the Guarantee. Any holder of the
Preferred Securities may institute a legal proceeding directly against the
Company to enforce its rights under the Guarantee without first instituting a
legal proceeding against the Issuer, 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 would lack funds
for the
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<PAGE>
payment of Distributions or amounts payable on redemption of the Preferred
Securities or otherwise, and, in such event, holders of the Preferred Securities
would not be able to rely upon the Guarantee for payment of such amounts.
Instead, if a Debenture Event of Default shall have occurred and be continuing
and such event is attributable to the failure of the Company to pay interest on
or principal of the Junior Subordinated Debentures on the applicable payment
date, then a holder of Preferred Securities may institute a legal proceeding
directly against the Company pursuant to the terms of the Indenture for
enforcement of payment to such holder of the principal of or interest on such
Junior Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Preferred Securities of such holder (a "Direct
Action"). In connection with such Direct Action, the Company will have a right
of set-off under the Indenture to the extent of any payment made by the Company
to such holder of Preferred Securities in the Direct Action. Except as
described herein, holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the 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 Preferred Securities," "-- Debenture
Events of Default" and "Description of Guarantee". The Trust Agreement provides
that each holder of Preferred Securities by acceptance thereof agrees to the
provisions of the Guarantee and the Indenture.
Uncertainty of Deductibility of Interest on the Junior Subordinated Debenture
The Company's ability to deduct the interest paid on the Junior
Subordinated Debentures depends upon whether the Junior Subordinated Debentures
are characterized as debt instruments for federal income tax purposes, taking
all the relevant facts and circumstances into account. The Company believes
that the Junior Subordinated Debentures are debt instruments for federal income
tax purposes and that interest on the Junior Subordinated Debentures will,
therefore, be deductible by the Company. There is no clear authority on the
appropriate characterization for federal income tax purposes of instruments such
as the Junior Subordinated Debentures when they are issued in connection with an
offering of securities such as the Preferred Securities. If the interest on the
Junior Subordinated Debentures is not deductible by the Company, the Company
would have significant additional income tax liabilities.
Limited Covenants
The covenants in the Indenture are limited and there are no covenants
in the Trust Agreement. As a result, neither the Indenture nor the Trust
Agreement protects holders of Junior Subordinated Debentures, or Preferred
Securities, respectively, in the event of material adverse change in the
Company's financial condition or results of operations or limits the ability of
the Company or any subsidiary to incur additional indebtedness. Therefore, the
provisions of these governing instruments should not be considered a significant
factor in evaluating whether the Company will be able to comply with its
obligations under the Junior Subordinated Debentures or the Guarantee.
Limited Voting Rights
Holders of Preferred Securities generally will have limited voting
rights relating only to the modification of the Preferred Securities and the
exercise of the Issuer's rights as holder of Junior Subordinated Debentures and
the Guarantee. Holders of Preferred Securities will not be entitled to vote to
appoint, remove or replace the Property Trustee, the Delaware Trustee or any
Administrative Trustee, and such voting rights are vested exclusively in the
holder of the Common Securities except, with respect to the Property Trustee and
the Delaware Trustee, upon the occurrence of certain events described under
"Description of Preferred Securities -- Voting Rights; Amendment of Trust
Agreement." The Property Trustee, the Administrative Trustees and the Company
may amend the Trust Agreement without the consent of holders of Preferred
Securities to ensure that the Issuer will be classified for United States
federal income tax purposes as a grantor trust or to ensure that the Issuer's
exemption from status as an "investment company" under the Investment Company
Act is preserved even if such action adversely affects the interests of such
holders. See "Description of Preferred Securities -- Voting Rights; Amendment of
the Trust Agreement" and "-- Removal of Issuer Trustees."
7
<PAGE>
Trading Characteristics of Preferred Securities
Application has been made to list the Preferred Securities on the New
York Stock Exchange. The Preferred Securities may trade at prices that do not
fully reflect the value of accrued and unpaid interest with respect to the
underlying Junior Subordinated Debentures. A holder of Preferred Securities that
disposes of such holder's Preferred Securities between record dates for payments
of Distributions (and consequently does not receive a Distribution from the
Issuer for the period prior to such disposition) will nevertheless be required
to include accrued but unpaid interest on the Junior Subordinated Debentures
through the date of disposition in income as ordinary income and to add such
amount to its adjusted tax basis in the Preferred Securities disposed. In
general, such holder will recognize a capital loss to the extent the selling
price (which may not fully reflect the value of accrued but unpaid interest) is
less than its adjusted tax basis (which will include accrued but unpaid
interest). Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for United States federal income tax purposes.
See "Certain Federal Income Tax Consequences -- Interest Income and Original
Issue Discount" and "-- Sales or Redemption of Preferred Securities" for a
discussion of the United States federal income tax consequences that may result
from a taxable disposition of the Preferred Securities.
As indicated above, application has been made to list the Preferred
Securities on the New York Stock Exchange. If the Preferred Securities are not
listed on a national securities exchange or the Nasdaq National Market and the
underwriters do not make a market for the securities, the liquidity of the
Preferred Securities could be adversely affected.
Potentially Adverse Impact of Interest Rates and Economic and Industry
Conditions
The savings institution industry is affected by fluctuations in market
interest rates. Like most savings institution holding companies, the Company's
net interest income is affected by general economic and other factors that
influence market interest rates and the Company's ability to respond to changes
in such rates. General economic conditions also affect the credit quality of the
Company's assets. Adverse economic conditions may affect the ability of the
Bank's borrowers to repay loans, particularly in the areas of commercial real
estate and consumer lending. To the extent that changes in interest rates and
economic conditions adversely affect the Company's financial condition and
results of operations, the Company's ability to make debt service payments on
the Junior Subordinated Debentures may be impaired.
Significant and rapid changes have occurred in the savings institution
industry in recent years, and the future of the industry is subject to various
uncertainties. The traditional role of savings institutions as the nation's
primary housing lenders is diminishing and savings institutions are subject to
increasing competition from commercial banks and mortgage bankers. The savings
institution industry also faces a volatile and uncertain regulatory environment
in which applicable laws, regulations and enforcement policies are subject to
significant change. There can be no assurance that changes in the savings
institution industry, regulatory and otherwise, will not adversely affect the
financial condition and results of operations of the Company and, as a result,
impair its ability to make debt service payments on the Junior Subordinated
Debentures.
THE COMPANY
The Company is a holding company for the Bank, which is the largest
depository institution headquartered in Nebraska. At December 31, 1996, the
Company had assets of $6.9 billion and stockholders' equity of $394.7 million.
Based upon total assets at that date, the Company was the 19th largest publicly
held thrift holding company in the United States. The Bank is a consumer-
oriented financial institution that emphasizes single-family residential real
estate lending, consumer lending, retail deposit activities, including demand
deposit accounts, and mortgage banking. At December 31, 1996, the Bank operated
34 branch offices in Nebraska, 20 branch offices in greater metropolitan Denver,
Colorado, 19 branch offices in Oklahoma, 25 branch offices in Kansas and 7
branch offices in Iowa. Throughout its 109 year history, the Bank has emphasized
customer service. To serve its customers, the Bank conducts loan origination
activities through its 105 branch office network, loan offices of its wholly-
owned
8
<PAGE>
mortgage banking subsidiary and a nationwide correspondent network consisting of
approximately 375 mortgage loan originators. The Bank also provides insurance
and securities brokerage and other retail financial services.
The Company's strategy for growth emphasizes both internal and
external growth. Operations focus on increasing deposits, including demand
accounts, making loans (primarily single-family mortgage and consumer loans) and
providing customers with a full array of financial products and a high level of
customer service. As part of its long-term strategic plan, the Company intends
to expand its operations within its market areas either through direct marketing
efforts aimed at increasing market share, branch expansions, or opening
additional branches. The Company's retail strategy will continue to be centered
on attracting new customers and selling both new and existing customers multiple
products and services. Additionally, the Company will continue to build and
leverage an infrastructure designed to increase fee and other income.
Complementing its strategy of internal growth, the Company will
continue to grow its five-state franchise through an ongoing program of
selective acquisitions of other financial institutions. Acquisition candidates
will be selected based on the extent to which the candidates can enhance the
Company's retail presence in new or underserved markets and complement the
Company's existing retail network.
The Company's principal executive offices are located at 2120 South
72nd Street, Omaha, Nebraska 68124, and its telephone number is (402) 554-9200.
THE ISSUER
The Issuer is a statutory business trust created under Delaware law
pursuant to (i) the Trust Agreement executed by the Company, as Depositor,
Wilmington Trust Company, as Delaware Trustee, Harris Trust & Savings Bank, as
Property Trustee, and the Administrative Trustees, as named therein, of the
Issuer and (ii) the filing of a certificate of trust with the Delaware Secretary
of State on January 30, 1997. The Trust Agreement will be qualified as an
indenture under the Trust Indenture Act. The Issuer exists for the exclusive
purposes of (i) issuing and selling its Trust Securities, (ii) using the
proceeds from the sale of such Trust Securities to acquire Junior Subordinated
Debentures issued by the Company, and (iii) engaging in only those other
activities necessary, convenient or incidental thereto (such as registering the
transfer of the Preferred Securities). Accordingly, the Junior Subordinated
Debentures will be the sole assets of the Issuer, and payments under the Junior
Subordinated Debentures and the Expense Agreement will be the sole revenue of
the Issuer.
All of the Common Securities of the Issuer will be owned by the
Company. The Common Securities of the Issuer will rank pari passu, and payments
will be made thereon pro rata, with the Preferred Securities, except that upon
the occurrence and continuance of an event of default under the Trust Agreement
resulting from an event of default under the Indenture, the rights of the
Company as holder of the Common Securities to payment in respect of
Distributions and payments upon liquidation or redemption will be subordinated
to the rights of the holders of the Preferred Securities. See "Description of
Preferred Securities -- Subordination of Common Securities." The Company will
acquire Common Securities in an aggregate Liquidation Amount equal to not less
than 3% of the total capital of the Issuer.
Unless otherwise specified in the Prospectus Supplement, the Issuer
has a term of approximately 55 years, but may terminate earlier as provided in
the Trust Agreement. The Issuer's business and affairs are conducted by its
trustees, each appointed by the Company as holder of the Common Securities.
Harris Trust & Savings Bank, as Property Trustee, will act as sole trustee under
the Trust Agreement for purposes of compliance with the Trust Indenture Act.
Harris Trust & Savings Bank will also act as trustee under the Guarantee and the
Indenture. See "Description of Guarantee" and "Description of Junior
Subordinated Debentures." The holder of the Common Securities of the Issuer, or
the holders of a majority in Liquidation Amount of the Preferred Securities if
an event of default under the Trust Agreement has occurred and is continuing,
will be entitled to appoint, remove or replace the Property Trustee and/or the
Delaware Trustee. In no event will the holders of the Preferred Securities have
the right to vote to appoint, remove or replace the Administrative Trustees;
such voting rights are vested exclusively in
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<PAGE>
the holder of the Common Securities. The duties and obligations of the Issuer
Trustee are governed by the Trust Agreement. Pursuant to the Expense Agreement,
the Company will pay all fees and expenses related to the Issuer and the
offering of the Preferred Securities and will pay, directly or indirectly, all
ongoing costs, expenses and liabilities of the Issuer.
The principal executive office of the Issuer is 2120 South 72nd
Street, Omaha, Nebraska 68124 and its telephone number is (402) 554-9200.
USE OF PROCEEDS
All of the proceeds from the sale of the Preferred Securities will be
invested by the Issuer in Junior Subordinated Debentures. The Company intends
that the proceeds from the sale of the Junior Subordinated Debentures for
general corporate purposes including, without limitation, possible future
acquisitions.
Although the Company, as a savings and loan holding company, is not
subject to the Federal Reserve capital requirements for bank holding companies,
it is possible that in the future it could become subject to such requirements
as a result of the acquisition of a bank or change in regulations. On October
21, 1996, the Federal Reserve announced that cumulative preferred securities
having the characteristics of the Preferred Securities could be included as Tier
1 capital for bank holding companies. Such Tier 1 capital treatment, together
with the Company's ability to deduct, for income tax purposes, interest payable
on the Junior Subordinated Debentures, will provide the Company with a more
cost-effective means of obtaining capital for regulatory purposes than if the
Company were to issue preferred stock.
ACCOUNTING TREATMENT
For financial reporting purposes, the Issuer will be treated as a
subsidiary of the Company and, accordingly, the accounts of the Issuer will be
included in the consolidated financial statements of the Company. The Preferred
Securities will be presented as a separate line item in the consolidated
statement of financial condition of the Company before the Stockholders' Equity
section under the separate caption "Company-Obligated Redeemable Preferred
Securities of Subsidiary Trust Holding Solely Junior Subordinated Debentures"
and appropriate disclosures about the Preferred Securities, the Guarantee and
the Junior Subordinated Debentures will be included in the notes to the
consolidated financial statements. For financial reporting purposes, the Company
will record Distributions payable on the Preferred Securities as minority
interest expense, net of related tax benefit, in the consolidated statement of
operations.
The Company has agreed that future financial reports of the Company
will: (i) include, in an audited footnote to the audited financial statements,
disclosure that (a) the Trust is wholly owned, (b) the sole assets of the Trust
are the Junior Subordinated Debentures (specifying the principal amount,
interest rate and maturity date of the Junior Subordinated Debentures held), and
(c) the obligations of the Company under the documents, in the aggregate,
constitute a full and unconditional guarantee by the Company of the obligations
of the Issuer under the Preferred Securities.
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<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Six Months Ended
December 31, Year Ended June 30,
---------------- ----------------------------------------------
1996 1995 1996 1995 1994 1993 1992
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Excluding interest on deposits............ 1.30x 1.58x 1.71x 1.43x 1.13x 1.41x 1.26x
Including interest on deposits............ 1.10x 1.21x 1.25x 1.18x 1.06x 1.20x 1.13x
</TABLE>
DESCRIPTION OF PREFERRED SECURITIES
Pursuant to the terms of the Trust Agreement, the Issuer Trustees on
behalf of the Issuer will issue the Preferred Securities and the Common
Securities. The Trust Agreement will be qualified as an indenture under the
Trust Indenture Act. Initially, Wilmington Trust Company will be the Delaware
Trustee and Harris Trust & Savings Bank will be the Property Trustee and will
act as trustee for the purpose of complying with the Trust Indenture Act. The
terms of the Preferred Securities will include those stated in the Trust
Agreement and those made part of the Trust Agreement by the Trust Indenture Act.
This summary of certain provisions of the Preferred Securities and the Trust
Agreement, which summarizes the material terms thereof, does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the Trust Agreement, including the definitions therein of
certain terms, and the Trust Indenture Act, to each of which reference is hereby
made. Wherever particular defined terms of the Trust Agreement (as amended or
supplemented from time to time) are referred to herein or in a Prospectus
Supplement, such defined terms are incorporated herein or therein by reference.
The form of the Trust Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
General
The Preferred Securities will represent beneficial ownership interests
in the Issuer and the holders thereof will be entitled to a preference in
certain circumstances with respect to Distributions and amounts payable on
redemption or liquidation over the Common Securities of such Issuer, as well as
other benefits as described in the Trust Agreement. See "-- Subordination of
Common Securities." The Preferred Securities of the Issuer will rank pari passu,
and payments will be made thereon pro rata, with the Common Securities of the
Issuer except as described under "-- Subordination of Common Securities." Legal
title to the Junior Subordinated Debentures will be held by the Property Trustee
in trust for the benefit of the holders of the Preferred Securities and Common
Securities. The Guarantee Agreement executed by the Company for the benefit of
the holders of the Preferred Securities (the "Guarantee") will be a guarantee on
a subordinated basis with respect to the Preferred Securities but will not
guarantee payment of Distributions or amounts payable on redemption or
liquidation of such Preferred Securities when the Issuer does not have funds on
hand available to make such payments. See "Description of Guarantee."
Distributions
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such dates
as specified in the Prospectus Supplement. In the event that any date on which
Distributions are payable on the Preferred Securities is not a Business Day (as
defined below), payment of the Distribution payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect to any such delay) except that, if such Business Day is
in the next succeeding calendar year, payment of such Distribution shall be made
on the immediately preceding Business Day, in either case
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<PAGE>
with the same force and effect as if made on such date (each date on which
Distributions are payable in accordance with the foregoing, a "Distribution
Date"). A "Business Day" shall mean any day other than a Saturday or a Sunday,
or a day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or a day on which the
corporate trust office of the Property Trustee or the Debenture Trustee is
closed for business.
The Preferred Securities represent beneficial ownership interests in
the Issuer, and the Distributions on each Preferred Security will be payable at
a rate specified in the Prospectus Supplement for such Preferred Securities.
The amount of Distributions payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months unless otherwise specified in the
Prospectus Supplement. Distributions to which holders of Preferred Securities
are entitled will accumulate additional Distributions at the rate per annum if
and as specified in the Prospectus Supplement. The term "Distributions" as used
herein includes any such additional Distributions unless otherwise stated.
Unless otherwise provided in the Prospectus Supplement and so long as
no Debenture Event of Default has occurred and is continuing, the Company has
the right under the Indenture, pursuant to which it will issue the Junior
Subordinated Debentures, to defer the payment of interest at any time or from
time to time on the Junior Subordinated Debentures for up to 20 consecutive
interest payment periods (each, an "Extension Period"), provided that no
Extension Period may extend beyond the Stated Maturity of the Junior
Subordinated Debentures. As a consequence of any such deferral, Distributions
on the Preferred Securities would be deferred (but would continue to accumulate
additional Distributions thereon at the rate per annum set forth in the
Prospectus Supplement for such Preferred Securities) by the Issuer during any
such Extension Period. During such Extension Period, the Company may not, and
may not permit any subsidiary of the Company to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock), (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu with or junior in interest to the
Junior Subordinated Debentures or (iii) make any guarantee payments with respect
to any guarantee by the Company of debt securities of any subsidiary of the
Company if such guarantee ranks pari passu with or junior in interest to the
Junior Subordinated Debentures (other than (a) dividends or distributions in
capital stock of the Company (which includes common and preferred stock), (b)
any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee with respect to the Preferred
Securities and (d) purchases of common stock related to the issuance of common
stock or rights under any of the Company's benefit plans for its directors,
officers or employees or related to the issuance of common stock (or securities
convertible into or exchangeable for common stock) as consideration in an
acquisition transaction).
The revenue of the Issuer available for distribution to holders of the
Preferred Securities will be limited to payments under the Junior Subordinated
Debentures in which the Issuer will invest the proceeds from the issuance and
sale of its Trust Securities. If the Company does not make interest payments on
such Junior Subordinated Debentures, the Property Trustee will not have funds
available to pay Distributions on the Preferred Securities. The payment of
Distributions (if and to the extent the Issuer has funds legally available for
the payment of such Distributions and cash sufficient to make such payments) is
guaranteed by the Company on the basis set forth herein under "Description of
Guarantee."
Distributions on the Preferred Securities will be payable to the
holders thereof as they appear on the register of the Issuer on the relevant
record dates, which, as long as the Preferred Securities remain in book-entry
form, will be one Business Day prior to the relevant Distribution Date. Subject
to any applicable laws and regulations and the provisions of the Trust
Agreement, each such payment will be made as described under "Book-Entry
Issuance." In the event any Preferred Securities are not in book-entry form,
the relevant record date for such Preferred Securities shall be the date at
least 15 days prior to the relevant Distribution Date, as specified in the
Prospectus Supplement.
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Redemption or Exchange
Mandatory Redemption. Upon the repayment or redemption, in whole or
in part, of any Junior Subordinated Debentures, whether at Stated Maturity or
upon earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the Preferred 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 Preferred Securities plus
accumulated but unpaid Distributions thereon to 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 of any 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 Preferred Securities and the Common
Securities. 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 Preferred Securities and the Common Securities.
The Company will have the right to redeem any Junior Subordinated
Debentures (i) on or after such date as may be specified in the Prospectus
Supplement, in whole at any time or in part from time to time, or (ii) at any
time, in whole (but not in part), upon the occurrence of a Tax Event or Capital
Treatment Event, in either case subject to receipt of prior approval by the
Federal Reserve if then required under applicable capital guidelines or policies
of the Federal Reserve.
Distribution of Junior Subordinated Debentures. Subject to the
Company having received prior approval of the Federal Reserve to do so if then
required under applicable capital guidelines or policies of the Federal Reserve,
the Company has the right at any time to liquidate the Issuer and, after
satisfaction of the liabilities of creditors of the Issuer as provided by
applicable law, cause such Junior Subordinated Debentures in respect of the
Preferred Securities and Common Securities issued by the Issuer to be
distributed to the holders of such Preferred Securities and Common Securities in
exchange therefor upon liquidation of the Issuer.
Tax Event or Capital Treatment Event Redemption. If a Tax Event or
Capital Treatment Event shall occur and be continuing, the Company has the right
to redeem the Junior Subordinated Debentures in whole (but not in part) and
thereby cause a mandatory redemption of such Preferred Securities and Common
Securities in whole (but not in part) at the Redemption Price within 90 days
following the occurrence of such Tax Event or Capital Treatment Event. In the
event a Tax Event or Capital Treatment Event has occurred and is continuing and
the Company does not elect to redeem the Junior Subordinated Debentures and
thereby cause a mandatory redemption of such Preferred Securities and Common
Securities or to liquidate the Issuer and cause the Junior Subordinated
Debentures to be distributed to holders of such Preferred Securities and Common
Securities in exchange therefor upon liquidation of the Issuer as described
above, such Preferred Securities will remain outstanding and Additional Sums may
be payable 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 on the
outstanding Preferred Securities and Common Securities of the Issuer shall not
be reduced as a result of any additional taxes, duties and other governmental
charges to which the Issuer has become subject as a result of a Tax Event.
"Like Amount" means (i) with respect to a redemption of any 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 Indenture, allocated to
the Common Securities and to the Preferred Securities pro rata based upon the
relative Liquidation Amounts of such classes and the proceeds of which will be
used to pay the Redemption Price of such Trust Securities, and (ii) with respect
to a distribution of Junior Subordinated Debentures to holders of any Trust
Securities in exchange therefor in connection with a
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<PAGE>
dissolution or liquidation of the related Issuer, 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 would be
distributed.
"Liquidation Amount" means the stated amount of $25 per Trust
Security.
After the liquidation date fixed for any distribution of Junior
Subordinated Debentures for Preferred Securities (i) such Preferred Securities
will no longer be deemed to be outstanding, (ii) the Depository or its nominee,
as the record holder of such Preferred Securities, will receive a registered
global certificate or certificates representing the Junior Subordinated
Debentures to be delivered upon such distribution and (iii) any certificates
representing such Preferred Securities not held by the Depository or its nominee
will be deemed to represent the Junior Subordinated Debentures having a
principal amount equal to the stated Liquidation Amount of the Preferred
Securities, and bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on such Preferred Securities until such
certificates are presented to the Administrative Trustees or their agent for
transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for Preferred Securities if a dissolution and liquidation of the Issuer
were to occur. Accordingly, the Preferred Securities that an investor may
purchase, or the Junior Subordinated Debentures that the investor may receive on
dissolution and liquidation of the Issuer, may trade at a discount to the price
that the investor paid to purchase the Preferred Securities offered hereby.
Redemption Procedures
Preferred Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the applicable proceeds from the
contemporaneous redemption of the Junior Subordinated Debentures. Redemptions
of the Preferred Securities shall be made and the Redemption Price shall be
payable on each Redemption Date only to the extent that the Issuer has funds on
hand available for the payment of such Redemption Price. See also "--
Subordination of Common Securities."
If the Issuer gives a notice of redemption of Preferred Securities,
then, by 12:00 noon, ______________ time, on the Redemption Date, to the extent
funds are available, the Property Trustee will deposit irrevocably with the
Depository funds sufficient to pay the applicable Redemption Price and will give
the Depository irrevocable instructions and authority to pay the Redemption
Price to the holders of the Preferred Securities. See "Book-Entry Issuance." If
such Preferred Securities are no longer in book-entry form, the Property
Trustee, to the extent funds are available, will irrevocably deposit with the
paying agent for such Preferred Securities funds sufficient to pay the
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 such Preferred Securities.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Preferred Securities called for redemption shall be
payable to the holders of such Preferred Securities on the relevant record dates
for the related Distribution Dates. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such deposit, all
rights of the holders of such Preferred Securities so called for redemption will
cease, except the right of the holders of such Preferred Securities to receive
the Redemption Price, but without interest on such Redemption Price, and such
Preferred Securities will cease to be outstanding. In the event that any date
fixed for redemption of Preferred Securities is not a Business Day, then payment
of the Redemption Price payable on such date will be made on the next succeeding
day which is a Business Day (and without any 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 Preferred
Securities called for redemption is improperly withheld or refused and not paid
either by the Issuer or by the Company pursuant to the Guarantee as described
under "Description of Guarantee," Distributions on such Preferred Securities
will continue to accrue at the then applicable rate, from the Redemption Date
originally established by the Issuer for such Preferred Securities to the date
such Redemption Price is actually
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paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United
States federal securities law), the Company or its subsidiaries may at any time
and from time to time purchase outstanding Preferred Securities by tender, in
the open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Junior Subordinated Debentures to holders of Preferred
Securities shall be made to the applicable recordholders thereof as they appear
on the register for such Preferred Securities on the relevant record date, which
shall be one Business Day prior to the relevant Redemption Date or liquidation
date, as applicable; provided, however, that in the event that any Preferred
Securities are not in book-entry form, the relevant record date for such
Preferred Securities shall be a date at least 15 days prior to the Redemption
Date or liquidation date, as applicable, as specified in the Prospectus
Supplement.
If less than all of the Preferred Securities and Common Securities
issued by the Issuer are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Preferred Securities and Common Securities to be
redeemed shall be allocated pro rata to the Preferred Securities and the Common
Securities based upon the relative Liquidation Amounts of such classes. The
particular Preferred Securities to be redeemed shall be selected on a pro rata
basis not more than 60 days prior to the Redemption Date by the Property Trustee
from the outstanding Preferred Securities not previously called for redemption,
by such method as the Property Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions (equal to $25 or an
integral multiple of $25 in excess thereof) of the Liquidation Amount of
Preferred Securities of a denomination larger than $25. The Property Trustee
shall promptly notify the trust registrar in writing of the Preferred Securities
selected for redemption and, in the case of any Preferred Securities selected
for partial redemption, the Liquidation Amount thereof to be redeemed. For all
purposes of the Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Preferred Securities shall relate, in
the case of any Preferred Securities redeemed or to be redeemed only in part, to
the portion of the aggregate Liquidation Amount of Preferred Securities which
has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each holder of Trust Securities to be
redeemed at its registered address.
Subordination of Common Securities
Payment of Distributions on, and the Redemption Price of Preferred
Securities and Common Securities, shall be made pro rata based on the
Liquidation Amount of such Preferred Securities and Common Securities; provided,
however, that if on any Distribution Date or Redemption Date a Debenture Event
of Default shall have occurred and be continuing, no payment of any Distribution
on, or Redemption Price of, any of the Issuer's Common Securities, and no other
payment on account of the redemption, liquidation or other acquisition of such
Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all of the Issuer's outstanding
Preferred Securities for all Distribution periods terminating on or prior
thereto, or in the case of payment of the Redemption Price the full amount of
such Redemption Price on all of the Issuer's outstanding Preferred Securities
then called for redemption, shall have been made or provided for, and all funds
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions on, or Redemption Price of, the Issuer's Preferred
Securities then due and payable.
In the case of any event of default under the Trust Agreement
resulting from a Debenture Event of Default, the Company as holder of the
Issuer's Common Securities will be deemed to have waived any right to act with
respect to any such event of default under the applicable Trust Agreement until
the effect of all such events of default with respect to such Preferred
Securities have been cured, waived or otherwise eliminated. Until all events of
default under the Trust Agreement with respect to the Preferred Securities have
been so cured, waived or otherwise
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eliminated, the Property Trustee shall act solely on behalf of the holders of
such Preferred Securities and not on behalf of the Company as holder of the
Issuer's Common Securities, and only the holders of such Preferred Securities
will have the right to direct the Property Trustee to act on their behalf.
Liquidation Distribution Upon Dissolution
Pursuant to the Trust Agreement, the Issuer shall automatically
dissolve upon expiration of its term and shall dissolve on the first to occur
of: (i) certain events of bankruptcy, dissolution or liquidation of the Company;
(ii) the distribution of a Like Amount of the Junior Subordinated Debentures to
the holders of its Trust Securities, if the Company, as Depositor, has given
written direction to the Property Trustee to terminate the Issuer (subject to
the Company having received prior approval of the Federal Reserve if so required
under applicable capital guidelines or policies of the Federal Reserve); (iii)
redemption of all of the Issuer's Preferred Securities as described under --
Redemption or Exchange -- Mandatory Redemption"; and (iv) the entry of an order
for the dissolution of the Issuer by a court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii) or
(iv) above, the Issuer shall be liquidated by the Issuer Trustees as
expeditiously as the Issuer Trustees determine to be possible by distributing,
after satisfaction of liabilities to creditors as provided by applicable law, to
the holders of such Trust Securities in exchange therefor a Like Amount of the
Junior Subordinated Debentures, unless such distribution is determined by the
Property Trustee not to be practical, in which event such holders will be
entitled to receive out of the assets of the Issuer available for distribution
to holders, after satisfaction of liabilities to creditors of the Issuer as
provided by applicable law, an amount equal to, in the case of holders of
Preferred Securities, the aggregate of the Liquidation Amount plus accrued and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because the Issuer has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Issuer on its Preferred Securities shall be paid on a pro rata basis. The
holder(s) of the Issuer's Common Securities will be entitled to receive
distributions upon any such liquidation pro rata with the holders of its
Preferred Securities, except that if a Debenture Event of Default has occurred
and is continuing, the Preferred Securities shall have a priority over the
Common Securities.
Events of Default; Notice
Any one of the following events constitutes an "Event of Default"
under the Trust Agreement with respect to the Preferred Securities (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see "Description
of Junior Subordinated Debentures --Debenture Events of Default"); or
(ii) default by the Property Trustee in the payment of any
Distribution when it becomes due and payable, and continuation of such default
for a period of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Issuer Trustees (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 defaulting Issuer Trustee or Trustees by the holders of at least
25% in aggregate Liquidation Amount of the outstanding Preferred Securities, a
written notice specifying such default or
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breach and requiring it to be remedied and stating that such notice is a "Notice
of Default" under such Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Company to appoint a
successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Preferred Securities, the
Administrative Trustees and the Company, as Depositor, unless such Event of
Default shall have been cured or waived. The Company, as Depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities as
described above. See " -- Subordination of Common Securities" and "--
Liquidation Distribution Upon Termination." The existence of an Event of
Default does not entitle the holders of Preferred Securities to accelerate the
maturity thereof.
Removal of Issuer Trustees
Unless a Debenture Event of Default shall have occurred and be
continuing, any Issuer Trustee may be removed at any time by the holder of the
Common Securities. If a Debenture Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be removed at such
time by the holders of a majority in Liquidation Amount of the outstanding
Preferred Securities. In no event will the holders of the Preferred Securities
have the right to vote to appoint, remove or replace the Administrative
Trustees, which voting rights are vested exclusively in the Company as the
holder of the Common Securities. No resignation or removal of 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.
Co-Trustees and Separate Property Trustee
Unless an Event of Default shall have occurred and be continuing, at
any time or from time to time, 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 Company, as the holder of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any part of such Trust Property, or to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the Trust Agreement. In case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone shall have
power to make such appointment.
Merger or Consolidation of Issuer Trustees
Any Person into which the Property Trustee, the Delaware Trustee or
any Administrative Trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which such Issuer Trustee shall be a
party, or any Person succeeding to all or substantially all the corporate trust
business of such Issuer Trustee, shall be the successor of such Issuer Trustee
under the Trust Agreement, provided such Person shall be otherwise qualified and
eligible.
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Mergers, Consolidations, Amalgamations or Replacements of the Issuer
The Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. The Issuer may, at the request of the Company, with the
consent of the Administrative Trustees and without the consent of the holders of
the Preferred Securities, merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, a trust organized as such under the laws of any
State; provided, that (i) such successor entity either (a) expressly assumes all
of the obligations of the Issuer with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the Preferred Securities in
priority with respect to distributions and payments upon liquidation, redemption
and otherwise, (ii) the Company expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee as the
holder of the Junior Subordinated Debentures, (iii) the Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or other organization on which the
Preferred Securities are then listed, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Preferred Securities to be downgraded by any nationally recognized statistical
rating organization which gives ratings on the Preferred Securities, (v) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the holders
of the Preferred Securities (including any Successor Securities) in any material
respect, (vi) such successor entity has a purpose identical to that of the
Issuer, (vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Company has received an opinion from
independent counsel to the Issuer experienced in such matters to the effect that
(a) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of the
holders of the Preferred Securities (including any Successor Securities) in any
material respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Issuer nor such
successor entity will be required to register as an investment company under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
(viii) the Company or any permitted successor or assignee owns all of the Common
Securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, the Issuer shall not, except
with the consent of holders of 100% in Liquidation Amount of the Preferred
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to any other entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the Issuer or the
successor entity to be classified as other than a grantor trust for United
States federal income tax purposes.
Voting Rights; Amendment of Trust Agreement
Except as provided below and under "Description of Guarantee --
Amendments and Assignment" and as otherwise required by law and the Trust
Agreement, the holders of the Preferred Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the Company,
the Property Trustee and the Administrative Trustees, without the consent of the
holders of the Preferred Securities (i) to cure any ambiguity, correct or
supplement any provisions in the 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, which shall not be inconsistent
with the other provisions of the Trust Agreement, or (ii) to modify, eliminate
or add to any provisions of the Trust Agreement to such extent as shall be
necessary to ensure that the Issuer will be classified for United States federal
income tax purposes as a grantor trust at all times that any Trust Securities
are outstanding or to ensure that the Issuer will not be required to register as
an "investment company" under the Investment Company Act; provided, however,
that in the case of clause (i) such action shall not adversely affect in any
material respect the interests of any holder of Preferred Securities, and any
amendments of the Trust Agreement shall become effective when notice thereof is
given to the holders of Trust Securities. The Trust Agreement may be amended by
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the Issuer Trustees and the Company with (i) the consent of holders representing
not less than a majority (based upon Liquidation Amounts) of the outstanding
Trust Securities, and (ii) receipt by the Issuer Trustees of an opinion of its
tax advisors 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's status as a grantor trust for United States federal income tax
purposes or an opinion of counsel that such amendment will not affect the
Issuer's exemption from status as an "investment company" under the Investment
Company Act, provided that without the consent of each holder of Trust
Securities, such Trust Agreement may not be amended to (i) change the amount or
timing of any Distribution on the Trust Securities or otherwise adversely affect
the amount of any Distribution required to be made in respect of the Trust
Securities as of a specified date or (ii) restrict the right of a holder of
Trust Securities to institute suit for the enforcement of any such payment on or
after such date.
So long as any Junior Subordinated Debentures are held by the Property
Trustee, the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Property Trustee with respect to
such Junior Subordinated Debentures, (ii) waive any past default that is
waivable under 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 such Junior Subordinated Debentures, where such consent
shall be required, without, in each case, obtaining the prior approval of the
holders of a majority in aggregate Liquidation Amount of all outstanding
Preferred Securities; provided, however, that where a consent under the
Indenture would require the consent of each holder of Junior Subordinated
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior consent of each holder of the corresponding Preferred
Securities. The Issuer Trustees shall not revoke any action previously
authorized or approved by a vote of the holders of the Preferred Securities
except by subsequent vote of the holders of the Preferred Securities. The
Property Trustee shall notify each holder of Preferred Securities of any notice
of default with respect to the Junior Subordinated Debentures. In addition to
obtaining the foregoing approvals of the holders of the Preferred Securities,
prior to taking any of the foregoing actions, the Issuer Trustees shall obtain
an opinion of its tax advisors to the effect that such action would not cause
the Issuer to be classified as other than a grantor trust for United States
federal income tax purposes.
Any required approval of holders of Preferred Securities may be given
at a meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such holders is to be taken, to
be given to each holder of record of Preferred Securities in the manner set
forth in the Trust Agreement.
No vote or consent of the holders of Preferred Securities will be
required for the Issuer to redeem and cancel its Preferred Securities in
accordance with the Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Company, the Issuer Trustees or any
affiliate of the Company or any Issuer Trustees, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
Global Preferred Securities
Unless otherwise specified in the applicable Prospectus Supplement,
the Preferred Securities will be issued in whole or in part in the form of one
or more global certificates ("Global Preferred Securities") registered in the
name of and deposited with, or on behalf of, the Depository Trust Company as
depository (the "Depository"). Global Preferred Securities may be issued only
in fully registered form and in either temporary or permanent form. Beneficial
interests in the Preferred Securities will be shown on, and transfers thereof
will be effected only through, records maintained by Depository. Except as
described below, Preferred Securities in certificated form will not be issued in
exchange for the global certificates. See "Book-Entry Issuance."
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Unless and until it is exchanged in whole or in part for the
individual Preferred Securities represented thereby, a Global Preferred Security
may not be transferred except as a whole by the Depository for such Global
Preferred Security to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository or by the
Depository or any nominee to a successor Depository or any nominee of such
successor.
A global security shall be exchangeable for Preferred Securities
registered in the names of persons other than the Depository or its nominee only
if (i) the Depository notifies the Issuer that it is unwilling or unable to
continue as a depository for such global security and no successor depository
shall have been appointed, or if at any time the Depository ceases to be a
clearing agency registered under the Exchange Act at a time when the Depository
is required to be so registered to act as such depository, (ii) the Company in
its sole discretion determines that such global security shall be so
exchangeable or (iii) there shall have occurred and be continuing a Debenture
Event of Default. Any global security that is exchangeable pursuant to the
preceding sentence shall be exchangeable for definitive certificates registered
in such names as the Depository shall direct. It is expected that such
instructions will be based upon directions received by the Depository from its
Participants (as defined in the accompanying Prospectus) with respect to
ownership of beneficial interests in such global security. In the event that
Preferred Securities are issued in definitive form, such Preferred Securities
will be in denominations of $25 and integral multiples thereof and may be
transferred or exchanged at the offices described below.
Payments on Preferred Securities represented by a global security will
be made to the Depository, as the depository for the Preferred Securities. In
the event Preferred Securities are issued in certificated form, the Liquidation
Amount and Distributions will be payable, the transfer of the Preferred
Securities will be registrable, and Preferred Securities will be exchangeable
for Preferred Securities of other denominations of a like aggregate Liquidation
Amount, at the corporate office of the Property Trustee in ___________________,
or at the offices of any paying agent or transfer agent appointed by the
Administrative Trustees, provided that payment of any Distribution may be made
at the option of the Administrative Trustees by check mailed to the address of
the persons entitled thereto or by wire transfer. In addition, if the Preferred
Securities are issued in certificated form, the record dates for payment of
Distributions will be the 15th day of the month in which the relevant
Distribution payment is scheduled to be paid.
Upon the issuance of a Global Preferred Security, and the deposit of
such Global Preferred Security with or on behalf of the Depository, the
Depository for such Global Preferred Security or its nominee will credit, on its
book-entry registration and transfer system, the respective aggregate
Liquidation Amounts of the individual Preferred Securities represented by such
Global Preferred Securities to the accounts of Participants. Such accounts
shall be designated by the dealers, underwriters or agents with respect to such
Preferred Securities or by the Company if such Preferred Securities are offered
and sold directly by the Company. Ownership of beneficial interests in a Global
Preferred Security will be limited to Participants or persons that may hold
interests through Participants. Ownership of beneficial interests in such
Global Preferred Security will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the applicable Depository
or its nominee (with respect to interests of Participants) and the records of
Participants (with respect to interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Preferred Security.
So long as the Depository for a Global Preferred Security, or its
nominee, is the registered owner of such Global Preferred Security, such
Depository or such nominee, as the case may be, will be considered the sole
owner or holder of the Preferred Securities represented by such Global Preferred
Security for all purposes under the Indenture governing such Preferred
Securities. Except as provided below, owners of beneficial interests in a
Global Preferred Security will not be entitled to have any of the individual
Preferred Securities represented by such Global Preferred Security registered in
their names, will not receive or be entitled to receive physical delivery of any
such Preferred Securities in definitive form and will not be considered the
owners or holders thereof under the Indenture.
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Payments of principal of (and premium, if any) and interest on
individual Preferred Securities represented by a Global Preferred Security
registered in the name of a Depository or its nominee will be made to the
Depository or its nominee, as the case may be, as the registered owner of the
Global Preferred Security representing such Preferred Securities. None of the
Company, the Property Trustee, any Paying Agent, or the Securities Registrar for
such Preferred Securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global Preferred Security representing such Preferred
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Company expects that the Depository or its nominee, upon receipt
of any payment of Liquidation Amount, Redemption Price, premium or Distributions
in respect of a permanent Global Preferred Security representing any of such
Preferred Securities, immediately will credit Participants' accounts with
payments in amounts proportionate to their respective beneficial interest in the
aggregate Liquidation Amount of such Global Preferred Security for such
Preferred Securities as shown on the records of such Depository or its nominee.
The Company also expects that payments by Participants to owners of beneficial
interests in such Global Preferred Security held through such Participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name." Such payments will be the responsibility of such Participants.
Unless otherwise specified in the Prospectus Supplement, if the
Depository is at any time unwilling, unable or ineligible to continue as
depository and a successor depository is not appointed by the Issuer within 90
days, the Issuer will issue individual Preferred Securities in exchange for the
Global Preferred Security. In addition, the Issuer may at any time and in its
sole discretion, subject to any limitations described in the Prospectus
Supplement, determine not to have any Preferred Securities represented by one or
more Global Preferred Securities and, in such event, will issue individual
Preferred Securities in exchange for the Global Preferred Security or Securities
representing such Preferred Securities. Further, if the Issuer so specifies
with respect to the Preferred Securities, an owner of a beneficial interest in a
Global Preferred Security representing Preferred Securities may, on terms
acceptable to the Issuer, the Property Trustee and the Depository for such
Global Preferred Security, receive individual Preferred Securities in exchange
for such beneficial interests, subject to any limitations described in the
Prospectus Supplement relating to such Preferred Securities. In any such
instance, an owner of a beneficial interest in a Global Preferred Security will
be entitled to physical delivery of individual Preferred Securities represented
by such Global Preferred Security equal in principal amount to such beneficial
interest and to have such Preferred Securities registered in its name.
Individual Preferred Securities so issued will be issued in denominations,
unless otherwise specified by the Issuer, of $25 and integral multiples thereof.
Payment and Paying Agency
Payments in respect of the Preferred Securities shall be made to the
Depository, which shall credit the relevant accounts at the Depository on the
applicable Distribution Dates or, if the Issuer's Preferred Securities are not
held by the Depository, such payments shall be made by check mailed to the
address of the holder entitled thereto as such address shall appear on the
Register. Unless otherwise specified in the Prospectus Supplement, the paying
agent (the "Paying Agent") shall initially be the Property Trustee and any co-
paying agent chosen by the Property Trustee and acceptable to the Administrative
Trustees and the Company. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Property Trustee and the
Company. In the event that the Property Trustee shall no longer be the Paying
Agent, the Administrative Trustees shall appoint a successor (which shall be a
bank or trust company acceptable to the Administrative Trustees and the Company)
to act as Paying Agent.
Registrar and Transfer Agent
Unless otherwise specified in the Prospectus Supplement, the Property
Trustee will act as registrar and transfer agent for the Preferred Securities.
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Registration of transfers of Preferred Securities will be effected
without charge by or on behalf of the Issuer, but upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The Issuer will not be required to register or cause to be
registered the transfer of its Preferred Securities after such Preferred
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
Preferred Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the Trust Agreement or is unsure of the application of any provision of the
Trust Agreement, and the matter is not one on which holders of Preferred
Securities are entitled under the Trust Agreement to vote, then the Property
Trustee shall take such action as is directed by the Company and if not so
directed, shall take such action as it deems advisable and in the best interests
of the holders of the Trust Securities and will have no liability except for its
own bad faith, negligence or willful misconduct.
Miscellaneous
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuer in such a way that it will not be deemed to
be an "investment company" required to be registered under the Investment
Company Act or classified as other than 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 Company and the Administrative Trustees are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust of the Issuer or the Trust Agreement, that the Company and
the Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar
rights.
The Issuer may not borrow money or issue debt or mortgage or pledge
any of its assets.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued in one or more
series under the Indenture between the Company and Harris Trust & Savings Bank,
as Debenture Trustee. The following summary of certain terms and provisions of
the Junior Subordinated Debentures and the Indenture, which summarizes the
material provisions thereof, does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, the Indenture, the form of
which is filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, and to the Trust Indenture Act, to each of which
reference is hereby made. The Indenture is qualified under the Trust Indenture
Act. Whenever particular defined terms of the Indenture are referred to herein
or in a Prospectus Supplement, such defined terms are incorporated herein or
therein by reference.
Concurrently with the issuance of the Preferred Securities, the Issuer
will invest the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in a series of Junior Subordinated Debentures
issued by the Company. The Junior Subordinated Debentures will be issued as
unsecured debt under the Indenture.
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General
Each series of the Junior Subordinated Debentures will rank pari passu
with all other series of Junior Subordinated Debentures and will be unsecured
and subordinate and junior in right of payment to the extent and in the manner
set forth in the Indenture to all Senior Debt (as defined below) of the Company.
See "-- Subordination." Because the Company is a holding company, the right of
the Company to participate in any distribution of assets of any subsidiary,
including the Bank, upon such subsidiary's liquidation or reorganization or
otherwise (and thus the ability of holders of the Preferred Securities to
benefit indirectly from such distribution), is subject to the prior claims of
creditors of the subsidiary, except to the extent the Company may itself be
recognized as a creditor of that subsidiary. Accordingly, the Junior
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Company's subsidiaries, and holders of Junior
Subordinated Debentures should look only to the assets of the Company for
payments on the Junior Subordinated Debentures. Except as otherwise provided in
the Prospectus Supplement, the Indenture does not limit the incurrence or
issuance of other secured or unsecured debt of the Company, including Senior
Debt, whether under the Indenture, any other existing indenture or any other
indenture that the Company may enter into in the future or otherwise. See "Risk
Factors -- Ranking of Subordinated Obligations Under the Guarantee and the
Junior Subordinated Debentures" and "-- Subordination" and the Prospectus
Supplement relating to any offering of Preferred Securities or Junior
Subordinated Debentures.
The Junior Subordinated Debentures will be issuable in one or more
series pursuant to an indenture supplemental to the Indenture or pursuant to a
resolution of the Company's Board of Directors or a committee thereof. The
Prospectus Supplement will describe the following terms of the Junior
Subordinated Debentures: (1) the title of the Junior Subordinated Debentures;
(2) any limit upon the aggregate principal amount of the Junior Subordinated
Debentures; (3) the date on which the principal of the Junior Subordinated
Debentures is payable (the "Stated Maturity") or the method of determination
thereof; (4) the rate at which the Junior Subordinated Debentures shall bear
interest, the dates on which any such interest shall be payable (the "Interest
Payment Dates"), the right, if any, of the Company to defer or extend an
Interest Payment Date, and the record dates for any interest payable on any
Interest Payment Date (the "Regular Record Dates") or the method by which any of
the foregoing shall be determined; (5) the place where, subject to the terms of
the Indenture as described below under "-- Payment and Paying Agents," the
principal of and premium, if any, and interest on the Junior Subordinated
Debentures will be payable and where, subject to the terms of the Indenture as
described below under "-- Denominations, Registration and Transfer," the Junior
Subordinated Debentures may be presented for registration of transfer or
exchange and the place where notices and demands to or upon the Company in
respect of the Junior Subordinated Debentures and the Indenture may be made
("Place of Payment"); (6) any period within which, or date on which, the price
at which and the terms and conditions upon which Junior Subordinated Debentures
may be redeemed, in whole or in part, at the option of the Company or a holder
thereof; (7) the obligation or the right, if any, of the Company or a holder
thereof to redeem, purchase or repay the Junior Subordinated Debentures and the
period within which, the price at which, the currency (including currency units)
in which and the other terms and conditions upon which the Junior Subordinated
Debentures shall be redeemed, repaid or purchased, in whole or in part, pursuant
to such obligation; (8) the denominations in which any Junior Subordinated
Debentures shall be issuable if other than denominations of $25 and any integral
multiple thereof; (9) if other than in U.S. Dollars, the currency or currencies
(including currency unit or units) in which the principal of (and premium, if
any) and interest, if any, on the Junior Subordinated Debentures shall be
payable, or in which the Junior Subordinated Debentures shall be denominated;
(10) any additions, modifications or deletions in the events of default under
the Indenture or covenants of the Company specified in the Indenture with
respect to the Junior Subordinated Debentures; (11) if other than the principal
amount thereof, the portion of the principal amount of Junior Subordinated
Debentures that shall be payable upon declaration of acceleration of the
maturity thereof; (12) any additions or changes to the Indenture with respect to
the Junior Subordinated Debentures as shall be necessary to permit or facilitate
their issuance in bearer form, registrable or not registrable as to principal,
and with or without interest coupons; (13) any index or indices used to
determine the amount of payments of principal of and premium, if any, on the
Junior Subordinated Debentures and the manner in which such amounts will be
determined; (14) the terms and conditions relating to the issuance of a
temporary Global Security representing all of the Junior Subordinated Debentures
and the exchange of such temporary Global Security for definitive Junior
Subordinated Debentures; (15) subject to the terms described herein
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under "-- Global Junior Subordinated Debentures," whether the Junior
Subordinated Debentures shall be issued in whole or in part in the form of one
or more Global Securities and, in such case, the depository for such Global
Securities, which depository shall be a clearing agency registered under the
Exchange Act; (16) the appointment of any paying agent or agents; (17) the terms
and conditions of any obligation or right of the Company or a holder to convert
or exchange the Junior Subordinated Debentures into any other securities or
property of the Company and the additions or changes to the Indenture to
facilitate such conversion or exchange; (18) the form of the Trust Agreement and
Guarantee Agreement, if applicable; (19) the relative degree, if any, to which
such Junior Subordinated Debentures shall be senior to or be subordinated to
other indebtedness of the Company in right of payment, whether such other
indebtedness are outstanding or not; and (20) any other terms of the Junior
Subordinated Debentures not inconsistent with the provisions of the Indenture.
If any index is used to determine the amount of payments of principal
of, premium, if any, or interest on the Junior Subordinated Debentures, special
United States federal income tax, accounting and other considerations applicable
thereto will be described in the Prospectus Supplement.
Option to Defer Interest Payments
Unless otherwise specified in the Prospectus Supplement and so long as
no Debenture Event of Default has occurred and is continuing, the Company will
have the right at any time and from time to time during the term of any series
of Junior Subordinated Debenture to defer payment of interest for up to such
number of consecutive interest payment periods as may be specified in the
Prospectus Supplement (each, an "Extension Period"), provided that such
Extension Period may not extend beyond the Stated Maturity of such Junior
Subordinated Debentures. During any such Extension Period, the Company may not,
and may not permit any subsidiary of the Company to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock ), (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu in all respects with or junior in
interest to the Junior Subordinated Debentures or (iii) make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company if such guarantee ranks pari passu with or junior
in interest to the Junior Subordinated Debentures (other than (a) dividends or
distributions in capital stock of the Company (which includes common and
preferred stock), (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan or the issuance of stock under any
such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, and (d) purchases of common
stock related to the issuance of common stock or rights under any of the
Company's benefit plans for its directors, officers or employees). Prior to the
termination of any such Extension Period, the Company may further defer the
payment of interest on the Junior Subordinated Debentures, provided that no
Extension Period may exceed 20 consecutive quarters or extend beyond the Stated
Maturity of the Junior Subordinated Debentures. Upon the termination of any
such Extension Period and the payment of all interest then accrued and unpaid
(together with interest thereon at the rate specified in the applicable
Prospectus Supplement, compounded quarterly, to the extent permitted by
applicable law), the Company may elect to begin a new Extension Period subject
to the above requirements. No interest shall be due and payable during an
Extension Period, except at the end thereof. The Company must give the Property
Trustee, the Administrative Trustees and the Debenture Trustee notice of its
election to begin such Extension Period at least one Business Day prior to the
earlier of (i) the date interest on the Junior Subordinated Debentures would
have been payable except for the election to begin such Extension Period, (ii)
the date the Administrative Trustees are required to give notice to the New York
Stock Exchange, the Nasdaq National Market or other applicable stock exchange or
automated quotation system on which the Preferred Securities are then listed or
quoted or to holders of Preferred Securities of the record date or (iii) the
date such Distributions are payable, but in any event not less than one Business
Day prior to such record date. The Debenture Trustee shall give notice of the
Company's election to begin a new Extension Period to the holders of the Junior
Subordinated Debentures. There is no limitation on the number of times that the
Company may elect to begin an Extension Period.
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Distributions on the Preferred Securities will be deferred by the
Issuer during any such Extension Period. See "Description of Preferred
Securities -- Distributions."
See "Certain Federal Income Tax Consequences" for a description of
certain federal income tax consequences and special considerations applicable to
any such Junior Subordinated Debentures.
Additional Sums
If the Issuer is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will pay as
additional amounts on the Junior Subordinated Debentures such amounts as shall
be required so that the Distributions payable by the Issuer shall not be reduced
as a result of any such additional taxes, duties or other governmental charges.
Redemption
Unless otherwise specified in the Prospectus Supplement, Junior
Subordinated Debentures will not be subject to any sinking fund.
Unless otherwise specified in the Prospectus Supplement, the Company
may, at its option and subject to receipt of prior approval by the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve, redeem the Junior Subordinated Debentures of any series in
whole at any time or in part from time to time on or after the date that is five
years from the date of issuance. If the Junior Subordinated Debentures are so
redeemable only upon the satisfaction of additional conditions, the Prospectus
Supplement will describe such conditions. Junior Subordinated Debentures in
denominations larger than $25 may be redeemed in part but only in integral
multiples of $25. Except as otherwise specified in the Prospectus Supplement,
the redemption price for any Junior Subordinated Debenture so redeemed shall
equal any accrued and unpaid interest thereon to the redemption date, plus 100%
of the principal amount thereof.
Except as otherwise specified in the Prospectus Supplement, if a Tax
Event or a Capital Treatment Event shall occur and be continuing, the Company
may, at its option and subject to receipt of prior approval by the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve, redeem such Junior Subordinated Debentures in whole (but not in
part) at any time within 90 days following of the occurrence of such Tax Event
or Capital Treatment Event, at a redemption price equal to 100% of the principal
amount of such Junior Subordinated Debentures then outstanding plus accrued and
unpaid interest to the date fixed for redemption except as otherwise specified
in the Prospectus Supplement.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Junior Subordinated
Debentures to be redeemed at its registered address. Unless the Company
defaults in payment of the redemption price, on and after the redemption date
interest ceases to accrue on such Junior Subordinated Debentures or portions
thereof called for redemption.
If the Issuer is required to pay additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will pay as
additional amounts on the Junior Subordinated Debentures the Additional Sums (as
defined herein).
Distribution Upon Liquidation
As described under "Description of Preferred Securities -- Liquidation
Distribution Upon Termination," under certain circumstances involving the
termination of the Issuer, the Junior Subordinated Debentures may be distributed
to the holders of the Preferred Securities in the liquidation of the Issuer
after satisfaction of liabilities to creditors of the Issuer as provided by
applicable law. If distributed to holders of the Preferred Securities in
liquidation, the Junior Subordinated Debentures will initially be issued in the
form of one or more global securities
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and the Depository, or any successor depository for the Preferred Securities,
will act as depository for the Junior Subordinated Debentures. It is
anticipated that the depository arrangements for the Junior Subordinated
Debentures would be substantially identical to those in effect for the Preferred
Securities. If the Junior Subordinated Debentures are distributed to the
holders of Preferred Stock upon the liquidation of the Issuer, there can be no
assurance as to the market price of any Junior Subordinated Debentures that may
be distributed to the holders of Preferred Securities.
Restrictions on Certain Payments
The Company will also covenant, as to each series of the Junior
Subordinated Debentures, that it will not, and will not permit any subsidiary of
the Company to, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company's capital stock (which includes common and preferred stock), (ii) make
any payment of principal, interest or premium, if any, on or repay or repurchase
or redeem any debt securities of the Company that rank pari passu in all
respects with or junior in interest to the Junior Subordinated Debentures or
(iii) make any guarantee payments with respect to any guarantee by the Company
of the debt securities of any subsidiary of the Company if such guarantee ranks
pari passu in all respects with or junior in interest to the Junior Subordinated
Debentures (other than (a) dividends or distributions in capital stock of the
Company (which includes common and preferred stock), (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under any Guarantee with respect to the Preferred Securities and (d)
purchases of common stock related to the issuance of common stock or rights
under any of the Company's benefit plans for its directors, officers or
employees, or related to the issuance of common stock (or securities convertible
into or exchangeable for common stock) as consideration in an acquisition
transaction) if at such time (i) there shall have occurred any event of which
the Company has actual knowledge (a) that with the giving of notice or the lapse
of time, or both, would constitute an "Event of Default" under the Indenture
with respect to the Junior Subordinated Debentures and (b) in respect of which
the Company shall not have taken reasonable steps to cure, (ii) if such Junior
Subordinated Debentures are held by the Issuer of Preferred Securities, the
Company shall be in default with respect to its payment of any obligations under
the Guarantee relating to such Preferred Securities or (iii) the Company shall
have given notice of its selection of an Extension Period as provided in the
Indenture with respect to the Junior Subordinated Debentures and shall not have
rescinded such notice, or such Extension Period, or any extension thereof, shall
be continuing.
Subordination
In the Indenture, the Company has covenanted and agreed that any
Junior Subordinated Debentures issued thereunder will be subordinate and junior
in right of payment to all Senior Debt to the extent provided in the Indenture.
Upon any payment or distribution of assets of the Company upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, the holders of Senior Debt will first be
entitled to receive payment in full of all Allocable Amounts (as defined below)
on such Senior Debt before the holders of Junior Subordinated Debentures will be
entitled to receive or retain any payment in respect thereof.
In the event of the acceleration of the maturity of any Junior
Subordinated Debentures, the holders of all Senior Debt outstanding at the time
of such acceleration will first be entitled to receive payment in full of all
amounts due thereon (including any amounts due upon acceleration) before the
holders of Junior Subordinated Debentures will be entitled to receive or retain
any payment in respect of the Junior Subordinated Debentures.
No payments on account of principal (or premium, if any) or interest
in respect of the Junior Subordinated Debentures may be made if there shall have
occurred and be continuing a default in any payment with respect to Senior Debt
or an event of default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default.
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"Allocable Amounts," when used with respect to any Senior Debt, means
all amounts due or to become due on such Senior Debt less, if applicable, any
amount which would have been paid to, and retained by, the holders of such
Senior Debt (whether as a result of the receipt of payments by the holders of
such Senior Debt from the Company or any other obligor thereon or from any
holders of, or trustee in respect of, other indebtedness that is subordinate and
junior in right of payment to such Senior Debt pursuant to any provision of such
indebtedness for the payment over of amounts received on account of such
indebtedness to the holders of such Senior Debt or otherwise) but for the fact
that such Senior Debt is subordinate or junior in right of payment to (or
subject to a requirement that amounts received on such Senior Debt be paid over
to obligees on) trade accounts payable or accrued liabilities arising in the
ordinary course of business.
"Debt" means with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) all
indebtedness of such Person whether incurred on or prior to the date of the
Indenture or thereafter incurred, for claims in respect of derivative products
including interest rate, foreign exchange rate and commodity forward contracts,
options and swaps and similar arrangements; and (vii) and every obligation of
the type referred to in clauses (i) through (vi) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has guaranteed or is responsible or liable, directly or indirectly, as obligor
or otherwise.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt of the Company, whether incurred on or prior to the date of the Indenture
or thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Junior Subordinated
Debentures or to other Debt which is pari passu with, or subordinated to, the
Junior Subordinated Debentures; provided, however, that Senior Debt shall not be
deemed to include (i) any Debt of the Company which when incurred and without
respect to any election under Section 1111(b) of the United States Bankruptcy
Code of 1978, as amended, was without recourse to the Company, (ii) any Debt of
the Company to any of its subsidiaries, (iii) Debt to any employee of the
Company, and (iv) any other debt securities issued pursuant to the Indenture.
The Indenture places no limitation on the amount of Senior Debt that
may be incurred by the Company. The Company expects from time to time to incur
additional indebtedness and other obligations constituting Senior Debt.
The Indenture provides that the foregoing subordination provisions,
insofar as they relate to any particular issue of Junior Subordinated
Debentures, may be changed prior to such issuance. Any such change would be
described in the Prospectus Supplement.
Global Junior Subordinated Debentures
Unless otherwise specified in the applicable Prospectus Supplement,
the Junior Subordinated Debentures will be issued in whole or in part in the
form of one or more global certificates ("Global Junior Subordinated
Debentures") registered in the name of and deposited with, or on behalf of, the
Depository. Global Junior Subordinated Debentures may be issued only in fully
registered form and in either temporary or permanent form. Beneficial interests
in the Junior Subordinated Debentures will be shown on, and transfers thereof
will be effected
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only through, records maintained by the Depository. Except as described below,
Junior Subordinated Debentures in certified form will not be issued in exchange
for the global certificates. See "Book-Entry Issuance."
Unless and until it is exchanged in whole or in part for the
individual Junior Subordinated Debentures represented thereby, a Global Junior
Subordinated Debenture may not be transferred except as a whole by the
Depository for such Global Junior Subordinated Debenture to a nominee of such
Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by the Depository or any nominee to a successor
Depository or any nominee of such successor.
Upon the issuance of a Global Junior Subordinated Debenture, and the
deposit of such Global Junior Subordinated Debenture with or on behalf of the
Depository, the Depository for such Global Junior Subordinated Debenture or its
nominee will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture to the accounts of
persons that have accounts with such Depository ("Participants"). Such accounts
shall be designated by the dealers, underwriters or agents with respect to such
Junior Subordinated Debentures or by the Company if such Junior Subordinated
Debentures are offered and sold directly by the Company. Ownership of
beneficial interests in a Global Junior Subordinated Debenture will be limited
to Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Junior Subordinated Debenture
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the Depository or its nominee (with respect to
interests of Participants) and the records of Participants (with respect to
interests of persons who hold through Participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to transfer beneficial interests in a Global Junior Subordinated Debenture.
A global security shall be exchangeable for Junior Subordinated
Debentures registered in the names of persons other than the Depository or its
nominee only if (i) the Depository notifies the Company that it is unwilling or
unable to continue as a depository for such global security and no successor
depository shall have been appointed, or if at any time the Depository ceases to
be a clearing agency registered under the Exchange Act at a time when the
Depository is required to be so registered to act as such depository, (ii) the
Company in its sole discretion determines that such global security shall be so
exchangeable or (iii) there shall have occurred and be continuing a Debenture
Event of Default. Any global security that is exchangeable pursuant to the
preceding sentence shall be exchangeable for definitive certificates registered
in such names as the Depository shall direct. It is expected that such
instructions will be based upon directions received by the Depository from its
Participants (as defined herein) with respect to ownership of beneficial
interests in such global security. In the event that Junior Subordinated
Debentures are issued in definitive form, such Junior Subordinated Debentures
will be in denominations of $25 and integral multiples thereof and may be
transferred or exchanged at the offices described below.
So long as the Depository for a Global Junior Subordinated Debenture,
or its nominee, is the registered owner of such Global Junior Subordinated
Debenture, such Depository or such nominee, as the case may be, will be
considered the sole owner or holder of the Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture for all purposes under
the Indenture governing such Junior Subordinated Debentures. Except as provided
below, owners of beneficial interests in a Global Junior Subordinated Debenture
will not be entitled to have any of the individual Junior Subordinated
Debentures represented by such Global Junior Subordinated Debenture registered
in their names, will not receive or be entitled to receive physical delivery of
any such Junior Subordinated Debentures in definitive form and will not be
considered the owners or holders thereof under the Indenture.
Payments of principal of (and premium, if any) and interest on
individual Junior Subordinated Debentures represented by a Global Junior
Subordinated Debenture registered in the name of a Depository or its nominee
will be made to the Depository or its nominee, as the case may be, as the
registered owner of the Global Junior Subordinated Debenture representing such
Junior Subordinated Debentures. None of the Company, the Debenture Trustee, any
Paying Agent, or the Securities Registrar for such Junior Subordinated
Debentures will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial
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ownership interests of the Global Junior Subordinated Debenture representing
such Junior Subordinated Debentures or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company expects that the Depository for the Junior Subordinated
Debentures or its nominee, upon receipt of any payment of principal, premium, if
any, or interest in respect of a permanent Global Junior Subordinated Debenture
representing any of such Junior Subordinated Debentures, immediately will credit
Participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the principal amount of such Global Junior
Subordinated Debenture for such Junior Subordinated Debentures as shown on the
records of such Depository or its nominee. The Company also expects that
payments by Participants to owners of beneficial interests in such Global Junior
Subordinated Debenture held through such Participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name." Such payments will be the responsibility of such Participants.
Unless otherwise specified in the Prospectus Supplement, if the
Depository is at any time unwilling, unable or ineligible to continue as
depository and a successor depository is not appointed by the Company within 90
days, the Company will issue individual Junior Subordinated Debentures in
exchange for the Global Junior Subordinated Debenture. In addition, the Company
may at any time and in its sole discretion, subject to any limitations described
in the Prospectus Supplement, determine not to have any Junior Subordinated
Debentures represented by one or more Global Junior Subordinated Debentures and,
in such event, will issue individual Junior Subordinated Debentures in exchange
for the Global Junior Subordinated Debenture or Debentures representing such
Junior Subordinated Debentures. Further, if the Company so specifies with
respect to the Junior Subordinated Debentures, an owner of a beneficial interest
in a Global Junior Subordinated Debenture representing Junior Subordinated
Debentures may, on terms acceptable to the Company, the Property Trustee and the
Depository for such Global Junior Subordinated Debenture, receive individual
Junior Subordinated Debentures in exchange for such beneficial interests,
subject to any limitations described in the Prospectus Supplement relating to
such Junior Subordinated Debentures. In any such instance, an owner of a
beneficial interest in a Global Junior Subordinated Debenture will be entitled
to physical delivery of individual Junior Subordinated Debentures represented by
such Global Junior Subordinated Debenture equal in principal amount to such
beneficial interest and to have such Junior Subordinated Debentures registered
in its name. Individual Junior Subordinated Debentures so issued will be issued
in denominations, unless otherwise specified by the Company, of $25 and integral
multiples thereof.
Denominations, Registration and Transfer
Unless otherwise specified in the Prospectus Supplement, the Junior
Subordinated Debentures will be issuable only in registered form without coupons
in denominations of $25 and any integral multiple thereof.
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 appropriate securities registrar or at the
office of any transfer agent designated by the Company for such purpose with
respect to the Junior Subordinated Debentures and referred to in the Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. The Company will appoint
the Debenture Trustee as securities registrar under the Indenture. If the
Prospectus Supplement refers to any transfer agents (in addition to the
securities registrar) initially designated by the Company with respect to any
Junior Subordinated Debentures, the Company may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, provided that the Company maintains
a transfer agent in each place of payment. 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 of any series during a period beginning at the
opening of business 15 days before the day of selection for redemption of Junior
Subordinated Debentures of that series and ending at the close of business on
the day of mailing of the relevant notice of redemption or (ii)
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transfer or exchange any Junior Subordinated Debentures so selected for
redemption, except, in the case of any Junior Subordinated Debentures being
redeemed in part, any portion thereof not to be redeemed.
Payment and Paying Agents
Unless otherwise specified in the Prospectus Supplement, payment of
principal of (and premium, if any) and any interest on a series of Junior
Subordinated Debentures will be made at the office of the Debenture Trustee or
at the office of such paying agent or paying agents as the Company may designate
from time to time in the Prospectus Supplement, except that at the option of the
Company payment of any interest may be made (i) except in the case of Global
Junior Subordinated Debentures, by check mailed to the address of the person
entitled thereto as such address shall appear in the securities register or (ii)
by transfer to an account maintained by the person entitled thereto as specified
in the securities register, provided that proper transfer instructions have been
received by the Regular Record Date. Unless otherwise indicated in the
Prospectus Supplement, payment of any interest on Junior Subordinated Debentures
will be made to the person in whose name such Junior Subordinated Debenture is
registered at the close of business on the Regular Record Date for such
interest, except in the case of defaulted interest. The Company may at any time
designate additional paying agents or rescind the designation of any paying
agent; however the Company will at all times be required to maintain a paying
agent in each place of payment for all of the Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any paying agent,
or then held by the Company in trust, for the payment of the principal of (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.
Modification of Indenture
From time to time the Company and the Debenture Trustee may, without
the consent of the holders of any series of Junior Subordinated Debentures,
amend, waive or supplement the Indenture for specified purposes, including,
among other things, curing ambiguities, defects or inconsistencies (provided
that any such action does not materially adversely affect the interest of the
holders of any series of the Junior Subordinated Debentures or of the Preferred
Securities so long as they remain outstanding) and qualifying, or maintaining
the qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Company and the Debenture Trustee, with the
consent of the holders of not less than a majority in principal amount of each
outstanding series of Junior Subordinated Debentures affected, to modify the
Indenture in a manner adversely affecting the rights of the holders of such
series of Junior Subordinated Debentures in any material respect; provided, 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 any
series of Junior Subordinated Debentures (except as otherwise specified in the
Prospectus Supplement), or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon or (ii) reduce the
percentage of principal amount of Junior Subordinated Debentures of any series,
the holders of which are required to consent to any such modification of the
Indenture, provided that, so long as any Preferred Securities remain
outstanding, no such modification may be made that adversely affects the holders
of such Preferred Securities in any material respect, and no termination of the
Indenture may occur, and no waiver of any event of default or compliance with
any covenant under the Indenture may be effective, without the prior consent of
the holders of at least a majority of the aggregate Liquidation Amount of all
outstanding Preferred Securities affected unless and until the principal of the
Junior Subordinated Debentures and all accrued and unpaid interest thereon have
been paid in full and certain other conditions have been satisfied, and (b)
where a consent under the Indenture would require the consent of each holder of
Junior Subordinated Debentures, no such consent shall be given by the Property
Trustee without the prior consent of each holder of Preferred Securities.
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In addition, the Company and the Debenture Trustee may execute, without the
consent of any holder of Junior Subordinated Debentures, any supplemental
Indenture for the purpose of creating any new series of Junior Subordinated
Debentures.
Debenture Events of Default
The Indenture provides that any one or more of the following described
events with respect to a series of Junior Subordinated Debentures that has
occurred and is continuing constitutes a "Debenture Event of Default" with
respect to such series of Junior Subordinated Debentures:
(i) failure for 30 days to pay any interest on such series of Junior
Subordinated Debentures when due (subject to the deferral of any interest
payment in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on such series of
Junior Subordinated Debentures when due whether at maturity or upon
redemption; or
(iii) failure to observe or perform in any material respect certain other
covenants contained in the Indenture for 60 days after written notice to
the Company from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of such affected series of
outstanding Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Company.
The holders of a majority in aggregate outstanding principal amount of each
series affected of 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 outstanding principal amount of Junior Subordinated Debentures
of each series affected may declare the principal due and payable immediately
upon a Debenture Event of Default. Should the Debenture Trustee or such holders
of such Junior Subordinated Debentures fail to make such declaration, the
holders of at least 25% in aggregate Liquidation Amount of the Preferred
Securities shall have such right. The holders of a majority in aggregate
outstanding principal amount of Junior Subordinated Debentures may annul such
declaration. Should the holders of such Junior Subordinated Debentures fail to
annul such declaration and waive such default, the holders of a majority in
aggregate Liquidation Amount of the Preferred Securities affected shall have
such right.
The holders of a majority in aggregate outstanding principal amount of each
series of Junior Subordinated Debentures affected thereby may, on behalf of the
holders of all the Junior Subordinated Debentures of such series, waive any
default, except a default in the payment of principal or interest (unless such
default has been cured and a sum sufficient to pay all matured installments of
interest and principal due otherwise than by acceleration has been deposited
with the 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 Debenture. The Company is
required to file annually with the Debenture Trustee a certificate as to whether
or not the Company is in compliance with all the conditions and covenants
applicable to it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing as to
the Junior Subordinated Debentures, the Property Trustee will have the right to
declare the principal of and the interest on such Junior Subordinated
Debentures, and any other amounts payable under the Indenture, to be forthwith
due and payable and to enforce its other rights as a creditor with respect to
such Junior Subordinated Debentures.
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Enforcement of Certain Rights By Holders of Preferred Securities
If a Debenture Event of Default with respect to a series of Junior
Subordinated Debentures has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest or principal on such
series of Junior Subordinated Debentures on the date such interest or principal
is due and payable, a holder of Preferred Securities may institute a legal
proceeding directly against the Company for enforcement of payment to such
holder of the principal of or interest on such series of Junior Subordinated
Debentures having a principal amount equal to the aggregate Liquidation Amount
of the Preferred Securities of such holder (a "Direct Action"). The Company may
not amend the Indenture to remove the foregoing right to bring a Direct Action
without the prior written consent of the holders of all of the Preferred
Securities outstanding. If the right to bring a Direct Action is removed, the
Issuer may become subject to the reporting obligations under the Exchange Act.
The Company shall have the right under the Indenture to set-off any payment made
to such holder of Preferred Securities by the Company in connection with a
Direct Action. See "Risk Factors -- Rights Under the Guarantee; Direct Action."
The holders of the Preferred Securities will not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the Junior Subordinated Debentures unless there
shall have been an event of default under the Trust Agreement. See "Description
of Preferred Securities -- Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that the Company shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person shall consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless (i) in case the Company
consolidates with or merges into another Person or conveys or transfers its
properties and assets substantially as an entirety to any Person, the successor
Person is organized under the laws of the United States or any state or the
District of Columbia, and such successor Person expressly assumes the Company's
obligations on the Junior Subordinated Debentures issued under the Indenture;
(ii) immediately after giving effect thereto, no Debenture Event of Default, and
no event which, after notice or lapse of time or both, would become a Debenture
Event of Default, shall have occurred and be continuing; (iii) such transaction
is permitted under the Trust Agreement and the Guarantee Agreement and does not
give rise to any breach or violation of the Trust Agreement or Guarantee
Agreement, and (iv) certain other conditions as prescribed by the Indenture are
met.
The general provisions of the 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 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 or (ii) will become due and payable
at their Stated Maturity within one year, and the Company deposits or causes to
be deposited with the Debenture Trustee funds, in trust, for the purpose and in
an amount in the currency or currencies in which the Junior Subordinated
Debentures are payable 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 Indenture will cease to be of further effect (except as to the Company's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and the
Company will be deemed to have satisfied and discharged the Indenture.
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Covenants of the Company
The Company will covenant in the Indenture that if and so long as (i) the
Issuer is the holder of all such Junior Subordinated Debentures, (ii) a Tax
Event in respect of the Issuer has occurred and is continuing and (iii) the
Company has elected, and has not revoked such election, to pay Additional Sums
(as defined under "Description of Preferred Securities -- Redemption or
Exchange") in respect of such Trust Securities, the Company will pay to the
Issuer such Additional Sums. The Company will also covenant (i) to maintain
directly or indirectly 100% ownership of the Common Securities of the Issuer,
provided that certain successors which are permitted pursuant to the Indenture
may succeed to the Company's ownership of the Common Securities, (ii) not to
voluntarily terminate, wind up or liquidate the Issuer, except (a) in connection
with a distribution of Junior Subordinated Debentures to the holders of the
Preferred Securities in exchange therefor upon liquidation of the Issuer, or (b)
in connection with certain mergers, consolidations or amalgamations permitted by
the Trust Agreement, in either such case, if so specified in the Prospectus
Supplement upon prior approval of the Federal Reserve if then so required under
applicable capital guidelines or policies, and (iii) to use its reasonable
efforts, consistent with the terms and provisions of the Trust Agreement, to
cause the Issuer to remain classified as a grantor trust and not as an
association taxable as a corporation for United States federal income tax
purposes.
Governing Law
The Indenture and the Junior Subordinated Debentures will be governed by
and construed in accordance with the laws of the State of Nebraska.
Information Concerning the Debenture Trustee
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Junior Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to
expend or risk its own funds or otherwise incur personal financial liability in
the performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
BOOK-ENTRY ISSUANCE
The Depository will act as securities depository for all of the Preferred
Securities and the Junior Subordinated Debentures, unless otherwise referred to
in the Prospectus Supplement relating to an offering of Preferred Securities or
Junior Subordinated Debentures. The Preferred Securities and the Junior
Subordinated Debentures will be issued only as fully-registered securities
registered in the name of Cede & Co. (the Depository's nominee). One or more
fully-registered global certificates will be issued for the Preferred Securities
of the Issuer and the Junior Subordinated Debentures, representing in the
aggregate the total number of the Issuer's Preferred Securities or aggregate
principal balance of Junior Subordinated Debentures, respectively, and will be
deposited with the Depository.
The Depository is a limited purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The Depository holds securities that its Participants deposit with the
Depository. The Depository also facilitates the settlement among Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Participants'
accounts, thereby eliminating the need for physical movement of securities
certificates. "Direct Participants" include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
The Depository is owned by a number of its Direct Participants and by the New
York Stock
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Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to the Depository system is also available
to others such as securities brokers and dealers, banks and trust companies that
clear through or maintain custodial relationships with Direct Participants,
either directly or indirectly ("Indirect Participants"). The rules applicable
to the Depository and its Participants are on file with the Commission.
Purchases of Preferred Securities or Junior Subordinated Debentures within
the Depository system must be made by or through Direct Participants, which will
receive a credit for the Preferred Securities or Junior Subordinated Debentures
on the Depository's records. The ownership interest of each actual purchaser of
each Preferred Security and each Junior Subordinated Debenture ("Beneficial
Owner") is in turn to be recorded on the Direct and Indirect Participants'
records. Beneficial Owners will not receive written confirmation from the
Depository of their purchases, but Beneficial Owners are expected to receive
written confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased Preferred Securities or Junior
Subordinated Debentures. Transfers of ownership interests in the Preferred
Securities or Junior Subordinated Debentures are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Preferred Securities or Junior Subordinated Debentures, except in
the event that use of the book-entry system for the Preferred Securities of such
Issuer or Junior Subordinated Debentures is discontinued.
The Depository has no knowledge of the actual Beneficial Owners of the
Preferred Securities or Junior Subordinated Debentures; the Depository's records
reflect only the identity of the Direct Participants to whose accounts such
Preferred Securities or Junior Subordinated Debentures are credited, which may
or may not be the Beneficial Owners. The Participants will remain responsible
for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by the Depository to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder of
the Preferred Securities or Junior Subordinated Debentures. If less than all of
the Issuer's Preferred Securities or the Junior Subordinated Debentures are
being redeemed, the Depository's current practice is to determine by lot the
amount of the interest of each Direct Participant to be redeemed.
Although voting with respect to the Preferred Securities or the Junior
Subordinated Debentures is limited to the holders of record of the Preferred
Securities or Junior Subordinated Debentures, in those instances in which a vote
is required, neither the Depository nor Cede & Co. will itself consent or vote
with respect to Preferred Securities or Junior Subordinated Debentures. Under
its usual procedures, the Depository would mail an omnibus proxy (the "Omnibus
Proxy") to the relevant Trustee as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts such Preferred Securities or Junior Subordinated
Debentures are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Distribution payments on the Preferred Securities or the Junior
Subordinated Debentures will be made by the relevant Trustee to the Depository.
The Depository's practice is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on the
Depository's records unless the Depository has reason to believe that it will
not receive payments on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices and will be the responsibility of such Participant and not of the
Depository, the relevant Trustee, the Issuer thereof or the Company, subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment of Distributions to the Depository is the responsibility of the relevant
Trustee, disbursement of such payments to Direct Participants is the
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responsibility of the Depository, and disbursements of such payments to the
Beneficial Owners is the responsibility of Direct and Indirect Participants.
The Depository may discontinue providing its services as securities
depository with respect to any of the Preferred Securities or the Junior
Subordinated Debentures at any time by giving reasonable notice to the Trustee
and the Company. In the event that a successor securities depository is not
obtained, definitive Preferred Security or Junior Subordinated Debenture
certificates representing such Preferred Securities or Junior Subordinated
Debentures are required to be printed and delivered. The Company, at its
option, may decide to discontinue use of the system of book-entry transfers
through the Depository (or a successor depository). After a Debenture Event of
Default, the holders of a majority in liquidation preference of Preferred
Securities or aggregate principal amount of Junior Subordinated Debentures may
determine to discontinue the system of book-entry transfers through the
Depository. In any such event, definitive certificates for such Preferred
Securities or Junior Subordinated Debentures will be printed and delivered.
The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that the Issuer
and the Company believe to be accurate, but the Issuer and the Company assume no
responsibility for the accuracy thereof. Neither the Issuer nor the Company has
any responsibility for the performance by the Depository or its Participants of
their respective obligations as described herein or under the rules and
procedures governing their respective operations.
DESCRIPTION OF THE GUARANTEE
The Guarantee will be executed and delivered by the Company concurrently
with the issuance by the Issuer of its Preferred Securities for the benefit of
the holders from time to time of the Preferred Securities. Harris Trust &
Savings Bank will act as the Guarantee Trustee under the Guarantee Agreement for
the purposes of compliance with the Trust Indenture Act and the Guarantee will
be qualified as an indenture under the Trust Indenture Act. This summary of
certain provisions of the Guarantee, which summarizes the material terms
thereof, does not purport to be complete and is subject to, and qualified in its
entirety by reference to, all of the provisions of the Guarantee, including the
definitions therein of certain terms, and the Trust Indenture Act, to each of
which reference is hereby made. The form of the Guarantee has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
The Guarantee Trustee will hold the Guarantee for the benefit of the holders of
the Issuer's Preferred 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 Preferred Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert other than
the defense of payment. The following payments with respect to the Preferred
Securities, to the extent not paid by or on behalf of the Issuer (the "Guarantee
Payments"), will be subject to the Guarantee: (i) any accumulated and unpaid
Distributions required to be paid on such Preferred Securities, to the extent
that the Issuer has funds on hand available therefor at such time, (ii) the
Redemption Price with respect to any Preferred Securities called for redemption,
to the extent that the Issuer has funds on hand available therefor at such time,
or (iii) upon a voluntary or involuntary dissolution, winding up or liquidation
of the Issuer (unless the Junior Subordinated Debentures are distributed to
holders of such Preferred Securities in exchange therefor), the lesser of (a)
the Liquidation Distribution and (b) the amount of assets of the Issuer
remaining available for distribution to holders of Preferred Securities after
satisfaction of liabilities to creditors of the Issuer as required by applicable
law. The Company's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Company to the holders of the
Preferred Securities or by causing the Issuer to pay such amounts to such
holders.
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The Guarantee will be an irrevocable guarantee on a subordinated basis of
the Issuer's obligations under the Preferred Securities, but will apply only to
the extent that the Issuer has funds sufficient to make such payments, and is
not a guarantee of collection.
If the Company does not make interest payments on the Junior Subordinated
Debentures held by the Issuer, the Issuer will not be able to pay Distributions
on the Preferred Securities and will not have funds legally available therefor.
The Guarantee will rank subordinate and junior in right of payment to all Senior
Debt of the Company. See "-- Status of the Guarantee." Because the Company is
a holding company, the right of the Company to participate in any distribution
of assets of any subsidiary upon such subsidiary's liquidation or reorganization
or otherwise, is subject to the prior claims of creditors of that subsidiary,
except to the extent the Company may itself be recognized as a creditor of that
subsidiary. Accordingly, the Company's obligations under the Guarantee will be
effectively subordinated to all existing and future liabilities of the Company's
subsidiaries, and claimants should look only to the assets of the Company for
payments thereunder. See "The Company." Except as otherwise provided in the
Prospectus Supplement, the Guarantee does not limit the incurrence or issuance
of other secured or unsecured debt of the Company, including Senior Debt,
whether under the Indenture, any other existing indenture or 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, the Indenture and the Expense Agreement, taken
together, fully, irrevocably and unconditionally guaranteed all of the Issuer's
obligations under the Preferred Securities. No single document standing alone
or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and unconditional
guarantee of the Issuer's obligations under the Preferred Securities. See
"Relationship Among the Preferred 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 Debt 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 for the benefit of the holders of the Preferred
Securities. The Guarantee will not be discharged except by payment of the
Guarantee Payments in full to the extent not paid by the Issuer or upon
distribution to the holders of the Preferred Securities of the Junior
Subordinated Debentures. The Guarantee does not place a limitation on the
amount of additional Senior Debt that may be incurred by the Company. The
Company expects from time to time to incur additional indebtedness constituting
Senior Debt.
Amendments and Assignment
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Preferred Securities (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of such
outstanding Preferred Securities. The manner of obtaining any such approval
will be as set forth under "Description of Preferred Securities -- Voting
Rights; Amendment of Trust Agreement." All guarantees and agreements contained
in the Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
the Preferred Securities then outstanding.
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Events of Default
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Issuer, the Guarantee Trustee
or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, must exercise the same degree of care and
skill as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of any Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
Termination of the Guarantee
The Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the Preferred Securities, upon full
payment of the amounts payable upon liquidation of the Issuer or upon
distribution of Junior Subordinated Debentures to the holders of the Preferred
Securities in exchange therefor. The Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of the
Preferred Securities must restore payment of any sums paid under such Preferred
Securities or such Guarantee.
Governing Law
The Guarantee will be governed by and construed in accordance with the laws
of the State of Nebraska.
The Expense Agreement
Pursuant to the Expense Agreement entered into by the Company under the
Trust Agreement (the "Expense Agreement"), the Company will irrevocably and
unconditionally guarantee to each person or entity to whom the Issuer becomes
indebted or liable, the full payment of any costs, expenses or liabilities of
the Issuer, other than obligations of the Issuer to pay to the holders of any
Preferred Securities or other similar interests in the Issuer of the amounts due
such holders pursuant to the terms of the Preferred Securities or such other
similar interests, as the case may be.
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<PAGE>
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES
AND THE GUARANTEE
Full and Unconditional Guarantee
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent the Issuer has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Company as and to the extent
set forth under "Description of Guarantee." Taken together, the Company's
obligations under the Junior Subordinated Debentures, the Indenture, the Trust
Agreement, the Expense Agreement and the Guarantee provide, in the aggregate, a
full, irrevocable and unconditional guarantee of payments of distributions and
other amounts due on the Preferred Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and unconditional
guarantee of the Issuer's obligations under the Preferred Securities. If and to
the extent that the Company does not make payments on the Junior Subordinated
Debentures, the Issuer will not pay Distributions or other amounts due on the
Preferred Securities. The Guarantee does not cover payment of Distributions
when the Issuer does not have sufficient funds to pay such Distributions. In
such event, the remedy of a holder of Preferred Securities is to institute a
Direct Action. The obligations of the Company under the Guarantee are
subordinate and junior in right of payment to all Senior Debt of the Company.
Sufficiency of Payments
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Preferred Securities, primarily
because (i) the aggregate principal amount of such Junior Subordinated
Debentures will be equal to the sum of the aggregate stated Liquidation Amount
of the Preferred Securities and Common Securities; (ii) the interest rate and
interest and other payment dates on such Junior Subordinated Debentures will
match the Distribution rate and Distribution and other payment dates for the
Trust Securities; (iii) the Company shall pay for all and any costs, expenses
and liabilities of the Issuer except the Issuer's obligations to holders of the
Trust Securities under such Trust Securities; and (iv) the Trust Agreement
further provides that the Issuer will not engage in any activity that is not
consistent with the limited purposes thereof.
Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set-off any payment it is otherwise required to make thereunder
with and to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a payment under the Guarantee.
Enforcement Rights of Holders of Preferred Securities
A holder of any Preferred Security may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
or any other person or entity.
A default or event of default under any Senior Debt of the Company would
not constitute a default or a Debenture Event of Default. However, in the event
of payment defaults under, or acceleration of, Senior Debt of the Company, the
subordination provisions of the Indenture provide that no payments may be made
in respect of the Junior Subordinated Debentures until such Senior Debt has been
paid in full or any payment default thereunder has been cured or waived.
Failure to make required payments on the Junior Subordinated Debentures would
constitute an Event of Default under the Trust Agreement.
38
<PAGE>
Limited Purpose of Issuer
The Issuer's Preferred Securities evidence a beneficial interest in the
Issuer, and the Issuer exists for the sole purpose of issuing its Preferred
Securities and Common Securities and investing the proceeds thereof in Junior
Subordinated Debentures. A principal difference between the rights of a holder
of a Preferred 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 the principal amount of and interest accrued on Junior Subordinated
Debentures held, while a holder of Preferred Securities is entitled to receive
Distributions from the Issuer (or from the Company under the Guarantee) if and
to the extent the Issuer has funds available for the payment of such
Distributions.
Rights Upon Termination
Upon any voluntary or involuntary termination, winding up or liquidation of
the Issuer involving the liquidation of the Junior Subordinated Debentures, the
holders of the Preferred Securities will be entitled to receive, out of the
assets held by the Issuer, the Liquidation Distribution in cash. See
"Description of Preferred Securities -- Liquidation Distribution Upon
Termination." Upon any voluntary or involuntary liquidation or bankruptcy of the
Company, the Property Trustee, as holder of the Junior Subordinated Debentures,
would be a subordinated creditor of the Company, subordinated in right of
payment to all Senior Debt as set forth in the Indenture, but entitled to
receive payment in full of principal and interest, before any stockholders of
the Company receive payments or distributions. Since the Company is the
guarantor under the Guarantee and has agreed to pay for all costs, expenses and
liabilities of the Issuer (other than the Issuer's obligations to the holders of
its Preferred Securities), the positions of a holder of such Preferred
Securities and a holder of such Junior Subordinated Debentures relative to other
creditors and to stockholders of the Company in the event of liquidation or
bankruptcy of the Company are expected to be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
General
In the opinion of Deloitte & Touche LLP, tax advisor to the Company and the
Issuer, the following summary accurately describes the material United States
federal income tax consequences that may be relevant to the purchase, ownership
and disposition of Preferred Securities. Unless otherwise stated, this summary
deals only with Preferred Securities held as capital assets by United States
Persons (defined below) who purchase the Preferred Securities upon original
issuance at their original offering price. As used herein, a "United States
Person" means a person that is (i) a citizen or resident of the United States,
(ii) a corporation, partnership or other entity created or organized in or under
the laws of the United States or any political subdivision thereof, (iii) an
estate the income of which is subject to United States federal income taxation
regardless of its source, or (iv) a trust the income of which is subject to
United States Federal income taxation regardless of its source; provided,
however, that for taxable years beginning after December 31, 1996 (or, if a
trustee so elects, for taxable years ending after August 20, 1996), a "United
States Person" shall include any trust if a court is able to exercise primary
supervision over the administration of such trust and one or more United States
fiduciaries have the authority to control all substantial decisions of such
trust. The tax treatment of a holder may vary depending on his, her or its
particular situation. This summary does not address all the tax consequences
that may be relevant to a particular holder or to holders who may be subject to
special tax treatment, such as banks, real estate investment trusts, regulated
investment companies, insurance companies, dealers in securities or currencies,
tax-exempt investors, foreign investors, or persons who hold Preferred
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. In addition, this summary does not include any description of any
alternative minimum tax consequences or the tax laws of any state, local or
foreign government that may be applicable to a holder of Preferred Securities.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), the Treasury regulations promulgated thereunder and administrative and
judicial interpretations thereof, as of the date hereof, all
39
<PAGE>
of which are subject to change, possibly on a retroactive basis. In particular,
legislation has been proposed that could adversely effect the Company's ability
to deduct interest on the Preferred Securities, which may in turn permit the
Company to cause a redemption of the Preferred Securities. See " -- Possible
Law Changes." The authorities on which this summary is based are subject to
various interpretations and the opinions of Deloitte & Touche LLP are not
binding on the Internal Revenue Service ("IRS") or the courts, either of which
could take a contrary position. Moreover, no rulings have been or will be
sought from the IRS with respect to the transactions described herein.
Accordingly, there can be no assurance that the IRS will not challenge the
opinions expressed herein or that a court would not sustain such a challenge.
The following discussion does not discuss the tax consequences that might
be relevant to persons that are not United States Persons ("non-United States
Persons"). Non-United States Persons should consult their own tax advisors as
to the specific United States federal income tax consequences of the purchase,
ownership and disposition of Preferred Securities.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE PREFERRED
SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN, AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR
OTHER TAX LAWS. FOR A DISCUSSION OF THE POSSIBLE REDEMPTION OF THE PREFERRED
SECURITIES UPON THE OCCURRENCE OF CERTAIN TAX EVENTS SEE "DESCRIPTION OF THE
PREFERRED SECURITIES -- LIQUIDATION OF ISSUER AND DISTRIBUTION OF JUNIOR
SUBORDINATED DEBENTURES TO HOLDERS."
Classification of the Issuer
In connection with the issuance of the Preferred Securities, Deloitte &
Touche LLP is of the opinion that, under current law and assuming compliance
with the terms of the Trust Agreement, and based on certain facts and
assumptions contained in such opinion, the Issuer will be classified as a
grantor trust or as a partnership and not as an association taxable as a
corporation for United States federal income tax purposes. As a result, each
beneficial owner of Preferred Securities (a "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 income or original issue discount that is
paid or accrued on the Junior Subordinated Debentures whether or not cash is
actually distributed to such Securityholder. See "-- Interest Income and
Original Issue Discount." No amounts included in taxable income will be
eligible for the dividends received deduction.
Classification of the Junior Subordinated Debentures
The Company, the Issuer and the holders of the Preferred Securities (by
acceptance of a beneficial interest in a Preferred Security) will agree to treat
the Junior Subordinated Debentures as indebtedness for all United States tax
purposes. In connection with the issuance of the Junior Subordinated
Debentures, Deloitte & Touche LLP is of the opinion that, under current law, and
based on certain representations, facts and assumptions set forth in such
opinion, the Junior Subordinated Debentures will be classified as indebtedness
for United States federal income tax purposes.
Interest Income and Original Issue Discount
Except as set forth below, stated interest on the Junior Subordinated
Debentures generally will be included in income by a Securityholder at the time
such interest income is paid or accrued in accordance with such Securityholder's
regular method of tax accounting.
Applicable Treasury Regulations issued generally provide that stated
interest on a debt instrument is not "qualified stated interest" and, therefore,
will give rise to original issue discount ("OID") unless such interest is
40
<PAGE>
unconditionally payable in cash or in property (other than debt instruments of
the issuer) at least annually at a single fixed rate. Interest is considered to
be unconditionally payable only if reasonable legal remedies exist to compel
timely payment or the debt instrument otherwise provides terms and conditions
that make the likelihood of late payment (other than late payment that occurs
within a reasonable grace period) or non-payment a "remote contingency."
Under the Junior Subordinated Indenture, the Company has the right, at any
time and from time to time during the term of the Junior Subordinated Debentures
to defer payments of interest by extending the interest payment period for a
period not exceeding 20 consecutive quarters with respect to each Extension
Period. Unless the likelihood of exercise of such right to defer is remote, the
Junior Subordinated Debenture would be issued with OID. During any Extension
Period, (a) the Company will not be permitted to declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of its capital stock, and (b) the Company will not be
permitted to make any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities (including guarantees) issued by
the Company that rank pari passu with or junior to the Junior Subordinated
Debentures (although these restrictions will not apply to dividends or
distributions in common stock of the Company and in certain other limited
situations). See "Certain Terms of Junior Subordinated Debentures--Option to
Defer Interest Payments." The Company currently believes that the adverse
impact that the imposition of such restrictions would have on the Company and
the value of the equity securities of the Company makes the likelihood of the
Company exercising its right to defer payments of interest on the Junior
Subordinated Debentures remote. Accordingly, the Company believes that the
stated interest on the Junior Subordinated Debentures should be considered
unconditionally payable for purposes of the OID provisions of the Code and that
the Junior Subordinated Debentures should not be considered to have been issued
with OID (other than de minimus OID, if any). As a result, each Securityholder
will be required to include interest payments in taxable income at the time
accrued or received in accordance with its own method of accounting. There can
be no assurance, however, that the IRS will agree with such determination.
If, however, the Company exercises its right to defer payments of interest
on the Junior Subordinated Debentures, the Junior Subordinated Debentures will
become OID instruments at such time and all Securityholders will be required to
accrue the stated interest on the Junior Subordinated Debentures on a daily
basis during the Extension Period and thereafter, even though the Company will
not pay such interest until the end of the Extension Period, and even though
some Securityholders may use the cash method of tax accounting. Moreover,
thereafter the Junior Subordinated Debentures will be taxed as OID instruments
for as long as they remain outstanding. Thus, even after the end of the
Extension Period, all Securityholders would be required to continue to include
the stated interest on the Junior Subordinated Debentures in income on a daily
economic accrual basis, regardless of their method of tax accounting and in
advance of receipt of the cash attributable to such interest income. Under the
OID economic accrual rules, a Securityholder would accrue an amount of interest
income each year that approximates the stated interest payments called for under
the terms of the Junior Subordinated Debentures, and actual cash payments of
interest on the Junior Subordinated Debentures would not be reported separately
as taxable income. Any amount of OID included in a Securityholder's gross
income (whether or not during an Extension Period) will increase such
Securityholder's tax basis in its Preferred Securities, and the amount of
Distributions received by a Securityholder with respect to such Preferred
Securities will reduce the tax basis of such Preferred Securities. A
Securityholder that disposes of the Preferred Securities during an Extension
Period may suffer a loss because the market value of the Preferred Securities
likely will fall if the Company exercises its option to defer payments of
interest on the Junior Subordinated Debentures. To the extent the selling price
is less than the Securityholder's adjusted tax basis (which will include all
accrued by unpaid interest), a Securityholder will recognize a capital loss.
The Treasury regulations described above have not yet been addressed in any
rulings or other interpretations by the IRS, and it is possible that the IRS
could take a contrary position. If the IRS were to assert successfully that the
stated interest on the Junior Subordinated Debentures was OID regardless of
whether the Company exercises its right to defer payments of interest on such
debentures, all Securityholders would be required to include such stated
interest in income on a daily economic accrual basis as described above.
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<PAGE>
Corporate Securityholders will not be entitled to a dividends-received
deduction with respect to any income recognized with respect to the Preferred
Securities.
Distribution of Junior Subordinated Debentures to Holders of Preferred
Securities
Under current law, a distribution by the Issuer of the Junior Subordinated
Debentures as described under the caption "Certain Terms of Preferred Securities
- -- Liquidation of Issuer and Distribution of Junior Subordinated Debentures to
Holders" in the applicable Prospectus Supplement will be non-taxable and will
result in the Securityholder receiving directly its pro rata share of the Junior
Subordinated Debentures previously held indirectly through the Issuer, with a
holding period and aggregate tax basis equal to the holding period and aggregate
tax basis such Securityholder had in its Preferred Securities before such
distribution. If, however, the liquidation of the Issuer were to occur because
the Issuer is subject to United States federal income tax with respect to income
accrued or received on the Junior Subordinated Debentures, the distribution of
Junior Subordinated Debentures to Securityholders by the Issuer would be a
taxable event to the Issuer and each Securityholder, and a Securityholder would
recognize gain or loss as if the Securityholder had exchanged its Preferred
Securities for the Junior Subordinated Debentures it received upon the
liquidation of the Issuer. A Securityholder will accrue interest in respect of
Junior Subordinated Debentures received from the Issuer in the manner described
above under "-- Interest Income and Original Issue Discount."
Sales or Redemption of Preferred Securities
Gain or loss will be recognized by a Securityholder on a sale of Preferred
Securities (including a redemption for cash) in an amount equal to the
difference between the amount realized by the Securityholder on the sale or
redemption of the Preferred Securities (except to the extent that such amount
realized is characterized as a payment in respect of accrued but unpaid interest
on such Securityholder's allocable share of the Junior Subordinated Debentures)
and the Securityholder's adjusted tax basis in the Preferred Securities sold or
redeemed. Such gain or loss generally will be taxable as long-term capital gain
or loss if the Securityholder held the Preferred Securities that it sold or
redeemed for more than one year. Subject to certain limited exceptions, capital
losses cannot be applied to offset ordinary income for Federal income tax
purposes.
Backup Withholding Tax and Information Reporting
The amount of OID accrued on the Preferred Securities held of record by
United States Persons (other than corporations and other exempt
Securityholders), if any, will be reported to the Internal Revenue Service.
"Backup" withholding at a rate of 31% will apply to payments of interest to non-
exempt United States Persons unless the Securityholder furnishes its taxpayer
identification number in the manner prescribed in applicable Treasury
Regulations, certifies that such number is correct, certifies as to no loss of
exemption from backup withholding and meets certain other conditions.
Payment of the proceeds from the disposition of Preferred Securities to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the holder or beneficial owner establishes an
exemption from information reporting and backup withholding.
Any amounts withheld from a Securityholder under the backup withholding
rules will be allowed as a refund or a credit against such Securityholder's
United States federal income tax liability, provided the required information is
furnished to the Internal Revenue Service.
Possible Tax Law Changes
On February 6, 1997, the Administration's Revenue Proposals (the "Bill")
was introduced in the 105th Congress. If enacted, the Bill would generally deny
interest deductions for interest on an instrument issued by a publicly traded
corporation that (a) has a maximum weighted average maturity of more than 40
years or (b) that has
42
<PAGE>
a maximum term of more than 15 years and that is not shown as indebtedness on
the separate balance sheet of the issuer or, where the instrument is issued to a
related party (other than a corporation), where the holder or some other related
party issues a related instrument that is not shown as indebtedness on the
issuer's consolidated balance sheet. For purposes of determining the weighted
average maturity or the term of an instrument, any right to extend would be
treated as exercised. The above-described provisions of the Bill are proposed
to be effective generally for instruments issued on or after the date of first
Congressional committee action on the Bill. If either provision were to apply
to the Junior Subordinated Debentures, the Company would not be able to deduct
interest on the Junior Subordinated Debentures. If the proposed legislation is
introduced and ultimately enacted and if the effective date provision contained
in the Act is followed, such legislation would not apply to the Junior
Subordinated Debentures. There can be no assurance, however, that current or
future legislative proposals or final legislation will not adversely affect the
ability of the Company to deduct interest on the Junior Subordinated Debentures
or otherwise affect the tax treatment of the transaction described herein.
Moreover, such a change could give rise to a Tax Event, which may permit the
Company to cause a redemption of the Preferred Securities, as described more
fully under "Description of Preferred Securities -- Redemption or Exchange --
Tax Event or Capital Treatment Event Redemption."
PLAN OF DISTRIBUTION
The Preferred Securities or the Junior Subordinated Debentures may be sold
in a public offering to or through underwriters or dealers designated from time
to time. The Company and the Issuer may sell its Preferred Securities or Junior
Subordinated Debentures as soon as practicable after effectiveness of the
Registration Statement of which this Prospectus forms a part. The names of any
underwriters or dealers involved in the sale of the Preferred Securities or
Junior Subordinated Debentures in respect of which this Prospectus is delivered,
the amount or number of Preferred Securities and Junior Subordinated Debentures
to be purchased by any such underwriters and any applicable commissions or
discounts will be set forth in the Prospectus Supplement.
Underwriters may offer and sell Preferred Securities or Junior Subordinated
Debentures at a fixed price or prices, which may be changed, or from time to
time at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. In connection with the sale
of Preferred Securities, underwriters may be deemed to have received
compensation from the Company and/or the Issuer in the form of underwriting
discounts or commissions and may also receive commissions. Underwriters may
sell Preferred Securities or Junior Subordinated Debentures to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters.
Any underwriting compensation paid by the Company and/or the Issuer to
underwriters in connection with the offering of Preferred Securities or Junior
Subordinated Debentures, and any discounts, concessions or commissions allowed
by such underwriters to participating dealers, will be described in an
accompanying Prospectus Supplement. Underwriters and dealers participating in
the distribution of Preferred Securities or Junior Subordinated Debentures may
be deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of such Preferred Securities or Junior
Subordinated Debentures may be deemed to be underwriting discounts and
commissions, under the Securities Act. Underwriters and dealers may be entitled,
under agreement with the Company and the Issuer, to indemnification against and
contribution toward certain civil liabilities, including liabilities under the
Securities Act, and to reimbursement by the Company for certain expenses.
In connection with the offering of the Preferred Securities of the Issuer,
the Issuer may grant to the underwriters an option to purchase additional
Preferred Securities to cover over-allotments, if any, at the initial public
offering price (with an additional underwriting commission), as may be set forth
in the accompanying Prospectus Supplement. If the Issuer grants any over-
allotment option, the terms of such over-allotment option will be set forth in
the Prospectus Supplement for such Preferred Securities.
Underwriters and dealers may engage in transactions with, or perform
services for, the Company and/or the Issuer and/or any of their affiliates in
the ordinary course of business.
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The Preferred Securities and the Junior Subordinated Debentures will be new
issues of securities and will have no established trading market. Any
underwriters to whom Preferred Securities or Junior Subordinated Debentures are
sold for public offering and sale may make a market in such Preferred Securities
and Junior Subordinated Debentures, but such underwriters will not be obligated
to do so and may discontinue any market making at any time without notice. Such
Preferred Securities or Junior Subordinated Debentures may or may not be listed
on a national securities exchange or the Nasdaq National Market. No assurance
can be given as to the liquidity of or the existence of trading markets for any
Preferred Securities or Junior Subordinated Debentures.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Preferred
Securities, the enforceability of the Trust Agreement and the formation of the
Issuer will be passed upon by Richards, Layton & Finger, P.A., special Delaware
counsel to the Company and the Issuer. The validity of the Junior Subordinated
Debentures will be passed upon for the Company by Housley Kantarian & Bronstein,
P.C. and for the Underwriters by Dorsey & Whitney LLP. The validity of the
Guarantee will be passed upon by Fitzgerald, Schorr, Barmettler and Brennan,
P.C. Housley Kantarian & Bronstein, P.C. and Dorsey & Whitney LLP will rely on
the opinion of Richards, Layton & Finger, P.A. as to matters of Delaware law.
Certain matters relating to United States federal income tax considerations
described in this Prospectus will be passed upon for the Company by Deloitte &
Touche LLP.
EXPERTS
The consolidated financial statements of the Company as of June 30, 1996
and 1995 and for each of the three years in the period ended June 30, 1996,
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference (which report
expresses an unqualified opinion and includes an explanatory paragraph referring
to a change in the method of accounting for mortgage servicing rights in fiscal
year 1996, and a change in the method of accounting for income taxes, a change
in the method of accounting for postretirement benefits, and a change in the
method of accounting for intangible assets in fiscal year 1994), and have been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
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No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus in
connection with the offer made by this Prospectus, and if given or made, such
information or representation should not be relied upon as having been
authorized by the Company or the Underwriters. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create any
implication that there has been no change in the affairs of the Company or its
subsidiaries or that information contained herein is current as of any time
subsequent to the date hereof. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any of the securities offered hereby
to any person or in any jurisdiction in which such offer or solicitation is not
authorized or in which the person making the offer or solicitation is not
qualified to do so, or to any person to whom it is unlawful to make such offer
or solicitation in such jurisdiction.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PROSPECTUS
<S> <C>
Available Information...........................................................
Incorporation of Certain Documents by Reference.................................
Risk Factors....................................................................
The Company.....................................................................
The Issuer......................................................................
Use of Proceeds.................................................................
Description of Preferred Securities.............................................
Description of the Junior Subordinated Debentures...............................
Book-Entry Issuance.............................................................
Description of the Guarantee....................................................
Relationship Among the Preferred Securities, the
Junior Subordinated Debentures and the Guarantee..............................
Certain Federal Income Tax Consequences.........................................
Plan of Distribution............................................................
Legal Matters...................................................................
Experts.........................................................................
</TABLE>
1,800,000 PREFERRED SECURITIES
CFC PREFERRED TRUST
Cumulative Trust Preferred Securities
(Liquidation Amount $25 Per Preferred Security)
Fully and Unconditionally
Guaranteed As Described Herein
By Commercial Federal Corporation
[LOGO]
--------------------
PROSPECTUS
--------------------
PIPER JAFFRAY INC.
DAIN BOSWORTH, INCORPORATED
____________, 1997
<PAGE>
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated expenses in connection with this offering are as follows:
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission registration fee......... $ 13,637
Legal fees and expenses..................................... 100,000
*Printing, postage and mailing............................... 75,000
*Accounting fees and expenses................................ 35,000
*Trustee fees................................................ 25,000
*Blue Sky fees (including counsel fees)...................... 10,000
*Miscellaneous expenses...................................... 16,363
---------
$275,000
=========
</TABLE>
- ---------
* Estimated
Item 15. Indemnification of Directors and Officers.
Indemnification of Directors and Officers of the Bank
Federal Regulations clearly define areas for indemnity coverage, as follows:
(a) Any person against whom any action is brought by reason of the fact
that such person is or was a director or officer of the Bank shall be
indemnified by the Bank for:
(i) Reasonable costs and expenses, including reasonable
attorney's fees, actually paid or incurred by such person in
connection with proceedings related to the defense or settlement
of such action;
(ii) Any amount for which such person becomes liable by reason
of any judgment in such action;
(iii) Reasonable costs and expenses, including reasonable
attorney's fees, actually paid or incurred in any action to
enforce his rights under this section, if the person attains a
final judgment in favor of such person in such enforcement
action.
(b) Indemnification provided for in subparagraph (a) shall be made to
such officer or director only if the requirements of this subparagraph
are met:
(i) The Bank shall make the indemnification provided by
subparagraph (a) in connection with any such action which results
in a final judgment on the merits in favor of such officer or
director.
(ii) The Bank shall make the indemnification provided by
subparagraph (a) in case of settlement of such action, final
judgment against such director or officer or final judgment in
favor of such director or officer other than on the merits except
in relation to matters as to which he shall be adjudged to be
liable for negligence or misconduct in the performance of his
duty, only if a majority of the directors of the Bank determines
that such a director or officer was acting in good faith within
what he was reasonably entitled to believe under the
circumstances was the scope of his employment or authority and
for a purpose which he was reasonably entitled to believe under
the circumstances was in the best interest of the Bank or its
shareholders.
II-1
<PAGE>
However, no indemnification shall be made unless the Bank gives the OTS at least
60 days' notice of its intention to make such indemnification. No such
indemnification shall be made if the OTS advises the Bank in writing, within
such notice period, of its objection thereto.
(c) As used in this paragraph:
(i) "Action" means any action, suit or other judicial or
administrative proceeding, or threatened proceeding, whether civil,
criminal, or otherwise, including any appeal or other proceeding for
review ;
(ii) "Court" includes, without limitation, any court to which or in
which any appeal or any proceeding for review is brought;
(iii) "Final Judgment" means a judgment, decree, or order which is
appealable and as to which the period for appeal has expired and no
appeal has been taken;
(iv) "Settlement" includes the entry of a judgment by consent or by
confession or upon a plea of guilty or of nolo contendere.
Indemnification of Directors and Officers of the Company
Indemnification of directors and officers of the Company is provided under
Article VI of the Articles of Incorporation of the Company for judgments, fines,
settlements, and expenses, including attorney fees incurred in connection with
any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative if such director or officer
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.
Article VI of the Articles of Incorporation provides that an outside
director shall not be personally liable to the Company or its stockholders for
monetary damages for breach of his fiduciary duty as a director and authorizes
the Company to indemnify such outside director against monetary damages for such
breach to the full extent permitted by law. This provision applies to acts or
omissions occurring after the effective date of the amendment, and does not
---
limit liability for (i) any act or omission not in good faith which involves
intentional misconduct or a knowing violation of law, (ii) any transaction from
which the outside director derived an improper direct or indirect financial
benefit, (iii) paying a dividend or approving a stock repurchase in violation of
the Nebraska Business Act or (iv) any act or omission which violates a
declaratory or injunctive order obtained by the Company or its stockholders.
For purposes of Article VI, "outside director" is defined as any member of the
Board of Directors who is not an officer or a person who may control the conduct
of the Company through management agreements, voting trusts, directorships in
related corporations or any other device or relationship.
The Company has purchased director and officer liability insurance that
insures directors and officers against certain liabilities in connection with
the performance of their duties as directors and officers, including liabilities
under the Securities Act of 1933, as amended, and provides for payment to the
Company of costs incurred by it in indemnifying its directors and officers.
Under Nebraska law, indemnification of directors and officers may be
provided for judgments, fines, settlements, and expenses, including attorney's
fees, incurred in connection with any threatened, pending, or completed action,
suit, or proceeding other than an action by or in the right of the Company. This
applies to any civil, criminal, investigative or administrative action provided
that the director or officer involved acted in good faith, in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
II-2
<PAGE>
Indemnification of directors and officers may be also provided for
judgments, fines, settlements, and expenses, including attorney's fees, incurred
in connection with any threatened, pending, or completed action, or suit by or
in the right of the corporation if such director or officer acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation. However, no indemnification shall be made in
respect of any claim, issue or matter in which such person is adjudged to be
liable for negligence or misconduct in the performance of his duties to the
corporation unless the court in which the action is brought deems indemnity
proper.
The grant of indemnification to a director or officer shall be determined
by a majority of a quorum of disinterested directors, by a written opinion from
independent legal counsel, or by the shareholders.
Indemnification shall be provided to any directors and officers for
expenses, including attorney's fees, actually and reasonably incurred in the
defense of any action, suit or proceeding to the extent that he or she has been
successful on the merits.
Item 16. Exhibits.
The exhibits filed as part of this Registration Statement are as
follows:
1 Form of Purchase Agreement
* 4.1 Form of Junior Subordinated Indenture
* 4.2 Certificate of Trust of CFC Preferred Trust
* 4.3 Trust Agreement of CFC Preferred Trust
4.4 Form of Amended and Restated Trust Agreement of CFC Preferred Trust
4.5 Form of Preferred Security Certificate for CFC Preferred Trust
(incorporated by reference to Exhibit E to Exhibit 4.4)
* 4.6 Form of Guarantee Agreement for CFC Preferred Trust
5.1 Form of Opinion of Housley Kantarian & Bronstein, P.C. regarding the
legality of Junior Subordinated Debentures
5.2 Opinion of Richards, Layton & Finger, P.A. as to legality of
Preferred Securities
5.3 Form of Opinion of Fitzgerald, Schorr, Barmettler & Brennan, P.C.
regarding legality of Guarantee
* 8 Form of Opinion of Deloitte & Touche LLP as to certain federal
income tax matters
12 Statement re: computation of ratio of earnings to fixed charges
23.1 Housley Kantarian & Bronstein, P.C. (included in Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2)
23.4 Consent of Fitzgerald, Schorr, Barmettler & Brennan, P.C. (included in
Exhibit 5.3)
* 24 Power of Attorney (reference is made to the signature page of the
Registration Statement)
II-3
<PAGE>
25.1 Form T-1 Statement re: Eligibility of Harris Trust and Savings Bank to
act as trustee under the Junior Subordinated Debentures
25.2 Form T-1 Statement of Eligibility of Harris Trust and Savings Bank to
act as trust under the Amended and Restated Trust Agreement of CFC
Preferred Trust
25.3 Form T-1 Statement of Eligibility of Harris Trust and Savings Bank to
act as trustee under the Guarantee
- -----------
* Previously filed.
** To be filed by amendment.
Item 17. Undertakings.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement: to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrants hereby undertake 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 the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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 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 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.
The undersigned registrants hereby undertake to provide to the Underwriter
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
The undersigned registrants undertake 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 a 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 purposes 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-4
<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 the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Omaha, State of Nebraska, on the 11th day of
March, 1997.
COMMERCIAL FEDERAL CORPORATION
By: /s/ William A. Fitzgerald
-------------------------------------------------
William A. Fitzgerald,
Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed below by the following persons in the
capacities and as of the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
- --------- -------- ----
<S> <C> <C>
/s/ William A. Fitzgerald
- ------------------------- Principal Executive Officer March 11, 1997
William A. Fitzgerald and Director
Chairman of the Board and
Chief Executive Officer
*
- ------------------------- Principal Financial March 11, 1997
James A. Laphen Officer
President, Chief Operating
Officer and Chief Financial
Officer
* Principal Accounting March 11, 1997
- ------------------------- Officer
Gary L. Matter
Senior Vice President, Controller
and Secretary
* Director March 11, 1997
- -------------------------
Talton K. Anderson
* Director March 11, 1997
- -------------------------
Robert F. Krohn
Director March __, 1997
- -------------------------
Charles M. Lillis
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
* Director March 11, 1997
- -------------------------
Carl G. Mammel
* Director March 11, 1997
- ------------------------
Robert S. Milligan
* Director March 11, 1997
- ------------------------
James P. O'Donnell
* Director March 11, 1997
- ------------------------
Robert D. Taylor
Director March __, 1997
- ------------------------
Aldo J. Tesi
</TABLE>
* By: /s/ William A. Fitzgerald
----------------------------------
William A. Fitzgerald
Attorney-in-Fact
II-6
<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
the requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Omaha, State of Nebraska, on the 11th day of
March, 1997.
CFC PREFERRED TRUST
By: COMMERCIAL FEDERAL CORPORATION,
as Depositor
By: /s/ James A. Laphen
------------------------------------
James A. Laphen
President
II-7
<PAGE>
D&W DRAFT 3/5/97
Cumulative Trust Preferred Securities
CFC Preferred Trust
[ ]% Cumulative Trust Preferred Securities
(Liquidation Preference of $25 per Trust Preferred Security)
PURCHASE AGREEMENT
------------------
, 1997
PIPER JAFFRAY INC.
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
Commercial Federal Corporation, a Nebraska corporation (the
"Company"), as Depositor and as guarantor, and its fiduciary subsidiary, CFC
Preferred Trust, a statutory business trust organized under the Delaware
Business Trust Act (the "Delaware Act") (the "Trust" and together with the
Company, the "Offerors"), propose that the Trust issue and sell to Piper Jaffray
Inc. (the "Underwriter") an aggregate of __________ of the Trust's ___%
Cumulative Trust Preferred Securities, with a liquidation preference of $25 per
Trust Preferred Security (the "Preferred Securities"), the terms of which are
more fully described in the Prospectus (as hereinafter defined). The Offerors
propose that the Trust issue the Preferred Securities pursuant to an Amended and
Restated Trust Agreement among Wilmington Trust Company, as Delaware Trustee,
Harris Trust and Savings Bank, as Property Trustee, the administrative trustees
named therein (the "Administrative Trustees") and the Company (the "Trust
Agreement"). The Preferred Securities will be guaranteed by the Company with
respect to distributions and payments upon liquidation, redemption and otherwise
(the "Guarantee") pursuant to a Guarantee Agreement (the "Guarantee Agreement"),
to be dated March __, 1997, between the Company and Harris Trust and Savings
Bank, as Guarantee Trustee (the "Guarantee Trustee"), and entitled to the
benefits of certain backup undertakings described in the Prospectus (as defined
herein) with respect to the Company's agreement pursuant to the Expense
Agreement (as defined herein) to pay all expenses relating to administration of
the Trust.
The proceeds of the sale of the Preferred Securities and the Common
Securities (liquidation amount $25.00 per common security (the "Common
Securities")) will be used to purchase junior subordinated deferrable interest
debentures (the "Junior Subordinated Debentures") issued by the Company pursuant
to an Indenture (the "Indenture"), to be dated March __, 1997, between the
<PAGE>
Company and Harris Trust and Savings Bank, as Debenture Trustee (the "Debenture
Trustee").
The Offerors hereby confirm their agreement with
respect to the sale of the Preferred Securities to the Underwriter.
1. Registration Statement and Prospectus. A registration statement
-------------------------------------
on Form S-3 (File No. 333-____) with respect to the Preferred Securities,
the Guarantee and the Junior Subordinated Debentures, including a
preliminary form of prospectus, has been prepared by the Offerors in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations ("Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and the Trust Indenture Act of
1939, as amended (the Trust Indenture Act") and the rules and regulations
thereunder and has been filed with the Commission; and, if the Offerors have
elected to rely upon Rule 462(b) of the Rules and Regulations to increase the
size of the offering registered under the Act, the Offerors will prepare and
file with the Commission a registration statement with respect to such increase
pursuant to Rule 462(b). Copies of such registration statement(s) and
amendments and each related preliminary prospectus have been delivered to the
Underwriter.
If the Offerors have elected not to rely upon Rule 430A of the Rules
and Regulations, the Offerors have prepared and will promptly file an amendment
to the registration statement and an amended prospectus (including a term sheet
meeting the requirements of Rule 434 of the Rules and Regulations) if necessary
to complete the Prospectus. If the Offerors have elected to rely upon Rule 430A
of the Rules and Regulations, they will prepare and file a prospectus (or a term
sheet meeting the requirements of Rule 434) pursuant to Rule 424(b) that
discloses the information previously omitted from the prospectus in reliance
upon Rule 430A. Such registration statement, as amended at the time it is or was
declared effective by the Commission, and, in the event of any amendment thereto
after the effective date and prior to the Closing Date (as hereinafter defined),
such registration statement as so amended (but only from and after the
effectiveness of such amendment), including a registration statement (if any)
filed pursuant to Rule 462(b) of the Rules and Regulations increasing the size
of the offering registered under the Act and information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to
Rules 430A(b) and 434(d) of the Rules and Regulations, is hereinafter called the
"Registration Statement". The prospectus included in the Registration Statement
at the time it is or was declared effective by the Commission and any related
prospectus supplement or supplements specifically relating to the Preferred
Securities, the Guarantee and the Junior Subordinated Debentures as filed with
or promptly hereafter filed with the Commission pursuant to Rule 424(b) under
the Act, is hereinafter called the "Prospectus", except that if any prospectus
(including any term sheet meeting the
-2-
<PAGE>
requirements of Rule 434 of the Rules and Regulations provided by the Offerors
for use with a prospectus subject to completion within the meaning of Rule 434
in order to meet the requirements of Section 10(a) of the Rules and Regulations)
filed by the Offerors with the Commission pursuant to Rule 424(b) (and Rule 434,
if applicable) of the Rules and Regulations or any other such prospectus
provided to the Underwriter by the Offerors for use in connection with the
offering of the Preferred Securities (whether or not required to be filed by the
Offerors with the Commission pursuant to Rule 424(b) of the Rules and
Regulations) differs from the prospectus on file at the time the Registration
Statement is or was declared effective by the Commission, the term "Prospectus"
shall refer to such differing prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) from and after the time such
prospectus is filed with the Commission or transmitted to the Commission for
filing pursuant to such Rule 424(b) (and Rule 434, if applicable) or from and
after the time it is first provided to the Underwriter by the Offerors for such
use. The term "Preliminary Prospectus" as used herein means the preliminary
prospectus included in any Registration Statement prior to the time it becomes
or became effective under the Act and any prospectus subject to completion as
described in Rule 430A or 434 of the Rules and Regulations.
2. Representations and Warranties of the Company.
---------------------------------------------
(a) The Offerors represent and warrant to, and agree with, the
Underwriter as follows:
(i) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission nor have any proceedings been
instituted or, to the best of the Company's knowledge, threatened for that
purpose. Each Preliminary Prospectus, at the time of filing thereof, 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; except that the foregoing shall not apply to statements in or
omissions from the Preliminary Prospectus in reliance upon, and in conformity
with, written information furnished to the Company by or on behalf of the
Underwriter for use in the preparation thereof.
(ii) As of the time the Registration Statement (or any post-effective
amendment thereto, including a registration statement (if any) filed pursuant
to Rule 462(b) of the Rules and Regulations increasing the size of the
offering registered under the Act) is or was declared effective by the
Commission, upon the filing or first delivery to the Underwriter of the
Prospectus (or any supplement to the Prospectus (including any term sheet
meeting the requirements of Rule 434 of the Rules and Regulations)) and at
the Closing Date (as hereinafter defined), (A) the Registration Statement and
Prospectus
-3-
<PAGE>
(in each case, as so amended and/or supplemented) conformed or will conform
in all material respects to the requirements of the Act and the Rules and
Regulations and the Registration Statement and Prospectus (in each case as so
amended and/or supplemented) conformed or will conform in all material
respects to the requirements of the Trust Indenture Act and the rules and
regulations thereunder, (B) the Registration Statement (as so amended) did
not or will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (C) the Prospectus (as so
supplemented) did not or will not include 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 in
which they are or were made, not misleading; except that the foregoing shall
not apply to (i) statements in or omissions from any such document in
reliance upon, and in conformity with, written information furnished to the
Offerors by or on behalf of the Underwriter specifically for use in the
preparation thereof and (ii) that part of the Registration Statement which
constitutes the Statement of Eligibility and Qualification ("Form T-1") under
the Trust Indenture Act. If the Registration Statement has been declared
effective by the Commission, no stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceeding for that
purpose has been initiated or, to the Offeror's knowledge, threatened by the
Commission.
(iii) The documents of the Company incorporated by reference in the
Registration Statement and the Prospectus, when they were filed with the
Commission conformed in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder, and
none of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and any further documents so
filed and incorporated by reference in the Registration Statement and the
Prospectus or any further amendment or supplement thereto, when such
documents are filed with the Commission will conform in all material respects
to the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder, and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances under
which they were made, not misleading.
(iv) The consolidated financial statements of the Company and its
subsidiaries, together with the notes thereto, contained in or incorporated
by reference in the Registration Statement, Preliminary Prospectus and
Prospectus comply in all material respects with the requirements of the Act,
the Rules and Regulations and the Exchange Act and fairly present the
-4-
<PAGE>
financial position of the Company and its subsidiaries as of the dates
indicated and the results of operations and changes in financial position for
the periods therein specified; said consolidated financial statements have
been prepared in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise
stated in the Registration Statement and Prospectus); and the supporting
schedules incorporated by reference in the Registration Statements present
fairly the information required to be stated therein. No other financial
statements or schedules are required to be included or incorporated by
reference in the Registration Statement or the Prospectus. The financial
information included in the Preliminary Prospectus and Prospectus under the
caption "Summary Consolidated Financial Information" presents fairly the
information purported to be shown therein at the dates and for the periods
indicated.
(v) The Company has been duly organized and is validly existing as
a corporation under the laws of the State of Nebraska, is duly registered as
a savings and loan holding company under Section 10 of the Home Owners' Loan
Act, as amended, and is qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the ownership or leasing of
properties or the conduct of its business requires such qualification, except
where failure to be so qualified would not have a material adverse effect
upon the Company's business, condition (financial or otherwise) or
properties. Each Significant Subsidiary of the Company, as defined below, has
been duly incorporated or organized and is in good standing under the laws of
its jurisdiction of incorporation or organization and is qualified to do
business and is in good standing as a foreign corporation in each
jurisdiction in which the ownership or leasing of properties or the conduct
of its business requires such qualification, except where failure to be so
qualified would not have a material adverse effect upon such Significant
Subsidiary's business, condition (financial or otherwise) or properties. The
"Significant Subsidiaries" of the Company are: Commercial Federal Bank, a
Federal Savings Bank (the "Bank"), duly organized and validly existing as a
federal savings bank chartered under the Home Owners Loan Act, 12 U.S.C. (S)
1464; Commercial Federal Mortgage Corporation, a Nebraska corporation;
Commercial Federal Investment Services, Inc., a Nebraska corporation;
Commercial Federal Investment Corporation, a Nebraska corporation; Commercial
Federal Insurance Corporation, a Nebraska corporation; Commercial Federal
Service Corporation, a Nebraska corporation; and Commercial Marketing, Inc.,
a Nebraska corporation. The subsidiaries of the Company which are not
Significant Subsidiaries are not individually or in the aggregate, material
to the financial condition, results of operations, business or business
prospects of the Company and its subsidiaries, taken as a whole. The Company
and each of its subsidiaries has all requisite power and
-5-
<PAGE>
authority (corporate and other) to own its properties and conduct its
business as it is currently being carried on and as described in the
Prospectus. The Bank is a member in good standing of the Federal Home Loan
Bank of Topeka, the Bank's savings accounts are insured by the Savings
Association Insurance Fund of the Federal Deposit Insurance Corporation
("FDIC") up to the maximum applicable amount in accordance with the rules and
regulations of the FDIC, and no proceedings for the termination or revocation
of such membership or insurance are pending, or to the knowledge of the
Company, contemplated. The Company owns all of the outstanding capital stock
of the Bank, free of any liens, claims charges or encumbrances. The Company
or one of its subsidiaries owns all of the outstanding capital stock of the
Company's subsidiaries, free of any liens, claims charges or encumbrances.
(vi) Deloitte & Touche LLP, who certified the financial statements and
supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus, are independent public accountants
as required by the Act and the Rules and Regulations.
(vii) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act with full trust power and
authority to own property and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform its
obligations under this Agreement, the Preferred Securities, the Common
Securities and the Trust Agreement and is authorized to do business in each
jurisdiction in which such qualification is required, except where the
failure to so qualify would not have a material adverse effect on the
Company's condition (financial or otherwise), earnings, business, prospects,
assets, results of operations or properties taken as a whole; the Trust has
conducted and will conduct no business other than the transactions
contemplated by the Trust Agreement and described in the Prospectus; the
Trust is not a party to or otherwise bound by any agreement other than those
described in the Prospectus; the Trust is and will be classified for United
States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation; and the Trust is and will be treated as
a consolidated subsidiary of the Company pursuant to generally accepted
accounting principles.
(viii) Since the respective dates as of which information is given
in the Registration Statement, the Preliminary Prospectus and the Prospectus,
and except as otherwise disclosed therein or in the documents incorporated
therein by reference, (i) there has been no material adverse change in the
condition (financial or otherwise) of the Company, the Trust or its or their
subsidiaries, or in the financial results, business affairs or business
prospects of the Trust, the Company or its subsidiaries, whether or not
arising in the ordinary course of business, (ii) there have been no
transactions entered into
-6-
<PAGE>
by the Company, its Significant Subsidiaries or the Trust which would
materially effect the Company, the Significant Subsidiaries or the Trust,
(iii) there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock or on any class of
capital stock of a subsidiary, except regular quarterly cash dividends
declared by the Board of Directors of the Company and paid by the Company in
the ordinary course of business in accordance with the dividend policy
established by the Board of Directors, (iv) neither the Company, the Trust
nor any subsidiary has incurred, other than in the ordinary course of
business, any material liabilities or obligations, direct or contingent, and
(v) there has not been (A) any change in the capital stock of the Company or
any subsidiary (except for options granted pursuant to or shares of common
stock issued pursuant to the employee benefit plans of, or as compensation to
the directors of, the Company and the Bank described in the documents
incorporated by reference in the Registration Statement, or any issuance of
options, warrants, convertible securities or other rights to purchase capital
stock of the Company or any subsidiary), or (B) any material increase in the
short-term or long-term debt (including capitalized lease obligations) of the
Company or any subsidiary except indebtedness and deposit liabilities
incurred by the Bank in the ordinary course of its banking business. Neither
the Trust, the Company nor any of its subsidiaries has any material
contingent liabilities which are not disclosed in the Prospectus or in the
Registration Statement.
(ix) Except as set forth in the Registration Statement, the
Preliminary Prospectus and the Prospectus or in the documents incorporated
therein by reference, there is not pending or, to the knowledge of the Trust
or the Company, threatened or contemplated, any action, suit or proceeding to
which the Trust, the Company or any subsidiary of the Company is a party or
to which either of their assets may be subject, before or by any court or
governmental agency, authority or body, domestic or foreign, or any
arbitrator, which might result in any material adverse change in the
condition (financial or otherwise) of the Trust, the Company or any
subsidiary of the Company, or in the financial results, business affairs or
business prospects of the Trust or the Company and its subsidiaries, taken as
a whole or the disposition of which would materially and adversely affect the
consummation of this Agreement.
(x) There are no contracts or documents of the Trust, the Company or
any subsidiary of the Company that are required to be filed or incorporated
by reference as exhibits to the Registration Statement by the Act or by the
Rules and Regulations which contracts or documents have not been so filed or
incorporated by reference as required.
-7-
<PAGE>
(xi) The execution, delivery and performance by the Company and/or the
Trust, as the case may be, of this Agreement, the Indenture, the Trust
Agreement, the Guarantee Agreement and the Expense Agreement and the
consummation of the transactions contemplated hereby and thereby, including
the issuance, sale and delivery of the Preferred Securities by the Trust and
the Junior Subordinated Debentures by the Company, will not (i) conflict with
or result in a breach of any of the terms and provisions of, or constitute a
default (or an event which with notice or lapse of time, or both, would
constitute a default) or require, except for such consents as have been
obtained and are currently in effect, consent 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 its subsidiaries pursuant to
the terms of, any agreement, instrument, franchise, license, permit or other
instrument to which the Trust, the Company or any of its subsidiaries is a
party or by which any of such companies or their respective properties or
assets may be bound or violate or conflict with any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Trust, the Company or
any of its subsidiaries or any of their respective properties or assets,
which conflicts, breaches, defaults, violations or liens would, in the
aggregate, have a material adverse effect on the Trust, the Company and its
subsidiaries, taken as a whole, or (ii) violate or conflict with any
provision of the certificate of incorporation, charter, by-laws or other
governing documents of the Company or any of its subsidiaries or the Trust's
Trust Agreement or its certificate of trust filed with the state of Delaware
on _______________, 1997 (the "Certificate of Trust"). No consent, approval,
authorization, order, registration, filing, qualification, license or permit
of or with any court or any public, governmental or regulatory agency or body
having jurisdiction over the Trust, the Company or any of its subsidiaries or
any of their respective properties or assets is required for the execution,
delivery and performance of this Agreement, the Indenture, the Trust
Agreement, the Guarantee Agreement and the Expense Agreement and the
consummation of the transactions contemplated hereby and thereby, including
the issuance, sale and delivery of the Preferred Securities by the Trust and
the Junior Subordinated Debentures by the Company, except such as may be
required under the Act, the qualification of the Indenture, the Trust
Agreement and the Guarantee Agreement under the Trust Indenture Act, and the
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state
securities or Blue Sky laws. Each of the Indenture, the Trust Agreement and
the Guarantee Agreement conform in all material respects to the descriptions
thereof contained in the Registration Statement, the Preliminary Prospectus
and the Prospectus.
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<PAGE>
(xii) This Agreement has been duly and validly authorized, executed
and delivered by the Company and the Trust and is a valid and binding
obligation of the Company and the Trust, enforceable against the Company and
the Trust in accordance with its terms, except as enforceability thereof may
be limited by bankruptcy, insolvency, reorganization or similar laws relating
to or affecting the rights of creditors generally and by equitable principles
and except as obligations of the Company and the Trust under the
indemnification provisions hereof may be limited under federal or state
securities laws.
(xiii) Each of the Company and the Trust has all requisite corporate
power and authority to execute, deliver and perform its obligations under the
Indenture, the Trust Agreement, the Guarantee Agreement and the Expense
Agreement. All necessary corporate proceedings of the Company and the Trust
have been duly taken to authorize the execution, delivery and performance by
each of the Company and the Trust of the Indenture, the Trust Agreement, the
Guarantee Agreement and the Expense Agreement, as the case may be. The
Indenture, the Trust Agreement, the Guarantee Agreement and the Expense
Agreement have been duly authorized, and when executed and delivered by the
Company and/or the Trust, as the case may be, will be a valid and binding
obligation of the Company and/or the Trust, as the case may be, enforceable
against the Company and/or the Trust, as the case may be, in accordance with
its terms, except as enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the
rights of creditors generally and by equitable principles.
(xiv) The authorized capital stock of the Company is as set forth
under the caption "Capitalization" in the Registration Statement, the
Preliminary Prospectus and the Prospectus. All of the outstanding shares of
capital stock have been duly authorized, validly issued and are fully paid
and nonassessable. Neither the filing of the Registration Statement nor the
offering or sale of the Preferred Securities or the Junior Subordinated
Debentures, as contemplated by this Agreement, gives rise to any rights,
other than those which have been waived or satisfied, for or relating to the
registration of any shares of capital stock or other securities of the
Company. All of the issued and outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized, validly issued and are
fully paid and nonassessable.
(xv) The Junior Subordinated Debentures have been duly authorized
by the Company and at the 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
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<PAGE>
Prospectus, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally
and subject to general principles of equity, will be in the form contemplated
by, and entitled to the benefits of, the Indenture and will conform in all
material respects to the statements relating thereto in the Prospectus.
(xvi) 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 Prospectus,
will be validly issued and (subject to the terms of the Trust Agreement)
fully paid and nonassessable undivided beneficial interests in the assets of
the Trust and will conform to all statements relating thereto contained in
the Prospectus; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at the Closing Date 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 equity.
(xvii) The Preferred Securities have been duly authorized by the Trust
Agreement and, when issued and delivered pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued and
fully paid and non-assessable undivided beneficial interests in the Trust,
will be entitled to the benefits of the Trust Agreement and will in all
material respects conform to the statements relating thereto contained in the
Prospectus; the issuance of the Preferred Securities is not subject to
preemptive or other similar rights; and holders of Preferred Securities will
be entitled to the same limitation of personal liability under Delaware law
as extended to stockholders of private corporations for profit.
(xviii) The Indenture, the Trust Agreement, the Guarantee Agreement
and the Expense Agreement are in substantially the respective forms filed as
exhibits to the Registration Statement.
(xix) The Company's obligations under the Guarantee are subordinated
and junior in right of payment to all "Senior Debt" (as defined in the
Indenture) of the Company.
(xx) The Junior Subordinated Debentures are subordinate and junior in
right of payment to all "Senior Debt" of the Company.
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<PAGE>
(xxi) Each of the Administrative Trustees of the Trust is an employee
of the Company and has been duly authorized by the Company to execute and
deliver the Trust Agreement.
(xxii) Neither the Company, the Trust nor any subsidiary of the
Company is in violation of any law, ordinance, governmental rule or
regulation or court decree to which it is subject nor has it failed to obtain
any license, certificate, permit, franchise or other governmental
authorization, registration, acceptance or approval necessary to the
ownership, leasing or operation of its property or to the conduct of its
business as it is currently being carried on and as described in the
Preliminary Prospectus or the Prospectus, which violation or failure to
obtain would have a material adverse effect on the condition (financial or
otherwise) of the Company and its subsidiaries, or on the financial results,
business affairs or business prospects of the Company and its subsidiaries,
taken as a whole.
(xxiii) Neither the Company nor any subsidiary of the Company is in
violation of its respective articles of incorporation, charter or bylaws or
other governing documents; the Trust is not in violation of its Trust
Agreement or its Certificate of Trust or other governing documents; None of
the Company, the Trust or any subsidiary of the Company is in violation or
default of any term of any contract, license, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the Company,
the Trust or any such subsidiary is a party or by which it is bound, or to
which any of the property or assets of the Company, the Trust or any such
subsidiary is subject, where any such default, breach or violation would
have, individually or in the aggregate, a material adverse effect on the
Company or any subsidiary of the Company, on the performance of this
Agreement, the Indenture, the Trust Agreement, the Guarantee Agreement, the
Expense Agreement, the Junior Subordinated Debentures or the Preferred
Securities.
(xiv) The Company and its subsidiaries have good title to all
properties owned by them that are material to the Company and its
subsidiaries, taken as a whole, in each case free and clear of all liens,
encumbrances and defects, except (i) as do not materially interfere with the
use made of such properties, (ii) referred to in the Registration Statement,
the Preliminary Prospectus and the Prospectus (including the notes to the
financial statements included or incorporated by reference therein), or (iii)
as could not reasonably be expected, singly or in the aggregate, to have a
material adverse effect on the business, results of operations, conditions
(financial or otherwise) or business prospects of the Company and the
subsidiaries, taken as a whole.
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<PAGE>
(xxv) The Company maintains insurance of the type and in the amounts
generally deemed adequate for its business and consistent with insurance
maintained by similar companies in similar businesses.
(xxvi) Each of the Trust and the Company has filed all federal, state,
local and foreign income and franchise tax returns required to be filed and
are not in default in the payment of any taxes which were payable pursuant to
said returns or any assessments with respect thereto.
(xxvii) The Company, the Trust and the Significant Subsidiaries have
all necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public, regulatory or
governmental agencies and bodies, material to the ownership of their
respective properties and conduct of their respective businesses as now being
conducted and as described in the Registration Statement and the Prospectus,
and no such consent, approval, authorization, order, registration,
qualification, license or permit contains a materially burdensome restriction
not adequately disclosed in the Registration Statement and the Prospectus.
The conduct of the business of the Company, the Trust and each of the
Significant Subsidiaries is in compliance in all material respects with all
applicable federal, state, local and foreign laws and regulations, except
where failure to be so in compliance would not materially adversely affect
the condition, business or results of operation of the Company, the Trust and
the Significant Subsidiaries taken as a whole.
(xxviii) The Offerors have not distributed and will not distribute any
prospectus or other offering material in connection with the offering and
sale of the Preferred Securities and the Common Stock other than any
Preliminary Prospectus or the Prospectus or other materials permitted by the
Act to be distributed by the Offerors.
(xxix) None of the Trust, the Company or any Subsidiary is an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or an
"investment adviser" within the meaning of the Investment Advisers Act of
1940, as amended.
(xxx) The proceeds from the sale of the Preferred Securities will
constitute "tier 1" capital (as defined in 12 C.F.R. Part 325).
(xxxi) Neither the Company, the Trust nor any of its officers,
directors (as defined in the Rules and Regulations) has taken or will take,
directly or indirectly, prior to the termination of the offering contemplated
by this Agreement, any action designed to stabilize or manipulate the price
of any
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<PAGE>
security of the Company or the Trust, or which has caused or resulted in, or
which might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company or
the Trust, to facilitate the sale or resale of any of the Preferred
Securities.
(xxxii) The Offerors have complied with all the provisions of Florida
Statutes Section 517.075 (Chapter 92-198, Laws of Florida). Neither of the
Offerors nor any of their affiliates is presently doing business with the
government of Cuba or with any person or affiliate located in Cuba.
(b) Any certificate signed by any officer of the Company or a trustee
of the Trust and delivered to the Underwriter or to counsel for the Underwriter
shall be deemed a representation and warranty by the Company to the Underwriter
as to the matters covered thereby.
3. Purchase, Sale and Delivery of Preferred Securities; Advisory Fee.
------------------------------------------------------------------
On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Trust agrees to issue and sell ________ Preferred Securities to the Underwriter,
and the Underwriter agrees to purchase the Preferred Securities from the Trust
at a purchase price per Preferred Security of $25.00 per share. As compensation
to the Underwriter for its commitments hereunder and in view of the fact that
the proceeds of the sale of the Preferred Securities (together with the entire
proceeds from the sale by the Trust to the Company of the Common Securities)
will be used to purchase the Junior Subordinated Debentures, the Company hereby
agrees to pay at the Closing Date to the Underwriter, a commission per Preferred
Security equal in amount to _________ percent (___%) of the gross proceeds from
the sale of the Preferred Securities to be delivered by the Trust hereunder at
the Closing Date.
The Preferred Securities will be delivered by the Company to the
Underwriter against payment of the purchase price therefor by certified or
official bank check or wire transfer of same day funds payable to the Company at
the offices of Piper Jaffray Inc., Piper Jaffray Tower, 222 South Ninth Street,
Minneapolis, Minnesota, or such other location as may be mutually acceptable, at
9:00 a.m. Central time on the third (or if the Preferred Securities are priced,
as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m.
Eastern time, on the fourth) full business day following the date hereof, or at
such other time and date as the Underwriter and the Company determine pursuant
to Rule 15c6-1(a) under the Exchange Act, such time and date of delivery being
herein referred to as the "Closing Date." Delivery of the Preferred Securities
may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Underwriter. Certificates
representing the Preferred Securities, in definitive form (unless otherwise
requested by the Underwriter) and in such denominations and
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<PAGE>
registered in such names as the Underwriter may request upon at least two
business days' prior notice to the Company shall be prepared and will be made
available for checking and packaging, not later than 10:30 a.m., Central time,
on the business day next preceding the Closing Date at the offices of Piper
Jaffray Inc., Piper Jaffray Tower, 222 South Ninth Street, Minneapolis,
Minnesota, or such other location as may be mutually acceptable.
Nothing herein contained shall constitute the Underwriter an
unincorporated association or partner with either or both Offerors.
4. Covenants.
---------
(a) The Offerors jointly and severally covenant and
agree with the Underwriter as follows:
(i) If the Registration Statement has not already been declared
effective by the Commission, the Company will use its best efforts to cause
the Registration Statement and any post-effective amendments thereto to
become effective as promptly as possible; the Company will notify the
Underwriter promptly, and with respect to (ii) through (iv) below shall
confirm the notice in writing, (i) of the time when the Registration
Statement or any post-effective amendment to the Registration Statement has
become effective, (ii) any supplement to the Prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) has been
filed, (iii) of the receipt of any comments from the Commission, and (iv) of
any request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or additional information; if the
Company has elected to rely on Rule 430A of the Rules and Regulations, the
Company will prepare and file a Prospectus (or term sheet within the meaning
of Rule 434 of the Rules and Regulations) containing the information omitted
therefrom pursuant to Rule 430A of the Rules and Regulations with the
Commission within the time period required by, and otherwise in accordance
with the provisions of, Rules 424(b), 430A and 434, if applicable, of the
Rules and Regulations; if the Company has elected to rely upon Rule 462(b) of
the Rules and Regulations to increase the size of the offering registered
under the Act, the Company will prepare and file a registration statement
with respect to such increase with the Commission within the time period
required by, and otherwise in accordance with the provisions of, Rule 462(b);
the Offerors will prepare and file with the Commission, promptly upon the
Underwriter's request, any amendments or supplements to the Registration
Statement or Prospectus (including any term sheet within the meaning of Rule
434 of the Rules and Regulations) that, in the Underwriter's opinion, may be
necessary or advisable in connection with the Underwriter's distribution of
the Preferred Securities; and the Offerors will not file any amendment or
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<PAGE>
supplement to the Registration Statement or Prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) to which
the Underwriter shall reasonably object by notice to the Company after having
been furnished a copy a reasonable time prior to the filing.
(ii) The Offerors will advise the Underwriter, promptly after they
shall receive notice or obtain knowledge thereof, and shall confirm such
notice, in writing, of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, of the suspension
of the qualification of the Preferred Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any
such purpose; and the Offerors will promptly use their best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if such a
stop order should be issued.
(iii) Within the time during which a prospectus (including
any term sheet within the meaning of Rule 434 of the Rules and Regulations)
relating to the Preferred Securities is required to be delivered under the
Act, the Offerors will comply as far as it is able with all requirements
imposed upon it by the Act, as now and hereafter amended, and by the Rules
and Regulations, as from time to time in force, so far as necessary to permit
the continuance of sales of or dealings in the Preferred Securities as
contemplated by the provisions hereof and the Prospectus. If during such
period any event occurs as a result of which the Prospectus would include an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
then existing, not misleading, or if during such period it is necessary, in
the written opinion of counsel to the Underwriter, to amend the Registration
Statement or supplement the Prospectus to comply with the Act, the Offerors
will promptly notify the Underwriter and will amend the Registration
Statement or supplement the Prospectus (in form and substance reasonably
satisfactory to counsel for the Underwriter and at the expense of the
Company) so as to correct such statement or omission or effect such
compliance.
(iv) The Offerors will use their best efforts to qualify the Preferred
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions of the United States as you may reasonably
designate; provided that no such qualification shall be required in any
jurisdiction where, as a result thereof, the Offerors would become subject to
service of general process or to qualification to do business as a foreign
corporation. In each jurisdiction in which the Preferred Securities have been
so qualified, the Offerors will file such statements and reports as may be
required to be filed by it by the laws of such jurisdiction to continue such
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<PAGE>
qualification in effect for a period of not less than one year from
the effective date of the Registration Statement.
(v) The Offerors will furnish to the Underwriter signed copies of the
Registration Statement as originally filed (including all exhibits filed
therewith), a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits), each of the
Preliminary Prospectuses, the Prospectus, and all amendments and supplements
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations) to such documents, in each case as soon as available and in such
quantities as the Underwriter may from time to time reasonably request.
(vi) For so long as any of the Preferred Securities remain
outstanding, the Company will furnish to the Underwriter, copies of all
annual reports, quarterly reports and current reports filed by the Company
with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms
as may be designated by the Commission, and of such other documents, proxy
statements, reports and information as are furnished by the Company to its
stockholders generally.
(vii) The Company will make generally available to its security
holders and holders of the Preferred Securities as soon as practicable, but
in any event not later than 18 months after the "effective date of the
Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), an earnings statement (which need not be audited) complying
with Section 11(a) of the Act and the Rules and Regulations (including at the
option of the Company Rule 158).
(viii) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming
effective under the provisions of Section 8(a) hereof or is terminated, will
pay or cause to be paid all costs and expenses incident to the performance of
the obligations of each Offeror hereunder, including, without limitation, (A)
all expenses (including transfer taxes allocated to the respective
transferees) incurred in connection with the issuance, transfer and delivery
to the Underwriter of the Preferred Securities, (B) all expenses and fees
(including, without limitation, fees and expenses of each Offeror's
accountants and counsel but, except as otherwise provided below, not
including fees of the Underwriter's counsel) in connection with the
preparation printing, filing, delivery, and shipping of the Registration
Statement (including the financial statements therein and all amendments,
schedules, and exhibits thereto), the Preferred Securities, each Preliminary
Prospectus, the Prospectus, and any amendment thereof or supplement thereto,
and the printing, delivery, and shipping of this Agreement and other
underwriting documents, including
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<PAGE>
Blue Sky Memoranda and any legal investment survey requested by the
Underwriter, and the Indenture, (C) all filing fees and fees and
disbursements of the Underwriter's counsel incurred in connection with the
qualification of the Preferred Securities for offering and sale by the
Underwriter or by dealers under the securities or blue sky laws of the states
and other jurisdictions which the Underwriter shall designate, (D) the fees
and expenses of any transfer agent or registrar, (E) the filing fees incident
to any required review by the National Association of Preferred Securities
Dealers, Inc. ("NASD") of the terms of the sale of the Preferred Securities,
(E) listing fees, if any, (G) the fees and expenses of the Debenture Trustee,
including the fees and disbursements of counsel for the Debenture Trustee in
connection with the Indenture and Junior Subordinated Debentures, (H) the
fees and expenses of the Property Trustee, including the fees and
disbursements of counsel for the Property Trustee in connection with the
Trust Agreement and the Certificate of Trust, (I) rating agency fees, if any,
and (J) all other costs and expenses incident to the performance of the
Offerors' obligations hereunder that are not otherwise specifically provided
for herein. If the sale of the Preferred Securities provided for herein is
not consummated by reason of action by either Offeror pursuant to Section
8(a) hereof which prevents this Agreement from becoming effective, or by
reason of any failure, refusal or inability on the part of either Offeror to
perform any agreement on its part to be performed, or because any other
condition of the Underwriter's obligations hereunder required to be fulfilled
by either Offeror is not fulfilled, the Company will reimburse the
Underwriter for all out-of-pocket disbursements (including, without
limitation, fees and disbursements of counsel for the Underwriter) incurred
by the Underwriter in connection with its investigation, preparing to market
and marketing the Preferred Securities or in contemplation of performing
their obligations hereunder. Neither Offeror shall in any event be liable to
the Underwriter for loss of anticipated profits from the transactions covered
by this Agreement.
(ix) The Offerors will apply the net proceeds from the sale of the
Preferred Securities to be sold by the Trust hereunder for the purposes set
forth in the Prospectus under the caption "Use of Proceeds" and will file
such reports with the Commission with respect to the sale of the Preferred
Securities and the application of the proceeds therefrom as may be required
in accordance with Rule 463 of the Rules and Regulations.
(x) The Offerors have not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or
manipulation of the price of any security of either Offeror to facilitate the
sale or resale of the Preferred Securities, and has not effected any sales of
Common Stock which
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are required to be disclosed in response to Item 701 of Regulation S-K under
the Act which have not been so disclosed in the Registration Statement.
(xi) Neither Offeror will incur any liability for any finder's or
broker's fee or agent's commission in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xii) The Offerors will inform the Florida Department of Banking and
Finance at any time prior to the consummation of the distribution of the
Preferred Securities by the Underwriter if it commences engaging in business
with the government of Cuba or with any person or affiliate located in Cuba.
Such information will be provided within 90 days after the commencement
thereof or after a change occurs with respect to previously reported
information.
(xii) The Offerors will not claim the benefit of any usury laws
against any holder of the Preferred Securities.
5. Conditions of Underwriter's Obligations. The obligations of the
---------------------------------------
Underwriter hereunder are subject to the accuracy, as of the date hereof and at
the Closing Date (as if made at the Closing Date), of and compliance with all
representations, warranties and agreements of the Offerors contained herein, to
the performance by each Offeror of its obligations hereunder and to the
following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 p.m., Central time, on the date of this Agreement, or such later time
and date as the Underwriter shall approve and all filings required by Rules 424,
430A and 434 of the Rules and Regulations shall have been timely made; no stop
order suspending the effectiveness of the Registration Statement or any
amendment thereof shall have been issued and no proceedings for the issuance of
such an order shall have been initiated or threatened; and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to the
Underwriter's reasonable satisfaction.
(b) The Underwriter shall not have advised the Company or the Trust
that the Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations), contains an untrue statement of fact which, in the
Underwriter's reasonable opinion, is material, or omits to state a fact which,
in the Underwriter's opinion, is material and is required to be stated therein
or necessary
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<PAGE>
to make the statements therein not misleading, and such misstatement or omission
has not been corrected.
(c) Except as contemplated in the Prospectus or the Registration
Statement, subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, none of the Trust or the
Company shall have incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, or declared or paid any
dividends or made any distribution of any kind with respect to its capital
stock, except regular quarterly cash dividends declared by the Board of
Directors of the Company and paid by the Company in the ordinary course of
business in accordance with the dividend policy established by the Board of
Directors; and there shall not have been any change in the capital stock (other
than a change in the number of outstanding shares of Common Stock due to the
issuance of shares pursuant to any employee benefit plan of, or as compensation
to the directors of, the Company and the Bank), or any material change in the
short-term or long-term debt, including capitalized lease obligations (except
such increases as are incurred in the ordinary course of business and are not
material to the condition, financial or otherwise, of the Company and its
subsidiaries considered as a whole), of the Company or its subsidiaries, or any
issuance of options, warrants, convertible securities or other rights to
purchase the capital stock of the Company or any of its subsidiaries (except for
securities granted pursuant to the Company's employee benefit plans), or any
material adverse change or any development involving a prospective material
adverse change in condition (financial or otherwise), financial results,
business affairs or business prospects of the Trust or the Company and its
subsidiaries, taken as a whole, that, in the Underwriter's judgment, makes it
impractical or inadvisable to offer or deliver the Preferred Securities on the
terms and in the manner contemplated in the Prospectus.
(d) On the Closing Date, there shall have been furnished to the
Underwriter the opinion of Housley Kantarian and Bronstein, P.C., counsel for
the Company, dated the Closing Date and addressed to the Underwriter, to the
effect that:
(i) Each of the Company and each of its significant Subsidiaries has
been duly organized and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation or organization. The
Company is duly registered as a savings and loan holding company under
Section 10 of the Home Owner's Act, as amended ("HOLA"). The Bank has been
duly organized and is validly existing as a federal savings bank chartered
under HOLA. Each of the Company and its Significant Subsidiaries has the
corporate power and authority to own its properties and conduct its business
as currently being carried on and as described in the Registration Statement
and Prospectus, and is duly qualified to do business as a foreign corporation
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and is in good standing in each jurisdiction in which its ownership or lease
of property or the conduct of its business makes such qualification necessary
and in which the failure to so qualify would have a material adverse effect
upon the business, condition (financial or otherwise) or properties of the
Company and its Significant Subsidiaries, taken as a whole.
(ii) The statements in the Prospectus under the caption "Description
of the Preferred Securities", "Description of Junior Subordinated
Debentures", "Description of Guarantee", and "Relationship among the
Preferred Securities, the Junior Subordinated Debentures and the Guarantee",
insofar as such statements constitute matters of law applicable to the
Offerors or summaries of documents, fairly present the information required
to be included therein in all material respects. All of the issued and
outstanding shares of the capital stock of the Company is set forth in the
Prospectus under the caption "Capitalization" and have been duly authorized
and validly issued and are fully paid and nonassessable. All of the
outstanding capital stock of the Bank is owned by the Company, and such
capital stock is not subject to any security interest, other encumbrance or
adverse claim
(iii) All of the issued and outstanding shares of capital stock of
each Significant Subsidiary have been duly and validly authorized and issued
and are fully paid and nonassessable. All of such shares of the Significant
Subsidiaries, other than the Bank, are owned free and clear of all perfected
and, to the best of such counsel's knowledge, other liens, encumbrances,
equities, claims, security interests, voting trusts or other defects of title
whatsoever.
(iv) All of the issued and outstanding Common Securities of the Trust
are owned by the Company, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equitable right.
(v) Each of the Trust Agreement, the Indenture and the Guarantee
Agreement has been duly qualified under the Trust Indenture Act.
(vi) The Junior Subordinated Debentures are in the form contemplated
by the Indenture, have been duly authorized, executed and delivered by the
Company and, when authenticated by the Debenture Trustee in the manner
provided for in the Indenture and delivered against payment therefor, will
constitute valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the rights of creditors generally and subject to
general principles of equity.
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(vii) The Junior Subordinated Debentures are subordinate and junior in
right of payment to all Senior Debt (as defined in the Indenture) of the
Company.
(viii) Neither the Company nor the Trust is an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the 1940 Act.
(ix) To the best of such counsel's knowledge and information after due
inquiry, the Trust is not required to be authorized to do business in any
other jurisdiction and the Trust is not a party to or otherwise bound by any
agreement other than those described in the Prospectus.
(x) Each of the Trust Agreement, the Guarantee Agreement, the
Indenture and the Expense Agreement has been duly authorized, executed and
delivered by the Company and the Administrative Trustees, as the case may be,
and will constitute valid and binding obligations of the Company and the
Administrative Trustees, as the case may be, enforceable against the Company
and the Administrative Trustees, as the case may be, in accordance with their
terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the rights
of creditors generally and subject to general principles of equity.
(xi) This Agreement has been duly authorized, executed and delivered
by the Company.
(xii) The Registration Statement has become effective under the Act
and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for that purpose has been instituted or, to the knowledge of such counsel,
threatened by the Commission.
(xiii) The descriptions in the Registration Statement and Prospectus
of statutes, legal and governmental proceedings or rulings, contracts and
other documents are accurate in all material respects and fairly present the
information required to be shown; and such counsel does not know of any
statutes or legal or governmental proceedings required to be described in the
Prospectus that are not described as required, or of any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus or included as exhibits to the Registration Statement
that are not described or included as required.
(xiv) The Bank is a member of the Federal Home Loan Bank of Topeka and
exit is an institution with deposit accounts insured by the FDIC to the
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full extent allowed by law and, to our actual knowledge, no proceedings for
the termination or revocation of such insurance are pending or threatened.
(xv) To our actual knowledge, there is no action, suit or proceeding
before or by any federal court or federal governmental agency or body,
domestic or foreign, or any arbitrator, now pending or threatened in writing
against or affecting the Company, the Trust or any Significant Subsidiary
which is required to be disclosed in the Registration Statement (other than
as disclosed therein), and other than those which individually or in the
aggregate would not have a material adverse effect on the Company or which
would not materially and adversely affect the consummation of this Agreement.
(xvi) To the best of such counsel's knowledge, neither the Company nor
any of the Significant Subsidiaries is in violation of its articles of
incorporation, charter or bylaws; the Trust is not in violation of its Trust
Agreement or its Certificate of Trust or other governing documents; none of
the Company, the Trust or any Significant Subsidiary is in default under any
material contract, license, indenture, mortgage, loan agreement, note, lease
or other agreement or instrument to which the Company, the Trust or any such
Significant Subsidiary is a party or by which it is bound, or to which any of
the property or assets of the Company, the Trust or any Significant
Subsidiary is subject, which violation or default would have a material
adverse effect on the Company.
(xvii) The documents incorporated by reference in the Registration
Statement and the Prospectus or any further amendment or supplement thereto
made by the Company (other than the financial statements, other financial
data and related schedules therein, as to which such counsel need express no
opinion), when they were filed with the Commission, complied as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
(xviii) The execution, delivery and performance of this Agreement, the
Indenture, the Trust Agreement, the Guarantee Agreement, the Preferred
Securities, the Common Securities, the Junior Subordinated Debentures and the
Guarantee Agreement and the consummation of the transactions herein or
therein contemplated will not conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any material property or assets of the Company, the Trust or
any Significant Subsidiary pursuant to (A) any statute, rule or regulation of
the United States or the State of Nebraska, or any statute, contract,
license, indenture, mortgage, loan agreement, note, lease or other agreement
or
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instrument known to us or to which the Company, the Trust or any Significant
Subsidiary is bound or to which any of the material property or assets of the
Company, the Trust or any such Significant Subsidiary is subject, or (B) the
charter or bylaws of the Company or any Significant Subsidiary, or the
Trust's Certificate of Trust, or (C) any applicable law, administrative
regulation or administrative or court decree known to such counsel the
violation of which would have a material adverse effect on the Company and
its Significant Subsidiaries, taken as a whole; and no consent, approval,
authorization or order of, or filing with, any court or governmental agency
or body is required for the execution, delivery and performance of this
Agreement, the Indenture, the Trust Agreement, the Guarantee Agreement, the
Expense Agreement, the Preferred Securities, the Junior Subordinated
Debentures, or the Guarantee or for the consummation of the transactions
contemplated hereby or thereby, including the issuance or sale of the Junior
Subordinated Debentures by the Company and the Common Securities and
Preferred Securities by the Trust, except (a) such as may be required under
the Act, which has been obtained, or under state securities or blue sky laws,
and (b) the qualification of the Trust Agreement, the Guarantee Agreement and
the Indenture under the Trust Indenture Act and the rules and regulations
thereunder.
(xix) The Registration Statement and the Prospectus, and any amendment
thereof or supplement thereto (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations), comply as to form in all material
respects with the requirements of the Act and the Rules and Regulations; and
on the basis of conferences with officers of the Company, examination of
documents referred to in the Registration Statement and Prospectus and such
other procedures as such counsel deemed appropriate, nothing has come to the
attention of such counsel that causes such counsel to believe that the
Registration Statement or any amendment thereof, at the time such
Registration Statement became effective and as of the Closing Date (including
any Registration Statement filed under Rule 462(b) of the Rules and
Regulations), contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus (as of their
respective dates and as of the Closing Date), as amended or supplemented,
includes any untrue statement of material fact or omits to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; it being understood that such
counsel need express no opinion as to the financial statements or other
financial data included in any of the documents mentioned in this clause.
In rendering such opinion such counsel may rely (i) as to matters of
law other than Nebraska and federal law, upon the opinion or opinions of local
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counsel provided that the extent of such reliance is specified in such opinion
and that such counsel shall state that such opinion or opinions of local counsel
are satisfactory to them and that they believe they and the Underwriter are
justified in relying thereon and (ii) as to matters of fact, to the extent such
counsel deems reasonable upon certificates of officers of the Company and its
subsidiaries and of public officials provided that the extent of such reliance
is specified in such opinion.
(e) On the Closing Date, there shall have been furnished to the
Underwriter the opinion of Deloitte & Touche LLP, tax advisor to the Offerors,
dated the Closing Date and addressed to the Underwriter, to the effect that:
(i) The statements set forth in the Prospectus under the caption
"Certain Federal Income Tax Consequences" constitute a fair and accurate
summary of the matters addressed therein, based upon current law and the
assumptions stated or referred to therein.
(ii) Under current law, 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; accordingly, for United States federal income tax
purposes each beneficial owner of Preferred Securities will be treated as
owning an undivided beneficial interest in the Junior Subordinated
Debentures, and stated interest on the Junior Subordinated Debentures
generally will be included in income by a holder of Preferred Securities at
the time such interest income is paid or accrued in accordance with such
holder's regular method of tax accounting.
(iii) For federal income tax purposes, (a) the Junior Subordinated
Debentures will constitute indebtedness of the Company and (b) the interest
on the Junior Subordinated Debentures will be deductible by the Company on an
economic accrual basis in accordance with Section 163(e) of the Internal
Revenue Code of 1986, as amended, and Treasury Regulation Section 1.163-7.
(f) The favorable opinion, dated as of Closing Date, of _____________,
counsel to Harris Trust and Savings Bank, as Property Trustee under the Trust
Agreement, Debenture Trustee under the Indenture, and Guarantee Trustee under
the Guarantee Agreement, in form and substance satisfactory to counsel for
the Underwriter, to the effect that:
(i) Harris Trust and Savings Bank is duly incorporated and is validly
existing in good standing as a banking corporation under the laws of the
State of Illinois.
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(ii) Harris Trust and Savings Bank has the power and authority to
execute, deliver and perform its obligations under the Trust Agreement, the
Indenture and the Guarantee Agreement.
(iii) Each of the Trust Agreement, the Indenture and the Guarantee
Agreement have been duly authorized, executed and delivered by Harris Trust
and Savings Bank and constitutes a legal, valid and binding obligation of
Harris Trust and Savings Bank, enforceable against Harris Trust and Savings
Bank, in accordance with its terms.
(iv) The execution, delivery and performance by Harris Trust and
Savings Bank of the Trust Agreement, the Indenture and the Guarantee
Agreement do not conflict with or constitute a breach of the charter or by-
laws of Harris Trust and Savings Bank.
(v) No consent, approval or authorization of, or registration with or
notice to, any governmental authority or agency of the State of Illinois or
the United States of America governing the banking or trust powers of Harris
Trust and Savings Bank is required for the execution, delivery or performance
by the Harris Trust and Savings Bank of the Trust Agreement, the Indenture
and the Guarantee Agreement.
(g) The favorable opinion, dated as of Closing Date, of Richards,
Layton & Finger, as special Delaware counsel for the Offerors, in form and
substance satisfactory to counsel for the Underwriter, to the effect that:
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act, and all filings required
as of the date hereof under the Delaware Act with respect to the creation and
valid existence of the Trust as a business trust have been made.
(ii) Under the Trust Agreement and the Delaware Act, the Trust has the
trust power and authority to own property and to conduct its business, all as
described in the Prospectus.
(iii) The Trust Agreement constitutes a valid and binding obligation
of the Company and each of the Property Trustee and the Administrative
Trustees, and is enforceable against the Company and each of the Property
Trustee and the Administrative Trustees, in accordance with its terms.
(iv) Under the Trust Agreement and the Delaware Act, the Trust has the
trust power and authority (i) to execute and deliver, and to perform its
obligations under, this Agreement, and (ii) to issue, and to perform its
obligations under, the Preferred Securities and the Common Securities.
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(v) Under the Trust Agreement and the Delaware Act, the execution and
delivery by the Trust of this Agreement, and the performance by the Trust of
its obligations under this Agreement, have been duly authorized by all
necessary trust action on the part of the Trust.
(vi) Under the Delaware Act, the certificate attached to the Trust
Agreement as Exhibit E is an appropriate form of certificate to evidence
ownership of the Preferred Securities. The Preferred Securities and the
Common Securities have been duly authorized by the Trust Agreement and are
duly and validly issued and, subject to the qualifications hereinafter
expressed in this paragraph (vi), fully paid and non-assessable undivided
beneficial interests in the assets of the Trust. The respective holders of
the Preferred Securities and the Common Securities, 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
respective holders of the Preferred Securities and the Common Securities may
be obligated, pursuant to the Trust Agreement, to make certain payments under
the Trust Agreement.
(vii) Under the Trust Agreement and the Delaware Act, the issuance of
the Preferred Securities and the Common Securities is not subject to
preemptive or similar rights.
(viii) The issuance and sale by the Trust of the Preferred Securities
and the Common Securities, the purchase by the Trust of the Junior
Subordinated Debentures, the execution, delivery and performance by the Trust
of this Agreement and the Guarantee Agreement, the consummation by the Trust
of the transactions contemplated by this Agreement and compliance by the
Trust with its obligations under this Agreement do not violate (a) any of the
provisions of the Certificate of Trust or the Trust Agreement, or (b) any
applicable Delaware law or Delaware administrative regulation.
(h) On the Closing Date, there shall have been furnished such opinion
or opinions from Dorsey & Whitney LLP, counsel for the Underwriter, dated the
Closing Date and addressed to the Underwriter, with respect to the formation of
the Company, the validity of the Preferred Securities, the Indenture, the
Guarantee Agreement, this Agreement, the Registration Statement, the Prospectus
and other related matters as the Underwriter reasonably may request, and such
counsel shall have received such papers and information as they request to
enable them to pass upon such matters.
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(i) On the Closing Date the Underwriter shall have received a letter
from Deloitte and Touche LLP, independent certified public accountants, dated
the Closing Date and addressed to the Underwriter, in form and substance
satisfactory to the Underwriter, confirming that they are independent public
accountants within the meaning of the Act and the Rules and Regulations and
are in compliance with the applicable requirements relating to the
qualifications of accountants under Rule 241 of Regulation S-X of the
Commission, that the Trust is and will be treated as a consolidated
Subsidiary of the Company pursuant to generally accepted accounting
principles, and stating, as of the date of such letter (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a
date not more than five days prior to the date of such letter), the
conclusions and findings of each said firm with respect to the financial
information and other matters covered by its letter delivered to the
Underwriter concurrently with the execution of this Agreement, and the effect
of the letter so to be delivered on the Closing Date shall be to confirm the
conclusions and findings set forth in such prior letter.
(j) On the Closing Date, there shall have been furnished to the
Underwriter, a certificate, dated the Closing Date and addressed to the
Underwriter, signed by the President or the Chief Executive Officer and by a
Vice President, Secretary and Treasurer of the Company, to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, in all material respects, as if made at and
as of the Closing Date, and the Offerors have complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) No stop order or other order suspending the effectiveness of the
Registration Statement or any amendment thereof or the qualification of the
Preferred Securities for offering or sale has been issued, and no proceeding
for that purpose has been instituted or, to the best of their knowledge, is
contemplated by the Commission or any state or regulatory body: and
(iii) The signers of said certificate have carefully examined the
Registration Statement and the Prospectus, and any amendments thereof or
supplements thereto (including any term sheet within the meaning of Rule 434
of the Rules and Regulations), and (A) such documents contain all statements
and information required to be included therein, the Registration Statement,
or any amendment thereof, does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and the
Prospectus, as amended or supplemented, does not include any untrue
statement of material fact or omit to state a material fact necessary to
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make the statements therein, in light of the circumstances under which they
were made, not misleading, (B) since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an
amended or supplemented prospectus which has not been so set forth, (C)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, neither the Trust, the Company
nor any of its Subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, not in the ordinary course of business, or declared or paid
any dividends or made any distribution of any kind with respect to its
capital stock (except regular quarterly cash dividends declared by the Board
of Directors of the Company and paid by the Company in the ordinary course
of business in accordance with the dividend policy established by the Board
of Directors, and there has not been any change in the capital stock of the
Company), and except as disclosed in the Prospectus, there has not been any
change in the capital stock (other than a change in the number of
outstanding shares of Common Stock due to the issuance of shares upon the
exercise of outstanding stock options), or any material change in the short-
term or long-term debt (including capitalized lease obligations) of the
Company, or any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock of the Company, (except for
securities granted pursuant to or shares of common stock issued pursuant to
the employee benefit plans of, or as compensation to the directors of, the
Company and the Bank), or any material adverse change, in condition
(financial or otherwise) of the Company, or in the financial results,
business affairs or business prospects of the Company, and the Company has
not sustained any material loss or damage to its property or material
interference with its business whether or not any of the foregoing is
insured, and (D) except as stated in the Registration Statement and the
Prospectus, there is not pending, or, to the knowledge of the Company or the
Trust, threatened or contemplated, any action, suit or proceeding to which
the Trust, the Company or any of its Subsidiaries is a party before or by
any court or governmental agency, authority or body, or any arbitrator,
which might result in any material adverse change in the condition
(financial or otherwise) of the Company, or in the financial results,
business affairs or business prospects of the Company.
(k) On the Closing Date, there shall have been furnished to the
Underwriter, a certificate, dated the Closing Date and addressed to the
Underwriter, signed by the Administrative Trustees, to the effect that:
(i) The representations and warranties of the Trust in this Agreement
are true and correct, in all material respects, as if made at and as of the
Closing Date, and the Trust has complied with all the agreements and
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satisfied all the conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) No stop order or other order suspending the effectiveness of the
Registration Statement or any amendment thereof or the qualification of the
Preferred Securities for offering or sale has been issued, and no proceeding
for that purpose has been instituted or, to the best of their knowledge, is
contemplated by the Commission or any state or regulatory body; and
(iii) The signers of said certificate have carefully examined the
Registration Statement and the Prospectus, and any amendments thereof or
supplements thereto (including any term sheet within the meaning of Rule 434
of the Rules and Regulations), and (a) such documents contain all statements
and information required to be included therein, the Registration Statement,
or any amendment thereof, does not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Prospectus,
as amended or supplemented, does not include any untrue statement of material
fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, (B) since the effective date of the Registration Statement, there
has occurred no event required to be set forth in an amended or supplemented
prospectus which has not been so set forth, (C) subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, the Trust has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions,
not in the ordinary course of business, or declared or paid any dividends or
made any distribution of any kind with respect to its preferred securities,
and except as disclosed in the Prospectus, there has not been any change in
the preferred securities, or any material change in the short-term or long-
term debt, or any issuance of options, warrants, convertible securities or
other rights to purchase the preferred securities, of the Trust or any
material adverse change or any development involving a prospective material
adverse change (whether or not arising in the ordinary course of business),
in condition (financial or otherwise) of the Trust, or in the financial
results, business affairs or business prospects of the Trust, and the Trust
has not sustained any material loss or damage to its property or material
interference with its business, whether or not any of the foregoing is
insured, and (D) except as stated in the Registration Statement and the
Prospectus, there is not pending, or, to the knowledge of the Trust,
threatened or contemplated, any action, suit or proceeding to which the Trust
is a party before or by any court or governmental agency, authority or body,
or any arbitrator, which might result in any material adverse change in the
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condition (financial or otherwise), business, prospects or results of
operations of the Trust.
(l) The Company shall have furnished to the Underwriter and to the
Underwriter's counsel such additional documents, certificates and evidence as
the Underwriter or they may have reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to the Underwriter and the Underwriter's counsel.
6. Indemnification and Contribution.
---------------------------------
(a) The Offerors agree to indemnify and hold harmless the Underwriter
against any losses, claims, damages or liabilities to which the Underwriter may
become subject, under the Act or otherwise (including in settlement of any
litigation if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
including the information deemed to be a part of the Registration Statement at
the time of effectiveness pursuant to Rules 430A and 434(d) of the Rules and
Regulations, if applicable, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations), or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Underwriter for any legal or other expenses reasonably
incurred by it in connection with investigating or defending against such loss,
claim, damage, liability or action; provided, however, that the Offerors shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Offerors by or on behalf of the Underwriter
specifically for use in the preparation thereof; and provided further that the
Offerors shall not be liable to the Underwriter under the indemnity agreement in
this subsection (a) with respect to any Preliminary Prospectus to the extent
that any such loss, claim, damage or liability of the Underwriter results from
the fact that the Underwriter sold Preferred Securities to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus or a copy of the Prospectus as then amended or
supplemented in any case where such delivery is required by the Act if the
Offerors have previously furnished copies thereof to the Underwriter and the
loss, claim, damage or liability of the Underwriter results from an untrue
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statement or omission of a material fact contained in the Preliminary Prospectus
or the Prospectus, as the case may be, which was corrected in the Prospectus (or
the Prospectus as amended or supplemented).
(b) The Underwriter will indemnify and hold harmless the Company and
the Trust against any losses, claims, damages or liabilities to which the
Company and the Trust may become subject, under the Act or otherwise (including
in settlement of any litigation, if such settlement is effected with the
Underwriter's written consent), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations), or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Underwriter for use
in the preparation thereof, and will reimburse the Company and the Trust for any
legal or other expenses reasonably incurred by the Company and the Trust in
connection with investigating or defending against any such loss, claim, damage,
liability or action.
(c) The Company agrees to indemnify the Trust against all loss,
liability, claim damage and expense whatsoever, which may become due from the
Trust under subsection (a).
(d) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party. In case any such action shall be
brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense
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thereof other than reasonable costs of investigation; provided, however, that
if, in the sole judgment of the indemnified party, it is advisable for the
indemnified party to be represented by separate counsel other than counsel for
the indemnified party, the indemnified party shall have the right to employ a
single counsel to represent the indemnified party, in which event the reasonable
fees and expenses of such separate counsel shall be borne by the indemnifying
party. An indemnifying party shall not be obligated under any settlement
agreement relating to any action under this Section 6 to which it has not agreed
in writing.
(e) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company or the Trust on the one hand and the Underwriter on the other
from the offering of the Preferred Securities 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 and the Trust on the one hand
and the Underwriter on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Trust on the one hand and the Underwriter on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriter, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Trust or the Underwriter and the parties' relevant intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company, the Trust and the Underwriter agree
that it would not be just and equitable if contributions pursuant to this
subsection (e) were to be determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to in the first sentence of this subsection (e). The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (e) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending against any action or claim
which is the subject of this subsection (e). Notwithstanding the provisions of
this subsection (e), the Underwriter shall not be required to contribute any
amount in excess of the amount by which the total price at which the Preferred
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any
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damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11
(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(f) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company and the Trust may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls the Underwriter within the meaning of the Act; and the obligations of
the Underwriter under this Section 6 shall be in addition to any liability that
the Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company (including any person who, with his
or her consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company or
the Trust within the meaning of the Act.
7. Representations and Agreements to Survive Delivery.
--------------------------------------------------
All representations, warranties, and agreements of the Offerors herein or in
certificates delivered pursuant hereto, and the agreements of the Offerors and
the Underwriter contained in Section 6 hereof shall remain operative and in full
force and effect regardless of any investigation made by the Underwriter or on
the Underwriter's behalf or any controlling person thereof, or the Company or
any of its officers, directors, or controlling persons or the Trust or any if
its trustees, or controlling persons and shall survive delivery of, and payment
for, the Preferred Securities to and by the Underwriter hereunder.
8. Effective Date of this Agreement and Termination.
------------------------------------------------
(a) This Agreement shall become effective at 10:00 a.m., Central time,
on the first full business day following the effective date of the Registration
Statement, or at such earlier time after the effective time of the Registration
Statement as the Underwriter in its discretion shall first release the Preferred
Securities for sale to the public; provided, that if the Registration Statement
is effective at the time this Agreement is executed, this Agreement shall become
effective at such time as the Underwriter in its discretion shall first release
the Preferred Securities for sale to the public. For the purpose of this
Section, the Preferred Securities shall be deemed to have been released for sale
to the public upon release by the Underwriter of the publication of a newspaper
advertisement relating thereto or upon release by the Underwriter of telexes
offering the Preferred Securities for sale to securities dealers, whichever
shall first occur. By giving notice as hereinafter specified before the time
this Agreement becomes effective, the Underwriter, the Trust or the Company may
prevent this Agreement from
-33-
<PAGE>
becoming effective without liability of any party to any other party, except
that the provisions of Section 4(a)(viii) and Section 6 hereof shall at all
times be effective.
(b) The Underwriter, shall have the right to terminate this Agreement,
by notice as hereinafter specified, at any time at or prior to the Closing Date
(i) if there has been, since the date of this Agreement or since the respective
dates as of which information is given in the Registration Statement, any
material adverse change in the condition (financial or otherwise) of the
Company, or in the financial results, business affairs or business prospects of
the Company, whether or not arising in the ordinary course of business, or (ii)
if either Offeror shall have failed, refused or been unable, at or prior to such
Closing Date, to perform any agreement on its part to be performed hereunder, or
(iii) if any other condition of the Underwriter's obligations hereunder required
to be fulfilled by the Offerors is not fulfilled, or (iv) if there has occurred
any material adverse change in the financial markets in the United States or any
outbreak or the escalation of major hostilities involving the United States or
the declaration by the United States of a national emergency, war, or other
calamity or crisis, the effect of which is such as to make it, in your
reasonable judgment, impracticable or inadvisable to market the Preferred
Securities or to enforce contracts for the sale of the Preferred Securities, or
(v) if trading in the Preferred Securities has been suspended by the Commission,
or if trading generally on either the American Stock Exchange or the New York
Stock Exchange has been suspended, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been required, by
either of said Exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal, New
York or Nebraska authorities. If this Agreement is terminated pursuant to this
Section 8(b), such termination shall be without liability of any party to any
other party except that the provisions of Section 4(n) and Section 6 hereof
shall at all times be effective.
(c) If the Underwriter elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section, the
Company shall be notified promptly by the Underwriter by telephone or telegram,
confirmed by letter. If the Trust or the Company elects to prevent this
Agreement from becoming effective, the Underwriter shall be notified by the
Trust or the Company by telephone or telegram, confirmed by letter.
9. Default by the Company. If the Trust shall fail at the Closing Date
----------------------
to sell and deliver the number of Preferred Securities which it is obligated to
sell hereunder or the Company fails to deliver the number of Junior Subordinated
Debentures required to be delivered pursuant to the Trust Agreement, then this
Agreement shall terminate without any liability on the part of any non-
defaulting party. No action taken pursuant to this Section shall relieve the
Trust or the Company so defaulting from liability, if any, in respect of such
default.
-34-
<PAGE>
10. Information Furnished by Underwriter. The statements
------------------------------------
set forth in the last paragraph of the cover page and under the caption
"Underwriting" in any Preliminary Prospectus and in the Prospectus constitute
the written information furnished by the Underwriter or on its behalf referred
to in Section 2 and Section 6 hereof.
11. Notices. Except as otherwise provided herein, all
-------
communications hereunder shall be in writing or by telegraph and, if to the
Underwriter, shall be mailed, telegraphed or delivered to Piper Jaffray Inc.,
Piper Jaffray Tower, 222 South Ninth Street, Minneapolis, Minnesota 55402; if to
the Company, shall be mailed, telegraphed or delivered to it at 2120 South 72nd
Street, Omaha, Nebraska 68124, Attention: Chief Executive Officer; if to the
Trust, shall be mailed, telegraphed or delivered to it c/o Commercial Federal
Corporation, 2120 South 72nd Street, Omaha, Nebraska 68124 Attention: Chief
Executive Officer. All notices given by telegram shall be promptly confirmed by
letter. Any party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new address for
such purpose.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure
----------------------------------------
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Preferred Securities
from the Underwriter.
13. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Minnesota.
[Signature Page Follows]
-35-
<PAGE>
Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the Company
and the Underwriter in accordance with its terms.
Very truly yours,
COMMERCIAL FEDERAL CORPORATION
By
---------------------
Its
-----------------
CFC PREFERRED TRUST
By
---------------------
Its
-----------------
Confirmed as of the date first
above mentioned.
PIPER JAFFRAY INC.
By
---------------------
Managing Director
-36-
<PAGE>
AMENDED AND RESTATED
TRUST AGREEMENT
among
COMMERCIAL FEDERAL CORPORATION, as Depositor,
HARRIS TRUST & SAVINGS BANK,
as Property Trustee,
WILMINGTON TRUST COMPANY
as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of ________ __, 1997
CFC PREFERRED TRUST
<PAGE>
CFC PREFERRED TRUST
Certain Sections of this Trust Agreement relating to Sections 310 through 318 of
the Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Trust Agreement
Act Section Act Section
- --------------- ---------------
<S> <C>
(S) 310 (a)(1) 8.7
(a)(2) 8.7
(a)(3) 8.9
(a)(4) 2.7(a)(ii)
(b) 8.8
(S) 311 (a) 8.13
(b) 8.13
(S) 312 (a) 5.7
(b) 5.7
(c) 5.7
(S) 313 (a) 8.14(a)
(a)(4) 8.14(b)
(b) 8.14(b)
(c) 10.8
(d) 8.14(c)
(S) 314 (a) 8.15
(b) Not Applicable
(c)(1) 8.16
(c)(2) 8.16
(c)(3) Not Applicable
(d) Not Applicable
(e) 1.1, 8.16
(S) 315 (a) 8.1(a), 8.3(a)
(b) 8.2, 10.8
(c) 8.1(a)
(d) 8.1, 8.3
(e) Not Applicable
(S) 316 (a) Not Applicable
(a)(1)(A) Not Applicable
(a)(1)(B) Not Applicable
(a)(2) Not Applicable
(b) 5.14
(c) 6.7
(S) 317 (a)(1) Not Applicable
(a)(2) Not Applicable
(b) 5.9
(S) 318 (a) 10.10
</TABLE>
- ------------
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Trust Agreement.
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of __________ __, 1997,
among (i) Commercial Federal Corporation, a Nebraska corporation (including any
successors or assigns, the "Depositor"), (ii) Harris Trust & Savings Bank, an
Illinois banking corporation, as property trustee, (in each such capacity, the
"Property Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), (iii) Wilmington Trust Company, a
Delaware banking corporation, as Delaware trustee (the "Delaware Trustee"), (iv)
William A. Fitzgerald, an individual, and James A. Laphen, an individual, each
of whose address is c/o Commercial Federal Corporation, 2120 South 72nd Street,
Omaha, Nebraska 68124 (each an "Administrative Trustee" and collectively the
"Administrative Trustees") (the Property Trustee, the Delaware Trustee and the
Administrative Trustees referred to collectively as the "Trustees") and (v) the
several Holders, as hereinafter defined.
Witnesseth
Whereas, the Depositor, the Property Trustee and the Delaware Trustee have
heretofore duly declared and established a business trust pursuant to the
Delaware Business Trust Act by the entering into that certain Trust Agreement,
dated as of January 30, 1997 (the "Original Trust Agreement"), and by the
execution and filing by the Administrative Trustee and the Delaware Trustee with
the Secretary of State of the State of Delaware of the Certificate of Trust,
filed on January 30, 1997, attached as Exhibit A; and
Whereas, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities by the Trust to
the Depositor, (ii) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Purchase Agreement, (iii) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Debentures and
(iv) the appointment of the Administrative Trustees;
Now Therefore, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, each party, for the benefit of the other parties and for
the benefit of the Securityholders, hereby amends and restates the Original
Trust Agreement in its entirety and agrees as follows:
ARTICLE I
Defined Terms
Section 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this Trust
Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Trust Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
<PAGE>
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Indenture) paid by the Depositor on a Like Amount of Debentures
for such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Administrative Trustee" means each of the Persons identified as an
"Administrative Trustee" in the preamble to this Trustee Agreement solely in
such Person's capacity as Administrative Trustee of the Trust formed and
continued hereunder and not in such Person's individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the
premises judging such Person a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable Bankruptcy 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 Bankruptcy 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 Law" means any Federal or state bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code).
"Book-Entry Preferred Securities Certificates" means a beneficial interest
in the Preferred Securities Certificates, ownership and transfers of which shall
be made through book entries by a Clearing Agency as described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed, or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.
"Certificate Depository Agreement" means the agreement among the Trust, the
Depositor and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Trust Securities
2
<PAGE>
Certificates, substantially in the form attached as Exhibit B, as the same may
be amended and supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" means ____________, 1997.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means (i) when used with respect to the Property
Trustee, the principal office of the Property Trustee located in Chicago,
Illinois, and (ii) when used with respect to the Debenture Trustee, the
principal office of the Debenture Trustee located in Chicago, Illinois.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Trustee" means Harris Trust & Savings Bank, an Illinois banking
corporation, and any successor thereto.
"Debentures" means the aggregate principal amount of the Depositor's _____%
Junior Subordinated Deferrable Interest Debentures, Series _, issued pursuant to
the Indenture.
"Definitive Preferred Securities Certificates" means either or both (as the
context requires) of (a) Preferred Securities Certificates issued as Book-Entry
Preferred Securities Certificate as provided in Section 5.11(a) and (b)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. (S) 3801, et seq., as it may be amended from time to time.
"Delaware Trustee" means the Person identified as the "Delaware Trustee" in
the preamble to this Trust Agreement solely in its capacity as Delaware Trustee
of the Trust formed and continued hereunder and not in its individual capacity,
or its successor in interest in such capacity, or any successor trustee
appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
3
<PAGE>
"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 Property Trustee in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a period of 30
days; or
(c) default by the Property Trustee in the payment of any Redemption Price
of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Trustees in this Trust Agreement (other than a
covenant or warranty a default in the performance or breach of which is dealt
with in clause (b) or (c) above) and continuation of such default or breach for
a period of 60 days after there has been given, by registered or certified mail,
to the defaulting Trustee or Trustees by the Holders of at least 25% in
aggregate liquidation preference of the Outstanding Preferred Securities a
written notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property Trustee
within 60 days thereof.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Guarantee" means the Guarantee Agreement extended by the Depositor
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the holders of the Preferred Securities, as amended from time to
time.
"Guarantee Agreement" means the Guarantee Agreement dated _____________,
between the Depositor, as Guarantor, and Harris Trust & Savings Bank, as
trustee, evidencing the Guarantee.
"Indenture" means the Junior Subordinated Indenture, dated as of _________
__, 1997, between the Depositor and the Debenture Trustee, as trustee, as
amended or supplemented from time to time.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, adverse claim, hypothecation, assignment,
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to the portion of the
principal amount of Debentures to be contemporaneously redeemed in accordance
with the Indenture, allocated to the Common Securities and to the Preferred
Securities pro rata based upon the relative Liquidation Amounts of such classes
the proceeds of which will be used to pay the Redemption
4
<PAGE>
Price of such Trust Securities, and (b) with respect to a distribution of
Debentures to Holders of Trust Securities in connection with a dissolution or
liquidation of the Trust, Debentures having a principal amount equal to the
Liquidation Amount of the Trust Securities of the Holder to whom such Debentures
are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
"Liquidation Date" means the date on which Debentures are to be distributed
to Holders of Trust Securities in connection with a termination and liquidation
of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, President or a Vice President, and by the Treasurer, an
Associate Treasurer, an Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary, of the Depositor, and delivered to the appropriate Trustee.
One of the officers signing an Officers' Certificate given pursuant to Section
8.16 shall be the principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether or not, in the opinion of each such officer,
such condition or covenant has been complied with.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding", when used 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 cancelled 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 Trust 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 Preferred Securities have been executed and delivered pursuant to
Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
5
<PAGE>
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that such Trustee knows to be so owned shall
be so disregarded and (b) the foregoing shall not apply at any time when all of
the outstanding Preferred Securities are owned by the Depositor, one or more of
the Trustees and/or any such Affiliate. Preferred Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustees the pledgee's
right so to act with respect to such Preferred Securities and that the pledgee
is not the Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.9 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its trust department
for the benefit of the Securityholders in which all amounts paid in respect of
the Debentures will be held and from which the Property Trustee, through the
Paying Agent, shall make payments to the Securityholders in accordance with
Sections 4.1 and 4.2.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing ownership
of Preferred Securities, substantially in the form attached as Exhibit E.
"Property Trustee" means the Person identified as the "Property Trustee" in
the preamble to this Trust Agreement solely in its capacity as Property Trustee
of the Trust heretofore formed and continued hereunder and not in its individual
capacity, or its successor in interest in such capacity, or any successor
property trustee appointed as herein provided.
"Purchase Agreement" means the Purchase Agreement, dated as of ___________
__, 199_, among the Trust, the Depositor and the underwriters named therein.
"Redemption Date" means, with respect to any Trust Security to be redeemed,
the date fixed for such redemption by or pursuant to this Trust Agreement;
provided that each Debenture Redemption Date and the stated maturity of the
Debentures shall be a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Debentures, allocated on a pro rata basis (based on Liquidation Amounts) among
the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
6
<PAGE>
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or 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.
"Trust" means the Delaware business trust created and continued hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including (i) all exhibits hereto and (ii) for all purposes
of this Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this Trust Agreement and any such modification, amendment or supplement,
respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) the rights of the Property
Trustee under the Guarantee, (c) any cash on deposit in, or owing to, the
Payment Account and (d) all proceeds and rights in respect of the foregoing and
any other property and assets for the time being held or deemed to be held by
the Property Trustee pursuant to the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the Preferred
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the Delaware Trustee
and the Administrative Trustees.
ARTICLE II.
Establishment of the Trust
Section 2.1. Name.
The Trust continued hereby shall be known as "CFC Preferred Trust" as such
name may be modified from time to time by the Administrative Trustees following
written notice to the Holders of Trust Securities and the other Trustees, in
which name the Trustees may engage in the transactions contemplated hereby, make
and execute contracts and other instruments on behalf of the Trust and sue and
be sued.
Section 2.2. Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is c/o
Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware 19890,
Attention: Corporate Trust Administration, or such other address in the State of
Delaware as the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal executive office of the Trust
is c/o Commercial Federal Corporation, 2120 South 72nd Street, Omaha, Nebraska
68124.
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Section 2.3. Initial Contribution of Trust Property; Organizational
Expenses.
The Property Trustee acknowledges receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee
pursuant to the Expense Agreement. The Depositor shall make no claim upon the
Trust Property for the payment of such expenses.
Section 2.4. Issuance of the Preferred Securities.
On ________ __, 1997 the Depositor, on behalf of the Trust and pursuant to
the Original Trust Agreement, executed and delivered the Purchase Agreement.
Contemporaneously with the execution and delivery of this Trust Agreement, an
Administrative Trustee, on behalf of the Trust, shall execute in accordance with
Section 5.2 and deliver to the Underwriters named in the Purchase Agreement
Preferred Securities Certificates, registered in the name of the nominee of the
initial Clearing Agency, in an aggregate amount of ___________ Preferred
Securities having an aggregate Liquidation Amount of $___________, against
receipt of such aggregate purchase price of such Preferred Securities of
$___________, which amount the Administrative Trustee shall promptly deliver to
the Property Trustee.
Section 2.5. Issuance of the Common Securities; Subscription and Purchase
of Debentures.
Contemporaneously with the execution and delivery of this Trust Agreement,
an Administrative Trustee, on behalf of the Trust, shall execute in accordance
with Section 5.2 and 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 payment by the Depositor of such amount, which amount such
Administrative Trustee shall promptly deliver to the Property Trustee.
Contemporaneously therewith, an Administrative Trustee, on behalf of the Trust,
shall subscribe to and purchase from the Depositor Debentures, registered in the
name of the Trust and having an aggregate principal amount equal to $_________,
and, in satisfaction of the purchase price for such Debentures, the Property
Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of
$_________ (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).
Section 2.6. Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the Debentures,
and (b) to engage in those activities necessary, advisable or incidental thereto
(such as registering the transfer of the Trust Securities). The Depositor
hereby appoints the Trustees as trustees of the Trust, to have all the rights,
powers and duties to the extent set forth herein, and the Trustees hereby accept
such appointment. The Property Trustee hereby declares that it will hold the
Trust Property in trust upon and subject to the conditions set forth herein for
the benefit of the Trust and the Securityholders. The Administrative Trustees
shall have all rights, powers and duties set forth herein and in accordance with
applicable law with respect to accomplishing the purposes of the Trust. The
Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities, of the Property
Trustee or the Administrative Trustees set forth herein. The Delaware Trustee
shall be one of the Trustees of the Trust for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Delaware Business Trust Act.
Section 2.7. Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section and Section 2.6, and in accordance with the
following provisions (i) and (ii), the Trustees shall have the authority to
enter into all transactions and agreements
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determined by the Trustees to be appropriate in exercising the authority,
express or implied, otherwise granted to the Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including without
limitation, the following:
(i) As among the Trustees, each Administrative Trustee shall have the
power and authority to act on behalf of the Trust with respect to the
following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Expense Agreement and the
Certificate Depository Agreement and such other agreements as may be
necessary or desirable in connection with the purposes and function of
the Trust;
(C) assisting in the registration of the Preferred Securities
under the Securities Act of 1933, as amended, and under state
securities or blue sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust Indenture Act;
(D) assisting in the listing of the Preferred Securities upon
such securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Securities under the
Securities Exchange Act of 1934, as amended, and the preparation and
filing of all periodic and other reports and other documents pursuant
to the foregoing;
(E) the sending of notices (other than notices of default) and
other information regarding the Trust Securities and the Debentures to
the Securityholders in accordance with this Trust Agreement;
(F) the appointment of a Paying Agent, authenticating agent and
Securities Registrar in accordance with this Trust Agreement;
(G) registering transfer of the Trust Securities in accordance
with this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(I) unless otherwise determined by the Depositor, the Property
Trustee or the Administrative Trustees, or as otherwise required by
the Delaware Business Trust Act or the Trust Indenture Act, to execute
on behalf of the Trust (either acting alone or together with any or
all of the Administrative Trustees) any documents that the
Administrative Trustees have the power to execute pursuant to this
Trust Agreement; and
(J) the taking of any action incidental to the foregoing as the
Trustees may from time to time determine is necessary or advisable to
give effect to the terms of this Trust Agreement for the benefit of
the Securityholders (without consideration of the effect of any such
action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the power,
duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
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(C) the collection of interest, principal and any other payments
made in respect of the Debentures in the Payment Account;
(D) the distribution through the Paying Agent of amounts owed to
the Securityholders in respect of the Trust Securities;
(E) the exercise of all of the rights, powers and privileges of a
holder of the Debentures;
(F) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in accordance with the
terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(I) after an Event of Default (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) the taking of
any action incidental to the foregoing as the Property Trustee may
from time to time determine is necessary or advisable to give effect
to the terms of this Trust Agreement and protect and conserve the
Trust Property for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder) and, within five Business Days after the occurrence of
any Event of Default actually known to the Property Trustee, to give
notice thereof to the Securityholders; and
(J) except as otherwise provided in this Section 2.7(a)(ii), the
Property Trustee shall have none of the duties, liabilities, powers or
the authority of the Administrative Trustees set forth in Section
2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Securityholders,
except as expressly provided herein, (iii) take any action that would cause the
Trust to fail or cease to qualify as a "grantor trust" for United States Federal
income tax purposes, (iv) incur any indebtedness for borrowed money or issue any
other debt or (v) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property. The Administrative Trustees
shall defend all claims and demands of all Persons at any time claiming any Lien
on any of the Trust Property adverse to the interest of the Trust or the
Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, including any
amendments thereto;
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(ii) the determination of the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities, the Guarantee and the determination of any and all such acts,
other than actions which must be taken by or on behalf of the Trust, and
the advice to the Trustees of actions they must take on behalf of the
Trust, and the preparation for execution and filing of any documents to be
executed and filed by the Trust or on behalf of the Trust, as the Depositor
deems necessary or advisable in order to comply with the applicable laws of
any such States;
(iii) the preparation for filing by the Trust and execution on behalf
of the Trust of an application to the New York Stock Exchange or any other
national stock exchange or the Nasdaq National Market for listing upon
notice of issuance of any Preferred Securities;
(iv) the preparation for filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on Form 8-
A relating to the registration of the Preferred Securities under Section
12(b) or 12(g) of the Exchange Act, including any amendments thereto;
(v) the negotiation of the terms of, and the execution and delivery
of, the Purchase Agreement providing for the sale of the Preferred
Securities; and
(vi) the taking of any other actions necessary or desirable to carry
out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust will not be deemed to be an "investment
company" required to be registered under the 1940 Act, or fail to be classified
as a grantor trust for United States Federal income tax purposes and so that the
Debentures will be treated as indebtedness of the Depositor for United States
Federal income tax purposes. In this connection, the Depositor and the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that each of
the Depositor and any Administrative Trustee determines in its discretion to be
necessary or desirable for such purposes, as long as such action does not
adversely affect in any material respect the interests of the holders of the
Preferred Securities.
Section 2.8. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
Section 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Trust and the Securityholders in
accordance with this Trust Agreement.
ARTICLE III.
Payment Account
Section 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and any agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in
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accordance with this Trust Agreement. All monies and other property deposited or
held from time to time in the Payment Account shall be held by the Property
Trustee in the Payment Account for the exclusive benefit of the Securityholders
and for distribution as herein provided, including (and subject to) any priority
of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV.
Distributions; 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
Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available for
the payment of Distributions. Distributions shall accrue from ________ __,
1997, and, except in the event (and to the extent) that the Depositor
exercises its right to defer the payment of interest on the Debentures
pursuant to the Indenture, shall be payable quarterly in arrears on March
31, June 30, September 30 and December 31 of each year, commencing on
_________ __, 1997. If any date on which a Distribution is otherwise
payable on the Trust Securities is not a Business Day, then the payment of
such Distribution shall be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding
calendar year, payment of such Distribution shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date (each date on which distributions are
payable in accordance with this Section 4.1(a), a "Distribution Date").
(ii) Assuming payments of interest on the Debentures are made when due
(and before giving effect to Additional Amounts, if applicable),
Distributions on the Trust Securities shall be payable at a rate of ____%
per annum of the Liquidation Amount of the Trust Securities. The amount of
Distributions payable for any full period shall be computed on the basis of
a 360-day year of twelve 30-day months. The amount of Distributions for any
partial period shall be computed on the basis of the number of days elapsed
in a 360-day year of twelve 30-day months. The amount of Distributions
payable for any period shall include the Additional Amounts, if any.
(iii) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand
and available in the Payment Account for the payment of such Distributions.
(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 on the relevant record date, which shall be
one Business Day prior to such Distribution Date; provided, however, that in the
event that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the date 15 days prior to the relevant
Distribution Date.
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Section 4.2. Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of the
Debentures, the Trust will be required to redeem, subject to Section 4.3, a Like
Amount of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by first-
class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior
to the Redemption Date to each Holder of Trust Securities to be redeemed, at
such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price will become due
and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accrue on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the proceeds from the contemporaneous redemption of
Debentures. Redemptions of the Trust Securities shall be made and the Redemption
Price shall be payable on each Redemption Date only to the extent that the Trust
has funds then on hand and available in the Payment Account for the payment of
such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, subject to Section 4.2(c), with respect to Preferred Securities held in
book-entry form, the Property Trustee will irrevocably deposit with the Clearing
Agency for the Preferred Securities funds sufficient to pay the applicable
Redemption Price and will give such Clearing Agency irrevocable instructions and
authority to pay the Redemption Price to the holders thereof. With respect to
Preferred Securities held in certificated form, the Property Trustee, subject to
Section 4.2(c), will irrevocably deposit with the Paying Agent funds sufficient
to pay the applicable Redemption Price and will give the Paying Agent
irrevocable instructions and authority to pay the Redemption Price to the
Holders thereof upon surrender of their Preferred Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be payable
to the Holders of such Trust Securities as they appear on the Register for the
Trust Securities on the relevant record dates for the related Distribution
Dates. If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of Securityholders
holding Trust Securities so called for redemption will cease, except the right
of such Securityholders to receive the Redemption Price and any Distribution
payable on or prior to the Redemption Date, but without interest, and such
Securities will cease to be outstanding. In the event that any date on which any
Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case, with the same force and effect as if made on such date. In the event
that payment of the Redemption Price in respect of any Trust Securities called
for redemption is improperly withheld or refused and not paid either by the
Trust or by the Depositor pursuant to the Guarantee, Distributions on such Trust
Securities will continue to accrue, at the then applicable rate, from the
Redemption Date originally established by the Trust for such Trust Securities to
the date such Redemption Price is actually paid, in which case the actual
payment date will be the date fixed for redemption for purposes of calculating
the Redemption Price.
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(e) Payment of the Redemption Price on the Trust Securities shall be made
to the recordholders thereof as they appear on the Securities Register for the
Trust Securities on the relevant record date, which shall be one Business Day
prior to the relevant Redemption Date; provided, however, that in the event that
the Preferred Securities do not remain in book-entry-only form, the relevant
record date shall be the date fifteen days prior to the relevant Redemption
Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected on a pro rata basis (based upon Liquidation Amounts) not more
than 60 days prior to the Redemption Date by the Property Trustee from the
Outstanding Preferred Securities not previously called for redemption, by such
method (including, without limitation, by lot) as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $25 or an integral multiple of $25 in excess thereof) of
the Liquidation Amount of Preferred Securities of a denomination larger than
$25. The Property Trustee shall promptly notify the Security Registrar in
writing of the Preferred Securities selected for redemption and, in the case of
any Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of this Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the Liquidation
Amount of Preferred Securities that has been or is to be redeemed.
Section 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if applicable)
on, and the Redemption Price of, the Trust Securities, as applicable, shall be
made, subject to Section 4.2(f), pro rata among the Common Securities and the
Preferred Securities based on the Liquidation Amount of the Trust Securities;
provided, however, that if on any Distribution Date or Redemption Date any Event
of Default resulting from a Debenture Event of Default shall have occurred and
be continuing, no payment of any Distribution (including Additional Amounts, if
applicable) on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including Additional Amounts, if applicable) on all
Outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the full amount
of such Redemption Price on all Outstanding Preferred Securities, shall have
been made or provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including Additional Amounts, if applicable) on, or the
Redemption Price of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting from
any Debenture Event of Default, the Holder of Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default under
this Trust Agreement until the effect of all such Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated.
Until any such Event of Default under this Trust Agreement with respect to the
Preferred Securities has been so cured, waived or otherwise eliminated, the
Property Trustee shall act solely on behalf of the Holders of the Preferred
Securities and not the Holder of the Common Securities, and only the Holders of
the Preferred Securities will have the right to direct the Property Trustee to
act on their behalf.
Section 4.4. Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable) in
respect of the Preferred Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Preferred Securities are held by a Clearing Agency, such
Distributions shall be made
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to the Clearing Agency in immediately available funds, which shall credit the
relevant Persons' accounts at such Clearing Agency on the applicable
Distribution Dates. Payments in respect of the Common Securities shall be made
in such manner as shall be mutually agreed between the Property Trustee and the
Common Securityholder.
Section 4.5. Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States Federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
Form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form required to be
provided on such form, together with an annual financial statement of the Trust.
The Administrative Trustees shall provide the Depositor and the Property Trustee
with a copy of all such returns and reports promptly after such filing or
furnishing. The Trustees shall comply with United States Federal withholding and
backup withholding tax laws and information reporting requirements with respect
to any payments to Securityholders under the Trust Securities.
Section 4.6. Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Debentures of Additional Sums, the Administrative
Trustees shall promptly pay any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Trust by the
United States or any other taxing authority.
Section 4.7. Payments under Indenture or Pursuant to Direct Actions.
Notwithstanding any payments made to any Holder of Preferred Securities
(and any Owner with respect thereto), pursuant to Section 5.8 of the Indenture
or Section 5.14 of this Trust Agreement, the Depositor shall remain obligated to
pay principal of or interest on Debentures and the Depositor shall be subrogated
to the rights of the Holder (and Owner) of such Preferred Securities with
respect to payments on the Preferred Securities to the extent of any payments
made by the Depositor to such Holder (and Owner) pursuant to either of such
Sections.
ARTICLE V.
Trust Securities Certificates
Section 5.1. Initial Ownership.
Upon the formation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
Section 5.2. The Trust Securities Certificates.
The Preferred Securities Certificates shall be issued in minimum
denominations of $25 Liquidation Amount and integral multiples of $25 in excess
thereof, and the Common Securities Certificates shall be issued in denominations
of $25 Liquidation Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust
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Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.
Section 5.3. Execution and Delivery of Trust Securities Certificates.
At the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to or
upon the written order of the Depositor, signed by its chairman of the board,
its president, any executive vice president or any vice president, treasurer or
assistant treasurer or controller without further corporate action by the
Depositor, in authorized denominations.
Section 5.4. Registration of Transfer and Exchange of Preferred Securities
Certificates.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities Register") in which, the
registrar designated by the Depositor (the "Securities Registrar"), subject to
such reasonable regulations as it may prescribe, shall provide for the
registration of Preferred Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Company shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such Administrative Trustee or
Trustees.
The Securities Registrar shall not be required to register the transfer of
any Preferred Securities that have been called for redemption. At the option of
a Holder, Preferred Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to an Administrative Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be cancelled and subsequently disposed of by an
Administrative Trustee in accordance with such Person's customary practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
Section 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered to
the Securities Registrar, or if the Securities Registrar shall receive evidence
to its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate and (b) there shall be delivered to the Securities Registrar and the
Administrative Trustees such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that such Trust
Securities Certificate shall have been acquired by a bona fide purchaser, the
Administrative Trustees, or any one of
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them, on behalf of the Trust shall execute and make available for delivery, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust
Securities Certificate, a new Trust Securities Certificate of like class, tenor
and denomination. In connection with the issuance of any new Trust Securities
Certificate under this Section, the Administrative Trustees or the Securities
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Trust Securities Certificate issued pursuant to this Section shall constitute
conclusive evidence of an undivided beneficial interest in the assets of the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Trust Securities Certificate shall be found at any time.
Section 5.6. Persons Deemed Securityholders.
The Trustees or the Securities Registrar shall treat the Person in whose
name any Trust Securities Certificate shall be registered in the Securities
Register as the owner of such Trust Securities Certificate for the purpose of
receiving Distributions and for all other purposes whatsoever, and neither the
Trustees nor the Securities Registrar shall be bound by any notice to the
contrary.
Section 5.7. Access to List of Securityholders' Names and Addresses.
Each Holder and each Owner shall be deemed to have agreed not to hold the
Depositor, the Property Trustee or the Administrative Trustees accountable by
reason of the disclosure of its name and address, regardless of the source from
which such information was derived.
Section 5.8. Maintenance of Office or Agency.
The Administrative Trustees shall maintain an office or offices or agency
or agencies where Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities Certificates may be served. The
Administrative Trustees initially designate Commercial Federal Corporation, 2120
South 72nd Street, Omaha, Nebraska 68124 Attn: ____________, as its principal
corporate trust office for such purposes. The Administrative Trustees shall give
prompt written notice to the Depositor and to the Securityholders of any change
in the location of the Securities Register or any such office or agency.
Section 5.9. Appointment of Paying Agent.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the Distributions referred to above. The Administrative Trustees may
revoke such power and remove the Paying Agent if such Trustees determine in
their sole discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Paying Agent
shall initially be the Bank, and any co-paying agent chosen by the Bank, and
acceptable to the Administrative Trustees and the Depositor. Any Person acting
as Paying Agent shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Administrative Trustees, the Property Trustee and the
Depositor. In the event that the Bank shall no longer be the Paying Agent or a
successor Paying Agent shall resign or its authority to act be revoked, the
Administrative Trustees shall appoint a successor that is acceptable to the
Property Trustee and the Depositor to act as Paying Agent (which shall be a bank
or trust company). The Administrative Trustees shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Administrative Trustees to
execute and deliver to the Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Trustees that as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Securityholders in trust for the
benefit of the Securityholders entitled thereto until such sums shall be paid to
such Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such
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Paying Agent shall also return all funds in its possession to the Property
Trustee. The provisions of Sections 8.1, 8.3 and 8.6 herein shall apply to the
Bank also in its role as Paying Agent, for so long as the Bank shall act as
Paying Agent and, to the extent applicable, to any other paying agent appointed
hereunder. Any reference in this Agreement to the Paying Agent shall include any
co-paying agent unless the context requires otherwise.
Section 5.10. Ownership of Common Securities by Depositor.
At the Closing Date, the Depositor shall acquire and retain beneficial and
record ownership of the Common Securities. To the fullest extent permitted by
law, other than a transfer in connection with a consolidation or merger of the
Depositor into another corporation, or any conveyance, transfer or lease by the
Depositor of its properties and assets substantially as an entirety to any
Person, pursuant to Section 8.1 of the Indenture, any attempted transfer of the
Common Securities shall be void. The Administrative Trustees shall cause each
Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
Section 5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate.
(a) The Preferred Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Preferred Securities Certificate or Certificates
shall initially be registered on the Securities Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Owner will receive a
Definitive Preferred Securities Certificate representing such Owner's interest
in such Preferred Securities, except as provided in Section 5.13. Unless and
until Definitive Preferred Securities Certificates have been issued to Owners
pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force
and effect;
(ii) the Securities Registrar and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Trust Agreement
relating to the Book-Entry Preferred Securities Certificates (including the
payment of the Liquidation Amount of and Distributions on the Preferred
Securities evidenced by Book-Entry Preferred Securities Certificates and
the giving of instructions or directions to Owners of Preferred Securities
evidenced by Book-Entry Preferred Securities Certificates) as the sole
Holder of Preferred Securities evidenced by Book-Entry Preferred Securities
Certificates and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred Securities
Certificates shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Certificate Depository Agreement, unless and until Definitive
Preferred Securities Certificates are issued pursuant to Section 5.13, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments on the Preferred
Securities to such Clearing Agency Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
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Section 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
Section 5.13. Definitive Preferred Securities Certificates.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option advises
the Trustees in writing that it elects to terminate the book-entry system
through the Clearing Agency or (c) after the occurrence of a Debenture Event of
Default, Owners of Preferred Securities Certificates representing beneficial
interests aggregating at least a majority of the Liquidation Amount advise the
Administrative Trustees in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interest of the Owners of
Preferred Securities Certificates, then the Administrative Trustee shall notify
the Clearing Agency and the Clearing Agency shall notify all Owners of Preferred
Securities Certificates and the other Trustees of the occurrence of any such
event and of the availability of the Definitive Preferred Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Administrative Trustees of the typewritten Preferred
Securities Certificate or Certificates representing the Book Entry Preferred
Securities Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute the
Definitive Preferred Securities Certificates in accordance with the instructions
of the Clearing Agency. Neither the Securities Registrar nor the Trustees shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Preferred Securities Certificates, the Trustees shall
recognize the Holders of the Definitive Preferred Securities Certificates as
Securityholders. The Definitive Preferred Securities Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.
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Section 5.14. Rights of Securityholders.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust Securities
shall have no preemptive or similar rights and when issued and delivered to
Securityholders against payment of the purchase price therefor will be fully
paid and nonassessable by the Trust. The Holders of the Trust Securities, in
their capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in Liquidation Amount of the Preferred Securities then
Outstanding shall have such right by a notice in writing to the Depositor and
the Debenture Trustee; and upon any such declaration such principal amount of
and the accrued interest on all of the Debentures shall become immediately due
and payable, provided that the payment of principal and interest on such
Debentures shall remain subordinated to the extent provided in the Indenture.
At any time after such a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, the Holders of a majority in Liquidation Amount of the Preferred
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
(A) all overdue installments of interest (including any
Additional Interest (as defined in the Indenture)) on all of the
Debentures,
(B) the principal of (and premium, if any, on) any Debentures
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures,
and
(C) 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 Events of Default with respect to the Debentures, other than
the non-payment of the principal of the Debentures which has become due
solely by such acceleration, have been cured or waived as provided in
Section 5.13 of the Indenture.
The holders of a majority in aggregate Liquidation Amount of the Preferred
Securities may, on behalf of the Holders of all the Preferred 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 Debenture. No
such rescission shall affect any subsequent default or impair any right
consequent thereon.
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Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Preferred
Securities all or part of which is represented by Book-Entry Preferred
Securities Certificates, a record date shall be established for determining
Holders of Outstanding Preferred 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 5.14(b).
(c) For so long as any Preferred 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 Preferred 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 Debentures having a principal amount equal to
the Liquidation Amount of the Preferred Securities of such Holder (a "Direct
Action"). Except as set forth in Section 5.14(b) and this Section 5.14(c), the
Holders of Preferred Securities shall have no right to exercise directly any
right or remedy available to the holders of, or in respect of, the Debentures.
(d) In the event any holder of Preferred Securities exercises the right to
institute a proceeding pursuant to Section 5.8 of the Indenture directly against
the Depositor, the Depositor shall notify the Property Trustee in writing of
such a proceeding. Unless and until the Property Trustee receives such notice,
it shall assume no such proceeding has been instituted. In addition, if any
Holder of Preferred Securities receives directly from the Depositor any payment
in connection with such a proceeding, the Depositor shall notify the Property
Trustee as to the identity of the Holder who received such payment, and the
amount of the payment.
ARTICLE VI.
Acts of Securityholders; Meetings; Voting
Section 6.1. Limitations on Voting Rights.
(a) Except as provided in this Section, in Sections 5.14, 8.10 and 10.2 and
in the Indenture and as otherwise required by law, no Holder of Preferred
Securities shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Trust Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 5.13 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable or (iv) consent to
any amendment, modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case, obtaining the prior
approval of the Holders of at least a majority in Liquidation Amount of all
Outstanding Preferred Securities, provided, however, that where a consent under
the Indenture would require the consent of each Holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior written consent of each Holder of Preferred Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of Preferred Securities, except by a subsequent vote of the Holders of Preferred
Securities. The Property Trustee shall notify all Holders of the Preferred
Securities of any notice of default received from the Debenture Trustee with
respect to the Debentures. In addition to obtaining the foregoing approvals of
the Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Trustees shall, at the expense of the
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Depositor, obtain an opinion of its tax advisors to the effect that such action
shall not cause the Trust to fail to be classified as a grantor trust for United
States Federal income tax purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or the
Trustees otherwise propose to effect, (i) any action that would adversely affect
in any material respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Securities as a class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a majority in Liquidation
Amount of the Outstanding Preferred Securities. 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 Trust to fail to be
classified as a grantor trust for United States Federal income tax purposes.
Section 6.2. Notice of Meetings.
Notice of all meetings of the Preferred Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
Section 6.3. Meetings of Preferred Securityholders.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Preferred
Securityholders to vote on any matter upon the written request of the Preferred
Securityholders of record of 25% of the Outstanding Preferred Securities (based
upon their Liquidation Amount) and the Administrative Trustees or the Property
Trustee may, at any time in their discretion, call a meeting of Preferred
Securityholders to vote on any matters as to which Preferred Securityholders are
entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding Preferred
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Preferred
Securityholders of record present, in person or by proxy, holding more than a
majority of the Preferred Securities (based upon their Liquidation Amount) held
by the Preferred Securityholders of record present, either in person or by
proxy, at such meeting shall constitute the action of the Preferred
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
Section 6.4. Voting Rights.
Securityholders shall be entitled to one vote for each $25 of Liquidation
Amount represented by their Trust Securities in respect of any matter as to
which such Securityholders are entitled to vote.
Section 6.5. Proxies, etc.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of the Property Trustee, proxies may be solicited in
the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote. When Trust
Securities are held jointly by several persons, any one of them may vote at any
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meeting in person or by proxy in respect of such Trust Securities, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust Securities. A
proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.
Section 6.6. Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be taken
without a meeting if Securityholders holding more than a majority of all
Outstanding Trust Securities (based upon their Liquidation Amount) entitled to
vote in respect of such action (or such larger proportion thereof as shall be
required by any express provision of this Trust Agreement) shall consent to the
action in writing.
Section 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any Distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from time to time fix a date, not
more than 90 days prior to the date of any meeting of Securityholders or the
payment of a Distribution or other action, as the case may be, as a record date
for the determination of the identity of the Securityholders of record for such
purposes.
Section 6.8. Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Trust Agreement to be given, made or
taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
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Without limiting the foregoing, a Securityholder entitled hereunder to take
any action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the Liquidation Amount of such Trust Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such liquidation amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee pursuant to Section 8.3(b) hereof, shall be conclusive with
respect to such matter.
A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee (as defined
in the Guarantee), the Trust or any person or entity.
Section 6.9. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
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 Securityholders that:
(a) the Property Trustee is an Illinois banking corporation duly organized,
validly existing and in good standing under the existing and in good standing
under the laws of the State of Illinois;
(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) the Delaware Trustee is a Delaware corporation duly organized, validly
existing and in good standing in the State of Delaware;
(d) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and delivered
by the Property Trustee and the Delaware Trustee and constitutes the valid and
legally binding agreement of each of the Property Trustee and the Delaware
Trustee enforceable against each of them in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
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(f) the execution, delivery and performance of this Trust Agreement has
been duly authorized by all necessary corporate or other action on the part of
the Property Trustee and the Delaware Trustee and does not require any approval
of stockholders of the Property Trustee and the Delaware Trustee and such
execution, delivery and performance will not (i) violate the Charter or By-laws
of the Property Trustee or the Delaware Trustee, (ii) to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, violate any provision
of, or constitute, with or without notice or lapse of time, a default under, or
result in the creation or imposition of, any Lien on any properties included in
the Trust Property pursuant to the provisions of, any indenture, mortgage,
credit agreement, license or other agreement or instrument to which the Property
Trustee or the Delaware Trustee is a party or by which it is bound, or (iii)
violate any law, governmental rule or regulation of the United States or the
State of Delaware, as the case may be, governing the banking, trust or general
powers of the Property Trustee or the Delaware Trustee (as appropriate in
context) or any order, judgment or decree applicable to the Property Trustee or
the Delaware Trustee;
(g) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context) contemplated herein or therein requires the consent or
approval of, the giving of notice to, the registration with or the taking of any
other action with respect to any governmental authority or agency under any
existing Federal law governing the banking, trust or general powers of the
Property Trustee or the Delaware Trustee, as the case may be, under the laws of
the United States or the State of Delaware;
(h) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely affect the
Trust or would question the right, power and authority of the Property Trustee
or the Delaware Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
Section 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued at the Closing Date on behalf
of the Trust have been duly authorized and will have been, duly and validly
executed, issued and delivered by the Trustees pursuant to the terms and
provisions of, and in accordance with the requirements of, this Trust Agreement
and the Securityholders will be, as of each such date, entitled to the benefits
of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by the
Trust (or the Trustees on behalf of the Trust) under the laws of the State of
Delaware or any political subdivision thereof in connection with the execution,
delivery and performance by the Property Trustee or the Delaware Trustee, as the
case may be, of this Trust Agreement.
ARTICLE VIII.
The Trustees
Section 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be as provided by
this Trust Agreement and, in the case of the Property Trustee, by the Trust
Indenture Act. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall
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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 Trustees shall be subject to the provisions of this Section.
Nothing in this Trust Agreement shall be construed to release an Administrative
Trustee or the Delaware Trustee from liability for its own grossly negligent
action, its own grossly negligent failure to act, or its own willful misconduct.
To the extent that, at law or in equity, an Administrative Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust or to
the Securityholders, such Administrative Trustee or the Delaware Trustee shall
not be liable to the Trust or to any Securityholder for such Trustee's good
faith reliance on the provisions of this Trust Agreement. The provisions of this
Trust Agreement, to the extent that they restrict the duties and liabilities of
the Administrative Trustees or the Delaware Trustee otherwise existing at law or
in equity, are agreed by the Depositor and the Securityholders to replace such
other duties and liabilities of the Administrative Trustees or the Delaware
Trustee.
(b) All payments made by the Property Trustee or a Paying Agent in respect
of the Trust Securities shall be made only from the revenue and proceeds from
the Trust Property and only to the extent that there shall be sufficient revenue
or proceeds from the Trust Property to enable the Property Trustee or a Paying
Agent to make payments in accordance with the terms hereof. Each Securityholder,
by its acceptance of a Trust Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Trustees are not personally
liable to it for any amount distributable in respect of any Trust Security or
for any other liability in respect of any Trust Security. This Section 8.1(b)
does not limit the liability of the Trustees expressly set forth elsewhere in
this Trust Agreement or, in the case of the Property Trustee, in the Trust
Indenture Act.
(c) No provision of this Trust Agreement shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in Liquidation
Amount of the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debentures and the Payment
Account shall be to deal with such Property in a similar manner as the
Property Trustee deals with similar property for its own account, subject
to the protections and limitations on liability afforded to the Property
Trustee under this Trust Agreement and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree with the Depositor;
and money held by the Property Trustee need not be segregated from other
funds held by it except in relation to the Payment Account maintained by
the Property Trustee pursuant to Section 3.1 and except to the extent
otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for the default or misconduct of the Administrative
Trustees or the Depositor.
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Section 8.2. Certain Notices.
Within five Business Days after the occurrence of any Event of Default
of which the Property Trustee has actual knowledge, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 10.8, notice of
such Event of Default to the Securityholders, the Administrative Trustees and
the Depositor, unless such Event of Default shall have been cured or waived. As
used herein, the term "actual knowledge" means the actual knowledge without any
duty to make an investigation with regard thereto.
Within five Business Days after the receipt of notice of the Depositor's
exercise of its right to defer the payment of interest on the Debentures
pursuant to the Indenture, the Administrative Trustee shall transmit, in the
manner and to the extent provided in Section 10.8, notice of such exercise to
the Securityholders and the Property Trustee, unless such exercise shall have
been revoked.
Section 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, opinion of counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the Property
Trustee is required to decide between alternative courses of action or (ii) in
construing any of the provisions of this Trust Agreement the Property Trustee
finds the same ambiguous or inconsistent with any other provisions contained
herein or (iii) the Property Trustee is unsure of the application of any
provision of this Trust Agreement, then, except as to any matter as to which the
Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken and the Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; provided, however, that if the
Property Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative Trustees
contemplated by this Trust Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the Property
Trustee shall deem it desirable that a matter be established before undertaking,
suffering or omitting any action hereunder, the Property Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Depositor or the Administrative
Trustees;
(e) the Property Trustee shall have no duty to see to any recording, filing
or registration of any instrument (including any financing or continuation
statement or any filing under tax or securities laws) or any rerecording,
refiling or reregistration thereof;
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(f) the Property Trustee may consult with counsel (which counsel may be
counsel to the Depositor or any of its Affiliates, and may include any of its
employees) and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon and in accordance with
such advice, such counsel may be counsel to the Depositor or any of its
Affiliates, and may include any of its employees; the Property Trustee shall
have the right at any time to seek instructions concerning the administration of
this Trust Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee security or
indemnity reasonable to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
(h) the Property Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through its agents or
attorneys, provided that the Property Trustee shall be responsible for its own
negligence or recklessness with respect to selection of any agent or attorney
appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the Property
Trustee (i) may request instructions from the Holders of the Trust Securities
which instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement; and
(l) the Property Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties hereunder.
No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
Section 8.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.
Section 8.5. May Hold Securities.
Except as provided in the definition of the term "Outstanding" in Article
I, any Trustee or any other agent of any Trustee or the Trust, in its individual
or any other capacity, may become the owner or pledgee of Trust Securities and,
subject to Sections 8.8 and 8.13, may otherwise deal with the Trust with the
same rights it would have if it were not a Trustee or such other agent.
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Section 8.6. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation for
all services rendered by them hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust) as specified in a separate agreement between any of the Trustees and the
Depositor.
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all expenses, disbursements and advances incurred or
made by the Trustees in accordance with any provision of this Trust Agreement
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to the fullest extent permitted by applicable law, to indemnify and
hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee, (iii) any
officer, director, shareholder, employee, representative or agent of any
Trustee, and (iv) any employee or agent of the Trust or its Affiliates,
(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 by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Trust Agreement, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence (ordinary negligence in the case of the Property Trustee) or willful
misconduct with respect to such acts or omissions.
The provisions of this Section 8.6 shall survive the termination of this
Trust Agreement.
No Trustee may claim any lien or charge on any Trust Property as a result
of any amount due pursuant to this Section 8.6, except amounts due and owing the
Property Trustee pursuant to Section 8.13(b) hereof.
The Depositor and any Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders 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 Trust, shall not be deemed wrongful or improper. Neither the
Depositor, nor any Trustee, shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and the
Depositor or any Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Trustee may engage 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 8.7. Corporate Property Trustee Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder with respect
to the Trust Securities. The Property Trustee shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Property Trustee with respect 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.
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(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.
Section 8.8. Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement.
Section 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property may
at the time be located, the Depositor and the Administrative Trustees, by agreed
action of the majority of such Trustees, shall have power to appoint, and upon
the written request of the Administrative Trustees, the Depositor shall for such
purpose join with the Administrative Trustees in the execution, delivery, and
performance of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Property Trustee either to act as co-
trustee, jointly with the Property Trustee, of all or any part of such Trust
Property, or to the extent required by law to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Depositor does not join
in such appointment within 15 days after the receipt by it of a request so to
do, or in case a Debenture Event of Default has occurred and is continuing, the
Property Trustee alone shall have power to make such appointment. Any co-trustee
or separate trustee appointed pursuant to this Section shall either be (i) a
natural person who is at least 21 years of age and a resident of the United
States or (ii) a legal entity with its principal place of business in the United
States that shall act through one or more persons authorized to bind such
entity.
Should any written instrument from the Depositor be required by any co-
trustee or separate trustee so appointed for more fully confirming to such co-
trustee or separate trustee such property, title, right, or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by law,
but to such extent only, be appointed subject to the following terms, namely:
(a) The Trust Securities shall be executed and delivered and all rights,
powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder shall be exercised
solely by such Trustees and not by such co-trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby conferred or imposed
upon the Property Trustee in respect of any property covered by such appointment
shall be conferred or imposed upon and exercised or performed by the Property
Trustee or by the Property Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing such co-trustee or
separate trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Property Trustee shall be
incompetent or unqualified
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to perform such act, in which event such rights, powers, duties and obligations
shall be exercised and performed by such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing executed
by it, with the written concurrence of the Depositor, may accept the resignation
of or remove any co-trustee or separate trustee appointed under this Section,
and, in case a Debenture Event of Default has occurred and is continuing, the
Property Trustee shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of the Depositor.
Upon the written request of the Property Trustee, the Depositor shall join with
the Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such resignation or
removal. A successor to any co-trustee or separate trustee so resigned or
removed may be appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally liable
by reason of any act or omission of the Property Trustee or any other trustee
hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a co-
trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
Section 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee may
resign at any time by giving written notice thereof to the Securityholders. If
the instrument of acceptance by the successor Trustee required by Section 8.11
shall not have been delivered to the Relevant Trustee within 30 days after the
giving of such notice of resignation, the Relevant Trustee may petition, at the
expense of the Trust, any court of competent jurisdiction for the appointment of
a successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by Act of the Common Securityholder. If a
Debenture Event of Default shall have occurred and be continuing, the Property
Trustee or the Delaware Trustee, or both of them, may be removed at such time by
Act of the Holders of a majority in Liquidation Amount of the Preferred
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust). An Administrative Trustee may be removed by the Common
Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of acting as
Trustee, or if a vacancy shall occur in the office of any Trustee for any cause,
at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees, and the retiring Trustee shall comply with the applicable requirements
of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign,
be removed or become incapable of continuing to act as the Property Trustee or
the Delaware Trustee, as the case may be, at a time when a Debenture Event of
Default shall have occurred and be continuing, the Preferred Securityholders, by
Act of the Securityholders of a majority in Liquidation Amount of the Preferred
Securities then Outstanding delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and such successor
Trustee shall comply with the applicable requirements of Section 8.11. If an
Administrative Trustee shall resign, be removed or become incapable of acting as
Administrative Trustee, at a time when a Debenture Event of Default shall have
occurred and be continuing, the Common Securityholder by Act of the Common
Securityholder delivered to the
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Administrative Trustee shall promptly appoint a successor Administrative Trustee
or Administrative Trustees and such successor Administrative Trustee or Trustees
shall comply with the applicable requirements of Section 8.11. If no successor
Relevant Trustee shall have been so appointed by the Common Securityholder or
the Preferred Securityholders and accepted appointment in the manner required by
Section 8.11, any Securityholder who has been a Securityholder of Trust
Securities for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
The Property Trustee shall give notice of each resignation and each removal
of a Trustee and each appointment of a successor Trustee to all Securityholders
in the manner provided in Section 10.8 and shall give notice to the Depositor.
Each notice shall include the name of the successor Relevant Trustee and the
address of its Corporate Trust Office if it is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of the remaining Administrative Trustees
if there are at least two of them or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees or Delaware Trustee, as the case may be, set forth
in Section 8.7).
Section 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee such successor
Trustee so appointed shall execute, acknowledge and deliver to the Trust and to
the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Depositor or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and if the Property Trustee is the resigning Trustee shall duly
assign, transfer and deliver to the successor Trustee all property and money
held by such retiring Property Trustee hereunder.
In case of the appointment hereunder of a successor Relevant Trustee, the
retiring Relevant Trustee and each successor Relevant Trustee with respect to
the Trust Securities shall execute and deliver an amendment hereto wherein each
successor Relevant Trustee shall accept such appointment and which (a) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees 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 Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant
Trustee all Trust Property, all proceeds thereof and money held by such retiring
Relevant Trustee hereunder with respect to the Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at the
time of such acceptance such successor Relevant Trustee shall be qualified and
eligible under this Article.
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Section 8.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of such Relevant Trustee, shall be the
successor of such Relevant Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
Section 8.13. Preferential Collection of Claims Against Depositor or Trust.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Trust Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the 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 moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Property Trustee and, in the event the Property Trustee shall
consent to the making of such payments directly to the Holders, to first pay to
the Property Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Property Trustee, its agents and
counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement adjustment or compensation affecting the 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;
provided, however, that the Trustee may, on behalf of the Holders, vote for the
execution of a trustee in bankruptcy or similar official and may be a member of
the creditors' committee.
Section 8.14. Reports by Property Trustee.
(a) Not later than ________ __ of each year commencing with ________ __,
199_, the Property Trustee shall transmit to all Securityholders in accordance
with Section 10.8, and to the Depositor, a brief report dated as of the
immediately preceding December 31 with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if to the
best of its knowledge it has continued to be eligible under said Section, a
written statement to such effect;
(ii) a statement that the Property Trustee has complied with all of
its obligations under this Trust Agreement during the twelve-month period
(or, in the case of the initial report, the period since the Closing Date)
ending with such December 31 or, if the Property Trustee has not complied
in any material respect with such obligations, a description of such
noncompliance; and
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(iii) any change in the property and funds in its possession as
Property Trustee since the date of its last report and any action taken by
the Property Trustee in the performance of its duties hereunder which it
has not previously reported and which in its opinion materially affects the
Trust Securities.
(b) In addition the Property Trustee shall transmit to Securityholders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Property Trustee with each national stock exchange, the
Nasdaq National Market or such other interdealer quotation system or self-
regulatory organization upon which the Trust Securities are listed or traded,
with the Commission and with the Depositor.
Section 8.15. Reports to the Property Trustee.
The Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.
Section 8.16. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314 (c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
Section 8.17. Number of Trustees.
(a) The number of Trustees shall be four, provided that the Holder of all
of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware Trustee
may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy, incompetence
or incapacity to perform the duties of a Trustee shall not operate to annul the
Trust. Whenever a vacancy in the number of Administrative Trustees shall occur,
until such vacancy is filled by the appointment of an Administrative Trustee in
accordance with Section 8.10, the Administrative Trustees in office, regardless
of their number (and notwithstanding any other provision of this Agreement),
shall have all the powers granted to the Administrative Trustees and shall
discharge all the duties imposed upon the Administrative Trustees by this Trust
Agreement.
Section 8.18. Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
2.7(a), including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
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(b) The Administrative Trustees shall have power to delegate from time to
time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of this Trust Agreement, as set forth herein.
ARTICLE IX.
Termination, Liquidation and Merger
Section 9.1. Termination Upon Expiration Date.
Unless earlier dissolved, the Trust shall automatically dissolve on
December 31, 2052 (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
Section 9.2. Early Termination.
The first to occur of any of the following events is an "Early Termination
Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution
or liquidation of, the Depositor;
(b) the written direction to the Property Trustee from the Depositor at any
time to dissolve the Trust and distribute Debentures to Securityholders in
exchange for a Like Amount of the Trust Securities (which direction is optional
and wholly within the discretion of the Depositor);
(c) the redemption of all of the Preferred Securities in connection with
the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
Section 9.3. Termination.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust; (c) the discharge
of all administrative duties of the Administrative Trustees, including the
performance of any tax reporting obligations with respect to the Trust or the
Securityholders and (d) the filing of a certificate of cancellation by the
Administrative Trustees.
Section 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d) of
Section 9.2 occurs or upon the Expiration Date, the Trust shall be liquidated by
the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Debentures,
subject to Section 9.4(d). Notice of liquidation shall be given by the Property
Trustee by first-class mail, postage prepaid mailed not later than 30 nor more
than 60 days prior to the Liquidation Date to each Holder of Trust Securities at
such Holder's address appearing in the Securities Register. All notices of
liquidation shall:
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(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by which
Holders may exchange Trust Securities Certificates for certificates
representing the Like Amount of the Debentures, or if Section 9.4(d)
applies receive a Liquidation Distribution, as the Administrative Trustees
or the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the
liquidation of the Trust and distribution of the Debentures to Securityholders,
the Administrative Trustees shall establish a record date for such distribution
(which shall be not more than 45 days prior to the Liquidation Date) and, either
itself acting as exchange agent or through the appointment of a separate
exchange agent, shall establish such procedures as it shall deem appropriate to
effect the distribution of Debentures in exchange for the Outstanding Trust
Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation
Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii)
certificates representing a Like Amount of Debentures will be issued to holders
of Trust Securities Certificates, upon surrender of such certificates to the
Administrative Trustees or their agent for exchange, (iii) the Depositor shall
use its best efforts to have the Debentures listed on the New York Stock
Exchange or on such other exchange, interdealer quotation system or self-
regulatory organization as the Preferred Securities are then listed, (iv) any
Trust Securities Certificates not so surrendered for exchange will be deemed to
represent a Like Amount of Debentures, accruing interest at the rate provided
for in the Debentures from the last Distribution Date on which a Distribution
was made on the related Trust Securities until such Certificates are so
surrendered (and until such Certificates are so surrendered, no payments of
interest or principal will be made to Holders of Debentures represented by such
Certificates) and (v) all rights of Securityholders holding Trust Securities
will cease, except the right of such Securityholders to receive a Like Amount of
Debentures upon surrender of Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this Section
9.4, whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner provided
herein is determined by the Administrative Trustees not to be practical, the
Trust Property shall be liquidated, and the Trust shall be dissolved, wound-up
or terminated, by the Administrative Trustees in such manner as the
Administrative Trustees determine. In such event, on the date of the
dissolution, winding-up or other termination of the Trust, Securityholders will
be entitled to receive out of the assets of the Trust available for distribution
to Securityholders, after satisfaction of liabilities to creditors of the Trust
as provided by applicable law, an amount equal to the Liquidation Amount per
Trust Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If, upon any such
dissolution, winding up or termination, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Trust Securities shall be paid
on a pro rata basis (based upon Liquidation Amounts). The holder of the Common
Securities will be entitled to receive Liquidation Distributions upon any such
dissolution, winding-up or termination pro rata (determined as aforesaid) with
Holders of Preferred Securities, except that, if a Debenture Event of Default
has occurred and is continuing, the Holders of Preferred Securities shall have a
priority over the Holders of Common Securities.
Section 9.5. Mergers, Consolidations, Amalgamations or Replacements of the
Trust.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except pursuant
to this Section 9.5. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the Holders of the Preferred
Securities, the Property Trustee or the Delaware Trustee, the Trust may merge
with
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or into, consolidate, amalgamate, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to a trust organized as
such under the laws of any State; provided, that (i) such successor entity
either (a) expressly assumes all of the obligations of the Trust with respect to
the Preferred Securities or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Preferred Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Depositor expressly
appoints a trustee of such successor entity possessing the same powers and
duties as the Property Trustee as the holder of the Debentures, (iii) the
Successor Securities are listed or traded, or any Successor Securities will be
listed upon notification of issuance, on any national securities exchange or
other organization on which the Preferred Securities are then listed or traded,
if any, (iv) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized statistical
rating organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Depositor has received an opinion of counsel to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Preferred Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the 1940 Act
and (viii) the Depositor or any permitted successor or assignee owns all of the
Common Securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of holders of 100% in Liquidation Amount of the
Preferred Securities, consolidate, amalgamate, merge with or into, or be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Trust or the successor entity to be classified as other than a grantor trust for
United States Federal income tax purposes.
ARTICLE X.
Miscellaneous Provisions
Section 10.1. Limitation of Rights of Securityholders.
The death or incapacity of any person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such person or any
Securityholder for such person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
Section 10.2. Amendment.
(a) This Trust Agreement may be amended from time to time by the Property
Trustee, the Administrative Trustees and the Delaware Trustee, without the
consent of any Securityholders, (i) to cure any ambiguity, correct or supplement
any provision herein which may be inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Trust Agreement, which shall not be inconsistent with the other
provisions of this Trust Agreement, or (ii) to modify, eliminate or add to any
provisions of this Trust Agreement to such extent as shall be necessary to
ensure that the Trust will be classified for United States Federal income tax
purposes as a grantor trust at all times that any Trust Securities are
outstanding or to ensure that the Trust will not be required to register as an
investment company under the 1940 Act; provided, however, that in the case of
clause (i), such action shall not adversely affect in any material respect the
interests of any Securityholder, and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Securityholders.
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(b) Except as provided in Section 10.2(c) hereof, any provision of this
Trust Agreement may be amended by the Trustees with (i) the consent of Trust
Securityholders representing not less than a majority (based upon Liquidation
Amounts) of the Trust Securities then Outstanding and (ii) receipt by the
Trustees of an opinion of its tax advisors to the effect that such amendment or
the exercise of any power granted to the Trustees in accordance with such
amendment will not affect the Trust's status as a grantor trust for United
States Federal income tax purposes or an opinion of counsel that such amendment
will not affect the Trust's exemption from status of an investment company under
the 1940 Act.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.3 or 6.6 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 6.3 or 6.6 hereof), this
paragraph (c) of this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or fail or cease to be
classified as a grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be required
to enter into any amendment to this Trust Agreement which affects its own
rights, duties or immunities under this Trust Agreement. The Property Trustee
shall be entitled to receive and be fully protected in relying upon an opinion
of counsel and an Officers' Certificate stating that any amendment to this Trust
Agreement is in compliance with this Trust Agreement.
Section 10.3. Separability.
In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 10.4. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF DELAWARE.
Section 10.5. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day that is a Business Day (except as otherwise
provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no interest shall accrue
thereon for the period after such date.
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Section 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Depositor, the Trust or the Relevant Trustee, including
any successor by operation of law. Except in connection with a consolidation,
merger or sale involving the Depositor that is permitted under Article Eight of
the Indenture and pursuant to which the assignee agrees in writing to perform
the Depositor's obligations hereunder, the Depositor shall not assign its
obligations hereunder.
Section 10.7. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
Section 10.8. Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder or the Depositor may be given or served in writing by deposit
thereof, first-class postage prepaid, in the United States mail, hand delivery
or facsimile transmission, in each case, addressed, (a) in the case of a
Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Commercial Federal
Corporation, ______________ _______, __________, _______ _____, Attention:
Treasurer, facsimile no.: (___) ___-____. Any notice to Preferred
Securityholders shall also be given to such owners as have, within two years
preceding the giving of such notice, filed their names and addresses with the
Property Trustee for that purpose. Such notice, demand or other communication to
or upon a Securityholder shall be deemed to have been sufficiently given or
made, for all purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees
shall be given in writing addressed (until another address is published by the
Trust) as follows: (a) with respect to the Property Trustee to Harris Trust and
Savings Bank, 311 West Monroe Street, 12th Floor, Chicago, Illinois 60606
Attention: Indenture Trust Division; (b) with respect to the Delaware Trustee,
to Wilmington Trust Company, _______________, Wilmington, Delaware _____; and
(c) with respect to the Administrative Trustees, to them at the address above
for notices to the Depositor, marked "Attention Administrative Trustees of CFC
Preferred Trust." Such notice, demand or other communication to or upon the
Trust or the Property Trustee shall be deemed to have been sufficiently given or
made only upon actual receipt of the writing by the Trust or the Property
Trustee.
Section 10.9. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any Bankruptcy Laws or
otherwise join in the commencement of any proceeding against the Trust under any
Bankruptcy Law. In the event the Depositor takes action in violation of this
Section 10.9, the Property Trustee agrees, for the benefit of Securityholders,
that at the expense of the Depositor, it shall file an answer with the
bankruptcy court or otherwise properly contest the filing of such petition by
the Depositor against the Trust or the commencement of such action and raise the
defense that the Depositor has agreed in writing not to take such action and
should be stopped and precluded therefrom and such other defenses, if any, as
counsel for the Trustee or the Trust may assert. The provisions of this Section
10.9 shall survive the termination of this Trust Agreement.
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Section 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Trust Agreement as so modified
or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.
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THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
COMMERCIAL FEDERAL CORPORATION
By:
-------------------------------------
Name:
Title:
HARRIS TRUST & SAVINGS BANK,
as Property Trustee
By:
-----------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:
-------------------------------------
Name:
Title:
----------------------------------------
WILLIAM A. FITZGERALD,
as Administrative Trustee
----------------------------------------
JAMES A. LAPHEN,
as Administrative Trustee
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EXHIBIT A
CERTIFICATE OF TRUST OF CFC PREFERRED TRUST
This Certificate of Trust of CFC Preferred Trust (the "Trust"), dated
January 29, 1997, is being duly executed and filed by Wilmington Trust Company,
a Delaware banking corporation, and James A. Laphen, as trustees, to form a
business trust under the Delaware Business Trust Act (12 Del. C. Section 3801,
et. seq.).
1. Name. The name of the business trust is CFC Preferred Trust.
----
2. Delaware Trustee. The name and business address of the trustee of the
----------------
Trust with a principal place of business in the State of Delaware are Wilmington
Trust Company, One Rodney Square, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective upon
--------------
filing with the Secretary of State.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust
have executed this Certificate of Trust as of the date first above written.
WILMINGTON TRUST COMPANY, as trustee
By:
-------------------------------------
Name:
Title:
JAMES A. LAPHEN, as trustee
----------------------------------------
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EXHIBIT B
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099 __________, 199_
Attention: _______________
General Counsel's Office
Re: CFC Preferred Trust ____% Trust Originated Preferred Securities, Series A
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating to the
issuance and deposit with The Depository Trust Company ("DTC") of the CFC
Preferred Trust ____% Trust Originated Preferred Securities, Series A (the
"Preferred Securities"), of CFC Preferred Trust, a Delaware business trust (the
"Issuer"), formed pursuant to a Trust Agreement between Commercial Federal
Corporation ("Commercial Federal Corporation") and Harris Trust & Savings Bank,
as Property Trustee, Wilmington Trust Company, as Delaware Trustee, and the
Administrative Trustees named therein. The payment of distributions on the
Preferred Securities, and payments due upon liquidation of Issuer or redemption
of the Preferred Securities, to the extent the Issuer has funds available for
the payment thereof are guaranteed by Commercial Federal Corporation to the
extent set forth in a Guarantee Agreement dated __________ __, ____ by
Commercial Federal Corporation with respect to the Preferred Securities.
Commercial Federal Corporation and the Issuer propose to sell the Preferred
Securities to certain Underwriters (the "Underwriters") pursuant to a Purchase
Agreement dated __________ __, 199_ by and among the Underwriters, the Issuer
and Commercial Federal Corporation dated __________ __, ____, and the
Underwriters wish to take delivery of the Preferred Securities through DTC.
Harris Trust & Savings Bank is acting as transfer agent and registrar with
respect to the Preferred Securities (the "Transfer Agent and Registrar").
To induce DTC to accept the Preferred Securities as eligible for deposit at
DTC, and to act in accordance with DTC's rules with respect to the Preferred
Securities, the Issuer, the Transfer Agent and Registrar and DTC agree among
each other as follows:
1. Prior to the closing of the sale of the Preferred Securities to the
Underwriters, which is expected to occur on or about __________ __, ____, there
shall be deposited with DTC one or more global certificates (individually and
collectively, the "Global Certificate") registered in the name of DTC's
Preferred Securities nominee, Cede & Co., representing an aggregate of
____________ Preferred Securities and bearing the following legend:
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to
Issuer or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of Cede
& Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
2. The Amended and Restated Trust Agreement of the Issuer provides for the
voting by holders of the Preferred Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes
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and shall, to the extent possible, give DTC notice of such record date not less
than 15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice of such event at least 5
business days prior to the effective date of such event.
4. In the event of distribution on, or an offering or issuance of rights
with respect to, the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice specifying: (a) the amount
of and conditions, if any, applicable to the payment of any such distribution or
any such offering or issuance of rights; (b) any applicable expiration or
deadline date, or any date by which any action on the part of the holders of
Preferred Securities is required; and (c) the date any required notice is to be
mailed by or on behalf of the Issuer to holders of Preferred Securities or
published by or on behalf of the Issuer (whether by mail or publication, the
"Publication Date"). Such notice shall be sent to DTC by a secure means (e.g.,
legible telecopy, registered or certified mail, overnight delivery) in a timely
manner designed to assure that such notice is in DTC's possession no later than
the close of business on the business day before the Publication Date. The
Issuer or the Transfer Agent and Registrar will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure transmission
of multiple CUSIP numbers (if applicable) that includes a manifest or list of
each CUSIP number submitted in that transmission. (The party sending such notice
shall have a method to verify subsequently the use of such means and the
timeliness of such notice.) The Publication Date shall be not less than 30
calendar days nor more than 60 calendar days prior to the payment of any such
distribution or any such offering or issuance of rights with respect to the
Preferred Securities. After establishing the amount of payment to be made on the
Preferred Securities, the Issuer or the Transfer Agent and Registrar will notify
DTC's Dividend Department of such payment 5 business days prior to payment date.
Notices to DTC's Dividend Department by telecopy shall be sent to (212) 709-
1723. Such notices by mail or by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm DTC's receipt
of such telecopy by telephoning the Dividend Department at (212) 709-1270.
5. In the event of a redemption by the Issuer of the Preferred Securities,
notice specifying the terms of the redemption and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC
not less than 30 calendar days prior to such event by a secure means in the
manner set forth in paragraph 4. Such redemption notice shall be sent to DTC's
Call Notification Department at (516) 227-4164 or (516) 227-4190, and receipt of
such notice shall be confirmed by telephoning (516) 227-4070. Notice by mail or
by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC by
a secure means and in a timely manner as described in paragraph 4. Notices to
DTC pursuant to this paragraph and notices of other corporate actions (including
mandatory tenders, exchanges and capital changes) shall be sent, unless
notification to another department is expressly provided for herein, by telecopy
to DTC's Reorganization Department
44
<PAGE>
at (212) 709-1093 or (212) 709-1094 and receipt of such notice shall be
confirmed by telephoning (212) 709-6884, or by mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the CUSIP
number or numbers of the Preferred Securities and the accompanying designation
of the Preferred Securities, which, as of the date of this letter, is "CFC
Preferred Trust ____% Trust Originated Preferred Securities, Series A.
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be received by
Cede & Co., as nominee of DTC, or its registered assigns in next day funds on
each payment date (or in accordance with existing arrangements between the
Issuer or the Transfer Agent and Registrar and DTC). Such payments shall be made
payable to the order of Cede & Co., and shall be addressed as follows:
NDFS Redemption Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
9. DTC may by prior written notice direct the Issuer and the Transfer Agent
and Registrar to use any other telecopy number or address of DTC as the number
or address to which notices or payments may be sent.
10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Transfer Agent and Registrar's invitation) necessitating a reduction in the
aggregate number of Preferred Securities outstanding evidenced by Global
Certificates, DTC, in its discretion: (a) may request the Issuer or the Transfer
Agent and Registrar to issue and countersign a new Global Certificate; or (b)
may make an appropriate notation on the Global Certificate indicating the date
and amount of such reduction.
11. DTC may discontinue its services as a securities depositary with
respect to the Preferred Securities at any time by giving at least 90 days'
prior written notice to the Issuer and the Transfer Agent and Registrar (at
which time DTC will confirm with the Issuer or the Transfer Agent and Registrar
the aggregate number of Preferred Securities deposited with it) and discharging
its responsibilities with respect thereto under applicable law. Under such
circumstances, the Issuer may determine to make alternative arrangements for
book-entry settlement for the Preferred Securities, make available one or more
separate global certificates evidencing Preferred Securities to any Participant
having Preferred Securities credited to its DTC account, or issue definitive
Preferred Securities to the beneficial holders thereof, and in any such case,
DTC agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar, and to return the Global Certificate, duly endorsed for transfer as
directed by the Issuer or the Transfer Agent and Registrar, together with any
other documents of transfer reasonably requested by the Issuer or the Transfer
Agent and Registrar.
12. In the event that the Issuer determines that beneficial owners of
Preferred Securities shall be able to obtain definitive Preferred Securities,
the Issuer or the Transfer Agent and Registrar shall notify DTC of the
availability of certificates. In such event, the Issuer or the Transfer Agent
and Registrar shall issue, transfer and exchange certificates in appropriate
amounts, as required by DTC and others, and DTC agrees to cooperate fully with
the Issuer and the Transfer Agent and Registrar and to return the Global
Certificate, duly endorsed for transfer as directed by the Issuer or the
Transfer Agent and Registrar, together with any other documents of transfer
reasonably requested by the Issuer or the Transfer Agent and Registrar.
45
<PAGE>
13. This letter may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Nothing herein shall be deemed to require the Transfer Agent and Registrar
to advance funds on behalf of CFC Preferred Trust.
Very truly yours,
CFC PREFERRED TRUST
(as Issuer)
WILMINGTON TRUST COMPANY
as Trustee
By:
------------------------------------
Name:
Title:
(As Transfer Agent and Registrar)
Harris Trust & Savings Bank
as Trustee
By:
------------------------------------
Name:
Title:
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
- -----------------------------
By:
------------------
Authorized Officer
46
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number
Number of Common Securities
C-1
Certificate Evidencing Common Securities
of
CFC Preferred Trust
____% Common Securities
(liquidation amount $25 per Common Security)
CFC Preferred Trust, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Commercial Federal
Corporation (the "Holder") is the registered owner of ( ) common
securities of the Trust representing beneficial interests of the Trust and
designated the ____% Common Securities (liquidation amount $25 per Common
Security) (the "Common Securities"). In accordance with Section 5.10 of the
Trust Agreement (as defined below) the Common Securities are not transferable
and any attempted transfer hereof shall be void. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust dated as of , , as the same may be amended from time to
time (the "Trust Agreement") including the designation of the terms of the
Common Securities as set forth therein. The Trust will furnish a copy of the
Trust Agreement to the Holder without charge upon written request to the Trust
at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate this day of , .
CFC PREFERRED TRUST
By: ____________________________________________
Name:
Administrative Trustee
47
<PAGE>
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
Agreement dated as of __________ __, 199_, between Commercial Federal
Corporation, a Nebraska corporation ("Commercial Federal Corporation"), and CFC
Preferred Trust, a Delaware business trust (the "Trust").
Whereas, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from Commercial Federal Corporation and
to issue and sell ____% Trust Originated Preferred Securities (the "Preferred
Securities") with such powers, preferences and special rights and restrictions
as are set forth in the Amended and Restated Trust Agreement of the Trust dated
as of _______ __, 199_ as the same may be amended from time to time (the "Trust
Agreement");
Whereas, Commercial Federal Corporation will directly or indirectly own all
of the Common Securities of the Trust and will issue the Debentures;
Now, Therefore, in consideration of the purchase by each holder of the
Preferred Securities, which purchase Commercial Federal Corporation hereby
agrees shall benefit Commercial Federal Corporation and which purchase
Commercial Federal Corporation acknowledges will be made in reliance upon the
execution and delivery of this Agreement, Commercial Federal Corporation and
Trust hereby agree as follows:
ARTICLE I
Section 1.1. Guarantee by Commercial Federal Corporation.
Subject to the terms and conditions hereof, Commercial Federal Corporation
hereby irrevocably and unconditionally guarantees to each person or entity to
whom the Trust is now or hereafter becomes indebted or liable (the
"Beneficiaries") the full payment, when and as due, of any and all Obligations
(as hereinafter defined) to such Beneficiaries. As used herein, "Obligations"
means any costs, expenses or liabilities of the Trust, other than obligations of
the Trust to pay to holders of any Preferred Securities or other similar
interests in the Trust the amounts due such holders pursuant to the terms of the
Preferred Securities or such other similar interests, as the case may be. This
Agreement is intended to be for the benefit of, and to be enforceable by, all
such Beneficiaries, whether or not such Beneficiaries have received notice
hereof.
Section 1.2. Term of Agreement.
This Agreement shall terminate and be of no further force and effect upon
the later of (a) the date on which full payment has been made of all amounts
payable to all holders of all the Preferred Securities (whether upon redemption,
liquidation, exchange or otherwise) and (b) the date on which there are no
Beneficiaries remaining; provided, however, that this Agreement shall continue
to be effective or shall be reinstated, as the case may be, if at any time any
holder of Preferred Securities or any Beneficiary must restore payment of any
sums paid under the Preferred Securities, under any Obligation, under the
Guarantee Agreement dated the date hereof by Commercial Federal Corporation and
[insert name of Guarantee Trustee], as guarantee trustee or under this Agreement
for any reason whatsoever. This Agreement is continuing, irrevocable,
unconditional and absolute.
Section 1.3. Waiver of Notice.
Commercial Federal Corporation hereby waives notice of acceptance of this
Agreement and of any Obligation to which it applies or may apply, and Commercial
Federal Corporation hereby waives presentment,
48
<PAGE>
demand for payment, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
Section 1.4. No Impairment.
The obligations, covenants, agreements and duties of Commercial Federal
Corporation under this Agreement shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation under,
arising out of, or in connection with, the obligations;
(b) any failure, omission, delay or lack of diligence on the part of the
Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, Commercial Federal Corporation with respect to the happening of
any of the foregoing.
Section 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against Commercial
Federal Corporation and Commercial Federal Corporation waives any right or
remedy to require that any action be brought against the Trust or any other
person or entity before proceeding against Commercial Federal Corporation.
Section 1.6. Subrogation.
Commercial Federal Corporation shall be subrogated to all (if any) rights
of the Trust in respect of any amounts paid to the Beneficiaries by Commercial
Federal Corporation under this Agreement; provided, however, that Commercial
Federal Corporation shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Agreement, if, at the
time of any such payment, any amounts are due and unpaid under this Agreement.
ARTICLE II
Section 2.1. Binding Effect.
All guarantees and agreements contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of Commercial
Federal Corporation and shall inure to the benefit of the Beneficiaries.
Section 2.2. Amendment.
So long as there remains any Beneficiary or any Preferred Securities of any
series are outstanding, this Agreement shall not be modified or amended in any
manner adverse to such Beneficiary or to the holders of the Preferred
Securities.
49
<PAGE>
Section 2.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or by registered
or certified mail, addressed as follows (and if so given, shall be deemed given
when mailed or upon receipt of an answer-back, if sent by telex):
CFC Preferred Trust
_______________
__________, Delaware _____
Facsimile No.: (302) ___-____
Attention: _________________
Commercial Federal Corporation
______________________
__________, _______ _____
Facsimile No.: (___) ___-____
Attention: Treasurer
Section 2.4. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEBRASKA.
This Agreement is executed as of the day and year first above written.
COMMERCIAL FEDERAL CORPORATION
By: _________________________
Name:
Title:
CFC Preferred Trust
By: _________________________
Name:
Administrative Trustee
50
<PAGE>
EXHIBIT E
If the Preferred Security is to be a Global Certificate Insert--This Preferred
Security is a Global Certificate within the meaning of the Trust Agreement
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depository") or a nominee of the Depository. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depository or its nominee only in the limited
circumstances described in the Trust Agreement and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York) to CFC Preferred Trust
or its agent for registration of transfer, exchange or payment, and any
Preferred Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Certificate Number
Number of Preferred Securities
P-
CUSIP NO.
Certificate Evidencing Preferred Securities
of
CFC Preferred Trust
____% Trust Originated Preferred Securities,
Series
(liquidation amount $25 per Preferred Security)
CFC Preferred Trust, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that (the
"Holder") is the registered owner of ( ) preferred securities of
the Trust representing an undivided beneficial interest in the assets of the
Trust and designated the CFC Preferred Trust ____% Trust Originated Preferred
Securities, Series (liquidation amount $25 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of , , as the same may be
amended from time to time (the "Trust Agreement") including the designation of
the terms of Preferred Securities as set forth therein. The Holder is entitled
to the benefits of the Guarantee Agreement entered into by Commercial Federal
Corporation, a ________ corporation, and Harris Trust & Savings Bank, as
guarantee trustee, dated as of _________ __, 199_, (the "Guarantee"), to the
extent provided therein. The Trust will furnish a copy of the Trust Agreement
and the Guarantee to the Holder without charge upon written request to the Trust
at its principal place of business or registered office.
51
<PAGE>
Upon receipt of this certificate, the Holder is bound by the Trust Agreement
and is entitled to the benefits thereunder.
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate this day of ________________, 199_.
CFC PREFERRED TRUST
By:___________________________________
Name:
Administrative Trustee
52
<PAGE>
ASSIGNMENT
For Value Received, the undersigned assigns and transfers this Preferred
Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: ________________
Signature: ___________________________________________________________________
(Sign exactly as your name appears on the other side of this
Preferred Security Certificate)
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.
53
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
<S> <C>
ARTICLE I. Defined Terms................................................................................
Section 1.1. Definitions...........................................................................
ARTICLE II. Establishment of the Trust..................................................................
Section 2.1. Name..................................................................................
Section 2.2. Office of the Delaware Trustee; Principal Place of Business...........................
Section 2.3. Initial Contribution of Trust Property; Organizational Expenses.......................
Section 2.4. Issuance of the Preferred Securities..................................................
Section 2.5. Issuance of the Common Securities; Subscription and Purchase of Debentures............
Section 2.6. Declaration of Trust..................................................................
Section 2.7. Authorization to Enter into Certain Transactions......................................
Section 2.8. Assets of Trust.......................................................................
Section 2.9. Title to Trust Property...............................................................
ARTICLE III. Payment Account............................................................................
Section 3.1. Payment Account.......................................................................
ARTICLE IV. Distributions; Redemption...................................................................
Section 4.1. Distributions.........................................................................
Section 4.2. Redemption............................................................................
Section 4.3. Subordination of Common Securities....................................................
Section 4.4. Payment Procedures....................................................................
Section 4.5. Tax Returns and Reports...............................................................
Section 4.6. Payment of Taxes, Duties, Etc. of the Trust...........................................
Section 4.7. Payments under Indenture or pursuant to Direct Actions................................
ARTICLE V. Trust Securities Certificates................................................................
Section 5.1. Initial Ownership.....................................................................
Section 5.2. The Trust Securities Certificates.....................................................
Section 5.3. Execution and Delivery of Trust Securities Certificates...............................
Section 5.4. Registration of Transfer and Exchange of Preferred....................................
Securities Certificates...............................................................
Section 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates....................
Section 5.6. Persons Deemed Securityholders........................................................
Section 5.7. Access to List of Securityholders' Names and Addresses................................
Section 5.8. Maintenance of Office or Agency.......................................................
Section 5.9. Appointment of Paying Agent...........................................................
Section 5.10. Ownership of Common Securities by Depositor...........................................
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
Page No.
<S> <C>
Section 5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate...............................................................
Section 5.12. Notices to Clearing Agency...........................................................
Section 5.13. Definitive Preferred Securities Certificates.........................................
Section 5.14. Rights of Securityholders............................................................
</TABLE>
55
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS (cont'd)
Page No.
<S> <C>
ARTICLE VI. Acts of Securityholders; Meetings; Voting..........................
Section 6.1. Limitations on Voting Rights.................................
Section 6.2. Notice of Meetings...........................................
Section 6.3. Meetings of Preferred Securityholders........................
Section 6.4. Voting Rights................................................
Section 6.5. Proxies, etc.................................................
Section 6.6. Securityholder Action by Written Consent.....................
Section 6.7. Record Date for Voting and Other Purposes....................
Section 6.8. Acts of Securityholders......................................
Section 6.9. Inspection of Records........................................
ARTICLE VII. Representations and Warranties....................................
Section 7.1. Representations and Warranties of the Property Trustee and
the Delaware Trustee.........................................
Section 7.2. Representations and Warranties of Depositor..................
ARTICLE VIII. The Trustees.....................................................
Section 8.1. Certain Duties and Responsibilities..........................
Section 8.2. Certain Notices..............................................
Section 8.3. Certain Rights of Property Trustee...........................
Section 8.4. Not Responsible for Recitals or Issuance of Securities.......
Section 8.5. May Hold Securities..........................................
Section 8.6. Compensation; Indemnity; Fees................................
Section 8.7. Corporate Property Trustee Required; Eligibility of Trustees.
Section 8.8. Conflicting Interests........................................
Section 8.9. Co-Trustees and Separate Trustee.............................
Section 8.10. Resignation and Removal; Appointment of Successor............
Section 8.11. Acceptance of Appointment by Successor.......................
Section 8.12. Merger, Conversion, Consolidation or Succession to Business
Section 8.13. Preferential Collection of Claims Against Depositor or Trust
Section 8.14. Reports by Property Trustee..................................
Section 8.15. Reports to the Property Trustee..............................
Section 8.16. Evidence of Compliance with Conditions Precedent.............
Section 8.17. Number of Trustees...........................................
Section 8.18. Delegation of Power..........................................
ARTICLE IX. Termination, Liquidation and Merger................................
Section 9.1. Termination Upon Expiration Date.............................
Section 9.2. Early Termination............................................
Section 9.3. Termination..................................................
Section 9.4. Liquidation..................................................
Section 9.5. Mergers, Consolidations, Amalgamations or Replacements
of the Trust.................................................
</TABLE>
56
<PAGE>
TABLE OF CONTENTS (cont'd)
<TABLE>
<CAPTION>
Page No.
<S> <C>
ARTICLE X. Miscellaneous Provisions............................................
Section 10.1. Limitation of Rights of Securityholders.....................
Section 10.2. Amendment...................................................
Section 10.3. Separability................................................
Section 10.4. Governing Law...............................................
Section 10.5. Payments Due on Non-Business Day............................
Section 10.6. Successors..................................................
Section 10.7. Headings....................................................
Section 10.8. Reports, Notices and Demands................................
Section 10.9. Agreement Not to Petition...................................
Section 10.10. Trust Indenture Act; Conflict with Trust Indenture Act......
Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee
and Indenture...............................................
</TABLE>
EXHIBIT A Certificate of Trust
EXHIBIT B Certificate Depository Agreement
EXHIBIT C Common Securities Certificates
EXHIBIT D Expense Agreement
EXHIBIT E Preferred Securities Certificate
57
<PAGE>
Exhibit 5.1
Form of Opinion of
Housley Kantarian & Bronstein, P.C.
March __, 1997
Board of Directors
Commercial Federal Corporation
2120 South 72nd Street
Omaha, Nebraska 68124
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 filed by
Commercial Federal Corporation, Inc. (the "Company") and CFC Preferred Trust
("CFC Trust") with the Securities and Exchange Commission on January 30, 1997
relating to a public offering by CFC Trust of up to 1,800,000 __% Cumulative
Preferred Securities (the "Preferred Securities"), please be advised that as
counsel to the Company, upon examination of such corporate documents and records
as we have deemed necessary or advisable for the purposes of this opinion, it is
our opinion that the Junior Subordinated Debentures, when issued and paid for as
contemplated by the Registration Statement, will be validly issued obligations
of the Company enforceable in accordance with their terms except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity.
Capitalized terms used herein shall have the definitions given to such
terms in the Registration Statement. We hereby consent to the filing of this
opinion as an exhibit to the Registration Statement, and to the reference to our
firm under the heading "Legal Matters" in the Prospectus comprising a part of
the Registration Statement.
Very truly yours,
HOUSLEY KANTARIAN & BRONSTEIN, P.C.
<PAGE>
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger]
March 11, 1997
CFC Preferred Trust
c/o Commercial Federal Corporation
2120 South 72nd Street
Omaha, Nebraska 68124
Re: CFC Preferred Trust
-------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for CFC Preferred Trust, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our examination
of documents has been limited to the examination of originals or copies of the
following:
(a) The Certificate of Trust of the Trust, dated January 29, 1997 (the
"Certificate") as filed with the office of the Secretary of State of the State
of Delaware (the "Secretary of State") on January 30, 1997;
(b) The Trust Agreement of the Trust, dated as of January 30, 1997, among
Commercial Federal Corporation, a Nebraska corporation (the "Company"), and the
trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a prospectus and a prospectus supplement (collectively, the
"Prospectus") relating to the ____% Cumulative Trust Preferred Securities of
the Trust representing preferred undivided beneficial interests in the Trust
(each, a "Preferred Security" and collectively, the "Preferred Securities"), as
filed by the Company and the Trust with the Securities and Exchange Commission
on January 30, 1997;
(d) A form of Amended and Restated Trust Agreement of the Trust, to be
entered into among the Company, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the Trust (the
"Trust Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated March __, 1997,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are used
as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other than
the documents listed above and we have assumed that there exists no provision in
any document that we have not reviewed that bears upon or
<PAGE>
Commercial Federal Corporation
March 11, 1997
Page 2
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 Preferred
Security is to be issued by the Trust (collectively, the "Preferred Security
Holders") of a Preferred Security Certificate for such Preferred Security and
the payment for such Preferred Security acquired by it, in accordance with the
Trust Agreement and the Prospectus, and (vii) that the Preferred Securities are
issued and sold to the Preferred Security Holders in accordance with the Trust
Agreement and the Prospectus. We have not participated in the preparation of
the Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding the
securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
-------
(S) 3801, et seq.
-- ---
2. The Preferred Securities of the Trust 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 Preferred Security Holders, as beneficial owners of the Trust, are
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We note that the Preferred Security Holders may be
obligated to make payments as set forth in the Trust Agreement.
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 headings "Validity of Securities" and
"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 Securities and Exchange Commission thereunder. Except as
stated
<PAGE>
Commercial Federal Corporation
March 11, 1997
Page 3
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
<PAGE>
Exhibit 5.3
Form of Opinion of
Fitzgerald, Schorr, Barmettler & Brennan, P.C.
March __, 1997
Board of Directors
Commercial Federal Corporation
2120 South 72nd Street
Omaha, Nebraska 68124
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 filed by
Commercial Federal Corporation, Inc. (the "Company") and CFC Preferred Trust
("CFC Trust") with the Securities and Exchange Commission on January 30, 1997
relating to a public offering by CFC Trust of up to 1,800,000 __% Cumulative
Preferred Securities (the "Preferred Securities"), please be advised that as
counsel to the Company, upon examination of such corporate documents and records
as we have deemed necessary or advisable for the purposes of this opinion, it is
our opinion that the Guarantee, when executed and delivered as contemplated by
the Registration Statement, will be validly issued obligations of the Company
enforceable in accordance with their terms except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity .
Capitalized terms used herein shall have the definitions given to such
terms in the Registration Statement. We hereby consent to the filing of this
opinion as an exhibit to the Registration Statement, and to the reference to our
firm under the heading "Legal Matters" in the Prospectus comprising a part of
the Registration Statement.
Very truly yours,
FITZGERALD, SCHORR, BARMETTLER & BRENNAN, P.C.
<PAGE>
EXHIBIT 12
COMMERCIAL FEDERAL CORPORATION
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Dollars in Thousands)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Six Months Ended
December 31, Year Ended June 30,
--------------------------------------------------------------------
1996 1995 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPUTATION OF EARNINGS:
- ------------------------
Income (loss) before income taxes, extraordinary items and
cumulative effects of changes in accounting principles $ 17,278 $ 35,931 $ 82,268 $ 54,327 $ 15,248 $ 56,197 $ 73,489
Fixed charges 168,292 168,869 329,262 305,506 256,999 277,347 326,202
-------- -------- -------- -------- -------- -------- --------
Total earnings for computation $185,578 $204,800 $411,530 $359,833 $272,247 $333,544 $399,691
======== ======== ======== ======== ======== ======== ========
Total earnings for computation excluding interest on deposits $ 74,496 $ 98,051 $197,490 $179,670 $129,690 $194,044 $222,794
======== ======== ======== ======== ======== ======== ========
COMPUTATION OF FIXED CHARGES:
- -----------------------------
Net rental expense $ 1,043 $ 1,601 $ 2,834 $ 2,939 $ 2,690 $ 2,289 $ 2,025
======== ======== ======== ======== ======== ======== ========
Portion of rentals deemed representative of interest $ 348 $ 534 $ 945 $ 980 $ 897 $ 763 $ 675
-------- -------- -------- -------- -------- -------- --------
Interest:
Interest on deposits 111,074 106,749 214,040 180,163 142,557 139,500 176,897
Interest on borrowings 56,870 61,586 114,277 124,363 113,545 137,084 175,630
-------- -------- -------- -------- -------- -------- --------
Total interest 167,944 168,335 328,317 304,526 256,102 276,584 352,527
-------- -------- -------- -------- -------- -------- --------
Total fixed charges $168,292 $168,869 $329,262 $305,506 $256,999 $277,347 $353,202
======== ======== ======== ======== ======== ======== ========
Total fixed charges excluding interest on deposits $ 57,218 $ 62,120 $115,222 $125,343 $114,442 $137,847 $176,305
======== ======== ======== ======== ======== ======== ========
RATIO OF EARNINGS TO FIXED CHARGES:
- -----------------------------------
Excluding interest on deposits 1.30x 1.58x 1.71x 1.43x 1.13x 1.41x 1.26x
Including interest on deposits 1.10x 1.21x 1.25x 1.18x 1.06x 1.20x 1.13x
</TABLE>
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statements No. 333-20711 and 333-20711-01 of Commercial Federal
Corporation and CFC Preferred Trust on Form S-3 of our report dated August 23,
1996 (which expresses an unqualified opinion and includes an explanatory
paragraph relating to a change in the method of accounting for mortgage
servicing rights in fiscal year 1996 and a change in the method of accounting
for income taxes, a change in the method of accounting for postretirement
benefits, and a change in the method of accounting for intangible assets in
fiscal year 1994), incorporated by reference in the Annual Report on Form 10-K
of Commercial Federal Corporation for the year ended June 30, 1996 and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
such Registration Statements.
/s/Deloitte & Touche LLP
Deloitte & Touche LLP
Omaha, Nebraska
March 10, 1997
<PAGE>
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) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer
Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
COMMERCIAL FEDERAL CORPORATION
(Name of obligor)
Nebraska 47-0658852
(State of Incorporation) (I.R.S. Employer
Identification No.)
2120 South 72nd Street
Omaha, Nebraska 68124
(Address of principal executive offices)
Debt Securities
(Title of indenture securities)
<PAGE>
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.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164 West
Jackson Boulevard, Chicago, Illinois; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System,Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise corporate
trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the Trustee,
describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee is now in effect
which includes the authority of the trustee to commence business and to
exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between Harris
Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which
constitutes the articles of association of the Trustee as now in effect
and includes the authority of the Trustee to commence business and to
exercise corporate trust powers was filed in connection with the
Registration Statement of Louisville Gas and Electric Company, File No.
2-44295, and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
(included as Exhibit C to this statement)
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 5th day of March, 1997.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
---------------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
---------------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1996, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
[LOGO OF HARRIS BANK APPEARS HERE]
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1996, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin........... $1,751,494
Interest bearing balances..................................... $839,856
Securities:...............................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $3,137,919
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement
subsidiaries, and in IBF's:
Federal funds sold........................................... $478,625
Securities purchased under agreements to resell.............. $0
Loans and lease financing receivables:
Loans and leases, net of unearned income..................... $7,897,067
LESS: Allowance for loan and lease losses................... $108,949
----------------
Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b)................................. $7,788,118
Assets held in trading accounts......... $74,302
Premises and fixed assets (including capitalized leases).................. $172,267
Other real estate owned................................................... $142
Investments in unconsolidated subsidiaries and associated companies....... $60
Customer's liability to this bank on acceptances outstanding.............. $100,950
Intangible assets......................................................... $299,478
Other assets.............................................................. $563,022
-----------------------
TOTAL ASSETS $15,206,233
=======================
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits:
In domestic offices.................................................... $8,013,146
Non-interest bearing................................................ $3,248,897
Interest bearing.................................................... $4,764,249
In foreign offices, Edge and Agreement subsidiaries, and IBF's......... $2,055,520
Non-interest bearing................................................ $32,775
Interest bearing.................................................... $2,022,745
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds purchased................................................ $886,457
Securities sold under agreements to repurchase......................... $1,841,475
Trading Liabilities
Other borrowed money:..................................................... $40,157
a. With remaining maturity of one year or less $606,331
b. With remaining maturity of more than one year $9,434
Bank's liability on acceptances executed and outstanding $100,950
Subordinated notes and debentures......................................... $310,000
Other liabilities......................................................... $186,408
-----------------------
TOTAL LIABILITIES $14,049,878
=======================
EQUITY CAPITAL
Common stock.............................................................. $100,000
Surplus................................................................... $600,295
a. Undivided profits and capital reserves................................. $486,054
b. Net unrealized holding gains (losses) on available-for-sale securities ($29,994)
-----------------------
TOTAL EQUITY CAPITAL $1,156,355
-----------------------
Total liabilities, limited-life preferred stock, and equity capital....... $15,206,233
=======================
</TABLE>
I, Steve Neudecker, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
STEVE NEUDECKER
10/30/96
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
MARIBETH S. RAHE
Directors.
4
<PAGE>
Exhibit C
Harris Trust and
Savings Bank
Bylaws
December, 1996
[LOGO OF HARRIS BANK APPEARS HERE]
<PAGE>
ARTICLE I: Meetings of Stockholders
------------------------------------
Section 1. Time and Notice. The annual meeting of stockholders shall be held
on the third Wednesday of April as soon as practicable after the adjournment of
the annual meeting of the stockholders of Harris Bankcorp, Inc. for the election
of directors and for such other business as may properly come before the
meeting.
Notice of the place, day and time of the annual meeting shall be given by
mailing not less than ten nor more than forty days previous to such meeting, a
notice addressed to each stockholder entitled to vote, at his address as the
same shall appear on the stock books of the Bank.
Section 2. Special Meetings. Special meetings of stockholders may be called at
any time by the Board of Directors or by the Chairman of the Board, a Vice Chair
of the Board or the President or by a majority of the directors without a
meeting. It shall be the duty of the Chairman of the Board to call such
meetings whenever requested in writing so to do by stockholders owning a
majority of the capital stock. Notice of such special meetings stating the
purpose thereof shall be given in the same manner as for the annual meeting,
unless the purpose of the meeting is to change the Bank's charter, in which
event such notice shall be given within the time and published as provided for
in the following Section 3.
Section 3. Charter Amendment. If any special meeting is called to effect a
change in the Bank's charter as provided for in Section 17 of the Illinois
Banking Act, the Board of Directors shall adopt a resolution setting forth the
proposed amendment and directing that it be submitted to vote at the special
meeting; and notice of the purpose, place, day and hour of the special meeting
shall be given by publication thereof at least once in each week for three
successive weeks immediately preceding the week during which the meeting is to
be held in a newspaper published in the city of Chicago and by mailing such
notice not less than thirty days previous to such meeting to each stockholder
entitled to vote at his address as the same shall appear on the stock books of
the Bank.
Section 4. Location. The Board of Directors may designate any place in the
State of Illinois as the place of meeting for any annual or special meeting.
Section 5. Record Date. In lieu of closing the stock transfer books for the
purpose of determining stockholders entitled to notice of or to vote at any
meeting of stockholders, or stockholders entitled to receive payment of any
dividend, or in order to make a determination of stockholders for any other
proper purpose, the Board of Directors may fix in advance a date as the record
date for any such determination. In the absence of specific action by the Board
closing the stock transfer books or fixing a different record date for each
annual and each special meeting of the stockholders, the date on which notice of
such meeting is mailed shall be the record date for such determination of
stockholders entitled to vote.
Section 6. Quorum. A majority of the outstanding shares of the capital stock
of the Bank, represented either by the holders thereof or by duly authenticated
proxies, shall constitute a quorum for the transaction of business at any
meeting of the stockholders, but in the absence of a quorum a meeting may be
adjourned from time to time without notice to the stockholders.
C-1
<PAGE>
ARTICLE II: Directors
- ----------------------
Section 1. Powers. The business and affairs of the Bank shall be managed by
the Board of Directors. The Board of Directors may adopt such rules and
regulations for the conduct of its meetings and the management of the affairs of
the Bank as it may deem proper, not inconsistent with the laws of the United
States, of the State of Illinois, or these bylaws; and all officers and
employees shall strictly adhere to and be bound by such rules and regulations.
Directors need not be stockholders of the Bank or of any company which has
control over the Bank within the meaning of Section 2 of the Illinois Bank
Holding Company Act, as now or hereafter amended.
Section 2. Committees. The Board of Directors may, by resolution or
resolutions passed by majority of the whole Board, designate an Executive
Committee and such other committees as it may deem necessary, and from time to
time suspend or continue the powers and duties of any committee. The Chairman
of the Board, a Vice Chair of the Board, the President or the member or members
of any Board committee present at any duly called meeting and not disqualified
from voting, whether or not such member or members constitute a quorum, may
designate another member or other members of the Board of Directors to act at
such meeting, and any director or directors so designated shall have the same
powers, duties and compensation as regular members. The presence at the meeting
of any director or directors so designated shall be considered in determining
whether a quorum is present.
Section 3. Vacancies. Vacancies in the Board of Directors may be filled for
the unexpired term at a special meeting of the stockholders called for that
purpose. Additionally, the Board of Directors pursuant to paragraph (5) of
Section 16 of the Illinois Banking Act, by the affirmative vote of a majority of
the Board of Directors at any regular or special meeting of the Board, may
during the interval between annual meetings of stockholders elect not more than
a total of three persons as directors to fill vacancies arising during such
interval.
Section 4. Meetings. Regular meetings of the Board of Directors shall be held
on the third Wednesday of each month at 11:00 o'clock a.m. (except for the
meeting, if any, in January, April, July and October which shall be held at 9:30
o'clock a.m.) unless such day be a legal holiday, in which case the regular
meeting shall be held at the same hour on the next business day, or at such
other time, which may be a legal holiday, as the Board of Directors may
determine. There shall be a minimum of two such regular meetings in each
calendar quarter, the times of such meetings to be determined by the Chairman of
the Board, or in his temporary absence, a Vice Chair of the Board. All such
regular meetings shall be held at the offices of the Bank, or at such other
place or such other time as the Chairman of the Board or a Vice Chair of the
Board may at any time designate, and in the event of such designation, notice of
the alternate meeting place or time shall be given by mailing the same to each
director not later than five business days preceding the date of the meeting, or
by telegraphing or telefaxing the same to him or her or delivering the same to
him or her personally not later than the day previous to such meeting, but save
for any such notice of alternate meeting place or time, such regular meetings
shall be held without other notice than this bylaw. Special meetings may be
called by the Chairman of the Board or a Vice Chair of the Board. Except to the
extent the time or method of giving notice is regulated by statute, notice of
any such meeting shall be given in the same manner as provided for notice or
regular meetings. Any director may waive notice of any meeting by waiver signed
either before or after such meeting. Except as otherwise required by statute or
these bylaws, neither the business to be transacted at, nor the purpose of any
meeting need be specified in the notice or waiver.
Section 5. Quorum. A majority of the authorized number of directors shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, but less than a quorum shall have power to take a recess or
adjourn a meeting to another day or hour.
C-2
<PAGE>
Section 6. Secretary of the Board. The Board of Directors may appoint a
Secretary of the Board other than the Secretary of the Bank as provided for in
Section 10 of Article III of the bylaws, who may or may not be a member of the
Board and who shall keep the minutes of the meetings of the Board and perform
such other duties as the Board shall from time to time prescribe.
ARTICLE III: Officers
- ----------------------
Section 1. Number and Tenure. The officers of the Bank shall be chosen by the
Board of Directors and may consist of a Chairman of the Board, one or more Vice
Chairs of the Board and a President, each of whom shall be a member of the
Board, and one of whom shall be designated the Chief Executive Officer, one or
more Senior Executive Vice Presidents, one or more Executive Vice Presidents,
and one or more Executives (of any whose titles may be accompanied by reference
to the area of their respective responsibilities), one or more Senior Vice
Presidents, Vice President, Assistant Vice Presidents, a Secretary, one or more
Assistant Secretaries, a Cashier, a Controller, an Auditor, one or more Trust
Counsel, and such other officers as the Chief Executive Officer may from time to
time designate. Officer directors shall be elected by the Board. Executives
who are not also directors shall be elected by the Directors Committee on
Compensation. All other officers shall be appointed by the Chief Executive
Officer. Officers, whether elected or appointed, shall hold their respective
offices until the next succeeding annual meeting of stockholders and their
successors are elected and qualified, or until their retirement, resignation,
removal or appointment to another office. Any officer may be removed by the
Chief Executive Officer or the Board at any time with or without cause.
Section 2. Chief Executive Officer. The Chief Executive Officer shall exercise
general control and supervision of the business and affairs of the Bank, shall
see to it that all resolutions and orders of the Board of Directors are effected
and shall have such other powers and duties as the directors may specify. He
may appoint persons to hold office as Senior Vice President or below. During
any absence or disability to act of the Chief Executive Officer, his powers and
duties shall be exercised and performed by a Vice Chair of the Board, the
President, or by an officer designated by the Board of Directors for that
purpose. He shall be an ex-officio member of all Board committees.
Section 3. Chairman of the Board. The Chairman of the Board shall preside at
all meetings of the Board of Directors and of the stockholders. He shall have
general responsibility for all Board matters, including without limitation, the
development of corporate governance policies and processes, committee
assignments, and meeting agendas. He shall have such other powers and duties as
the Board of Directors may specify. He shall be an ex-officio member of all
Board committees.
Section 4. President. The President shall have such powers and duties as the
Board of Directors or the Chief Executive Officer may specify. During any
absence or disability to act of the President, his powers and duties shall be
performed and exercised by an officer designated in writing by the Chief
Executive, or in the absence of such designation, by an officer designated by
the Board of Directors for that purpose.
Section 5. Chief Operating Officer. The Chief Operating Officer shall manage
or supervise the management of the day-to-day operations of the Bank and shall
have such powers and duties as the Chief Executive Officer or the Board of
Directors may specify.
Section 6. Vice Chair of the Board. A Vice Chair of the Board shall have such
powers and duties as the Board of Directors may specify. During any absence or
disability to act of the Chairman of the Board, a Vice Chair of the Board shall
preside at all meetings of the Board of Directors and of the stockholders and
have and exercise his powers and duties.
C-3
<PAGE>
Section 7. Senior Executive Vice Presidents, Executive Vice Presidents,
Executives, Senior Vice Presidents, Vice Presidents. Each Senior Executive Vice
President, Executive Vice President, Executive, Senior Vice President, and Vice
President shall have and perform such duties as the Chairman of the Board, a
Vice Chair of the Board or the President may delegate and is authorized to
accept trusts, execute contracts and agreements in relation to trusts and loans,
sign authentications and certificates in connection with trusts and certificates
of stock, and sign or countersign checks, drafts, certificates of deposit and
letters of credit and all similar instruments or obligations issued by the Bank.
Section 8. Assistant Vice Presidents. Each Assistant Vice President is
authorized, subject to the supervision and direction of the President or a Vice
President, to accept trusts, execute contracts and agreements in relation to
trusts and to sign authentications and certificates in connection with trusts
and certificates of stock; also to sign or countersign checks, drafts,
certificates of deposit and letters of credit and all similar instruments or
obligations issued by the Bank.
Section 9. Cashier. The Cashier shall have charge and superintendence of the
operations of the Bank touching the deposit of money and commercial and savings
accounts, subject to the supervision and direction of the Chairman of the Board,
a Vice Chair of the Board, the President or a Vice President, and is authorized
to sign or countersign checks, drafts, certificates of deposit and letters of
credit and, as provided in Article V hereof, to sign certificates representing
stock of the Bank.
Section 10. Secretary. The Secretary shall act as secretary of the Board and
as secretary at meetings of the stockholders and, in general, shall have charge
of all records of the Bank relating to its organization and corporate action and
shall have power to certify the contents thereof.
Section 11. Assistant Secretaries. Each Assistant Secretary is authorized,
subject to the supervision and direction of the President, a Vice President or
the Secretary, to accept trusts, execute contracts and agreements in relation to
trusts, to sign authentications and certificates in connection with trusts and
certificates of stock, and to certify the contents of all records of the Bank,
to the same extent as the Secretary; to sign or countersign checks, drafts,
certificates of deposit, letters of credit and, as provided in Article V hereof,
certificates representing the stock of the Bank.
Section 12. Other Officers. All other officers shall perform such duties and
possess such powers as from time to time may be directed or delegated by the
Board of Directors, the Executive Committee, the Chairman of the Board, a Vice
Chair of the Board, the President or a Vice President.
Section 13. Other Signing Authority. In addition to the signing authorities
granted by or pursuant to the foregoing provisions of this Article III, the
Chairman of the Board, a Vice Chair of the Board, the President, any Senior
Executive Vice President, Executive Vice President, or Executive or any Senior
Vice President within the area of his assigned duties or responsibilities, may
designate from time to time in writing any officer or employee, either by name
or by title, to sign or execute any documents, instruments or contracts to which
the Bank is a party.
ARTICLE IV: Seal
- -----------------
The Board shall provide a Seal for the Bank, which shall be in the charge of the
Secretary or any other officer designated by him or by the President or the
Executive Committee, such Seal or a facsimile thereof to be affixed to or
otherwise reproduced on certificates of stock and any other documents in
accordance with the directions of the Board, the Executive Committee, the
President, any Vice President or the Secretary.
C-4
<PAGE>
ARTICLE V: Capital Stock
- -------------------------
Section 1. Transfer. Transfers of shares of stock of the Bank shall be made
upon the books of the Bank by the registered holder in person, or by attorney
duly authorized, on surrender of the certificate or certificates representing
such shares. The person in whose name shares of stock stand on the books of the
Bank shall be deemed to be the owner thereof for all purposes as regards the
Bank. All transfers of shares of stock in the Bank to a fiduciary, including an
executor, administrator, trustee, guardian, committee, conservator, curator,
tutor, custodian or nominee, and any transfer of shares of stock of the Bank
upon assignment by such fiduciary, shall be made by the Bank under, and the Bank
shall have the protections and rights with respect thereto provided for by, an
Act of the General Assembly of the State of Illinois entitled "An Act relating
to the transfer of securities to and by fiduciaries and to repeal a part of an
Act therein named", approved May 23, 1957.
Section 2. Certificates. All certificates representing stock of the Bank shall
be signed manually by the Chairman of the Board or the President or a Vice
President or the Cashier, and by the Secretary or an Assistant Secretary.
ARTICLE VI: Loans on Stock of this Bank
- ----------------------------------------
The Bank shall make no loans in whole or in part upon the stock of the Bank as
collateral.
ARTICLE VII: Audits
- --------------------
Section 1. Scope. The scope of and the procedures or tests to be followed in
the auditing division in examining the books, assets, liabilities and affairs of
the Bank and reporting thereon to the Board of Directors, and the extent and
manner of coordinating such examination and report into or with any audit report
by certified public accountants, shall be such as may be from time to time
prescribed by the Board of Directors or by an Examining Committee appointed from
time to time by the Board of Directors and consisting of at least two directors
who are not officers of the Bank.
Section 2. Reports. The Auditor, or the officer designated by the Board as
responsible for the supervision of the auditing division, shall report under
seal to the Examining Committee appointed by the Board of Directors and, if none
is appointed, to the Board of Directors, itself, on the audit program and
internal controls in each quarter of the year and shall appear at any time at
the request of the Board of Directors or the Executive Committee at any regular
or special meetings thereof and report on the results of examinations, the
soundness of condition of the Bank and any other pertinent information in
connection therewith. The Auditor, or officer designated by the Board as
responsible for the supervision of the auditing division, shall have continuing
responsibility to report promptly under seal to the Board of Directors or the
Executive Committee any material irregularities which in his opinion are of
sufficient importance to be brought to their attention before his next quarterly
report.
C-5
<PAGE>
ARTICLE VIII: Indemnification
- ------------------------------
Section 1. Applicability. Every person now or heretofore or hereafter serving
as a director, officer or employee of the Bank or of a wholly owned subsidiary
of the Bank, and every officer or employee of the Bank or of any such wholly
owned subsidiary now, heretofore or hereafter serving as director or officer of
one or more other corporations or organizations, or as trustee, executor,
administrator, guardian or conservator or in a similar fiduciary capacity, at
the request of the Bank as evidenced by action of the Executive Committee or the
Board designating the situation as one entitled to the benefit of this bylaw or
to the benefit of a similar indemnifying resolution of the Board, shall be
indemnified or reimbursed by the Bank from and for expenses, liabilities, fines,
penalties and costs that may be imposed upon or incurred by him, including by
way of settlement, in connection with any action, suit, or proceeding, civil or
criminal, in which he may be or become a party by reason of his being or having
been such director, officer, trustee, executor, administrator, guardian,
conservator or other such fiduciary; provided, however, that no such person
shall be entitled to such indemnity or reimbursement.
(a) in relation to matters as to which he shall be finally adjudged in
an action brought by the Bank directly or derivatively to be liable for breach
of a duty to or for nonpayment of a liability to the Bank; or
(b) in relation to matters included in an action, suit or proceeding
of the kind referred to in the foregoing subparagraph (a) but which is settled
or disposed of without final adjudication on the merits except and unless the
Board or, as the case may be, the stockholders, shall make the same findings as
are provided for in the following subparagraph (c) as a condition precedent to
such indemnity or reimbursement; or
(c) in relation to matters involved in an action, suit or proceeding
which is of a kind other than that referred to in the foregoing subparagraph
(a), unless such action, suit or proceeding is dismissed or otherwise disposed
of on the merits in favor of such person, or, if not so dismissed or disposed
of, unless the Board shall find that such person acted in good faith for a
purpose which he reasonably believed to be in the best interests of the Bank,
and in the case of criminal actions or proceedings, in addition had good warrant
to believe that his conduct was not unlawful.
Section 2. Findings. The action by the Board called for in subparagraph (c) of
Section 1 hereof shall be at a meeting at which a quorum consisting of directors
who are not parties to such suit, action or proceeding is present; and in taking
such action no director involved shall be qualified to vote thereon. In the
absence of quorum, such finding shall nevertheless be effective if made by
resolution of the stockholders adopted at an annual meeting or at a special
meeting of the stockholders. The right of indemnification or reimbursement
provided for by this Article shall not be exclusive and shall not affect any
right to indemnification or reimbursement which any director, officer or
employee might otherwise have as a matter of law.
The term "Bank" as used in this Article shall be deemed to include the Bank and
the predecessor bank of the same name, all with the same effect as if the Bank
and said predecessor had at all times been one and the same corporation.
Section 3. Legal Expenses. Expenses incurred by a director, officer or
employee in defending a civil or criminal action, suit or proceeding may be paid
by the Bank in advance of the final disposition of such action, suit or
proceeding as authorized by the Board of Directors in a specific case upon
receipt of an undertaking by or on behalf of the director, officer or employee
to repay such amount unless it shall ultimately be determined that he is
entitled to indemnification as provided in this Article VIII.
C-6
<PAGE>
ARTICLE IX: Management Succession Provisions
- ---------------------------------------------
In the temporary absence of the Chairman of the Board, the Vice Chairs of the
Board and the President, certain Senior Executive Vice Presidents, Executive
Vice Presidents, Executives or Senior Vice Presidents shall have and exercise
all the powers and duties of the Chief Executive Officer until the Board of
Directors meets to provide for permanent succession, the order of precedence
having been set by the Board of Directors referring to this Article IX. The
provisions of this paragraph are, however, subject to the right of the
stockholder, the Board of Directors and of the Executive Committee to appoint
the presiding officer of their respective meetings.
ARTICLE X: Amendment or Repeal
- -------------------------------
These bylaws, or any part hereof, may be amended, altered, changed, added to or
repealed, and others adopted in their place by the Board of Directors of the
Bank at any regular or special meeting.
. . . . . . . . . . . . . . . . .
C-7
<PAGE>
Exhibit 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer
Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
COMMERCIAL FEDERAL CORPORATION
(Name of obligor)
Nebraska 47-0658852
(State of Incorporation) (I.R.S. Employer
Identification No.)
2120 South 72nd Street
Omaha, Nebraska 68124
(Address of principal executive offices)
Preferred Securities
(Title of indenture securities)
<PAGE>
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.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164 West
Jackson Boulevard, Chicago, Illinois; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System,Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise corporate
trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the Trustee,
describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee is now in effect
which includes the authority of the trustee to commence business and to
exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between Harris
Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which
constitutes the articles of association of the Trustee as now in effect
and includes the authority of the Trustee to commence business and to
exercise corporate trust powers was filed in connection with the
Registration Statement of Louisville Gas and Electric Company, File No.
2-44295, and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
(included as Exhibit C to this statement)
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 5th day of March, 1997.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
---------------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
---------------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1996, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
[LOGO OF HARRIS BANK APPEARS HERE]
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1996, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin........... $1,751,494
Interest bearing balances..................................... $839,856
Securities:...............................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $3,137,919
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement
subsidiaries, and in IBF's:
Federal funds sold........................................... $478,625
Securities purchased under agreements to resell.............. $0
Loans and lease financing receivables:
Loans and leases, net of unearned income..................... $7,897,067
LESS: Allowance for loan and lease losses................... $108,949
----------------
Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b)................................. $7,788,118
Assets held in trading accounts......... $74,302
Premises and fixed assets (including capitalized leases).................. $172,267
Other real estate owned................................................... $142
Investments in unconsolidated subsidiaries and associated companies....... $60
Customer's liability to this bank on acceptances outstanding.............. $100,950
Intangible assets......................................................... $299,478
Other assets.............................................................. $563,022
-----------------------
TOTAL ASSETS $15,206,233
=======================
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits:
In domestic offices.................................................... $8,013,146
Non-interest bearing................................................ $3,248,897
Interest bearing.................................................... $4,764,249
In foreign offices, Edge and Agreement subsidiaries, and IBF's......... $2,055,520
Non-interest bearing................................................ $32,775
Interest bearing.................................................... $2,022,745
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds purchased................................................ $886,457
Securities sold under agreements to repurchase......................... $1,841,475
Trading Liabilities
Other borrowed money:..................................................... $40,157
a. With remaining maturity of one year or less $606,331
b. With remaining maturity of more than one year $9,434
Bank's liability on acceptances executed and outstanding $100,950
Subordinated notes and debentures......................................... $310,000
Other liabilities......................................................... $186,408
-----------------------
TOTAL LIABILITIES $14,049,878
=======================
EQUITY CAPITAL
Common stock.............................................................. $100,000
Surplus................................................................... $600,295
a. Undivided profits and capital reserves................................. $486,054
b. Net unrealized holding gains (losses) on available-for-sale securities ($29,994)
-----------------------
TOTAL EQUITY CAPITAL $1,156,355
-----------------------
Total liabilities, limited-life preferred stock, and equity capital....... $15,206,233
=======================
</TABLE>
I, Steve Neudecker, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
STEVE NEUDECKER
10/30/96
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
MARIBETH S. RAHE
Directors.
4
<PAGE>
Exhibit C
Harris Trust and
Savings Bank
Bylaws
December, 1996
[LOGO OF HARRIS BANK APPEARS HERE]
<PAGE>
ARTICLE I: Meetings of Stockholders
------------------------------------
Section 1. Time and Notice. The annual meeting of stockholders shall be held
on the third Wednesday of April as soon as practicable after the adjournment of
the annual meeting of the stockholders of Harris Bankcorp, Inc. for the election
of directors and for such other business as may properly come before the
meeting.
Notice of the place, day and time of the annual meeting shall be given by
mailing not less than ten nor more than forty days previous to such meeting, a
notice addressed to each stockholder entitled to vote, at his address as the
same shall appear on the stock books of the Bank.
Section 2. Special Meetings. Special meetings of stockholders may be called at
any time by the Board of Directors or by the Chairman of the Board, a Vice Chair
of the Board or the President or by a majority of the directors without a
meeting. It shall be the duty of the Chairman of the Board to call such
meetings whenever requested in writing so to do by stockholders owning a
majority of the capital stock. Notice of such special meetings stating the
purpose thereof shall be given in the same manner as for the annual meeting,
unless the purpose of the meeting is to change the Bank's charter, in which
event such notice shall be given within the time and published as provided for
in the following Section 3.
Section 3. Charter Amendment. If any special meeting is called to effect a
change in the Bank's charter as provided for in Section 17 of the Illinois
Banking Act, the Board of Directors shall adopt a resolution setting forth the
proposed amendment and directing that it be submitted to vote at the special
meeting; and notice of the purpose, place, day and hour of the special meeting
shall be given by publication thereof at least once in each week for three
successive weeks immediately preceding the week during which the meeting is to
be held in a newspaper published in the city of Chicago and by mailing such
notice not less than thirty days previous to such meeting to each stockholder
entitled to vote at his address as the same shall appear on the stock books of
the Bank.
Section 4. Location. The Board of Directors may designate any place in the
State of Illinois as the place of meeting for any annual or special meeting.
Section 5. Record Date. In lieu of closing the stock transfer books for the
purpose of determining stockholders entitled to notice of or to vote at any
meeting of stockholders, or stockholders entitled to receive payment of any
dividend, or in order to make a determination of stockholders for any other
proper purpose, the Board of Directors may fix in advance a date as the record
date for any such determination. In the absence of specific action by the Board
closing the stock transfer books or fixing a different record date for each
annual and each special meeting of the stockholders, the date on which notice of
such meeting is mailed shall be the record date for such determination of
stockholders entitled to vote.
Section 6. Quorum. A majority of the outstanding shares of the capital stock
of the Bank, represented either by the holders thereof or by duly authenticated
proxies, shall constitute a quorum for the transaction of business at any
meeting of the stockholders, but in the absence of a quorum a meeting may be
adjourned from time to time without notice to the stockholders.
C-1
<PAGE>
ARTICLE II: Directors
- ----------------------
Section 1. Powers. The business and affairs of the Bank shall be managed by
the Board of Directors. The Board of Directors may adopt such rules and
regulations for the conduct of its meetings and the management of the affairs of
the Bank as it may deem proper, not inconsistent with the laws of the United
States, of the State of Illinois, or these bylaws; and all officers and
employees shall strictly adhere to and be bound by such rules and regulations.
Directors need not be stockholders of the Bank or of any company which has
control over the Bank within the meaning of Section 2 of the Illinois Bank
Holding Company Act, as now or hereafter amended.
Section 2. Committees. The Board of Directors may, by resolution or
resolutions passed by majority of the whole Board, designate an Executive
Committee and such other committees as it may deem necessary, and from time to
time suspend or continue the powers and duties of any committee. The Chairman
of the Board, a Vice Chair of the Board, the President or the member or members
of any Board committee present at any duly called meeting and not disqualified
from voting, whether or not such member or members constitute a quorum, may
designate another member or other members of the Board of Directors to act at
such meeting, and any director or directors so designated shall have the same
powers, duties and compensation as regular members. The presence at the meeting
of any director or directors so designated shall be considered in determining
whether a quorum is present.
Section 3. Vacancies. Vacancies in the Board of Directors may be filled for
the unexpired term at a special meeting of the stockholders called for that
purpose. Additionally, the Board of Directors pursuant to paragraph (5) of
Section 16 of the Illinois Banking Act, by the affirmative vote of a majority of
the Board of Directors at any regular or special meeting of the Board, may
during the interval between annual meetings of stockholders elect not more than
a total of three persons as directors to fill vacancies arising during such
interval.
Section 4. Meetings. Regular meetings of the Board of Directors shall be held
on the third Wednesday of each month at 11:00 o'clock a.m. (except for the
meeting, if any, in January, April, July and October which shall be held at 9:30
o'clock a.m.) unless such day be a legal holiday, in which case the regular
meeting shall be held at the same hour on the next business day, or at such
other time, which may be a legal holiday, as the Board of Directors may
determine. There shall be a minimum of two such regular meetings in each
calendar quarter, the times of such meetings to be determined by the Chairman of
the Board, or in his temporary absence, a Vice Chair of the Board. All such
regular meetings shall be held at the offices of the Bank, or at such other
place or such other time as the Chairman of the Board or a Vice Chair of the
Board may at any time designate, and in the event of such designation, notice of
the alternate meeting place or time shall be given by mailing the same to each
director not later than five business days preceding the date of the meeting, or
by telegraphing or telefaxing the same to him or her or delivering the same to
him or her personally not later than the day previous to such meeting, but save
for any such notice of alternate meeting place or time, such regular meetings
shall be held without other notice than this bylaw. Special meetings may be
called by the Chairman of the Board or a Vice Chair of the Board. Except to the
extent the time or method of giving notice is regulated by statute, notice of
any such meeting shall be given in the same manner as provided for notice or
regular meetings. Any director may waive notice of any meeting by waiver signed
either before or after such meeting. Except as otherwise required by statute or
these bylaws, neither the business to be transacted at, nor the purpose of any
meeting need be specified in the notice or waiver.
Section 5. Quorum. A majority of the authorized number of directors shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, but less than a quorum shall have power to take a recess or
adjourn a meeting to another day or hour.
C-2
<PAGE>
Section 6. Secretary of the Board. The Board of Directors may appoint a
Secretary of the Board other than the Secretary of the Bank as provided for in
Section 10 of Article III of the bylaws, who may or may not be a member of the
Board and who shall keep the minutes of the meetings of the Board and perform
such other duties as the Board shall from time to time prescribe.
ARTICLE III: Officers
- ----------------------
Section 1. Number and Tenure. The officers of the Bank shall be chosen by the
Board of Directors and may consist of a Chairman of the Board, one or more Vice
Chairs of the Board and a President, each of whom shall be a member of the
Board, and one of whom shall be designated the Chief Executive Officer, one or
more Senior Executive Vice Presidents, one or more Executive Vice Presidents,
and one or more Executives (of any whose titles may be accompanied by reference
to the area of their respective responsibilities), one or more Senior Vice
Presidents, Vice President, Assistant Vice Presidents, a Secretary, one or more
Assistant Secretaries, a Cashier, a Controller, an Auditor, one or more Trust
Counsel, and such other officers as the Chief Executive Officer may from time to
time designate. Officer directors shall be elected by the Board. Executives
who are not also directors shall be elected by the Directors Committee on
Compensation. All other officers shall be appointed by the Chief Executive
Officer. Officers, whether elected or appointed, shall hold their respective
offices until the next succeeding annual meeting of stockholders and their
successors are elected and qualified, or until their retirement, resignation,
removal or appointment to another office. Any officer may be removed by the
Chief Executive Officer or the Board at any time with or without cause.
Section 2. Chief Executive Officer. The Chief Executive Officer shall exercise
general control and supervision of the business and affairs of the Bank, shall
see to it that all resolutions and orders of the Board of Directors are effected
and shall have such other powers and duties as the directors may specify. He
may appoint persons to hold office as Senior Vice President or below. During
any absence or disability to act of the Chief Executive Officer, his powers and
duties shall be exercised and performed by a Vice Chair of the Board, the
President, or by an officer designated by the Board of Directors for that
purpose. He shall be an ex-officio member of all Board committees.
Section 3. Chairman of the Board. The Chairman of the Board shall preside at
all meetings of the Board of Directors and of the stockholders. He shall have
general responsibility for all Board matters, including without limitation, the
development of corporate governance policies and processes, committee
assignments, and meeting agendas. He shall have such other powers and duties as
the Board of Directors may specify. He shall be an ex-officio member of all
Board committees.
Section 4. President. The President shall have such powers and duties as the
Board of Directors or the Chief Executive Officer may specify. During any
absence or disability to act of the President, his powers and duties shall be
performed and exercised by an officer designated in writing by the Chief
Executive, or in the absence of such designation, by an officer designated by
the Board of Directors for that purpose.
Section 5. Chief Operating Officer. The Chief Operating Officer shall manage
or supervise the management of the day-to-day operations of the Bank and shall
have such powers and duties as the Chief Executive Officer or the Board of
Directors may specify.
Section 6. Vice Chair of the Board. A Vice Chair of the Board shall have such
powers and duties as the Board of Directors may specify. During any absence or
disability to act of the Chairman of the Board, a Vice Chair of the Board shall
preside at all meetings of the Board of Directors and of the stockholders and
have and exercise his powers and duties.
C-3
<PAGE>
Section 7. Senior Executive Vice Presidents, Executive Vice Presidents,
Executives, Senior Vice Presidents, Vice Presidents. Each Senior Executive Vice
President, Executive Vice President, Executive, Senior Vice President, and Vice
President shall have and perform such duties as the Chairman of the Board, a
Vice Chair of the Board or the President may delegate and is authorized to
accept trusts, execute contracts and agreements in relation to trusts and loans,
sign authentications and certificates in connection with trusts and certificates
of stock, and sign or countersign checks, drafts, certificates of deposit and
letters of credit and all similar instruments or obligations issued by the Bank.
Section 8. Assistant Vice Presidents. Each Assistant Vice President is
authorized, subject to the supervision and direction of the President or a Vice
President, to accept trusts, execute contracts and agreements in relation to
trusts and to sign authentications and certificates in connection with trusts
and certificates of stock; also to sign or countersign checks, drafts,
certificates of deposit and letters of credit and all similar instruments or
obligations issued by the Bank.
Section 9. Cashier. The Cashier shall have charge and superintendence of the
operations of the Bank touching the deposit of money and commercial and savings
accounts, subject to the supervision and direction of the Chairman of the Board,
a Vice Chair of the Board, the President or a Vice President, and is authorized
to sign or countersign checks, drafts, certificates of deposit and letters of
credit and, as provided in Article V hereof, to sign certificates representing
stock of the Bank.
Section 10. Secretary. The Secretary shall act as secretary of the Board and
as secretary at meetings of the stockholders and, in general, shall have charge
of all records of the Bank relating to its organization and corporate action and
shall have power to certify the contents thereof.
Section 11. Assistant Secretaries. Each Assistant Secretary is authorized,
subject to the supervision and direction of the President, a Vice President or
the Secretary, to accept trusts, execute contracts and agreements in relation to
trusts, to sign authentications and certificates in connection with trusts and
certificates of stock, and to certify the contents of all records of the Bank,
to the same extent as the Secretary; to sign or countersign checks, drafts,
certificates of deposit, letters of credit and, as provided in Article V hereof,
certificates representing the stock of the Bank.
Section 12. Other Officers. All other officers shall perform such duties and
possess such powers as from time to time may be directed or delegated by the
Board of Directors, the Executive Committee, the Chairman of the Board, a Vice
Chair of the Board, the President or a Vice President.
Section 13. Other Signing Authority. In addition to the signing authorities
granted by or pursuant to the foregoing provisions of this Article III, the
Chairman of the Board, a Vice Chair of the Board, the President, any Senior
Executive Vice President, Executive Vice President, or Executive or any Senior
Vice President within the area of his assigned duties or responsibilities, may
designate from time to time in writing any officer or employee, either by name
or by title, to sign or execute any documents, instruments or contracts to which
the Bank is a party.
ARTICLE IV: Seal
- -----------------
The Board shall provide a Seal for the Bank, which shall be in the charge of the
Secretary or any other officer designated by him or by the President or the
Executive Committee, such Seal or a facsimile thereof to be affixed to or
otherwise reproduced on certificates of stock and any other documents in
accordance with the directions of the Board, the Executive Committee, the
President, any Vice President or the Secretary.
C-4
<PAGE>
ARTICLE V: Capital Stock
- -------------------------
Section 1. Transfer. Transfers of shares of stock of the Bank shall be made
upon the books of the Bank by the registered holder in person, or by attorney
duly authorized, on surrender of the certificate or certificates representing
such shares. The person in whose name shares of stock stand on the books of the
Bank shall be deemed to be the owner thereof for all purposes as regards the
Bank. All transfers of shares of stock in the Bank to a fiduciary, including an
executor, administrator, trustee, guardian, committee, conservator, curator,
tutor, custodian or nominee, and any transfer of shares of stock of the Bank
upon assignment by such fiduciary, shall be made by the Bank under, and the Bank
shall have the protections and rights with respect thereto provided for by, an
Act of the General Assembly of the State of Illinois entitled "An Act relating
to the transfer of securities to and by fiduciaries and to repeal a part of an
Act therein named", approved May 23, 1957.
Section 2. Certificates. All certificates representing stock of the Bank shall
be signed manually by the Chairman of the Board or the President or a Vice
President or the Cashier, and by the Secretary or an Assistant Secretary.
ARTICLE VI: Loans on Stock of this Bank
- ----------------------------------------
The Bank shall make no loans in whole or in part upon the stock of the Bank as
collateral.
ARTICLE VII: Audits
- --------------------
Section 1. Scope. The scope of and the procedures or tests to be followed in
the auditing division in examining the books, assets, liabilities and affairs of
the Bank and reporting thereon to the Board of Directors, and the extent and
manner of coordinating such examination and report into or with any audit report
by certified public accountants, shall be such as may be from time to time
prescribed by the Board of Directors or by an Examining Committee appointed from
time to time by the Board of Directors and consisting of at least two directors
who are not officers of the Bank.
Section 2. Reports. The Auditor, or the officer designated by the Board as
responsible for the supervision of the auditing division, shall report under
seal to the Examining Committee appointed by the Board of Directors and, if none
is appointed, to the Board of Directors, itself, on the audit program and
internal controls in each quarter of the year and shall appear at any time at
the request of the Board of Directors or the Executive Committee at any regular
or special meetings thereof and report on the results of examinations, the
soundness of condition of the Bank and any other pertinent information in
connection therewith. The Auditor, or officer designated by the Board as
responsible for the supervision of the auditing division, shall have continuing
responsibility to report promptly under seal to the Board of Directors or the
Executive Committee any material irregularities which in his opinion are of
sufficient importance to be brought to their attention before his next quarterly
report.
C-5
<PAGE>
ARTICLE VIII: Indemnification
- ------------------------------
Section 1. Applicability. Every person now or heretofore or hereafter serving
as a director, officer or employee of the Bank or of a wholly owned subsidiary
of the Bank, and every officer or employee of the Bank or of any such wholly
owned subsidiary now, heretofore or hereafter serving as director or officer of
one or more other corporations or organizations, or as trustee, executor,
administrator, guardian or conservator or in a similar fiduciary capacity, at
the request of the Bank as evidenced by action of the Executive Committee or the
Board designating the situation as one entitled to the benefit of this bylaw or
to the benefit of a similar indemnifying resolution of the Board, shall be
indemnified or reimbursed by the Bank from and for expenses, liabilities, fines,
penalties and costs that may be imposed upon or incurred by him, including by
way of settlement, in connection with any action, suit, or proceeding, civil or
criminal, in which he may be or become a party by reason of his being or having
been such director, officer, trustee, executor, administrator, guardian,
conservator or other such fiduciary; provided, however, that no such person
shall be entitled to such indemnity or reimbursement.
(a) in relation to matters as to which he shall be finally adjudged in
an action brought by the Bank directly or derivatively to be liable for breach
of a duty to or for nonpayment of a liability to the Bank; or
(b) in relation to matters included in an action, suit or proceeding
of the kind referred to in the foregoing subparagraph (a) but which is settled
or disposed of without final adjudication on the merits except and unless the
Board or, as the case may be, the stockholders, shall make the same findings as
are provided for in the following subparagraph (c) as a condition precedent to
such indemnity or reimbursement; or
(c) in relation to matters involved in an action, suit or proceeding
which is of a kind other than that referred to in the foregoing subparagraph
(a), unless such action, suit or proceeding is dismissed or otherwise disposed
of on the merits in favor of such person, or, if not so dismissed or disposed
of, unless the Board shall find that such person acted in good faith for a
purpose which he reasonably believed to be in the best interests of the Bank,
and in the case of criminal actions or proceedings, in addition had good warrant
to believe that his conduct was not unlawful.
Section 2. Findings. The action by the Board called for in subparagraph (c) of
Section 1 hereof shall be at a meeting at which a quorum consisting of directors
who are not parties to such suit, action or proceeding is present; and in taking
such action no director involved shall be qualified to vote thereon. In the
absence of quorum, such finding shall nevertheless be effective if made by
resolution of the stockholders adopted at an annual meeting or at a special
meeting of the stockholders. The right of indemnification or reimbursement
provided for by this Article shall not be exclusive and shall not affect any
right to indemnification or reimbursement which any director, officer or
employee might otherwise have as a matter of law.
The term "Bank" as used in this Article shall be deemed to include the Bank and
the predecessor bank of the same name, all with the same effect as if the Bank
and said predecessor had at all times been one and the same corporation.
Section 3. Legal Expenses. Expenses incurred by a director, officer or
employee in defending a civil or criminal action, suit or proceeding may be paid
by the Bank in advance of the final disposition of such action, suit or
proceeding as authorized by the Board of Directors in a specific case upon
receipt of an undertaking by or on behalf of the director, officer or employee
to repay such amount unless it shall ultimately be determined that he is
entitled to indemnification as provided in this Article VIII.
C-6
<PAGE>
ARTICLE IX: Management Succession Provisions
- ---------------------------------------------
In the temporary absence of the Chairman of the Board, the Vice Chairs of the
Board and the President, certain Senior Executive Vice Presidents, Executive
Vice Presidents, Executives or Senior Vice Presidents shall have and exercise
all the powers and duties of the Chief Executive Officer until the Board of
Directors meets to provide for permanent succession, the order of precedence
having been set by the Board of Directors referring to this Article IX. The
provisions of this paragraph are, however, subject to the right of the
stockholder, the Board of Directors and of the Executive Committee to appoint
the presiding officer of their respective meetings.
ARTICLE X: Amendment or Repeal
- -------------------------------
These bylaws, or any part hereof, may be amended, altered, changed, added to or
repealed, and others adopted in their place by the Board of Directors of the
Bank at any regular or special meeting.
. . . . . . . . . . . . . . . . .
C-7
<PAGE>
Exhibit 25.3
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer
Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
COMMERCIAL FEDERAL CORPORATION
(Name of obligor)
Nebraska 47-0658852
(State of Incorporation) (I.R.S. Employer
Identification No.)
2120 South 72nd Street
Omaha, Nebraska 68124
(Address of principal executive offices)
Guarantee of Preferred Securities
(Title of indenture securities)
<PAGE>
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.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164 West
Jackson Boulevard, Chicago, Illinois; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System,Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise corporate
trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the Trustee,
describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee is now in effect
which includes the authority of the trustee to commence business and to
exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between Harris
Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which
constitutes the articles of association of the Trustee as now in effect
and includes the authority of the Trustee to commence business and to
exercise corporate trust powers was filed in connection with the
Registration Statement of Louisville Gas and Electric Company, File No.
2-44295, and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
(included as Exhibit C to this statement)
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 5th day of March, 1997.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
---------------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
---------------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1996, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
[LOGO OF HARRIS BANK APPEARS HERE]
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1996, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin........... $1,751,494
Interest bearing balances..................................... $839,856
Securities:...............................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $3,137,919
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement
subsidiaries, and in IBF's:
Federal funds sold........................................... $478,625
Securities purchased under agreements to resell.............. $0
Loans and lease financing receivables:
Loans and leases, net of unearned income..................... $7,897,067
LESS: Allowance for loan and lease losses................... $108,949
----------------
Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b)................................. $7,788,118
Assets held in trading accounts......... $74,302
Premises and fixed assets (including capitalized leases).................. $172,267
Other real estate owned................................................... $142
Investments in unconsolidated subsidiaries and associated companies....... $60
Customer's liability to this bank on acceptances outstanding.............. $100,950
Intangible assets......................................................... $299,478
Other assets.............................................................. $563,022
-----------------------
TOTAL ASSETS $15,206,233
=======================
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits:
In domestic offices.................................................... $8,013,146
Non-interest bearing................................................ $3,248,897
Interest bearing.................................................... $4,764,249
In foreign offices, Edge and Agreement subsidiaries, and IBF's......... $2,055,520
Non-interest bearing................................................ $32,775
Interest bearing.................................................... $2,022,745
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds purchased................................................ $886,457
Securities sold under agreements to repurchase......................... $1,841,475
Trading Liabilities
Other borrowed money:..................................................... $40,157
a. With remaining maturity of one year or less $606,331
b. With remaining maturity of more than one year $9,434
Bank's liability on acceptances executed and outstanding $100,950
Subordinated notes and debentures......................................... $310,000
Other liabilities......................................................... $186,408
-----------------------
TOTAL LIABILITIES $14,049,878
=======================
EQUITY CAPITAL
Common stock.............................................................. $100,000
Surplus................................................................... $600,295
a. Undivided profits and capital reserves................................. $486,054
b. Net unrealized holding gains (losses) on available-for-sale securities ($29,994)
-----------------------
TOTAL EQUITY CAPITAL $1,156,355
-----------------------
Total liabilities, limited-life preferred stock, and equity capital....... $15,206,233
=======================
</TABLE>
I, Steve Neudecker, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
STEVE NEUDECKER
10/30/96
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
MARIBETH S. RAHE
Directors.
4
<PAGE>
Exhibit C
Harris Trust and
Savings Bank
Bylaws
December, 1996
[LOGO OF HARRIS BANK APPEARS HERE]
<PAGE>
ARTICLE I: Meetings of Stockholders
------------------------------------
Section 1. Time and Notice. The annual meeting of stockholders shall be held
on the third Wednesday of April as soon as practicable after the adjournment of
the annual meeting of the stockholders of Harris Bankcorp, Inc. for the election
of directors and for such other business as may properly come before the
meeting.
Notice of the place, day and time of the annual meeting shall be given by
mailing not less than ten nor more than forty days previous to such meeting, a
notice addressed to each stockholder entitled to vote, at his address as the
same shall appear on the stock books of the Bank.
Section 2. Special Meetings. Special meetings of stockholders may be called at
any time by the Board of Directors or by the Chairman of the Board, a Vice Chair
of the Board or the President or by a majority of the directors without a
meeting. It shall be the duty of the Chairman of the Board to call such
meetings whenever requested in writing so to do by stockholders owning a
majority of the capital stock. Notice of such special meetings stating the
purpose thereof shall be given in the same manner as for the annual meeting,
unless the purpose of the meeting is to change the Bank's charter, in which
event such notice shall be given within the time and published as provided for
in the following Section 3.
Section 3. Charter Amendment. If any special meeting is called to effect a
change in the Bank's charter as provided for in Section 17 of the Illinois
Banking Act, the Board of Directors shall adopt a resolution setting forth the
proposed amendment and directing that it be submitted to vote at the special
meeting; and notice of the purpose, place, day and hour of the special meeting
shall be given by publication thereof at least once in each week for three
successive weeks immediately preceding the week during which the meeting is to
be held in a newspaper published in the city of Chicago and by mailing such
notice not less than thirty days previous to such meeting to each stockholder
entitled to vote at his address as the same shall appear on the stock books of
the Bank.
Section 4. Location. The Board of Directors may designate any place in the
State of Illinois as the place of meeting for any annual or special meeting.
Section 5. Record Date. In lieu of closing the stock transfer books for the
purpose of determining stockholders entitled to notice of or to vote at any
meeting of stockholders, or stockholders entitled to receive payment of any
dividend, or in order to make a determination of stockholders for any other
proper purpose, the Board of Directors may fix in advance a date as the record
date for any such determination. In the absence of specific action by the Board
closing the stock transfer books or fixing a different record date for each
annual and each special meeting of the stockholders, the date on which notice of
such meeting is mailed shall be the record date for such determination of
stockholders entitled to vote.
Section 6. Quorum. A majority of the outstanding shares of the capital stock
of the Bank, represented either by the holders thereof or by duly authenticated
proxies, shall constitute a quorum for the transaction of business at any
meeting of the stockholders, but in the absence of a quorum a meeting may be
adjourned from time to time without notice to the stockholders.
C-1
<PAGE>
ARTICLE II: Directors
- ----------------------
Section 1. Powers. The business and affairs of the Bank shall be managed by
the Board of Directors. The Board of Directors may adopt such rules and
regulations for the conduct of its meetings and the management of the affairs of
the Bank as it may deem proper, not inconsistent with the laws of the United
States, of the State of Illinois, or these bylaws; and all officers and
employees shall strictly adhere to and be bound by such rules and regulations.
Directors need not be stockholders of the Bank or of any company which has
control over the Bank within the meaning of Section 2 of the Illinois Bank
Holding Company Act, as now or hereafter amended.
Section 2. Committees. The Board of Directors may, by resolution or
resolutions passed by majority of the whole Board, designate an Executive
Committee and such other committees as it may deem necessary, and from time to
time suspend or continue the powers and duties of any committee. The Chairman
of the Board, a Vice Chair of the Board, the President or the member or members
of any Board committee present at any duly called meeting and not disqualified
from voting, whether or not such member or members constitute a quorum, may
designate another member or other members of the Board of Directors to act at
such meeting, and any director or directors so designated shall have the same
powers, duties and compensation as regular members. The presence at the meeting
of any director or directors so designated shall be considered in determining
whether a quorum is present.
Section 3. Vacancies. Vacancies in the Board of Directors may be filled for
the unexpired term at a special meeting of the stockholders called for that
purpose. Additionally, the Board of Directors pursuant to paragraph (5) of
Section 16 of the Illinois Banking Act, by the affirmative vote of a majority of
the Board of Directors at any regular or special meeting of the Board, may
during the interval between annual meetings of stockholders elect not more than
a total of three persons as directors to fill vacancies arising during such
interval.
Section 4. Meetings. Regular meetings of the Board of Directors shall be held
on the third Wednesday of each month at 11:00 o'clock a.m. (except for the
meeting, if any, in January, April, July and October which shall be held at 9:30
o'clock a.m.) unless such day be a legal holiday, in which case the regular
meeting shall be held at the same hour on the next business day, or at such
other time, which may be a legal holiday, as the Board of Directors may
determine. There shall be a minimum of two such regular meetings in each
calendar quarter, the times of such meetings to be determined by the Chairman of
the Board, or in his temporary absence, a Vice Chair of the Board. All such
regular meetings shall be held at the offices of the Bank, or at such other
place or such other time as the Chairman of the Board or a Vice Chair of the
Board may at any time designate, and in the event of such designation, notice of
the alternate meeting place or time shall be given by mailing the same to each
director not later than five business days preceding the date of the meeting, or
by telegraphing or telefaxing the same to him or her or delivering the same to
him or her personally not later than the day previous to such meeting, but save
for any such notice of alternate meeting place or time, such regular meetings
shall be held without other notice than this bylaw. Special meetings may be
called by the Chairman of the Board or a Vice Chair of the Board. Except to the
extent the time or method of giving notice is regulated by statute, notice of
any such meeting shall be given in the same manner as provided for notice or
regular meetings. Any director may waive notice of any meeting by waiver signed
either before or after such meeting. Except as otherwise required by statute or
these bylaws, neither the business to be transacted at, nor the purpose of any
meeting need be specified in the notice or waiver.
Section 5. Quorum. A majority of the authorized number of directors shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, but less than a quorum shall have power to take a recess or
adjourn a meeting to another day or hour.
C-2
<PAGE>
Section 6. Secretary of the Board. The Board of Directors may appoint a
Secretary of the Board other than the Secretary of the Bank as provided for in
Section 10 of Article III of the bylaws, who may or may not be a member of the
Board and who shall keep the minutes of the meetings of the Board and perform
such other duties as the Board shall from time to time prescribe.
ARTICLE III: Officers
- ----------------------
Section 1. Number and Tenure. The officers of the Bank shall be chosen by the
Board of Directors and may consist of a Chairman of the Board, one or more Vice
Chairs of the Board and a President, each of whom shall be a member of the
Board, and one of whom shall be designated the Chief Executive Officer, one or
more Senior Executive Vice Presidents, one or more Executive Vice Presidents,
and one or more Executives (of any whose titles may be accompanied by reference
to the area of their respective responsibilities), one or more Senior Vice
Presidents, Vice President, Assistant Vice Presidents, a Secretary, one or more
Assistant Secretaries, a Cashier, a Controller, an Auditor, one or more Trust
Counsel, and such other officers as the Chief Executive Officer may from time to
time designate. Officer directors shall be elected by the Board. Executives
who are not also directors shall be elected by the Directors Committee on
Compensation. All other officers shall be appointed by the Chief Executive
Officer. Officers, whether elected or appointed, shall hold their respective
offices until the next succeeding annual meeting of stockholders and their
successors are elected and qualified, or until their retirement, resignation,
removal or appointment to another office. Any officer may be removed by the
Chief Executive Officer or the Board at any time with or without cause.
Section 2. Chief Executive Officer. The Chief Executive Officer shall exercise
general control and supervision of the business and affairs of the Bank, shall
see to it that all resolutions and orders of the Board of Directors are effected
and shall have such other powers and duties as the directors may specify. He
may appoint persons to hold office as Senior Vice President or below. During
any absence or disability to act of the Chief Executive Officer, his powers and
duties shall be exercised and performed by a Vice Chair of the Board, the
President, or by an officer designated by the Board of Directors for that
purpose. He shall be an ex-officio member of all Board committees.
Section 3. Chairman of the Board. The Chairman of the Board shall preside at
all meetings of the Board of Directors and of the stockholders. He shall have
general responsibility for all Board matters, including without limitation, the
development of corporate governance policies and processes, committee
assignments, and meeting agendas. He shall have such other powers and duties as
the Board of Directors may specify. He shall be an ex-officio member of all
Board committees.
Section 4. President. The President shall have such powers and duties as the
Board of Directors or the Chief Executive Officer may specify. During any
absence or disability to act of the President, his powers and duties shall be
performed and exercised by an officer designated in writing by the Chief
Executive, or in the absence of such designation, by an officer designated by
the Board of Directors for that purpose.
Section 5. Chief Operating Officer. The Chief Operating Officer shall manage
or supervise the management of the day-to-day operations of the Bank and shall
have such powers and duties as the Chief Executive Officer or the Board of
Directors may specify.
Section 6. Vice Chair of the Board. A Vice Chair of the Board shall have such
powers and duties as the Board of Directors may specify. During any absence or
disability to act of the Chairman of the Board, a Vice Chair of the Board shall
preside at all meetings of the Board of Directors and of the stockholders and
have and exercise his powers and duties.
C-3
<PAGE>
Section 7. Senior Executive Vice Presidents, Executive Vice Presidents,
Executives, Senior Vice Presidents, Vice Presidents. Each Senior Executive Vice
President, Executive Vice President, Executive, Senior Vice President, and Vice
President shall have and perform such duties as the Chairman of the Board, a
Vice Chair of the Board or the President may delegate and is authorized to
accept trusts, execute contracts and agreements in relation to trusts and loans,
sign authentications and certificates in connection with trusts and certificates
of stock, and sign or countersign checks, drafts, certificates of deposit and
letters of credit and all similar instruments or obligations issued by the Bank.
Section 8. Assistant Vice Presidents. Each Assistant Vice President is
authorized, subject to the supervision and direction of the President or a Vice
President, to accept trusts, execute contracts and agreements in relation to
trusts and to sign authentications and certificates in connection with trusts
and certificates of stock; also to sign or countersign checks, drafts,
certificates of deposit and letters of credit and all similar instruments or
obligations issued by the Bank.
Section 9. Cashier. The Cashier shall have charge and superintendence of the
operations of the Bank touching the deposit of money and commercial and savings
accounts, subject to the supervision and direction of the Chairman of the Board,
a Vice Chair of the Board, the President or a Vice President, and is authorized
to sign or countersign checks, drafts, certificates of deposit and letters of
credit and, as provided in Article V hereof, to sign certificates representing
stock of the Bank.
Section 10. Secretary. The Secretary shall act as secretary of the Board and
as secretary at meetings of the stockholders and, in general, shall have charge
of all records of the Bank relating to its organization and corporate action and
shall have power to certify the contents thereof.
Section 11. Assistant Secretaries. Each Assistant Secretary is authorized,
subject to the supervision and direction of the President, a Vice President or
the Secretary, to accept trusts, execute contracts and agreements in relation to
trusts, to sign authentications and certificates in connection with trusts and
certificates of stock, and to certify the contents of all records of the Bank,
to the same extent as the Secretary; to sign or countersign checks, drafts,
certificates of deposit, letters of credit and, as provided in Article V hereof,
certificates representing the stock of the Bank.
Section 12. Other Officers. All other officers shall perform such duties and
possess such powers as from time to time may be directed or delegated by the
Board of Directors, the Executive Committee, the Chairman of the Board, a Vice
Chair of the Board, the President or a Vice President.
Section 13. Other Signing Authority. In addition to the signing authorities
granted by or pursuant to the foregoing provisions of this Article III, the
Chairman of the Board, a Vice Chair of the Board, the President, any Senior
Executive Vice President, Executive Vice President, or Executive or any Senior
Vice President within the area of his assigned duties or responsibilities, may
designate from time to time in writing any officer or employee, either by name
or by title, to sign or execute any documents, instruments or contracts to which
the Bank is a party.
ARTICLE IV: Seal
- -----------------
The Board shall provide a Seal for the Bank, which shall be in the charge of the
Secretary or any other officer designated by him or by the President or the
Executive Committee, such Seal or a facsimile thereof to be affixed to or
otherwise reproduced on certificates of stock and any other documents in
accordance with the directions of the Board, the Executive Committee, the
President, any Vice President or the Secretary.
C-4
<PAGE>
ARTICLE V: Capital Stock
- -------------------------
Section 1. Transfer. Transfers of shares of stock of the Bank shall be made
upon the books of the Bank by the registered holder in person, or by attorney
duly authorized, on surrender of the certificate or certificates representing
such shares. The person in whose name shares of stock stand on the books of the
Bank shall be deemed to be the owner thereof for all purposes as regards the
Bank. All transfers of shares of stock in the Bank to a fiduciary, including an
executor, administrator, trustee, guardian, committee, conservator, curator,
tutor, custodian or nominee, and any transfer of shares of stock of the Bank
upon assignment by such fiduciary, shall be made by the Bank under, and the Bank
shall have the protections and rights with respect thereto provided for by, an
Act of the General Assembly of the State of Illinois entitled "An Act relating
to the transfer of securities to and by fiduciaries and to repeal a part of an
Act therein named", approved May 23, 1957.
Section 2. Certificates. All certificates representing stock of the Bank shall
be signed manually by the Chairman of the Board or the President or a Vice
President or the Cashier, and by the Secretary or an Assistant Secretary.
ARTICLE VI: Loans on Stock of this Bank
- ----------------------------------------
The Bank shall make no loans in whole or in part upon the stock of the Bank as
collateral.
ARTICLE VII: Audits
- --------------------
Section 1. Scope. The scope of and the procedures or tests to be followed in
the auditing division in examining the books, assets, liabilities and affairs of
the Bank and reporting thereon to the Board of Directors, and the extent and
manner of coordinating such examination and report into or with any audit report
by certified public accountants, shall be such as may be from time to time
prescribed by the Board of Directors or by an Examining Committee appointed from
time to time by the Board of Directors and consisting of at least two directors
who are not officers of the Bank.
Section 2. Reports. The Auditor, or the officer designated by the Board as
responsible for the supervision of the auditing division, shall report under
seal to the Examining Committee appointed by the Board of Directors and, if none
is appointed, to the Board of Directors, itself, on the audit program and
internal controls in each quarter of the year and shall appear at any time at
the request of the Board of Directors or the Executive Committee at any regular
or special meetings thereof and report on the results of examinations, the
soundness of condition of the Bank and any other pertinent information in
connection therewith. The Auditor, or officer designated by the Board as
responsible for the supervision of the auditing division, shall have continuing
responsibility to report promptly under seal to the Board of Directors or the
Executive Committee any material irregularities which in his opinion are of
sufficient importance to be brought to their attention before his next quarterly
report.
C-5
<PAGE>
ARTICLE VIII: Indemnification
- ------------------------------
Section 1. Applicability. Every person now or heretofore or hereafter serving
as a director, officer or employee of the Bank or of a wholly owned subsidiary
of the Bank, and every officer or employee of the Bank or of any such wholly
owned subsidiary now, heretofore or hereafter serving as director or officer of
one or more other corporations or organizations, or as trustee, executor,
administrator, guardian or conservator or in a similar fiduciary capacity, at
the request of the Bank as evidenced by action of the Executive Committee or the
Board designating the situation as one entitled to the benefit of this bylaw or
to the benefit of a similar indemnifying resolution of the Board, shall be
indemnified or reimbursed by the Bank from and for expenses, liabilities, fines,
penalties and costs that may be imposed upon or incurred by him, including by
way of settlement, in connection with any action, suit, or proceeding, civil or
criminal, in which he may be or become a party by reason of his being or having
been such director, officer, trustee, executor, administrator, guardian,
conservator or other such fiduciary; provided, however, that no such person
shall be entitled to such indemnity or reimbursement.
(a) in relation to matters as to which he shall be finally adjudged in
an action brought by the Bank directly or derivatively to be liable for breach
of a duty to or for nonpayment of a liability to the Bank; or
(b) in relation to matters included in an action, suit or proceeding
of the kind referred to in the foregoing subparagraph (a) but which is settled
or disposed of without final adjudication on the merits except and unless the
Board or, as the case may be, the stockholders, shall make the same findings as
are provided for in the following subparagraph (c) as a condition precedent to
such indemnity or reimbursement; or
(c) in relation to matters involved in an action, suit or proceeding
which is of a kind other than that referred to in the foregoing subparagraph
(a), unless such action, suit or proceeding is dismissed or otherwise disposed
of on the merits in favor of such person, or, if not so dismissed or disposed
of, unless the Board shall find that such person acted in good faith for a
purpose which he reasonably believed to be in the best interests of the Bank,
and in the case of criminal actions or proceedings, in addition had good warrant
to believe that his conduct was not unlawful.
Section 2. Findings. The action by the Board called for in subparagraph (c) of
Section 1 hereof shall be at a meeting at which a quorum consisting of directors
who are not parties to such suit, action or proceeding is present; and in taking
such action no director involved shall be qualified to vote thereon. In the
absence of quorum, such finding shall nevertheless be effective if made by
resolution of the stockholders adopted at an annual meeting or at a special
meeting of the stockholders. The right of indemnification or reimbursement
provided for by this Article shall not be exclusive and shall not affect any
right to indemnification or reimbursement which any director, officer or
employee might otherwise have as a matter of law.
The term "Bank" as used in this Article shall be deemed to include the Bank and
the predecessor bank of the same name, all with the same effect as if the Bank
and said predecessor had at all times been one and the same corporation.
Section 3. Legal Expenses. Expenses incurred by a director, officer or
employee in defending a civil or criminal action, suit or proceeding may be paid
by the Bank in advance of the final disposition of such action, suit or
proceeding as authorized by the Board of Directors in a specific case upon
receipt of an undertaking by or on behalf of the director, officer or employee
to repay such amount unless it shall ultimately be determined that he is
entitled to indemnification as provided in this Article VIII.
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ARTICLE IX: Management Succession Provisions
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In the temporary absence of the Chairman of the Board, the Vice Chairs of the
Board and the President, certain Senior Executive Vice Presidents, Executive
Vice Presidents, Executives or Senior Vice Presidents shall have and exercise
all the powers and duties of the Chief Executive Officer until the Board of
Directors meets to provide for permanent succession, the order of precedence
having been set by the Board of Directors referring to this Article IX. The
provisions of this paragraph are, however, subject to the right of the
stockholder, the Board of Directors and of the Executive Committee to appoint
the presiding officer of their respective meetings.
ARTICLE X: Amendment or Repeal
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These bylaws, or any part hereof, may be amended, altered, changed, added to or
repealed, and others adopted in their place by the Board of Directors of the
Bank at any regular or special meeting.
. . . . . . . . . . . . . . . . .
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