<PAGE>
As filed with the Securities and Exchange Commission on January 30, 1997
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
COMMERCIAL FEDERAL CORPORATION
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nebraska 47-0658852
- --------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
CFC PREFERRED TRUST
----------------------------------------------------------
(Exact name of registrant as specified in its Charter)
Delaware [Applied For]
- --------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.)
2120 South 72nd Street, Omaha, Nebraska 68124
(402) 554-9200
- --------------------------------------------------------------------------------
(Address, including zip code and telephone number, including area code of each
registrant's principal executive offices)
James A. Laphen, President
Commercial Federal Corporation
2120 South 72nd Street, Omaha, Nebraska 68124
(402) 390-5361
- --------------------------------------------------------------------------------
(Name, address, including zip code, and telephone number, including area code,
of agent for service for each registrant)
Copies To:
----------
Gary R. Bronstein, Esq. Elizabeth C. Hinck, Esq.
Cynthia R. Cross, Esq. Dorsey & Whitney LLP
Housley Kantarian & Bronstein, P.C. 220 South Sixth Street
1220 19th Street, N.W., Suite 700 Minneapolis, MN 55402
Washington, DC 20036 (612) 340-2600
(202) 822-9611
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. [_]
- --------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Title of Each Proposed Maximum Proposed Maximum
Class of Securities Amount to Offering Price Aggregate Offering Amount of
to be Registered be Registered Per Unit (1) Price Per Unit (1) Registration Fee
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Junior Subordinated
Deferrable Interest
Debentures of Commercial
Federal Corporation (2) $45,000,000 $25 $45,000,000
- --------------------------------------------------------------------------------------------------------------------------
Preferred Securities
of CFC Preferred Trust 1,800,000 $25 $45,000,000
- --------------------------------------------------------------------------------------------------------------------------
Commercial Federal
Corporation Guarantee
with respect to Preferred
Securities (3)(4) N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Total $45,000,000 (5) 100% $45,000,000 $13,636.36
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely to calculate the registration fee pursuant to Rule 457(a).
(2) The Junior Subordinated Deferrable Interest Debentures will be purchased by
CFC Preferred Trust with the proceeds of the sale of the Preferred
Securities.
(3) No separate consideration will be received for the Commercial Federal
Corporation Guarantee.
(4) This Registration Statement is deemed to cover the Junior Subordinated
Deferrable Interest Debentures of Commercial Federal Corporation under the
Indenture, the rights of holders of Preferred Securities of CFC Preferred
Trust under the Trust Agreement, the rights of holders of the Preferred
Securities under the Guarantee and the Expense Agreement, which taken
together, fully, irrevocably and unconditional guarantee all of the
respective obligations of CFC Preferred Trust under the Preferred
Securities.
(5) Such amount represents the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at their principal amount and the
issue price rather than the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at an original issue discount. Such
amount also represents the initial public offering price of the CFC
Preferred Trust Preferred Securities.
The registrants hereby amend this registration statement on such date or dates
as may be necessary to delay its effective date until the registrants shall file
a further amendment which specifically states that 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.
================================================================================
<PAGE>
PROSPECTUS Subject to completion, dated ___________, 1997
dated , 1997
$45,000,000
[LOGO]
CFC PREFERRED TRUST
CUMULATIVE TRUST PREFERRED SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED AS DESCRIBED HEREIN
BY
COMMERCIAL FEDERAL CORPORATION
------------------------------
COMMERCIAL FEDERAL CORPORATION
JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES
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.
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.
<PAGE>
(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.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports 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
(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 incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for
1
<PAGE>
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.
2
<PAGE>
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 September 30, 1996, after giving pro
forma effect to the redemption of $6.9 million of 10% Senior Notes due 1999
which occurred on December 27, 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 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
3
<PAGE>
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 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 the Stated Maturity as it may be
shortened by the Company) 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.
4
<PAGE>
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 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 March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
introduced in the 104th Congress. If enacted, the Bill would have generally
denied interest deductions for interest on an instrument issued by a corporation
(a) that has a maximum weighted average maturity of more than 40 years or (b)
has a maximum term of more than 20 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 were
proposed to be effective generally for instruments issued on or after December
7, 1995. 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. However, on March 29, 1996, the Chairmen of the Senate
Finance and House Ways and Means Committees issued a joint statement (the "Joint
Statement") to the effect that it was their intention that the effective date of
the President's legislative proposals, if adopted, would be no earlier than the
date of appropriate Congressional action. In addition, subsequent to the
publication of the Joint Statement, Senator Daniel Patrick Moynihan and
Representatives Sam M. Gibbons and Charles B. Rangel wrote letters to Treasury
Department officials concurring with the view expressed in the Joint Statement
(the "Democrat Letters"). It has been reported that President Clinton will
submit a fiscal 1998 Budget to Congress between February 6 and 10, 1997. The
fiscal 1998 Budget may include the proposed legislation. If the proposed
legislation is introduced and ultimately enacted and if the principles contained
in the Joint Statement and the Democrat Letters were 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."
5
<PAGE>
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."
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
6
<PAGE>
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
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 offering of the Preferred Securities and the issuance of the Junior
Subordinated Debentures is a relatively novel type of financing transaction.
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
7
<PAGE>
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."
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.
8
<PAGE>
THE COMPANY
The Company is a holding company for the Bank, which is the largest
depository institution headquartered in Nebraska. At September 30, 1996, the
Company had assets of $6.7 billion and stockholders' equity of $359.7 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 October 1, 1996, following the
acquisition of Heritage Financial, Ltd. ("Heritage"), the Bank operated 34
branch offices in Nebraska, 20 branch offices in greater metropolitan Denver,
Colorado, 19 branch offices in Oklahoma, 24 branch offices in Kansas and seven
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 104 branch office network, loan offices of
its wholly-owned 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.
On October 1, 1996, the Company completed the acquisition of Heritage,
headquartered in Boone, Iowa, the holding company for Hawkeye Federal Savings
Bank. Heritage operated six offices in Iowa and at October 1, 1996, had $182.9
million in total assets, $157.9 million in deposits and $10.3 million in
stockholders' equity.
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 29, 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
9
<PAGE>
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 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 will be
added to its general corporate funds and used primarily to finance 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.
10
<PAGE>
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 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.
11
<PAGE>
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.
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
12
<PAGE>
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 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
13
<PAGE>
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 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
14
<PAGE>
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 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 --
15
<PAGE>
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 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.
16
<PAGE>
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.
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
17
<PAGE>
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
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)
18
<PAGE>
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."
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 herein)
19
<PAGE>
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.
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
20
<PAGE>
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.
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
21
<PAGE>
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.
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
22
<PAGE>
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 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.
23
<PAGE>
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.
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.
24
<PAGE>
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 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
25
<PAGE>
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.
"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
26
<PAGE>
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 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
27
<PAGE>
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 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.
28
<PAGE>
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) 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
29
<PAGE>
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.
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
30
<PAGE>
(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.
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."
31
<PAGE>
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.
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.
32
<PAGE>
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
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
33
<PAGE>
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
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.
34
<PAGE>
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.
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
35
<PAGE>
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.
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.
36
<PAGE>
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.
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.
37
<PAGE>
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.
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
38
<PAGE>
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 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 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.
39
<PAGE>
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
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
40
<PAGE>
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.
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.
41
<PAGE>
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 March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"),
the revenue portion of President Clinton's budget proposal, was introduced in
the 104th Congress. If enacted, the Bill would have generally denied interest
deductions for interest on an instrument issued by a corporation that (a) has a
maximum weighted average maturity of more than 40 years or (b) that has a
maximum term of more than 20 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 were proposed
to be effective generally for instruments issued on or after December 7, 1995.
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. However, on March 29, 1996, the Chairmen of the Senate Finance and
House Ways and Means Committees issued a joint statement (the "Joint Statement")
to the effect that it was their intention that the effective date of the
President's legislative proposals, if adopted, would be no earlier than the date
of appropriate Congressional action. In addition, subsequent to the publication
of the Joint Statement, Senator Daniel Patrick Moynihan and Representatives Sam
M. Gibbons and Charles B. Rangel wrote letters to Treasury Department officials
concurring with the view expressed in the Joint Statement (the "Democrat
Letters"). It has been reported that President Clinton will submit a fiscal 1998
budget to Congress between February 6 and 10, 1997. The fiscal 1998 budget may
include the proposed legislation. If the proposed legislation is reintroduced
and ultimately enacted and if the principles contained in the Joint Statement
and the Democrat Letters were followed and the Bill was enacted, 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
42
<PAGE>
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.
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 Guarantee and 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.
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.
43
<PAGE>
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.
44
<PAGE>
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 OF CONTENTS
PROSPECTUS
Available Information.................................... 1
Incorporation of Certain Documents by Reference.......... 1
Risk Factors............................................. 3
The Company.............................................. 9
The Issuer............................................... 9
Use of Proceeds.......................................... 10
Description of Preferred Securities...................... 11
Description of the Junior Subordinated Debentures........ 22
Book-Entry Issuance...................................... 33
Description of the Guarantee............................. 35
Relationship Among the Preferred Securities, the
Junior Subordinated Debentures and the Guarantee........ 37
Certain Federal Income Tax Consequences.................. 38
Plan of Distribution..................................... 42
Legal Matters............................................ 43
Experts.................................................. 44
CFC PREFERRED TRUST
$45,000,000
Cumulative Trust Preferred
Securities Fully and Unconditionally
Guaranteed As Described Herein
By Commercial Federal Corporation
COMMERCIAL FEDERAL
CORPORATION
Junior Subordinated Deferrable
Interest Debentures
[LOGO APPEARS HERE]
--------------------
PROSPECTUS
--------------------
PIPER JAFFRAY INC.
____________, 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:
Securities and Exchange Commission registration fee........ $ 13,637
Legal fees and expenses.................................... *
Printing, postage and mailing.............................. *
Accounting fees and expenses............................... *
Trustee fees............................................... *
Blue Sky fees (including counsel fees)..................... *
Miscellaneous expenses..................................... *
---------
$ *
=========
- ---------------
* To be filed by amendment.
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
4.6 Form of Guarantee Agreement for CFC Preferred Trust
4.7 Form of Junior Subordinated Debenture (filed as part of Exhibit 4.1)
* 5.1 Opinion of Housley Kantarian & Bronstein, P.C. regarding the legality
of Junior Subordinated Debentures and the Guarantee
* 5.2 Opinion of Richards, Layton & Finger, P.A. as to legality of Preferred
Securities
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 Consent of Housley Kantarian & Bronstein, P.C. (included in Exhibit 5)
23.2 Consent of Deloitte & Touche LLP
* 23.3 Consent of Richards, Layton & Finger, P.A.
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
- -----------
* To be filed by amendment.
** To be filed by Current Report on Form 8-K.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(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 registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in 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 registrant undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in 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.
The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreement, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Omaha, State of Nebraska, on the 30th day of January,
1997.
COMMERCIAL FEDERAL CORPORATION
By:
_________________________________________________
William A. Fitzgerald,
Chairman of the Board and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of Commercial Federal
Corporation, do hereby severally constitute and appoint William A. Fitzgerald
and James A. Laphen, and each of them singly, our true and lawful attorneys and
agents, to do any and all things and acts in our names in the capacities
indicated below and to execute any and all instruments for us and in our names
in the capacities indicated below which said William A. Fitzgerald or James A.
Laphen, or either of them, may deem necessary or advisable to enable Commercial
Federal Corporation to comply with the Securities Act of 1933, as amended, and
any rules, regulations and requirements of the Securities and Exchange
Commission, in connection with the offering contemplated by this Registration
Statement on Form S-3, including specifically, but not limited to, power and
authority to sign for us or any of us in our names in the capacities indicated
below the Registration Statement and any and all amendments (including post-
effective amendments) thereto; and we hereby ratify and confirm all that said
William A. Fitzgerald and James A. Laphen, or either of them, shall do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and as of the dates indicated.
Signature Capacity Date
- --------- -------- ----
- ------------------------- Principal Executive Officer January __, 1997
William A. Fitzgerald and Director
Chairman of the Board and
Chief Executive Officer
/s/ James A. Laphen Principal Financial Officer January 30, 1997
- -------------------------
James A. Laphen
President, Chief Operating
Officer and Chief Financial
Officer
/s/ Gary L. Matter Principal Accounting Officer January 30, 1997
- -------------------------
Gary L. Matter
Senior Vice President,
Controller and Secretary
II-5
<PAGE>
/s/ Talton K. Anderson
- ------------------------ Director January 30, 1997
Talton K. Anderson
/s/ Robert F. Krohn
- ------------------------ Director January 30, 1997
Robert F. Krohn
- ------------------------ Director January __, 1997
Charles M. Lillis
/s/ Carl G. Mammel
- ------------------------ Director January 30, 1997
Carl G. Mammel
/s/ Robert S. Milligan
- ------------------------ Director January 30, 1997
Robert S. Milligan
James P. O'Donnell
- ------------------------ Director January 30, 1997
James P. O'Donnell
/s/ Robert D. Taylor
- ------------------------ Director January 30, 1997
Robert D. Taylor
- ------------------------ Director January __, 1997
Aldo J. Tesi
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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Omaha, State of Nebraska, on the 30th day of January,
1997.
CFC PREFERRED TRUST
By: COMMERCIAL FEDERAL CORPORATION,
as Depositor
By: /s/ James A. Laphen
--------------------------------
James A. Laphen
President
II-7
<PAGE>
EXHIBIT 4.1
COMMERCIAL FEDERAL CORPORATION
to
HARRIS TRUST & SAVINGS BANK
Trustee
____________________________
JUNIOR SUBORDINATED INDENTURE
Dated as of _________, 1997
<PAGE>
COMMERCIAL FEDERAL CORPORATION
Reconciliation and tie between the Trust Indenture Act of 1939 (including
cross-references to provisions of Sections 310 to and including 317 which,
pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended by the
Trust Reform Act of 1990, are a part of and govern the Indenture whether or not
physically contained therein) and the Junior Subordinated Indenture, dated as of
_________, 1997.
<TABLE>
<CAPTION>
Trust Indenture
Indenture
Act Section Section
----------- ---------
<S> <C> <C>
(S) 310 (a) (1), (2) and (5) .................................. Not Applicable
(a) (3)................................................ Not Applicable
(a) (4)................................................ Not Applicable
(b).................................................... 6.8
....................................................... 6.10
(c).................................................... Not Applicable
(S) 311 (a).................................................... 6.13(a)
(b).................................................... 6.13(b b) (2)
7.3 (a) (2)................................................ 7.3(a) (2)
(S) 312 (a).................................................... 7.1
....................................................... 7.2(a)
(b).................................................... 7.2(b)
(c).................................................... 7.2(c)
(S) 313 (a).................................................... 7.3(a)
(b).................................................... 7.3(b)
(c).................................................... 7.3(a), 7.3(b)
(d).................................................... 7.3(c)
(S) 314 (a) (1), (2) and (3)................................... 7.4
(a) (4)................................................ 10.5
(b).................................................... Not Applicable
(c) (1)................................................ 1.2
(c) (2)................................................ 1.2
(c) (3)................................................ Not Applicable
(d).................................................... Not Applicable
(e).................................................... 1.2
(f).................................................... Not Applicable
(S) 315 (a).................................................... 6.1(a)
(b).................................................... 6.2
....................................................... 7.3(a) (6)
(c).................................................... 6.1(b)
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Trust Indenture
Act Section Section
----------- -------
<S> <C> <C>
(d).................................................... 6.1 (c)
(d) (1)................................................ 6.1(a) (1)
(d) (2)................................................ 6.1(c) (2)
(d) (3)................................................ 6.1(c) (3)
(e).................................................... 5.14
(S) 316 (a).................................................... 1.1
(a) (1) (A)............................................ 5.12
(a) (1) (B)............................................ 5.13
(a) (2)................................................ Not Applicable
(b).................................................... 5.8
(c).................................................... 1.4(F)
(S) 317 (a) (1)................................................ 5.3
(a) (2)................................................ 5.4
(b).................................................... 10.3
(S)318 (a).................................................... 1.7
- -------------------
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Junior Subordinated Indenture.
3
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.................. 1
Section 1.1. Definitions........................................... 1
Section 1.2. Compliance Certificate and Opinions................... 10
Section 1.3. Forms of Documents Delivered to Trustee............... 11
Section 1.4. Acts of Holders....................................... 12
Section 1.5. Notices, Etc. to Trustee and Company.................. 14
Section 1.6. Notice to Holders; Waiver............................. 14
Section 1.7. Conflict with Trust Indenture Act..................... 15
Section 1.8. Effect of Headings and Table of Contents.............. 15
Section 1.9. Successors and Assigns................................ 15
Section 1.10. Separability Clause................................... 15
Section 1.11 Benefits of Indenture................................. 15
Section 1.12. Governing Law......................................... 16
Section 1.13. Non-Business Days..................................... 16
ARTICLE II
SECURITY FORMS........................................................... 16
Section 2.1. Forms Generally....................................... 16
Section 2.2. Form of Face of Security.............................. 17
Section 2.3. Form of Reverse of Security........................... 20
Section 2.4. Additional Provisions Required in Global Security..... 24
Section 2.5. Form of Trustee's Certificate of Authentication....... 24
ARTICLE III
THE SECURITIES........................................................... 24
Section 3.1. Title and Terms....................................... 24
Section 3.2. Denominations......................................... 27
Section 3.3. Execution, Authentication, Delivery and Dating........ 27
Section 3.4. Temporary Securities.................................. 29
Section 3.5. Registration, Transfer and Exchange................... 30
Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities...... 32
Section 3.7. Payment of Interest; Interest Rights Preserved........ 32
Section 3.8. Persons Deemed Owners................................. 34
Section 3.9. Cancellation.......................................... 34
Section 3.10. Computation of Interest............................... 34
Section 3.11. Deferrals of Interest Payment Dates................... 35
Section 3.12. Right of Set-Off...................................... 36
Section 3.13. Agreed Tax Treatment.................................. 36
Section 3.14. Shortening of Stated Maturity......................... 36
Section 3.15. CUSIP Numbers......................................... 37
-4-
<PAGE>
ARTICLE IV
SATISFACTION AND DISCHARGE............................................... 37
Section 4.1. Satisfaction and Discharge of Indenture............... 37
Section 4.2. Application of Trust Money............................ 38
ARTICLE V
REMEDIES................................................................. 38
Section 5.1 Events of Default..................................... 38
Section 5.2. Acceleration of Maturity; Rescission and Annulment.... 40
Section 5.3. Collection of Indebtedness and Suits for Enforcement
by Trustee............................................ 41
Section 5.4. Trustee May File Proofs of Claim...................... 42
Section 5.5. Trustee May Enforce Claim WithoutPossession of........
Securities............................................ 43
Section 5.6. Application of Money Collected........................ 43
Section 5.7. Limitation on Suits................................... 44
Section 5.8. Unconditional Right of Holders toReceive Principal,
Premium and Interest; Direct Action by Holders of
Preferred Securities.................................. 44
Section 5.9. Restoration of Rights and Remedies.................... 45
Section 5.10. Rights and Remedies Cumulative........................ 45
Section 5.11. Delay or Omission Not Waiver.......................... 45
Section 5.12. Control by Holders.................................... 46
Section 5.13. Waiver of Past Defaults............................... 46
Section 5.14. Undertaking for Costs................................. 47
Section 5.15. Waiver of Usury, Stay or Extension Laws............... 47
ARTICLE VI
THE TRUSTEE 47
Section 6.1. Certain Duties and Responsibilities................... 47
Section 6.3. Certain Rights of Trustee............................. 49
Section 6.4. Not Responsible for Recitals or Issuance of Securities 50
Section 6.5. May Hold Securities................................... 50
Section 6.6. Money Held in Trust................................... 50
Section 6.7. Compensation and Reimbursement........................ 51
Section 6.8. Disqualification; Conflicting Interests............... 51
Section 6.9. Corporate Trustee Required; Eligibility............... 51
Section 6.10. Resignation and Removal; Appointment of Successor..... 52
Section 6.11. Acceptance of Appointment by Successor................ 54
Section 6.12. Merger, Conversion, Consolidation or Succession to
Business.............................................. 55
Section 6.13. Preferential Collection of Claims Against Company..... 55
Section 6.14. Appointment of Authenticating Agent................... 55
-5-
<PAGE>
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY........................ 57
Section 7.1. Company to Furnish Trustee Names and Addresses of
Holders............................................... 57
Section 7.2. Preservation of Information, Communications to
Holders............................................... 58
Section 7.3. Reports by Trustee.................................... 58
Section 7.4. Reports by Company.................................... 58
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE..................... 59
Section 8.1. Company May Consolidate, Etc., Only on Certain Terms.. 59
Section 8.2. Successor Corporation Substituted..................... 60
ARTICLE IX
SUPPLEMENTAL INDENTURES 60
Section 9.1. Supplemental Indentures without Consent of Holders.... 60
Section 9.2. Supplemental Indentures with Consent of Holders....... 62
Section 9.3. Execution of Supplemental Indentures.................. 63
Section 9.4. Effect of Supplemental Indentures..................... 64
Section 9.5. Conformity with Trust Indenture Act................... 64
Section 9.6. Reference in Securities to Supplemental Indentures.... 64
ARTICLE X
COVENANTS................................................................ 64
Section 10.1. Payment of Principal, Premium and Interest............ 64
Section 10.2. Maintenance of Office or Agency....................... 65
Section 10.3. Money for Security Payments to be Held in Trust....... 65
Section 10.4. Statement as to Compliance............................ 67
Section 10.5. Waiver of Certain Covenants........................... 67
Section 10.6. Additional Sums....................................... 67
Section 10.7. Additional Covenants.................................. 68
ARTICLE XI
REDEMPTION OF SECURITIES................................................. 69
Section 11.1 Applicability of This Article......................... 69
Section 11.2. Election to Redeem; Notice to Trustee................. 69
Section 11.3. Selection of Securities to be Redeemed................ 70
Section 11.4. Notice of Redemption.................................. 70
Section 11.5. Deposit of Redemption Price........................... 71
Section 11.6. Payment of Securities Called for Redemption........... 71
Section 11.7. Right of Redemption of Securities Initially Issued to
a CFC Trust........................................... 72
-6-
<PAGE>
ARTICLE XII
SINKING FUNDS............................................................ 72
Section 12.1. Applicability of Article.............................. 72
Section 12.2. Satisfaction of Sinking Fund Payments with Securities. 73
Section 12.3. Redemption of Securities for Sinking Fund............. 73
ARTICLE XIII
SUBORDINATION OF SECURITIES.............................................. 75
Section 13.1. Securities Subordinate to Senior Debt................. 75
Section 13.2. Payment Over of Proceeds Upon Dissolution, Etc........ 75
Section 13.3. Prior Payment to Senior Debt Upon Acceleration of
Securities............................................ 76
Section 13.4. No Payment When Senior Debt in Default................ 77
Section 13.5. Payment Permitted If No Default....................... 78
Section 13.6. Subrogation to Rights of Holders of Senior Debt....... 78
Section 13.7. Provisions Solely to Define Relative Rights........... 79
Section 13.8. Trustee to Effectuate Subordination................... 79
Section 13.9. No Waiver of Subordination Provisions................. 79
Section 13.10.Notice to Trustee..................................... 80
Section 13.11.Reliance on Judicial Order or Certificate of
Liquidating Agent..................................... 81
Section 13.12.Trustee Not Fiduciary for Holders of Senior Debt...... 81
Section 13.13.Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights...................... 81
Section 13.14.Article Applicable to Paying Agents................... 81
Section 13.15.Certain Conversions or Exchanges Deemed Payment....... 82
-7-
<PAGE>
JUNIOR SUBORDINATED INDENTURE, dated as of ________, 1997, between
COMMERCIAL FEDERAL CORPORATION, a Nebraska corporation (hereinafter called the
"Company") having its principal office at 2120 South 72nd Street, Omaha,
Nebraska 68124, and HARRIS TRUST & SAVINGS BANK, a Delaware banking corporation,
as Trustee (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured junior
subordinated debt securities in series (hereinafter called the "Securities") of
substantially the tenor hereinafter provided, including, without limitation,
Securities issued to evidence loans made to the Company of the proceeds from the
issuance from time to time by one or more business trusts (each a "CFC Trust,"
and, collectively, the "CFC Trusts") of preferred trust interests in such Trusts
(the Preferred Securities") and common interests in such Trusts (the "Common
Securities" and, collectively with the Preferred Securities, the Trust
Securities), and to provide the terms and conditions upon which the Securities
are to be authenticated, issued and delivered.
All things necessary to make the Securities, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company, in accordance with their and its terms, have been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the
premises and the purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of any series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
(2) All other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles which are generally
-8-
<PAGE>
accepted at the date or time of such computation; provided, that when two or
more principles are so generally accepted, it shall mean that set of principles
consistent with those in use by the Company; and
(4) The words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.4.
"Additional Interest" means the interest, if any, that shall accrue on any
interest on the Securities of any series the payment of which has not been made
on the applicable Interest Payment Date and which shall accrue at the rate per
annum specified or determined as specified in such Security.
"Additional Sums" has the meaning specified in Section 10.6.
"Additional Taxes" means the sum of any additional taxes, duties and other
governmental charges to which a CFC Trust has become subject from time to time
as a result of a Tax Event.
"Administrative Trustee" means, in respect of any CFC Trust, each Person
identified as an "Administrative Trustee" or an "Administrative Agent" in the
related Trust Agreement, solely in such Person's capacity as Administrative
Trustee or an Administrative Agent, as the case may be, of such CFC Trust under
such Trust Agreement and not in such Person's individual capacity, or any
successor administrative trustee or successor administrative agent, as the case
may be, appointed as therein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, no CFC Trust to which
Securities have been issued shall be deemed to be an Affiliate of the Company.
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.
"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)
-9-
<PAGE>
trade accounts payable or accrued liabilities arising in the ordinary course of
business.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.14 to act on behalf of the Trustee to authenticate Securities of
one or more series.
"Board of Directors" means either the board of directors of the Company or
any committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors, or such committee of the Board of Directors or officers of the
Company to which authority to act on behalf of the Board of Directors has been
delegated, and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii) a
day on which banking institutions in the State of Nebraska or in The City of New
York are authorized or required by law or executive order to remain closed or
(iii) a day on which the Corporate Trust Office of the Trustee, or, with respect
to the Securities of a series initially issued to a CFC Trust, the principal
office of the Property Trustee under the related Trust Agreement, is closed for
business.
"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 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 of such CFC Trust, there is more
than an insubstantial risk of impairment of the Company's ability to treat the
Preferred Securities corresponding to a series of Securities (or any 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.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties on such date.
"Common Securities" has the meaning specified in the first recital of this
Indenture.
"Common Stock" means the common stock, par value $_______ per share, of the
Company.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
-10-
<PAGE>
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by the Chairman of the Board
of Directors, the Vice Chairman of the Board of Directors, its President or a
Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary of the Company, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered.
"Corporation" includes a corporation, association, company, joint-stock
company or business trust.
"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 this
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) 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 for, directly or indirectly, as obligor
or otherwise.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary by the Company pursuant to Section 3.1 with
respect to such series (or any successor thereto).
"Discount Security" means any security which provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Distributions," with respect to the Trust Securities issued by a CFC
Trust, means amounts payable in respect of such Trust Securities as provided in
the related Trust Agreement and referred to therein as "Distributions."
"Dollar" or "U.S. $" means the currency of the United States of America
that, as at the time of payment, is legal tender for the payment of public and
private debts.
"Event of Default" has the meaning specified in Article V unless otherwise
specified
-11-
<PAGE>
in the supplemental indenture or the Officers' Certificate delivered pursuant to
Section 3.1 hereof creating a series of Securities.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Extension Period" has the meaning specified in Section 3.11.
"Global Security" means a Security in the form prescribed in Section 2.4
evidencing all or part of a series of Securities, issued to the Depositary or
its nominee for such series, and registered in the name of such Depositary or
its nominee.
"CFC Guarantee" means the guarantee by the Company of distributions on the
Preferred Securities of a CFC Trust to the extent provided in the related
Guarantee Agreement.
"CFC Trust" has the meaning specified in the first recital of this
Indenture.
"Guarantee Agreement" means the Guarantee Agreement substantially in the
form attached hereto as Annex C, or substantially in such form as may be
specified as contemplated by Section 3.1 with respect to the Securities of any
series, in each case as amended from time to time.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof or one or more
Officers' Certificates delivered pursuant to Section 3.1 and shall include the
terms of each particular series of Securities established as contemplated by
Section 3.1.
"Interest Payment Date" means as to each series of Securities the Stated
Maturity of an installment of interest on such Securities.
"Junior Subordinated Payment" has the meaning specified in Section 13.2.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in Section
5.1(3).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board of Directors, a Vice Chairman of the Board of Directors, the President or
a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary of the Company, and delivered to the Trustee.
-12-
<PAGE>
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be acceptable to the Trustee.
"Original Issue Date" means the date of issuance specified as such in each
Security.
"Outstanding" means, when used in reference to any Securities, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities for whose payment money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent in trust for the
Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other Securities
have been authenticated and delivered or which have been paid pursuant to
Section 3.6, unless proof satisfactory to the Trustee is presented that any such
Securities are held by Holders in whose hands such Securities are valid, binding
and legal obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Company or any other obligor upon the Securities or
any Affiliate of the Company or such other obligor. Upon the written request of
the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Securities, if any, known by the Company
to be owned or held by or for the account of the Company, or any other obligor
on the Securities or any Affiliate of the Company or such obligor, and, subject
to the provisions of Section 6.1, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Securities not listed therein are Outstanding for the
purpose of any such determination.
"Paying Agent" means the Trustee or any Person authorized by the Company to
pay) the principal of or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means, with respect to the Securities of any series, the
place or places where the principal of (and premium, if any) and interest on the
Securities of such series are payable pursuant to Sections 3.1 and 3.11.
-13-
<PAGE>
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any security
authenticated and delivered under Section 3.6 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Preferred Securities" has the meaning specified in the first recital of
this Indenture.
"Proceeding" has the meaning specified in Section 13.2.
"Property Trustee" means, in respect of any CFC Trust, the commercial bank
or trust company identified as the "Property Trustee" in the related Trust
Agreement, solely in its capacity as Property Trustee of such CFC Trust under
such Trust Agreement and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as
therein provided.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of a series, (i)uin the case
of Securities of a series represented by one or more Global Securities, the
Business Day next preceding such Interest Payment Date and (ii)uin the case of
Securities of a series not represented by one or more Global Securities, the
date which is fifteen days next preceding such Interest Payment Date (whether or
not a Business Day).
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee assigned by the Trustee from time to time to administer
its corporate trust matters.
"Securities" or "Security" means any debt securities or debt security, as
the case may be, authenticated and delivered under this Indenture.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5.
"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 this 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 Securities, provided,
however, that Senior Debt shall not be deemed to include (a) any Debt of the
Company which, when
-14-
<PAGE>
incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Reform Act of 1978, as amended, was without recourse to the Company,
(b) any Debt of the Company to any of its Subsidiaries, (c) Debt to any employee
of the Company, and (d) any Securities.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" when used with respect to any Security or any installment
of principal thereof or interest thereon means the date specified pursuant to
the terms of such Security as the date on which the principal of such Security
or such installment of interest is due and payable, in the case of such
principal, as such date may be shortened or extended as provided pursuant to the
terms of such Security and this Indenture.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For purposes of this definition, "voting stock" means stock which ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
"Tax Event" means the receipt by the Company and the CFC Trust of an
Opinion of Counsel (as defined in the relevant CFC Trust Agreement) experienced
in such matters to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official 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 of such CFC Trust, there is more than an insubstantial risk
that (i) such CFC Trust is, or will be within 90 days of the date of such
Opinion of Counsel, subject to United States Federal income tax with respect to
income received or accrued on the corresponding series of Securities, (ii)
interest payable by the Company on such corresponding series of Securities is
not, or within 90 days of the date of such Opinion of Counsel, will not be,
deductible by the Company, in whole or in part, for United States Federal income
tax purposes or (iii) such CFC Trust is, or will be within 90 days of the date
of such Opinion of Counsel, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Trust" has the meaning specified in the first recital of this Indenture.
"Trust Agreement" means the Trust Agreement substantially in the form
attached hereto as Annex A, as amended by the form of Amended and Restated Trust
Agreement substantially in the form attached hereto as Annex B, or substantially
in such form as may be specified as contemplated by Section 3.1 with respect to
the Securities of any series, in each case as amended from time to time.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this
-15-
<PAGE>
instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder and, if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
(S)(S) 77aaa-77bbb), as amended and as in effect on the date as of this
Indenture, except as provided in Section 9.5.
"Trust Securities" has the meaning specified in the first recital of this
Indenture.
"Vice President" when used with respect to the Company, means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
Section 1.2. Compliance Certificate and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent
(including covenants, compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent (including covenants compliance with which
constitute a condition precedent), if any, have been complied with, except that
in the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than the certificates provided
pursuant to Section 10.5) shall include:
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
-16-
<PAGE>
Section 1.3. Forms of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent or
proxy duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
is or are delivered to the Trustee, and, where it is hereby expressly required,
to the Company. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.1) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a Person acting in other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
-17-
<PAGE>
(d) The ownership of Securities shall be proved by the Securities
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
(f) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date, provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be canceled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 1.6.
The Trustee may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to join in the
giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2) or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date, provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any
-18-
<PAGE>
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Trustee, at the
Company's expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the Company in
writing and to each Holder of Securities of the relevant series in the manner
set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day, provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 10.6, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
(g) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
Section 1.5. Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, any holder of Preferred Securities or the
Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
office, or
(2) the Company by the Trustee, any Holder or any holder of Preferred
Securities shall be sufficient for every purpose (except as otherwise provided
in Section 5.1) hereunder if in writing and mailed, first class, postage
prepaid, to the Company, addressed to it at the address of its principal office
specified in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
Section 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to each Holder affected
by such event, at the address of such
-19-
<PAGE>
Holder as it appears in the Securities Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
Section 1.7. Conflict with Trust Indenture Act.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by any of Sections 310 to 317, inclusive, of the Trust Indenture
Act through operation of Section 318(c) thereof, such imposed duties shall
control.
Section 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
Section 1.10. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 1.11 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors and
assigns, the Holders of Senior Debt, the Holders of the Securities and, to the
extent expressly provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.1 and 9.2,
the holders of Preferred Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
Section 1.12. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
-20-
<PAGE>
Section 1.13. Non-Business Days.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or the Securities) payment of interest or
principal (and premium, if any) need not be made on such date, but may be made
on the next succeeding Business Day (and no interest shall accrue for the period
from and after such Interest Payment Date, Redemption Date or Stated Maturity,
as the case may be, until such next succeeding Business Day except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day (in each case with the same force and
effect as if made on the Interest Payment Date or Redemption Date or at the
Stated Maturity)).
ARTICLE II
SECURITY FORMS
Section 2.1. Forms Generally.
The Securities of each series shall be in substantially the forms set forth
in this Article, or in such other form or forms as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with applicable tax
laws or the rules of any securities exchange or as may, consistently herewith,
be determined by the officers executing such securities, as evidenced by their
execution of the Securities. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 3.3 with respect to
the authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be substantially in the
form set forth in this Article.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such securities.
-21-
<PAGE>
Section 2.2. Form of Face of Security.
COMMERCIAL FEDERAL CORPORATION
__% Junior Subordinated Debenture due
Registered Principal Amount:
No. CUSIP No.:
Commercial Federal Corporation, a corporation organized and existing under
the laws of Nebraska (hereinafter called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to __________, or registered assigns, the
principal sum of $_______ Dollars on _____________; provided that the Company
may (i) shorten the Stated Maturity of the principal of this Security to a date
not earlier than _____________, and (ii) extend the Stated Maturity of the
principal of this Security at any time on one or more occasions, subject to
certain conditions specified in Section 3.14 of the Indenture, but in no event
to a date later than _______________. The Company further promises to pay
interest on said principal sum from _______________ or from the most recent
interest payment date (each such date, an "Interest Payment Date") on which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on the last day of_____ and_____ of each year
commencing __________________ at the rate of ____% per annum, until the
principal hereof shall have become due and payable, plus Additional Interest, if
any, until the principal hereof is paid or duly provided for or made available
for payment and on any overdue principal and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the rate of ____% per annum, compounded
quarterly. The amount of interest payable for any period shall be computed on
the basis of twelve 30-day months and a 360-day year. The amount of interest
payable for any partial period shall be computed on the basis of the number of
days elapsed in a 360-day year of twelve 30-day months. In the event that any
date on which interest is payable on this Security is not a Business Day, then a
payment of the interest payable on such date will be made on the next succeeding
day which is a 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
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the date the
payment was originally payable. A "Business Day" shall mean any day other than
a Saturday or Sunday a day on which banking institutions in the State of
Nebraska or the State of New York are authorized or required by law or executive
order to remain closed or on a day on which the Corporate Trust Office of the
Trustee, or the principal office of the Property Trustee under the Trust
Agreement (hereinafter referred to) for [name of trust] is closed for business.
The interest installment so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
installment, which shall be[insert Record Date] next preceding such Interest
Payment Date. Any such interest installment not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than _____ days prior to such Special Record Date, or be
-22-
<PAGE>
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
[If applicable insert--So long as no Event of Default has occurred and is
continuing, the Company shall have the right at any time during the term of this
Security to defer payment of interest on this Security, at any time or from time
to time, for up to 20 consecutive quarterly interest payment periods with
respect to each deferral period (each an "Extension Period"), (during which
Extension Periods the Company shall have the right to make partial payments of
interest on any Interest Payment Date, and at the end of which the Company shall
pay all interest then accrued and unpaid (together with Additional Interest
thereon to the extent permitted by applicable law)); provided, however, that no
Extension Period shall extend beyond the Stated Maturity of the principal of
this Security; provided, further, that during any such Extension Period, the
Company shall not, and shall not permit any Subsidiary of the Company to, (i)
declare or pay any dividends or distributions or redeem, purchase, acquire or
make a liquidation payment with respect to, any of the Company's capital stock
(which includes common and preferred stock), or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt security of the Company (including Securities issued by the Company
pursuant to the Indenture other than the Securities represented by this
certificate) that ranks pari passu with or junior in interest to this Security,
or (iii) make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any Subsidiaries of the Company (if such
guarantee ranks pari passu in all respects with or junior in interest to this
Security (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 CFC
Guarantee related to the Preferred Securities issued by [name of trust], 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). Prior to the termination of any such Extension Period, the Company
may further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed __________ consecutive interest payment
periods or to extend beyond the Stated Maturity. Upon the termination of any
such Extension Period and upon the payment of all amounts then due, and subject
to the foregoing limitation, the Company may elect to begin a new Extension
Period. No interest shall be due and payable during an Extension Period except
at the end thereof. The Company shall give the Trustee, the Property Trustee and
the Administrative Trustees of [name of Trust] notice of its election to begin
any Extension Period at least ___ Business Days prior to the earlier of (i) the
date on which Distributions on the Preferred Securities would be payable except
for the election to begin such Extension Period, or (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 such Preferred Securities of the record date or (iii)
the date such Distributions are payable, but in any event not less than _____
Business Days prior to such record date. The Trustee shall give notice of the
-23-
<PAGE>
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.]
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Trustee or at the office of
such paying agent or paying agents as the Company may designate from time to
time, maintained for that purpose in the United States, in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
the Company payment of interest may be made (i) by check mailed to the address
of the Person entitled thereto as such address shall appear in the Securities
Register or (ii) by transfer to an account maintained by the person entitled
thereto, in immediately available funds, at such place and to such account as
may be designated by the Person entitled thereto as specified in the Securities
Register.
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, unsecured and will rank junior and subordinate and subject in
right of payments to the prior payment in full of all Senior Debt, and this
Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such actions as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance hereof, waives
all notice of the acceptance of the subordination provisions contained herein
and in the Indenture by each holder of Senior Debt, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
COMMERCIAL FEDERAL
CORPORATION
By:
[President or Vice President]
Attest:
[Secretary or Assistant Secretary]
-24-
<PAGE>
Section 2.3. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under a Junior Subordinated Indenture, dated as of ________, 1997 (herein
called the "Indenture"), between the Company and __________ as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Trustee, the Company and the Holders of
the Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $_________.
All terms used in this Security that are defined in the Indenture and in
the Trust Agreement, dated as of _____________, ____, as amended (the "Trust
Agreement"), for [insert name of trust] among Commercial Federal Corporation, as
Depositor, and the Trustees named therein, shall have the meanings assigned to
them in the Indenture or the Trust Agreement, as the case may be.
[If applicable, insert--The Company may at any time, at its option, on or
after ________, and subject to the terms and conditions of Article XI of the
Indenture], [if applicable insert--and subject to the Company having received
prior approval of the Board of Governors of the Federal Reserve System (the
"Federal Reserve") if then required under applicable capital guidelines or
policies of the Federal Reserve] redeem this Security [in whole at any time] [or
in part from time to time], without premium or penalty, at a redemption price
equal to [insert redemption price] to the Redemption Date.]
[If applicable, insert--Upon the occurrence and during the continuation of
a Tax Event or Capital Treatment Event in respect of a CFC Trust, the Company
may, at its option, at any time within 90 days of the occurrence of such Tax
Event or Capital Treatment Event redeem this Security, [if applicable, insert--
in whole but not in part], subject to the provisions of Section 11.7 and the
other provisions of Article XI of the Indenture, at a redemption price equal to
[insert redemption price] to the Redemption Date.
[If applicable, insert--In the event of redemption of this Security in part
only, a new Security or Securities of this series for the portion hereof not
redeemed will be issued in the name of the Holder hereof upon the cancellation
hereof.
The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by the Company with certain
conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of each series to be affected by such supplemental indenture. The
Indenture also contains provisions permitting Holders of
-25-
<PAGE>
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
[If the Security is not a Discount Security,--As provided in and subject to
the provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series may declare the
principal amount of all the Securities of this series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), provided that, in the case of the Securities of this series issued
to a CFC Trust, if upon an Event of Default, the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of this series
fails to declare the principal of all the Securities of this series to be
immediately due and payable, the holders of at least 25% in aggregate
Liquidation Amount of the Preferred Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee; and upon any such
declaration the principal amount of and the accrued interest (including any
Additional Interest) on all the Securities of this series shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article XIII of the Indenture.]
[If the Security is a Discount Security,--As provided in and subject to the
provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than such portion
of the principal amount as may be specified in the terms of this series may
declare an amount of principal of the Securities of this series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), provided that, in the case of the Securities of this
series issued to a CFC Trust, if upon an Event of Default, the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of this series fails to declare the principal of all the Securities of this
series to be immediately due and payable, the holders of at least 25% in
aggregate Liquidation Amount of the Preferred Securities then outstanding shall
have such right by a notice in writing to the Company and the Trustee. Such
amount shall be equal to [insert formula for determining the amount]. Upon any
such declaration, such amount of the principal of and the accrued interest
(including any Additional Interest) on all the Securities of this series shall
become immediately due and payable, provided that the payment of principal and
interest (including any Additional Interest) on such Securities shall remain
subordinated to the extent provided in Article XIII of the Indenture. Upon
payment (i) of the amount of principal so declared due and payable and (ii) of
interest on any overdue principal and overdue interest (in each case to the
extent that the payment of such interest shall be legally enforceable), all of
the Company's obligations in respect of the payment of the principal of and
interest, if any, on this Security shall terminate.]
-26-
<PAGE>
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Securities Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company maintained under Section 10.2 of the Indenture duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Securities of this series are issuable only in registered form without
coupons in denominations of minimum denominations of $[25] and any integral
multiples of $[25] in excess thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of such series
of a different authorized denomination, as requested by the Holder surrendering
the same.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States Federal, state and local
tax purposes it is intended that this Security constitute indebtedness.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
Section 2.4. Additional Provisions Required in Global Security.
Any Global Security issued hereunder shall, in addition to the provisions
contained in Sections 2.2 and 2.3, bear a legend in substantially the following
form:
"THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY."
Section 2.5. Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:
HARRIS TRUST & SAVINGS BANK
as Trustee
By:
Authorized Officer
-27-
<PAGE>
ARTICLE III
THE SECURITIES
Section 3.1. Title and Terms.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate (such Officers' Certificate shall have the effect of a supplemental
indenture for all purposes hereunder), or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of a series:
(a) the title of the securities of such series, which shall distinguish
the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.6 and except for any
Securities which, pursuant to Sectionu3.3, are deemed never to have been
authenticated and delivered hereunder); provided, however, that the authorized
aggregate principal amount of such series may be increased above such amount by
a Board Resolution to such effect;
(c) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination thereof;
-28-
<PAGE>
(d) the rate or rates, if any, at which the Securities of such series
shall bear interest, if any, the rate or rates and extent to which Additional
Interest, if any, shall be payable in respect of any Securities of such series,
the Interest Payment Dates on which such interest shall be payable, the right,
pursuant to Section 3.11 or as otherwise set forth therein, of the Company to
defer or extend an Interest Payment Date, and the Regular Record Date for the
interest payable on any Interest Payment Date or the method by which any of the
foregoing shall be determined;
(e) the place or places where the principal of (and premium, if any) and
interest on the Securities of such series shall be payable, the place or places
where the Securities of such series may be presented for registration of
transfer or exchange, and the place or places where notices and demands to or
upon the Company in respect of the Securities of such series may be made;
(f) the period or periods within or the date or dates on which, if any,
the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the option of
the Company;
(g) the obligation or the right, if any, of the Company to prepay, repay
or purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions, or at the option of a Holder thereof, and
the period or periods within which, the price or prices at which, the currency
or currencies (including currency unit or units) in which and the other terms
and conditions upon which Securities of the series shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
(h) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $25 and any integral multiples of $25
in excess thereof;
(i) if other than 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 Securities of the series shall be payable, or in which
the Securities of the series shall be denominated;
(j) the additions, modifications or deletions, if any, in the Events of
Default or covenants of the Company set forth herein with respect to the
Securities of such series;
(k) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
(l) the additions or changes, if any, to this Indenture with respect to
the Securities of such series as shall be necessary to permit or facilitate the
issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;
(m) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the manner
in which such amounts will be determined;
-29-
<PAGE>
(n) whether the Securities of the series, or any portion thereof, shall
initially be issuable in the form of a temporary Global Security representing
all or such portion of the Securities of such series and provisions for the
exchange of such temporary Global Security for definitive Securities of such
series;
(o) if applicable, that any Securities of the series shall be issuable in
whole or in part in the form of one or more Global Securities and, in such case,
the respective Depositaries for such Global Securities, the form of any legend
or legends which shall be borne by any such Global Security in addition to or in
lieu of that set forth in Section 2.4 and any circumstances in addition to or in
lieu of those set forth in Section 3.5 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any transfer of
such Global Security in whole or in part may be registered, in the name or names
of Persons other than the Depositary for such Global Security or a nominee
thereof;
(p) the appointment of any Paying Agent or Agents for the Securities of
such series;
(q) the terms of any right to convert or exchange Securities of such series
into any other securities or property of the Company, and the additions or
changes, if any, to this Indenture with respect to the Securities of such series
to permit or facilitate such conversion or exchange;
(r) the form or forms of the Trust Agreement, Amended and Restated Trust
Agreement and Guarantee Agreement, if different from the forms attached hereto
as Annexes A, B and C, respectively;
(s) the relative degree, if any, to which the Securities of the series
shall be senior to or be subordinated to other series of Securities in right of
payment, whether such other series of Securities are Outstanding or not; and
(t) any other terms of the Securities of such series (which terms shall not
be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided herein or in or pursuant
to such Board Resolution and set forth in such Officers' Certificate or in any
such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
The Securities shall be subordinated in right of payment to Senior Debt as
provided in Article XIII.
-30-
<PAGE>
Section 3.2. Denominations.
The Securities of each series shall be in registered form without coupons
and shall be issuable in minimum denominations of $25 and integral multiples of
$25 in excess thereof, unless otherwise specified as contemplated by Section
3.1.
Section 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its President
or one of its Vice Presidents under its corporate seal reproduced or impressed
thereon and attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver
Securities of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established by or pursuant to one or more
Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(1) if the form of such Securities has been established by or pursuant to
Board Resolution as permitted by Section 2.1, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or pursuant to
Board Resolution as permitted by Section 3.1, that such terms have been
established in conformity with the provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not
-31-
<PAGE>
be necessary to deliver the Officers' Certificate otherwise required pursuant to
Section 3.1 or the Company Order and Opinion of Counsel otherwise required
pursuant to such preceding paragraph at or prior to the authentication of each
Security of such series if such documents are delivered at or prior to the
authentication upon original issuance of the first Security of such series to be
issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder. Notwithstanding the foregoing, if any Security shall have
been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.9, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
Section 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any denomination, substantially of the tenor of the
definitive Securities of such series in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary Securities shall
be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for that purpose
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more definitive Securities
of the same series of authorized denominations having the same Original Issue
Date and Stated Maturity and having the same terms as such temporary Securities.
Until so exchanged, the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series.
-32-
<PAGE>
Section 3.5. Registration, Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and of
transfers of Securities. Such register is herein sometimes referred to as the
"Securities Register." The Trustee is hereby appointed "Securities Registrar"
for the purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the office
or agency of the Company designated for that purpose the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of the same series of any
authorized denominations, of a like aggregate principal amount, of the same
Original Issue Date and Stated Maturity and having the same terms.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated Maturity
and having the same terms, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any transfer or exchange of Securities shall be
the valid obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall (if
so required by the Company or the Securities Registrar) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or exchange of
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Securities.
No service charge shall be made to a Holder for any transfer or exchange of
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Securities.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global Security or
a nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor, and each such Global Security shall constitute a single
Security for all purposes of this Indenture.
-33-
<PAGE>
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (A) such Depositary (i) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or
(ii) has ceased to be a clearing agency registered under the Exchange Act at a
time when the Depositary is required to be so registered to act as depositary,
in each case unless the Company has approved a successor Depositary within 90
days, (B) there shall have occurred and be continuing an Event of Default with
respect to such Global Security, (C) the Company in its sole discretion
determines that such Global Security will be so exchangeable or transferable or
(D) there shall exist such circumstances, if any, in addition to or in lieu of
the foregoing as have been specified for this purpose as contemplated by Section
3.1.
(3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities issued in
exchange for a Global Security or any portion thereof shall be registered in
such names as the Depositary for such Global Security shall direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Section, Section 3.4, 3.6, 9.6 or 11.6 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (a) to issue, transfer or exchange any Security of
any series during a period beginning at the opening of business 15 days before
the day of selection for redemption of Securities pursuant to Article XI and
ending at the close of business on the day of mailing of notice of redemption or
(b) to transfer or exchange any Security so selected for redemption in whole or
in part, except, in the case of any Security to be redeemed in part, any portion
thereof not to be redeemed.
Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee together with such
security or indemnity as may be required by the Company or the Trustee to save
each of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same issue
and series of like tenor and principal amount, having the same Original Issue
Date and Stated Maturity, and bearing a number not contemporaneously
outstanding.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security, and
(ii) such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute
and upon its request the Trustee shall
-34-
<PAGE>
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same issue and series of like tenor and
principal amount, having the same Original Issue Date and Stated Maturity as
such destroyed, lost or stolen Security, and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section 3.6 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Security of any series which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date, shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
in respect of Securities of such series, except that, unless otherwise provided
in the Securities of such series, interest payable on the Stated Maturity of the
principal of a Security shall be paid to the Person to whom principal is paid.
The initial payment of interest on any Security of any series which is issued
between a Regular Record Date and the related Interest Payment Date shall be
payable as provided in such Security or in the Board Resolution pursuant to
Section 3.1 with respect to the related series of Securities.
Any interest on any Security which is payable, but is not timely paid or
duly provided for, on any Interest Payment Date for Securities of such series
(herein called "Defaulted Interest"), shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series in respect of which
interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed
-35-
<PAGE>
in the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this Clause provided. Thereupon, the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first class, postage prepaid,
to each Holder of a Security of such series at the address of such Holder as it
appears in the Securities Register not less than 10 days prior to such Special
Record Date. The Trustee may, in its discretion, in the name and at the expense
of the Company, cause a similar notice to be published at least once in a
newspaper, customarily published in the English language on each Business Day
and of general circulation in the Borough of Manhattan, The City of New York,
but such publication shall not be a condition precedent to the establishment of
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered on such Special Record Date and shall no longer be payable pursuant
to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of the series in respect of which interest is in default
may be listed and, upon such notice as may be required by such exchange (or by
the Trustee if the Securities are not listed), if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause, such
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 3.7, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
Section 3.8. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 3.7) any interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
-36-
<PAGE>
Section 3.9. Cancellation.
All Securities surrendered for payment, redemption, transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee, and any such Securities and Securities surrendered directly to the
Trustee for any such purpose shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities shall be destroyed by the
Trustee and the Trustee shall deliver to the Company a certificate of such
destruction.
Section 3.10. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for Securities
of any series, interest on the Securities of each series for any period shall be
computed on the basis of a 360-day year of twelve 30-day months and interest on
the Securities of each series 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.
Section 3.11. Deferrals of Interest Payment Dates.
If specified as contemplated by Section 2.1 or Section 3.1 with respect to
the Securities of a particular series, so long as no Event of Default has
occurred and is continuing, the Company shall have the right, at any time during
the term of such series, from time to time to defer the payment of interest on
such Securities for such period or periods as may be specified as contemplated
by Section 3.1 (each, an "Extension Period") during which Extension Periods the
Company shall have the right to make partial payments of interest on any
Interest Payment Date. No Extension Period shall end on a date other than an
Interest Payment Date. At the end of any such Extension Period the Company shall
pay all interest then accrued and unpaid on the Securities (together with
Additional Interest thereon, if any, at the rate specified for the Securities of
such series to the extent permitted by applicable law); provided, however, that
no Extension Period shall extend beyond the Stated Maturity of the principal of
the Securities of such series; provided, further, that during any such Extension
Period, the Company shall not, and shall not permit any Subsidiary to,
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
capital stock (which includes common and preferred stock), or (ii) make any
payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Company (including Securities other than
the Securities of such series) that ranks pari passu in all respects with or
junior in interest to the Securities of such series or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any Subsidiary of the Company if such guarantee rank pari passu in all respects
with or junior in interest to the securities of such series (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 the CFC
Guarantee related to the Preferred Securities issued by the CFC Trust holding
Securities of such series, and (d) purchases of Common Stock
-37-
<PAGE>
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 extend such
Extension Period, provided that such extension does not cause such Extension
Period to extend beyond the Stated Maturity of the principal of such Securities.
Upon termination of any Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due on any Interest Payment
Date, the Company may elect to begin a new Extension Period, subject to the
above requirements. No interest shall be due and payable during an Extension
Period, except at the end thereof. The Company shall give the Trustee, the
Property Trustee and the Administrative Trustees of the CFC Trust holding
Securities of such series notice of its election of any Extension Period (or an
extension thereof) at least one Business Day prior to the earlier of (i) the
next succeeding date on which Distributions on the Preferred Securities of such
CFC Trust would be payable except for the election to begin or extend such
Extension Period or (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 such 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 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.
The Trustee shall promptly give notice of the Company's election to begin
any such Extension Period to the Holders of the Outstanding Securities of such
series.
Section 3.12. Right of Set-Off.
With respect to the Securities of a series issued to a CFC Trust,
notwithstanding anything to the contrary in the Indenture, the Company shall
have the right to set-off any payment it is otherwise required to make
thereunder in respect of any such Security to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the Guarantee Agreement relating to such Security or under Section
5.8 of the Indenture.
Section 3.13. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the Company and, by its
acceptance of a Security or a beneficial interest therein, the Holder of, and
any Person that acquires a beneficial interest in, such Security agree that for
United States Federal, state and local tax purposes it is intended that such
Security constitute indebtedness.
Section 3.14. Shortening of Stated Maturity.
If specified as contemplated by Section 2.1 or Section 3.1 with respect to
the Securities of a particular series, the Company shall have the right to
shorten the Stated Maturity of the principal of the Securities of such series at
any time to any date not earlier than the first date on which the Company has
the right to redeem the Securities of such series.
-38-
<PAGE>
Section 3.15. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Company Request, cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for and as otherwise provided in this
Section 4.1) and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.6 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 10.3) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year of the date of deposit, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of Clause (B) (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in trust for
such purpose an amount in the currency or currencies in which the Securities of
such series are payable sufficient to pay
-39-
<PAGE>
and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and premium, if any)
and interest (including any Additional Interest) to the date of such deposit (in
the case of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.
Section 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all money
deposited with the Trustee pursuant to Section 4.1 shall be held in trust and
applied by the Trustee, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for the payment of which such money or obligations have been
deposited with or received by the Trustee.
ARTICLE V
REMEDIES
Section 5.1 Events of Default.
"Event of Default", wherever used herein with respect to the Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series, including any Additional Interest in respect thereof, when it becomes
due and payable, and continuance of such default for a period of 30 days
(subject to the deferral of any due date in the case of an Extension Period); or
(2) default in the payment of the principal of (or premium, if any, on) any
Security of that series at its Maturity; or
-40-
<PAGE>
(3) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Company in this Indenture (other than a covenant or
warranty a default in the performance of which or the breach of which is
elsewhere in this Section 5.1 specifically dealt with), and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such default
or breach and requiring it to be remedied; or
(4) the entry of a decree or order by a court having jurisdiction in the
premises adjudging the Company a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(5) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit for creditors, or the admission by
it in writing of its inability to pay its debts generally as they become due and
its willingness to be adjudicated a bankrupt, or the taking of corporate action
by the Company in furtherance of any such action; or
(6) any other Event of Default provided with respect to Securities of that
series.
Section 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Sectionu5.1(4) or 5.1(5)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), provided that, in the case of
the Securities of a series issued to a CFC Trust, if, upon an Event of Default,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series fail to declare the principal of all the
Securities of that series to be immediately due and payable, the holders of at
least 25% in aggregate liquidation amount of the corresponding series of
Preferred Securities then outstanding shall have such right by a notice in
writing to the Company and the Trustee; and upon any such declaration such
principal amount (or specified portion
-41-
<PAGE>
thereof) of and the accrued interest (including any Additional Interest) on all
the Securities of such series shall become immediately due and payable. Payment
of principal and interest (including any Additional Interest) on such Securities
shall remain subordinated to the extent provided in Article XIII notwithstanding
that such amount shall become immediately due and payable as herein provided. If
an Event of Default specified in Section 5.1(4) or 5.1(5) with respect to
Securities of any series at the time Outstanding occurs, the principal amount of
all the Securities of that series (or, if the Securities of that series are
Discount Securities, such portion of the principal amount of such Securities as
may be specified by the terms of that series) shall automatically, and without
any declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay:
(A) all overdue installments of interest (including any Additional
Interest) on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that
series which have become due otherwise than by such declaration of acceleration
and interest thereon at the rate borne by the Securities, and
(C) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel; and
(2) all Events of Default with respect to Securities of that series, other
than the non-payment of the principal of Securities of that series which has
become due solely by such acceleration, have been cured or waived as provided in
Section 5.13.
In the case of Securities of a series issued to a CFC Trust, the holders of
a majority in aggregate Liquidation Amount (as defined in the Trust Agreement
under which such CFC Trust is formed) of the related series of Preferred
Securities issued by such CFC Trust shall also have the right to rescind and
annul such declaration and its consequences by written notice to the Company and
the Trustee subject to the satisfaction of the conditions set forth in
Clauses (1) and (2) above of this Section 5.2.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
-42-
<PAGE>
Section 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any installment of interest
(including any Additional Interest) on any Security when such interest becomes
due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (and premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal, including any sinking fund payment or
analogous obligations (and premium, if any) and interest (including any
Additional Interest); and, in addition thereto, all amounts owing the Trustee
under Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
Section 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors,
(a) the Trustee (irrespective of whether the principal of the Securities of
any series shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of overdue principal (and premium, if any) or
interest (including any Additional Interest)) shall be entitled and empowered,
by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest (including any Additional Interest) owing and
unpaid in respect to the Securities and to file such other papers or documents
as may be necessary
-43-
<PAGE>
or advisable and to take any and all actions as are authorized under the Trust
Indenture Act in order to have the claims of the Holders and any predecessor to
the Trustee under Section 6.7 allowed in any such judicial proceedings; and
(ii) in particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same in accordance with Section 5.6; and
(b) any custodian, receiver, assignee, trustee, liquidator, sequestrator
(or other similar official) in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee for distribution in
accordance with Section 5.6, and in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due to it and any predecessor Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
Section 5.5. Trustee May Enforce Claim Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of all the amounts owing the Trustee and any predecessor Trustee
under Section 6.7, its agents and counsel, be for the ratable benefit of the
Holders of the Securities in respect of which such judgment has been recovered.
Section 5.6. Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal (or premium,
if any) or interest (including any Additional Interest), upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 6.7;
SECOND: Subject to Article XIII, to the payment of the amounts then due
and unpaid upon such series of Securities for principal (and premium, if any)
and interest (including any Additional Interest), in respect of which or for the
benefit of which such
-44-
<PAGE>
money has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such series of Securities for
principal (and premium, if any) and interest (including any Additional
Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
Section 5.7. Limitation on Suits.
No Holder of any Securities of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture or for the
appointment of a receiver, assignee, trustee, liquidator, sequestrator (or other
similar official) or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request:
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
Section 5.8. Unconditional Right of Holders to Receive Principal, Premium and
Interest; Direct Action by Holders of Preferred Securities.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right which is absolute and unconditional to receive
payment of the principal of (and premium, if any) and (subject to Section 3.7)
interest (including any Additional Interest) on such Security on the respective
Stated Maturities expressed in such Security (or, in the case of redemption, on
the Redemption Date) and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder. In the case of Securities of a series issued to a CFC Trust, any holder
of the corresponding series of Preferred Securities issued by such CFC Trust
shall have the
-45-
<PAGE>
right, upon the occurrence of an Event of Default described in Section 5.1(1) or
5.1(2), to institute a suit directly against the Company for enforcement of
payment to such holder of principal of (premium, if any) and (subject to Section
3.7) interest (including any Additional Interest) on the Securities having a
principal amount equal to the aggregate Liquidation Amount (as defined in the
Trust Agreement under which such CFC Trust is formed) of such Preferred
Securities of the corresponding series held by such holder.
Section 5.9. Restoration of Rights and Remedies.
If the Trustee, any Holder or any holder of Preferred Securities has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee, such Holder or such holder of
Preferred Securities, then and in every such case the Company, the Trustee, the
Holders and such holder of Preferred Securities shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee, the Holders and the holders of Preferred Securities shall continue as
though no such proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of Section 3.6, no right
or remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee, any Holder of any Security or any
holder of any Preferred Security to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to
the Holders and the right and remedy given to the holders of Preferred
Securities by Section 5.8 may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee, the Holders or the holders of Preferred
Securities, as the case may be.
Section 5.12. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that:
-46-
<PAGE>
(1) such direction shall not be in conflict with any rule of law or with
this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall have the
right to decline to follow such direction if a Responsible Officer or Officers
of the Trustee shall, in good faith, determine that the proceeding so directed
would be unjustly prejudicial to the Holders not joining in any such direction
or would involve the Trustee in personal liability.
Section 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series and, in the case of any Securities of a
series issued to a CFC Trust, the holders of Preferred Securities issued by such
CFC Trust may waive any past default hereunder and its consequences with respect
to such series except a default:
(1) in the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article IX
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Any such waiver shall be deemed to be on behalf of the Holders of all the
Securities of such series or, in the case of a waiver by holders of Preferred
Securities issued by such CFC Trust, by all holders of Preferred Securities
issued by such CFC Trust.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest (including any
Additional Interest) on any Security on or after the respective Stated
Maturities expressed in such Security.
-47-
<PAGE>
Section 5.15. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
Section 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default;
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts; and
-48-
<PAGE>
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
Holders pursuant to Section 5.12 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture with respect
to the Securities of such series.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
6.1.
Section 6.2. Notice of Defaults.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest (including any Additional
Interest) on any Security of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of Securities of such series; and provided, further,
that, in the case of any default of the character specified in Section 5.1(3),
no such notice to Holders of Securities of such series shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section,
the term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Securities of such
series.
Section 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, Security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem
it
-49-
<PAGE>
desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of the Securities or the proceeds thereof.
Section 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Securities
Registrar or such other agent.
Section 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for
-50-
<PAGE>
interest on any money received by it hereunder except as otherwise agreed with
the Company.
Section 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time compensation for all services
rendered by it hereunder in such amounts as the Company and the Trustee shall
agree from time to time (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(2) to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense (including the reasonable compensation and the
expenses and disbursements of its agents and counsel) incurred without
negligence or bad faith, arising out of or in connection with the acceptance or
administration of this trust or the performance of its duties hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. This indemnification shall survive the termination of this
Agreement.
To secure the Company's payment obligations in this Section 6.7, the
Company and the Holders agree that the Trustee shall have a lien prior to the
Securities on all money or property held or collected by the Trustee. Such lien
shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or any successor statute.
Section 6.8. Disqualification; Conflicting Interests.
The Trustee for the Securities of any series issued hereunder shall be
subject to the provisions of Section 310(b) of the Trust Indenture Act. Nothing
herein shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of said Section 301(b).
Section 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws of the United
States of America or of any State or Territory or the District of Columbia,
authorized under
-51-
<PAGE>
such laws to exercise corporate trust powers and subject to supervision or
examination by Federal, State, Territorial or District of Columbia authority, or
(b) a corporation or other Person organized and doing business under the
laws of a foreign government that is permitted to act as Trustee pursuant to a
rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees,
in either case having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
for the purposes of this Section 6.9, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
6.9, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article VI. Neither the Company nor any Person directly or
indirectly controlling, controlled by or under common control with the Company
shall serve as Trustee for the Securities of any series issued hereunder.
Section 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article VI shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after written request
therefor by the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and shall fail
to resign after written request therefor by the Company or by any such Holder,
or
-52-
<PAGE>
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company, acting pursuant to the authority of a
Board Resolution, may remove the Trustee with respect to all Securities, or (ii)
subject to Section 5.14, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee with respect to the Securities of
that or those series. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee with respect to the Securities of such series and supersede
the successor Trustee appointed by the Company. If no successor Trustee with
respect to the Securities of any series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Security for at least
six months may, subject to Section 5.14, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Securities Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
Section 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign,
-53-
<PAGE>
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts, and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all rights, powers and trusts referred to in paragraph
(a) or (b) of this Section 6.11, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article VI.
Section 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article VI, without the execution or filing of any paper or any further act on
the
-54-
<PAGE>
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated, and in case any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.
Section 6.13. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
Section 6.14. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, or of any State or Territory or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section 6.14 the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.14, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 6.14.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
-55-
<PAGE>
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.14, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment in the manner provided in Section 1.6 to all Holders
of Securities of the series with respect to which such Authenticating Agent will
serve. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provision of this Section 6.14.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section 6.14, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.7.
If an appointment with respect to one or more series is made pursuant to
this Section 6.14, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:
HARRIS TRUST & SAVINGS BANK
As Trustee
By:
As Authenticating Agent
By:
Authorized Officer
-56-
<PAGE>
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after _____ and _____ in each
year, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of _____ and _____ of such year, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished,
excluding from any such list names and addresses received by the Trustee in its
capacity as Securities Registrar.
Section 7.2. Preservation of Information, Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided in the Trust
Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
Section 7.3. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act, at the times and in the manner provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of not more
than 12 months shall be transmitted no later than July 15 in each calendar year,
commencing with the first July 15 after the first issuance of Securities under
this Indenture.
(c) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed and also with the Commission. The Company will notify the
Trustee when any Securities are listed on any stock exchange.
Section 7.4. Reports by Company.
The Company shall file with the Trustee and with the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner
-57-
<PAGE>
provided in the Trust Indenture Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act shall be filed with the Trustee
within 15 days after the same is required to be filed with the Commission.
Notwithstanding that the Company may not be required to remain subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall continue to file with the Commission and provide the Trustee with the
annual reports and the information, documents and other reports which are
specified in Sections 13 and 15(d) of the Exchange Act. The Company also shall
comply with the other provisions of Trust Indenture Act Section 314(a).
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and no Person shall consolidate with or merge into the Company or
convey, transfer or lease its properties and assets substantially as an entirety
to the Company, unless:
(1) in case the Company shall consolidate with or merge into another Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust
organized and existing under the laws of the United States of America or any
State or the District of Columbia, and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of (and premium,
if any) and interest (including any Additional Interest) on all the Securities
and the performance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(3) in the case of the Securities of a series issued to a CFC Trust, such
consolidation, merger, conveyance, transfer or lease is permitted under the
related Trust Agreement and related CFC Guarantee and does not give rise to any
breach or violation of the related Trust Agreement or related CFC Guarantee; and
(4) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and any such supplemental indenture comply with this Article
and that all conditions precedent herein provided for relating to such
transaction have been complied with; and the Trustee, subject to Section 6.1,
may rely upon such Officers' Certificate and Opinion of Counsel as conclusive
evidence that such transaction complies with this Section 8.1.
-58-
<PAGE>
Section 8.2. Successor Corporation Substituted.
Upon any consolidation or merger by the Company with or into any other
Person, or any conveyance, transfer or lease by the Company of its properties
and assets substantially as an entirety to any Person in accordance with Section
8.1, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein; and in the event of any such
conveyance, transfer or lease the Company shall be discharged from all
obligations and covenants under the Indenture and the Securities and may be
dissolved and liquidated.
Such successor Person may cause to be signed, and may issue either in its
own name or in the name of the Company, any or all of the Securities issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor Person instead
of the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication pursuant to such provisions and
any Securities which such successor Person thereafter shall cause to be signed
and delivered to the Trustee on its behalf for the purpose pursuant to such
provisions. All the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form may be made in the Securities thereafter to be
issued as may be appropriate.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
provided, however, that the form and terms of Securities of any series may be
established by a Board Resolution, as set forth in the Officers' Certificate
delivered to the Trustee pursuant to Section 3.1, without entering into a
supplemental indenture for all purposes hereunder, for any of the following
purposes:
(1) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company herein and in
the Securities contained; or
-59-
<PAGE>
(2) to convey, transfer, assign, mortgage or pledge any property to or with
the Trustee or to surrender any right or power herein conferred upon the
Company; or
(3) to establish the form or terms of Securities of any series as permitted
by Sections 2.1 or 3.1; or
(4) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating that such covenants are
expressly being included solely for the benefit of such series) or to surrender
any right or power herein conferred upon the Company; or
(5) to add any additional Events of Default for the benefit of the Holders
of all or any series of Securities (and if such additional Events of Default are
to be for the benefit of less than all series of Securities, stating that such
additional Events of Default are expressly being included solely for the benefit
of such series); or
(6) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or
(7) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Indenture, provided that such action pursuant to this clause (7) shall not
adversely affect the interest of the Holders of Securities of any series in any
material respect or, in the case of the Securities of a series issued to a CFC
Trust and for so long as any of the corresponding series of Preferred Securities
issued by such CFC Trust shall remain outstanding, the holders of such Preferred
Securities; or
(8) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Securities of one or more series and to
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 6.11(b); or
(9) to comply with the requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act.
Section 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the
-60-
<PAGE>
rights of the Holders of Securities of such series under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(1) except to the extent permitted by Sections 3.11 or 3.14 or as otherwise
specified as contemplated by Section 2.1 or Section 3.1 with respect to the
deferral of the payment of interest on the Securities of any series or the
shortening of the Stated Maturity of the Securities of any series, change the
Stated Maturity of the principal of, or any installment of interest (including
any Additional Interest) on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or reduce any premium payable upon the
redemption thereof, or reduce the amount of principal of a Discount Security
that would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.2, or change the place of payment where, or the
coin or currency in which, any Security or interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding Securities
of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 5.13 or Section
10.5, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Security affected thereby; or
(4) modify the provisions in Article XIII of this Indenture with respect to
the subordination of Outstanding Securities of any series in a manner adverse to
the Holders thereof;
provided, further, that, in the case of the Securities of a series issued to a
CFC Trust, so long as any of the corresponding series of Preferred Securities
issued by such CFC Trust remains outstanding, (i) no such amendment shall be
made that adversely affects the holders of such Preferred Securities in any
material respect, and no termination of this Indenture shall occur, and no
waiver of any Event of Default or compliance with any covenant under this
Indenture shall be effective, without the prior consent of the holders of at
least a majority of the aggregate liquidation preference of such Preferred
Securities then outstanding unless and until the principal (and premium, if any)
of the Securities of such series and all accrued and, subject to Section 3.7,
unpaid interest (including any Additional Interest) thereon have been paid in
full and (ii) no amendment shall be made to Section 5.8 of this Indenture that
would impair the rights of the holders of Preferred Securities provided therein
without the prior consent of the holders of each Preferred Security then
outstanding unless and until the principal (and premium, if any) of the
Securities of such series and all accrued and (subject to Section 3.7) unpaid
interest (including any Additional Interest) thereon have been paid in full.
-61-
<PAGE>
A supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture that has expressly been included solely for the
benefit of one or more particular series of Securities or Preferred Securities,
or which modifies the rights of the Holders of Securities or holders of
Preferred Securities of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities or holders of Preferred Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional series of Securities created by
any supplemental indenture permitted by this Article or the modifications
thereby of any series of Securities previously created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Section 6.1) shall be
fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture, and that all conditions precedent have been
complied with. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article IX or
delivery to the Trustee of the Officers' Certificate pursuant to Section 3.1
hereof (which Officers' Certificate shall have the effect of a supplemental
indenture for all purposes hereunder), this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
Section 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article IX and every
Officers' Certificate delivered to the trustee pursuant to Section 3.1 hereof
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.6. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX or delivery to the Trustee of
the Officers' Certificate pursuant to Section 3.1 hereof (which Officers'
Certificate shall have the effect of a supplemental indenture for all purposes
hereunder) may, and shall if required by the Company, bear a notation in form
approved by the Company as to any matter provided for in such supplemental
indenture or such Officers' Certificate. If the Company shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Company, to any such supplemental indenture or such Officers's Certificate may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
-62-
<PAGE>
ARTICLE X
COVENANTS
Section 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of such Securities and this Indenture.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities, an office or agency where Securities of that series may be presented
or surrendered for payment and an office or agency where Securities of that
series may be surrendered for transfer or exchange and where notices and demands
to or upon the Company in respect of the Securities of that series and this
Indenture may be served. The Company initially appoints the Trustee, acting
through its Corporate Trust Office, as its agent for said purposes. The Company
will give prompt written notice to the Trustee of any change in the location of
any such office or agency. If at any time the Company shall fail to maintain
such office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
of such purposes, and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in each Place of
Payment for Securities of any series for such purposes. The Company will give
prompt written notice to the Trustee of any such designation and any change in
the location of any such office or agency.
Section 10.3. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, prior
to 10:00 a.m. New York City time on each due date of the principal of or
interest on any Securities, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or
-63-
<PAGE>
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal and premium (if any) or interest, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section 10.3, that such
Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal (and
premium, if any) or interest:
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(4) comply with the provisions of the Trust Indenture Act applicable to it
as a Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Security and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall
(unless otherwise required by mandatory provision of applicable escheat or
abandoned or unclaimed property law) be paid on Company Request to the Company,
or (if then held by the Company) shall (unless otherwise required by mandatory
provision of applicable escheat or abandoned or unclaimed property law) be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
-64-
<PAGE>
Section 10.4. Statement as to Compliance.
The Company shall deliver to the Trustee, within 120 days after the end of
each calendar year of the Company ending after the date hereof, an Officers'
Certificate covering the preceding calendar year, stating whether or not to the
best knowledge of the signers thereof the Company is in default in the
performance, observance or fulfillment of or compliance with any of the terms,
provisions, covenants and conditions of this Indenture, and if the Company shall
be in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge. For the purpose of this Section 10.4, compliance
shall be determined without regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture.
Section 10.5. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any covenant
or condition provided pursuant to Sections 3.1, 9.1(3), or 9.1(4) with respect
to the Securities of any series, if before or after the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company in respect of any such covenant
or condition shall remain in full force and effect.
Section 10.6. Additional Sums.
In the case of the Securities of a series issued to a CFC Trust, so long as
no Event of Default has occurred and is continuing and except as otherwise
specified as contemplated by Section 2.1 or Section 3.1, in the event that
(i) such CFC Trust is the Holder of all of the Outstanding Securities of such
series, (ii) a Tax Event in respect of such CFC Trust shall have occurred and be
continuing and (iii) the Company shall not have (A) redeemed the Securities of
such series pursuant to Section 11.7(b) or (B) terminated such CFC Trust
pursuant to Section 9.2(b) of the related Trust Agreement, the Company shall pay
to such CFC Trust (and its permitted successors or assigns under the related
Trust Agreement) for so long as such CFC Trust (or its permitted successor or
assignee) is the registered holder of any Securities of such series, such
additional amounts as may be necessary in order that the amount of Distributions
(including any Additional Amounts (as defined in such Trust Agreement)) then due
and payable by such CFC Trust on the related Preferred Securities and Common
Securities that at any time remain outstanding in accordance with the terms
thereof shall not be reduced as a result of any Additional Taxes (the
"Additional Sums"). Whenever in this Indenture or the Securities there is a
reference in any context to the payment of principal of or interest on the
Securities, such mention shall be deemed to include mention of the payments of
the Additional Sums provided for in this paragraph to the extent that, in such
context, Additional Sums are, were or would be payable in respect thereof
pursuant to the provisions of this paragraph and express mention of the payment
of Additional Sums (if applicable) in any provisions hereof
-65-
<PAGE>
shall not be construed as excluding Additional Sums in those provisions hereof
where such express mention is not made; provided, however, that the deferral of
the payment of interest pursuant to Section 3.11 or the Securities shall not
defer the payment of any Additional Sums that may be due and payable.
Section 10.7. Additional Covenants.
The Company covenants and agrees with each Holder of Securities of any
series that it shall not, and it shall not permit any Subsidiary of the Company
to, (a) declare or pay any dividends or distributions on, or redeem purchase,
acquire or make a liquidation payment with respect to, any shares of the
Company's capital stock (which includes common and preferred stock), or (b) make
any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company (including Securities
other than the Securities of such series) that rank pari passu in all respects
with or junior in interest to the Securities of such series or 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
in all respects with or junior in interest to the Securities (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 rights plan or the redemption or repurchase of any
such rights pursuant thereto, (c) payments under the CFC Guarantee related to
the Preferred Securities issued by the CFC Trust holding Securities of such
series, 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 that (A) with the giving of notice or
the lapse of time or both, would constitute an Event of Default with respect to
the Securities of such series and (B) in respect of which the Company shall not
have taken reasonable steps to cure, (ii) if the Securities of such series are
held by a CFC Trust, the Company shall be in default with respect to its payment
of any obligations under the CFC Guarantee relating to the Preferred Securities
issued by such CFC Trust or (iii) the Company shall have given notice of its
election to begin an Extension Period with respect to the Securities of such
series as provided herein and shall not have rescinded such notice, or such
Extension Period, or any extension thereof, shall be continuing.
The Company also covenants with each Holder of Securities of a series
issued to a CFC Trust (i) to maintain directly or indirectly 100% ownership of
the Common Securities of such CFC Trust; provided, however, that any permitted
successor of the Company hereunder may succeed to the Company's ownership of
such Common Securities, (ii) not to voluntarily terminate, wind-up or liquidate
such CFC Trust, except (a) in connection with a distribution of the Securities
of such series to the holders of Trust Securities in liquidation of such CFC
Trust or (b) in connection with certain mergers, consolidations or amalgamations
permitted by the related Trust Agreement and (iii) to use its reasonable
efforts, consistent with the terms and provisions of such Trust Agreement, to
cause such CFC Trust to remain classified as a grantor trust and not an
association taxable as a corporation for United States federal income tax
purposes.
-66-
<PAGE>
ARTICLE XI
REDEMPTION OF SECURITIES
Section 11.1 Applicability of This Article.
Redemption of Securities of any series (whether by operation of a sinking
fund or otherwise) as permitted or required by any form of Security issued
pursuant to this Indenture shall be made in accordance with such form of
Security and this Article; provided, however, that if any provision of any such
form of Security shall conflict with any provision of this Article, the
provision of such form of Security shall govern. Except as otherwise set forth
in the form of Security for such series, each Security of such series shall be
subject to partial redemption only in the amount of $25 or, in the case of the
Securities of a series issued to a CFC Trust, $25, or integral multiples of $25
in excess thereof.
Section 11.2. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption at the election of
the Company of less than all of the Securities of any particular series and
having the same terms, the Company shall, not less than 30 nor more than 60 days
prior to the Redemption Date (unless a shorter notice shall be satisfactory to
the Trustee), notify the Trustee of such date and of the principal amount of
Securities of that series to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities, the Company shall furnish the Trustee
with an Officers' Certificate and an Opinion of Counsel evidencing compliance
with such restriction.
Section 11.3. Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of any Security of such series, provided that
the portion of the principal amount of any Security not redeemed shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security. If less than all the Securities of such series
and of a specified tenor are to be redeemed (unless such redemption affects only
a single Security), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously called
for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the Securities
selected for partial redemption and the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the
-67-
<PAGE>
redemption of Securities shall relate, in the case of any Security redeemed or
to be redeemed only in part, to the portion of the principal amount of such
Security which has been or is to be redeemed. If the Company shall so direct,
Securities registered in the name of the Company, any Affiliate or any
Subsidiary thereof shall not be included in the Securities selected for
redemption.
Section 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not later than the thirtieth day, and not earlier than the sixtieth day,
prior to the Redemption Date, to each Holder of Securities to be redeemed, at
the address of such Holder as it appears in the Securities Register.
With respect to Securities of each series to be redeemed, each notice of
redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities of such particular series and
having the same terms are to be redeemed, the identification (and, in the case
of partial redemption, the respective principal amounts) of the particular
Securities to be redeemed;
(d) that on the Redemption Date, the Redemption Price will become due and
payable upon each such Security or portion thereof, and that interest thereon,
if any, shall cease to accrue on and after said date;
(e) the place or places where such Securities are to be surrendered for
payment of the Redemption Price; and
(f) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall not be
irrevocable. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or any
defect in the notice to the Holder of any Security designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.
Section 11.5. Deposit of Redemption Price.
Prior to 10:00 a.m. New York City time on the Redemption Date specified in
the notice of redemption given as provided in Section 11.4, the Company will
deposit with the Trustee or with one or more Paying Agents (or if the Company is
acting as its own Paying Agent, the Company will segregate and hold in trust as
provided in Sectionu10.3) an amount of money sufficient to pay the Redemption
Price of, and any accrued interest (including Additional Interest) on, all the
Securities which are to be redeemed on that date.
-68-
<PAGE>
Section 11.6. Payment of Securities Called for Redemption.
If any notice of redemption has been given as provided in Section 11.4, the
Securities or portion of Securities with respect to which such notice has been
given shall become due and payable on the date and at the place or places stated
in such notice at the applicable Redemption Price. On presentation and surrender
of such Securities at a Place of Payment in said notice specified, the said
securities or the specified portions thereof shall be paid and redeemed by the
Company at the applicable Redemption Price, together with accrued interest
(including any Additional Interest) to the Redemption Date; provided, however,
that, unless otherwise specified as contemplated by Sectionu3.1, installments of
interest whose Stated Maturity is on or prior to the Redemption Date will be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 3.7.
Upon presentation of any Security redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder thereof, at
the expense of the Company, a new Security or Securities of the same series, of
authorized denominations, in aggregate principal amount equal to the portion of
the Security not redeemed so presented and having the same Original Issue Date,
Stated Maturity and terms. If a Global Security is so surrendered, such new
Security will also be a new Global Security.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal of and premium, if any, on such Security
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Section 11.7. Right of Redemption of Securities Initially Issued to a CFC
Trust.
In the case of the Securities of a series initially issued to a CFC Trust,
except as otherwise specified as contemplated by Section 3.1, the Company, at
its option, may redeem such Securities (i) on or after the date five years after
the Original Issue Date of such Securities, in whole at any time or in part from
time to time, or (ii) upon the occurrence and during the continuation of a Tax
Event or Capital Treatment Event, at any time within 90udays following the
occurrence of such Tax Event or Capital Treatment Event in respect of such CFC
Trust, in whole (but not in part), in each case at a Redemption Price equal to
100% of the principal amount thereof.
ARTICLE XII
SINKING FUNDS
Section 12.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by
-69-
<PAGE>
Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms of
any Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any sinking fund payment in excess of such minimum amount which is
permitted to be made by the terms of such Securities of any series is herein
referred to as an "optional sinking fund payment". If provided for by the terms
of any Securities of any series, the cash amount of any sinking fund payment may
be subject to reduction as provided in Section 12.2. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of such Securities.
Section 12.2. Satisfaction of Sinking Fund Payments with Securities.
In lieu of making all or any part of a mandatory sinking fund payment with
respect to any Securities of a series in cash, the Company may at its option, at
any time no more than 16 months and no less than 30 days prior to the date on
which such sinking fund payment is due, deliver to the Trustee Securities of
such series (together with the unmatured coupons, if any, appertaining thereto)
theretofore purchased or otherwise acquired by the Company, except Securities of
such series that have been redeemed through the application of mandatory or
optional sinking fund payments pursuant to the terms of the Securities of such
series, accompanied by a Company Order instructing the Trustee to credit such
obligations and stating that the Securities of such series were originally
issued by the Company by way of bona fide sale or other negotiation for value;
provided that the Securities to be so credited have not been previously so
credited. The Securities to be so credited shall be received and credited for
such purpose by the Trustee at the redemption price for such Securities, as
specified in the Securities so to be redeemed, for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 12.3. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash in the currency in which the
Securities of such series are payable (except as provided pursuant to Section
3.1) and the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities pursuant to Section 12.2 and will also deliver to the
Trustee any Securities to be so delivered. Such Officers' Certificate shall be
irrevocable and upon its delivery the Company shall be obligated to make the
cash payment or payments therein referred to, if any, on or before the
succeeding sinking fund payment date. In the case of the failure of the Company
to deliver such Officers' Certificate (or, as required by this Indenture, the
Securities and coupons, if any, specified in such Officers' Certificate), the
sinking fund payment due on the succeeding sinking fund payment date for such
series shall be paid entirely in cash and shall be sufficient to redeem the
principal amount of the Securities of such series subject to a mandatory sinking
fund payment without the right to deliver or credit securities as provided in
Section 12.2 and without the right to make the optional sinking fund payment
with respect to such series at such time.
-70-
<PAGE>
Any sinking fund payment or payments (mandatory or optional) made in cash
plus any unused balance of any preceding sinking fund payments made with respect
to the Securities of any particular series shall be applied by the Trustee (or
by the Company if the Company is acting as its own Paying Agent) on the sinking
fund payment date on which such payment is made (or, if such payment is made
before a sinking fund payment date, on the sinking fund payment date immediately
following the date of such payment) to the redemption of Securities of such
series at the Redemption Price specified in such Securities with respect to the
sinking fund. Any sinking fund moneys not so applied or allocated by the
Trustee (or, if the Company is acting as its own Paying Agent, segregated and
held in trust by the Company as provided in Section 10.3) for such series and
together with such payment (or such amount so segregated) shall be applied in
accordance with the provisions of this Section 12.3. Any and all sinking fund
moneys with respect to the Securities of any particular series held by the
Trustee (or if the Company is acting as its own Paying Agent, segregated and
held in trust as provided in Section 10.3) on the last sinking fund payment date
with respect to Securities of such series and not held for the payment or
redemption of particular Securities of such series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent),
together with other moneys, if necessary, to be deposited (or segregated)
sufficient for the purpose, to the payment of the principal of the Securities of
such series at Maturity. The Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section 11.3 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 11.4. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Section 11.6. On or before each sinking fund
payment date, the Company shall pay to the Trustee (or, if the Company is acting
as its own Paying Agent, the Company shall segregate and hold in trust as
provided in Section 10.3) in cash a sum in the currency in which Securities of
such series are payable (except as provided pursuant to Section 3.1) equal to
the principal and any interest accrued to the Redemption Date for Securities or
portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section 12.3.
Neither the Trustee nor the Company shall redeem any Securities of a series
with sinking fund moneys or mail any notice of redemption of Securities of such
series by operation of the sinking fund for such series during the continuance
of a default in payment of interest, if any, on any Securities of such series or
of any Event of Default (other than an Event of Default occurring as a
consequence of this paragraph) with respect to the Securities of such series,
except that if the notice of redemption shall have been provided in accordance
with the provisions hereof, the Trustee (or the Company, if the Company is then
acting as its own Paying Agent) shall redeem such Securities if cash sufficient
for that purpose shall be deposited with the Trustee (or segregated by the
Company) for that purpose in accordance with the terms of this Article XII.
Except as aforesaid, any moneys in the sinking fund for such series at the time
when any such default or Event of Default shall occur and any moneys thereafter
paid into such sinking fund shall, during the continuance of such default or
Event of Default, be held as security for the payment of the Securities and
coupons, if any, of such series; provided, however, that in case such default or
Event of Default shall have been cured or waived herein, such moneys shall
thereafter be applied on the next sinking fund payment date for the Securities
of such series on which such moneys may be applied pursuant to the provisions of
this Section 12.3.
-71-
<PAGE>
ARTICLE XIII
SUBORDINATION OF SECURITIES
Section 13.1. Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article XIII, the payment of the
principal of (and premium, if any) and interest (including any Additional
Interest) on each and all of the Securities are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
amounts then due and payable in respect of all Senior Debt.
Section 13.2. Payment Over of Proceeds Upon Dissolution, Etc.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company (each such event, if any, herein
sometimes referred to as a "Proceeding"), then the holders of Senior Debt shall
be entitled to receive payment in full of Allocable Amounts of such Senior Debt,
or provision shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt, before the
Holders of the Securities are entitled to receive or retain any payment or
distribution of any kind or character, whether in cash, property or securities
(including any payment or distribution which may be payable or deliverable by
reason of the payment of any other Debt of the Company subordinated to the
payment of the Securities, such payment or distribution being hereinafter
referred to as a "Junior Subordinated Payment"), on account of principal of (or
premium, if any) or interest (including any Additional Interest) on the
Securities or on account of the purchase or other acquisition of Securities by
the Company or any Subsidiary and to that end the holders of Senior Debt shall
be entitled to receive, for application to the payment thereof, any payment or
distribution of any kind or character, whether in cash, property or securities,
including any Junior Subordinated Payment, which may be payable or deliverable
in respect of the Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this Section
13.2, the Trustee or the Holder of any Security shall have received any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, including any Junior Subordinated Payment, before
all Allocable Amounts of all Senior Debt are paid in full or payment thereof is
provided for in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Debt, and if such fact shall, at or prior to the time
of such payment or distribution, have been made known to the Trustee or, as the
case may be, such Holder, then and in such event such payment or distribution
shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person making
payment or distribution of assets of the Company for application to the payment
of all Allocable Amounts of all Senior Debt remaining unpaid, to the extent
necessary to pay all Allocable Amounts of all Senior Debt in full, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
-72-
<PAGE>
For purposes of this Article XIII only, the words "any payment or
distribution of any kind or character, whether in cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment which securities are subordinated in
right of payment to all then outstanding Senior Debt to substantially the same
extent as the Securities are so subordinated as provided in this Article XIII.
The consolidation of the Company with, or the merger of the Company into,
another Person or the liquidation or dissolution of the Company following the
sale of all or substantially all of its properties and assets as an entirety to
another Person upon the terms and conditions set forth in Article VIII shall not
be deemed a Proceeding for the purposes of this Section 13.2 if the Person
formed by such consolidation or into which the Company is merged or the Person
which acquires by sale such properties and assets as an entirety, as the case
may be, shall, as a part of such consolidation, merger, or sale comply with the
conditions set forth in Article VIII.
Section 13.3. Prior Payment to Senior Debt Upon Acceleration of Securities.
In the event that any Securities are declared due and payable before their
Stated Maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all Allocable Amounts due on or in
respect of such Senior Debt (including any amounts due upon acceleration), or
provision shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt, before the
Holders of the Securities are entitled to receive any payment or distribution of
any kind or character, whether in cash, properties or securities (including any
Junior Subordinated Payment) by the Company on account of the principal of (or
premium, if any) or interest (including any Additional Interest) on the
Securities or on account of the purchase or other acquisition of Securities by
the Company or any Subsidiary; provided, however, that nothing in this Section
13.3 shall prevent the satisfaction of any sinking fund payment in accordance
with this Indenture or as otherwise specified as contemplated by Section 3.1 for
the Securities of any series by delivering and crediting pursuant to Section
12.2 or as otherwise specified as contemplated by Section 3.1 for the Securities
of any series Securities which have been acquired (upon redemption or otherwise)
prior to such declaration of acceleration.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section 13.3, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section 13.3 shall not apply to any payment with
respect to which Section 13.2 would be applicable.
Section 13.4. No Payment When Senior Debt in Default.
(a) In the event and during the continuation of any default in the payment
of principal of (or premium, if any) or interest on any Senior Debt, or in the
event that any
-73-
<PAGE>
event of default with respect to any Senior Debt shall have occurred and be
continuing and shall have resulted in such Senior Debt becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable, unless and until such event of default shall have been
cured or waived or shall have ceased to exist and such acceleration shall have
been rescinded or annulled, or (b) in the event any judicial proceeding shall be
pending with respect to any such default in payment or such event or default,
then no payment or distribution of any kind or character, whether in cash,
properties or securities (including any Junior Subordinated Payment) shall be
made by the Company on account of principal of (or premium, if any) or interest
(including any Additional Interest), if any, on the Securities or on account of
the purchase or other acquisition of Securities by the Company or any
Subsidiary, in each case unless and until all Allocable Amounts of such Senior
Debt are paid in full; provided, however, that nothing in this Section 13.4
shall prevent the satisfaction of any sinking fund payment in accordance with
this Indenture or as otherwise specified as contemplated by Section 3.1 for the
Securities of any series by delivering and crediting pursuant to Section 12.2 or
as otherwise specified as contemplated by Section 3.1 for the Securities of any
series Securities which have been acquired (upon redemption or otherwise) prior
to such default in payment or event of default.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section 13.4, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section 13.4 shall not apply to any payment with
respect to which Section 13.2 would be applicable.
Section 13.5. Payment Permitted If No Default.
Nothing contained in this Article XIII or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time except during
the pendency of any Proceeding referred to in Section 13.2 or under the
conditions described in Sections 13.3 and 13.4, from making payments at any time
of principal of (and premium, if any) or interest (including Additional
Interest) on the Securities, or (b) the application by the Trustee of any money
deposited with it hereunder to the payment of or on account of the principal of
(and premium, if any) or interest (including any Additional Interest) on the
Securities or the retention of such payment by the Holders, if, at the time of
such application by the Trustee, it did not have knowledge that such payment
would have been prohibited by the provisions of this Article XIII.
Section 13.6. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all amounts due or to become due on all
Senior Debt, or the provision for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt, the Holders of
the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Debt pursuant to the provisions
of this Article XIII (equally and ratably with the
-74-
<PAGE>
holders of all indebtedness of the Company which by its express terms is
subordinated to Senior Debt of the Company to substantially the same extent as
the Securities are subordinated to the Senior Debt and is entitled to like
rights of subrogation by reason of any payments or distributions made to holders
of such Senior Debt) to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of (and premium, if any) and interest on the
Securities shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of the Senior Debt of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article, and no payments over
pursuant to the provisions of this Article XIII to the holders of Senior Debt by
Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Debt, and the Holders of the Securities,
be deemed to be a payment or distribution by the Company to or on account of the
Senior Debt.
Section 13.7. Provisions Solely to Define Relative Rights.
The provisions of this Article XIII are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Debt on the other hand. Nothing contained in
this Article XIII or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as between the Company and the Holders of the
Securities, the obligations of the Company, which are absolute and
unconditional, to pay to the Holders of the Securities the principal of (and
premium, if any) and interest (including any Additional Interest) on the
Securities as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than their rights
in relation to the holders of Senior Debt; or (c) prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture including, without limitation,
filing and voting claims in any Proceeding, subject to the rights, if any, under
this Article XIII of the holders of Senior Debt to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
Section 13.8. Trustee to Effectuate Subordination.
Each Holder of a Security by his or her acceptance thereof authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination provided in this
Article XIII and appoints the Trustee his or her attorney-in-fact for any and
all such purposes.
Section 13.9. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with.
-75-
<PAGE>
Without in any way limiting the generality of the immediately preceding
paragraph, the holders of Senior Debt may, at any time and from to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Debt, do any one or more of the following: (i)uchange the manner, place or
terms of payment or extend the time of payment of, or renew or alter, Senior
Debt, or otherwise amend or supplement in any manner Senior Debt or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (ii)usell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii)urelease any Person
liable in any manner for the collection of Senior Debt; and (iv)uexercise or
refrain from exercising any rights against the Company and any other Person.
Section 13.10. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article XIII or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee, agent or representative
therefor; provided, however, that if the Trustee shall not have received the
notice provided for in this Section 13.10 at least two Business Days prior to
the date upon which by the terms hereof any monies may become payable for any
purpose (including, without limitation, the payment of the principal of (and
premium, if any) or interest (including any Additional Interest) on any
Security), then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such monies and to apply
the same to the purpose for which they were received and shall not be affected
by any notice to the contrary which may be received by it within two Business
Days prior to such date.
Subject to the provisions of Sectionu6.1, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Debt (or a trustee therefor) to establish that such
notice has been given by a holder of Senior Debt (or a trustee therefor). In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Debt held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this Article, and
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
-76-
<PAGE>
Section 13.11. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article XIII, the Trustee, subject to the provisions of Section 6.1, and
the Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XIII.
Section 13.12. Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee, in its capacity as trustee under this Indenture, shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt and shall not be
liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article or otherwise.
Section 13.13. Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article XIII with respect to any Senior Debt which may at any
time be held by it, to the same extent as any other holder of Senior Debt, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.
Section 13.14. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article XIII shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article XIII in addition to or in place of the Trustee.
Section 13.15. Certain Conversions or Exchanges Deemed Payment.
For the purposes of this Article XIII only, (a) the issuance and delivery
of junior securities upon conversion or exchange of Securities shall not be
deemed to constitute a payment or distribution on account of the principal of
(or premium, if any) or interest (including any Additional Interest) on
Securities or on account of the purchase or other acquisition of Securities, and
(b) the payment, issuance or delivery of cash, property or securities (other
than junior securities) upon conversion or exchange of a Security shall be
deemed to constitute payment on account of the principal of such security. For
the purposes of this Section 13.15, the term "junior securities" means (i)
shares of any stock of any class of the Company and (ii) securities of the
Company which are subordinated in right of payment to all Senior Debt which may
be outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article XIII.
* * * *
-77-
<PAGE>
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
COMMERCIAL FEDERAL
CORPORATION
By:
Its:
Attest:
By
----------------------------
Its ________________________
HARRIS TRUST & SAVINGS BANK
as Trustee
By:
Its:
Attest:
By ____________________________
Its ________________________
-78-
<PAGE>
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
On the _______ day of _________, 1997 before me personally came
---------
______________ to me known, who, being by me duly sworn, did depose and say that
he is ____________ of Commercial Federal Corporation, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; and that he signed his name thereto by authority of the Board of Directors
of said corporation.
[SEAL] ________________________________
Notary Public
STATE OF DELAWARE )
) SS.
COUNTY OF ____________________ )
On the _______ day of _________, 1997 before me personally came
______________ to me known, who, being by me duly sworn, did depose and say that
he is ____________ of Harris Trust & Savings Bank, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; and that he signed his name thereto by authority of the Board of Directors
of said corporation.
[SEAL] ________________________________
Notary Public
-79-
<PAGE>
EXHIBIT 4.2
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
----------------------------------------
<PAGE>
EXHIBIT 4.3
TRUST AGREEMENT
---------------
This TRUST AGREEMENT, dated as of January 29, 1997 (this "Trust
Agreement"), among (i) Commercial Federal Corporation, a Nebraska corporation
(the "Depositor"), (ii) Wilmington Trust Company, a Delaware banking
corporation, as trustee, and (iii) James A. Laphen, an individual, as trustee
(each of such trustees in (ii) and (iii) a "Trustee" and collectively, the
"Trustees"). The Depositor and the Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be known as "CFC Preferred
Trust" in which name the Trustees, or the Depositor to the extent provided
herein, may engage in the transactions contemplated hereby, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers conveys and sets over to the
Trustees the sum of $10. The Trustees hereby acknowledge receipt of such amount
in trust from the Depositor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the trust estate in
trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C., (S) 3801, et seq. (the "Business Trust Act), and
------- -- ---
that this document constitutes the governing instrument of the Trust. The
Trustees are hereby authorized and directed to execute and file a certificate of
trust with the Delaware Secretary of State in accordance with the provisions of
the Business Trust Act.
3. The Depositor and the Trustees will enter into an amended and restated
Trust Agreement, satisfactory to each such party and substantially in the form
included as an exhibit to the 1933 Act Registration Statement (as defined
below), to provide for the contemplated operation of the Trust created hereby
and the issuance of the Preferred Securities and Common Securities referred to
therein. Prior to the execution and delivery of such amended and restated Trust
Agreement, the Trustees shall not have any duty or obligation hereunder or with
respect to the trust estate, except as otherwise required by applicable law or
as may be necessary to obtain prior to such execution and delivery of any
licenses, consent or approvals required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement, relating to the registration
under the Securities Act of 1933, as amended, of the Preferred Securities of the
Trust and possibly certain other securities and (b) a Registration Statement on
Form 8-A (the "1934 Act Registration Statement") (including all pre-effective
and post-effective amendments thereto) relating to the registration of the
Preferred Securities of the Trust under the Securities Exchange Act of 1934, as
amended; (ii) to file with the New York Stock Exchange or any other national
stock exchange or The Nasdaq National Market (each, an "Exchange") and execute
on behalf of the Trust one or more listing applications and all other
applications, statements, certificates, agreements and other instruments as
shall be necessary or desirable to cause the Preferred Securities to be listed
<PAGE>
on any of the Exchanges; (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under the securities
or blue sky laws of such jurisdictions as the Depositor, on behalf of the Trust,
may deem necessary or desirable and (iv) to execute on behalf of the Trust that
certain Purchase Agreement relating to the Preferred Securities, among the
Trust, the Depositor and the one or more Underwriters named therein,
substantially in the form included as an exhibit to the 1933 Act Registration
Statement. In the event that any filing referred to in clauses (i), (ii), and
(iii) above is required by the rules and regulations of the Commission, an
Exchange or state securities or blue sky laws, to be executed on behalf of the
Trust by one or more of the Trustees, each of the Trustees, in its or his
capacity as a Trustee of the Trust, is hereby authorized and, to the extent so
required, directed to join in any such filing and to execute on behalf of the
Trust and all of the foregoing, it being understood that Wilmington Trust
Company in its capacity as a Trustee of the Trust shall not be required to join
in any such filing or execute on behalf of the Trust any such document unless
required by the rules and regulations of the Commission, the Exchange or state
securities or blue sky laws. In connection with the filings referred to above,
the Depositor, hereby constitutes and appoints William A. Fitzgerald and James
A. Laphen, and each of them, as its true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for the Depositor or
such Trustee or in the Depositor's or such Trustee's name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to the 1933 Act Registration Statement and the 1934 Act Registration
Statement and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Commission, the Exchange and administrators of
state securities or blue sky laws, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as the Depositor or such Trustee might or could to in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their respective substitute or substitutes, shall do
or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be two (2) and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Depositor which may increase or decrease the
number of Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and otherwise meets
the requirements of applicable Delaware law. Subject to the foregoing, the
Depositor is entitled to appoint or remove without cause any Trustee at any
time. The Trustees may resign upon thirty (30) days' prior notice to the
Depositor.
7. This Trust Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware (without regard to conflict of laws
principles).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed as of the day and year first above written.
COMMERCIAL FEDERAL CORPORATION
------------------------------
as Depositor
By: _______________________________
Name: James A. Laphen
Title: President
WILMINGTON TRUST COMPANY
------------------------
as Trustee
By: _______________________________
Name:
Title:
_____________________________________
James A. Laphen, as Trustee
<PAGE>
Exhibit 4.6
DRAFT 1/27/97
__________________________________________________________
GUARANTEE AGREEMENT
BETWEEN
COMMERCIAL FEDERAL CORPORATION
(AS GUARANTOR)
AND
HARRIS TRUST & SAVINGS BANK
(AS TRUSTEE)
DATED AS OF
_________________________________, 1997
__________________________________________________________
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of Trust Section of
Indenture Act of 1939, as amended Guarantee Agreement
- --------------------------------- -------------------
<S> <C>
310(a). 4.1(a)
310(b). 4.1(c), 2.8
310(c). Inapplicable
311(a). 2.2(b)
311(b). 2.2(b)
311(c). Inapplicable
312(a). 2.2(a)
312(b). 2.2(b)
313. 2.3
314(a). 2.4
314(b). Inapplicable
314(c). 2.5
314(d). Inapplicable
314(e). 1.1, 2.5, 3.2
314(f). 2.1, 3.2
315(a). 3.1(d)
315(b). 2.7
315(c). 3.1
315(d). 3.1(d)
316(a). 1.1, 2.6, 5.4
316(b). 5.3
316(c). 9.2
317(a). Inapplicable
317(b). Inapplicable
318(a). 2.1(b)
318(b). 2.1
318(c). 2.1(a)
</TABLE>
- ----------------
* This Cross-Reference Table d oes not constitute part of the Guarantee
Agreement and shall not affect the inte rpretation of any of its terms or
provisions.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS 1
Section 1.1. Definitions 1
ARTICLE II. TRUST INDENTURE ACT 3
Section 2.1. Trust Indenture Act; Application 3
Section 2.2. List of Holders 3
Section 2.3. Reports by the Guarantee Trustee 3
Section 2.4. Periodic Reports to Guarantee Trustee 4
Section 2.5. Evidence of Compliance with Conditions Precedent 4
Section 2.6. Events of Default; Waiver 4
Section 2.7. Event of Default; Notice 4
Section 2.8. Conflicting Interests 4
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE 4
Section 3.1. Powers and Duties of the Guarantee Trustee 4
Section 3.2. Certain Rights of Guarantee Trustee 6
Section 3.3. Indemnity 7
ARTICLE IV. GUARANTEE TRUSTEE 7
Section 4.1. Guarantee Trustee; Eligibility 7
Section 4.2. Appointment, Removal and Resignation of the
Guarantee Trustee 7
ARTICLE V. GUARANTEE 8
Section 5.1. Guarantee 8
Section 5.2. Waiver of Notice and Demand 8
Section 5.3. Obligations Not Affected 8
Section 5.4. Rights of Holders 9
Section 5.5. Guarantee of Payment 9
Section 5.6. Subrogation 9
Section 5.7. Independent Obligations 9
ARTICLE VI. COVENANTS AND SUBORDINATION 9
Section 6.1. Subordination 9
Section 6.2. Pari Passu Guarantees 9
ARTICLE VII. CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS 10
Section 7.1. Guarantor May Consolidate, Etc., Only on Certain Terms 10
Section 7.2. Successor Guarantor Substituted 10
ARTICLE VIII. TERMINATION
Section 8.1. Termination 10
10
ARTICLE IX. MISCELLANEOUS 11
Section 9.1. Successors and Assigns 11
Section 9.2. Amendments 11
Section 9.3. Notices 11
Section 9.4. Benefit 12
Section 9.5. Interpretation 12
Section 9.6. Governing Law 12
</TABLE>
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of ____________, 1997, is executed and
delivered by COMMERCIAL FEDERAL CORPORATION, a Nebraska corporation (the
"Guarantor") having its principal office at 2120 South 72nd Street, Omaha,
Nebraska 68124, and HARRIS TRUST & SAVINGS BANK, a Delaware banking corporation,
as trustee (the "Guarantee Trustee"), for the benefit of the Holders from time
to time of the Preferred Securities (as defined herein) of [NAME OF TRUST], a
Delaware statutory business trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of
____________, 1997 (the "Trust Agreement") among the Guarantor, as Depositor,
Harris Trust & Savings Bank, as Property Trustee, Wilmington Trust Company, as
Delaware Trustee and the Administrative Trustees named therein and the Holders
from time to time of undivided beneficial interests in the assets of the Trust,
the Trust issued $__________ aggregate Liquidation Amount (as defined in the
Trust Agreement) of its _____% Preferred Securities, Liquidation Amount $25 per
Preferred Security (the "Preferred Securities") representing preferred
undivided beneficial interests in the assets of the Trust and having the terms
set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Trust and the
proceeds thereof, together with the proceeds from the issuance of the Trust's
Common Securities (as defined below), will be used to purchase the Debentures
(as defined in the Trust Agreement) of the Guarantor which was deposited with
Harris Trust & Savings Bank, as Property Trustee under the Trust Agreement, as
trust assets;
WHEREAS, as an incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionlly to agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement and
pursuant to Section 5.1 hereof extends the Guarantee for the benefit of the
Holders from time to time of the Preferred Securities.
ARTICLE 1. DEFINITIONS
SECTION 1.1. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement and the Indenture (as
defined herein), each as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to be an Affiliate of the Trust. 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.
"Board of Directors" means either the board of directors of the Guarantor
or any committee of that board duly authorized to act hereunder.
-1-
<PAGE>
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Trust.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee" has the meaning set forth in Section 5.1.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by or on behalf of the Trust: (i) any accrued and unpaid Distributions (as
defined in the Trust Agreement) required to be paid on the Preferred Securities,
to the extent the Trust shall have funds on hand available therefor at such
time, (ii) the applicable Redemption Price (as defined in the Trust Agreement),
to the extent the Trust shall have funds on hand available therefor at such
time, and (iii) upon a voluntary or involuntary termination, winding up or
liquidation of the Trust, unless Debentures are distributed to the Holders, the
lesser of (a) the aggregate of the Liquidation Distribution (as defined in the
Trust Agreement) and (b) the amount of assets of the Trust remaining available
for distribution to Holders of Preferred Securities after satisfaction of
liabilities to creditors of the Trust as required by applicable law.
"Guarantee Trustee" means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement, and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of the
Trust, of any Preferred Securities; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor
or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of November
15, 1996, as supplemented and amended between the Guarantor and Wilmington Trust
Company, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Preferred Securities" means, except
as provided by the Trust Indenture Act, a vote by the Holder(s), voting
separately as a class, of more than 50% of the Liquidation Amount of all then
outstanding Preferred Securities issued by the Trust.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman or a Vice Chairman of the Board of Directors of such
Person or the President or a Vice President of such Person, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
such Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
-2-
<PAGE>
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
"Other Guarantees" means any guarantees similar to the Guarantee issued,
from time to time, by the Guarantor on behalf of holders of one or more series
of Preferred Securities issued by one or more CFC Trusts (as defined in the
Indenture) other than the Trust.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
officer of the Corporate Trust Department of the Guarantee Trustee and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee (a) semiannually, on or before January 15 and July 15 of each year, a
list, in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders ("List of Holders") as of a date not more than 15
days prior to the delivery thereof, and (b) at such other times as the Guarantee
Trustee may request in writing, within 30 days after the receipt by the
Guarantor of any such request, a List of Holders as of a date not more than 15
days prior to the time such list is furnished, in each case to the extent such
information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Guarantee Trustee shall comply with its obligations under Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than July 15 of each year, commencing [July 15, 1997], the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the
-3-
<PAGE>
form and in the manner provided by Section 313 of the Trust Indenture Act. The
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee, on an annual basis,
such evidence of compliance with such conditions precedent, if any, provided for
in this Guarantee Agreement that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion required
to be given by an officer pursuant to Section 314(c)(1) may be given in the form
of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Preferred Securities
may, by vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders,
notices of all Events of Default known to the Guarantee Trustee, unless such
defaults have been cured before the giving of such notice, provided, that,
except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of
Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee shall be held by the Guarantee Trustee for the benefit
of the Holders, and the Guarantee Trustee shall not transfer this Guarantee to
any Person except to a Holder exercising his or her rights pursuant to Section
5.4(iv) or to a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The
right, title and interest of the Guarantee Trustee shall automatically vest in
any Successor Guarantee Trustee, upon acceptance by such Successor Guarantee
Trustee of its appointment hereunder, and such vesting and cessation of title
shall be effective whether
-4-
<PAGE>
or not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically
set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions that
by any provision hereof or of the Trust Indenture Act are specifically
required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in Liquidation
Amount of the Preferred Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Guarantee
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it.
-5-
<PAGE>
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document reasonably believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the
written advice or opinion of such legal counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it hereunder in
good faith and in accordance with such advice or opinion. Such legal
counsel may be legal counsel to the Guarantor or any of its Affiliates and
may be one of its employees. The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee such adequate security and indemnity as would
satisfy a reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Guarantee Trustee; provided that, nothing contained in this Section
3.2(a)(v) shall be taken to relieve the Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, and the Guarantee Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
-6-
<PAGE>
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Guarantee Trustee, arising out of or in connection
with the acceptance or administration of this Guarantee Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee: Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section
310(a) of the Trust Indenture Act. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority, then, for the purposes of this
Section 4.1(a)(ii) and to the extent permitted by the Trust Indenture Act,
the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
-7-
<PAGE>
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full on a
subordinated basis to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by or on behalf of the Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the Trust may
have or assert other than the defense of payment (the "Guarantee"). The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Trust to pay such amounts to the Holders.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee and of
any liability to which it applies or may apply, presentment, demand for payment,
any right to require a proceeding first against the Guarantee Trustee, Trust or
any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Debentures as provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Trust granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
-8-
<PAGE>
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee will be
deposited with the Guarantee Trustee to be held for the benefit of the Holders;
(ii) the Guarantee Trustee has the right to enforce this Guarantee on behalf of
the Holders; (iii) the Holders of a Majority in 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 this Guarantee Agreement or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and (iv) any Holder
may institute a legal proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Guarantee Trustee, the Trust or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee creates a guarantee of payment and not of collection. This
Guarantee will not be discharged except by payment of the Guarantee Payments in
full (without duplication of amounts theretofore paid by the Trust) or upon
distribution of Debentures to Holders as provided in the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Trust in respect of any amounts paid to the Holders by the Guarantor
under this Guarantee Agreement and shall have the right to waive payment by the
Trust pursuant to Section 5.1; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to
enforce or exercise any rights which it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of payment
under this Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Guarantee. If any amount shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agrees to hold such amount
in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Trust with respect to the Preferred Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
The obligations of the Guarantor under this Guarantee will constitute
unsecured obligations of the Guarantor and will rank subordinate and junior in
right of payment to all Senior Debt (as defined in the Indenture) in the same
manner as Debentures (as defined in the Trust Agreement).
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee shall rank pari passu
with the obligations of the Guarantor under all Other Guarantees.
-9-
<PAGE>
ARTICLE VII. CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 7.1. Guarantor May Consolidate, Etc., Only on Certain Terms.
The Guarantor 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 Guarantor
or convey, transfer or lease its properties and assets substantially as an
entirety to the Guarantor, unless:
(1) in case the Guarantor shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, the Person formed by such consolidation or into which
the Guarantor is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Guarantor substantially as an
entirety shall be a corporation, partnership or trust organized and existing
under the laws of the United States of America or any State or the District of
Columbia, and shall expressly assume the Guarantor's obligations under this
Guarantee;
(2) immediately after giving effect thereto, no Event of Default, and no
event which, after notice or lapse of time, or both, would become an Event of
Default, shall have happened and be continuing;
(3) such consolidation, merger, conveyance, transfer or lease is permitted
under the Trust Agreement and the Indenture and does not give rise to any breach
or violation of the Trust Agreement or the Indenture; and
(4) the Guarantor has delivered to the Guarantee Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and assumption of the Guarantor's
obligations under this Guarantee Agreement comply with this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with; and the Guarantee Trustee, subject to Section 3.1 hereof, may
rely upon such Officers' Certificate and Opinion of Counsel as conclusive
evidence that such transaction complies with this Section 7.1.
SECTION 7.2. Successor Guarantor Substituted.
Upon any consolidation or merger by the Guarantor with or into any other
Person, or any conveyance, transfer or lease by the Guarantor of its properties
and assets substantially as an entirety to any Person in accordance with Section
7.1, the successor Person formed by such consolidation or into which the
Guarantor is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Guarantor under this Guarantee Agreement with the same effect as if such
successor Person had been named as the Guarantor herein; and in the event of any
such conveyance, transfer or lease the Guarantor shall be discharged from all
obligations and covenants under this Guarantee Agreement.
ARTICLE VIII. TERMINATION
SECTION 8.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon the earliest of (i) full payment of the applicable Redemption Price
of all Preferred Securities, (ii) the distribution of Debentures to the Holders
in exchange for all of the Preferred Securities or (iii) full payment of the
amounts payable in accordance with the Trust Agreement upon liquidation of the
Trust. Notwithstanding the foregoing clauses (i) through (iii), this Guarantee
Agreement will continue to be effective or will be reinstated if it has been
terminated pursuant to one of such clauses (i) through (iii), as the case may
be, if at any time any Holder must restore payment of any sums paid with respect
to Preferred Securities or this Guarantee Agreement.
-10-
<PAGE>
ARTICLE IX. MISCELLANEOUS
SECTION 9.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VII hereof and
Article VIII of the Indenture, the Guarantor shall not assign its obligations
hereunder.
SECTION 9.2. Amendments.
Except with respect to any changes which do not adversely affect the rights
of the Holders in any material respect (in which case no vote will be required),
this Guarantee Agreement may not be amended without the prior approval of the
Holders of not less than a Majority in Liquidation Amount of the Preferred
Securities. The provisions of Article VI of the Trust Agreement concerning
meetings of the Holders shall apply to the giving of such approval.
SECTION 9.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such other
address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:
Commercial Federal Corporation
2120 South 72nd Street
Omaha, Nebraska 68124
Facsimile No.: (402)
Attention:
(b) if given to the Trust, in care of the Guarantee Trustee, at the Trust's
(and the Guarantee Trustee's) address set forth below or such other address as
the Guarantee Trustee on behalf of the Trust may give notice to the Holders:
[Name of Trust]
c/o Commercial Federal Corporation
2120 South 72nd Street
Omaha, Nebraska 68124
Facsimile No.: (402)
Attention:
with a copy to:
Harris Trust & Savings Bank
[ADDRESS]
(c) if given to any Holder, at the address set forth on the books and
records of the Trust.
-11-
<PAGE>
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4. Benefit.
This Guarantee is solely for the benefit of the Holders and is not
separately transferable from the Preferred Securities.
SECTION 9.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined in
the preamble hereto have the respective meanings assigned to them in Section
1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections are
to Articles and Sections of this Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the
masculine, feminine and neuter genders.
SECTION 9.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF [NEBRASKA] WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
-12-
<PAGE>
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
COMMERCIAL FEDERAL CORPORATION
By:
-----------------------------
Name:
Title:
HARRIS TRUST & SAVINGS BANK
as Guarantee Trustee
By:
----------------------------
Name:
Title:
<PAGE>
EXHIBIT 8
[Letterhead of Deloitte & Touche LLP]
[Date]
Commercial Federal Corporation
2120 South 72nd Street
Omaha, NE 68124
(CFC Trust)
c/o Commercial Federal Corporation
2120 South 72nd Street
Omaha, NE 68124
RE: Opinion as to Certain Federal Income Tax Considerations
Applicable to the ____% Cumulative Trust Preferred Securities
Ladies and Gentlemen:
We have acted as special tax advisor to Commercial Federal Corporation (the
"Company"), a Nebraska corporation, and to CFC Trust (the "Issuer" or the
"Trust"), a Delaware business trust, in connection with the offering (the
"Offering") for sale of the _____% Cumulative Trust Preferred Securities (the
"Preferred Securities") to be issued by the Trust formed pursuant to a Trust
Agreement, dated as of ___________, 1997 (the "Trust Agreement"), among the
Company, as Depositor, ___________, as Property Trustee (the "Property
Trustee"), ____________, as Delaware Trustee, (the "Delaware Trustee"), and the
Administrative Trustees named therein, (collectively, with the Property Trustee
and the Delaware Trustee, the "Issuer Trustees").
The Preferred Securities which are the subject of the Offering and the common
securities (the "Common Securities") which are not being offered for sale
represent the entire beneficial ownership interest in the Trust. The Trust
property will consist primarily of ____% Junior Subordinate Deferrable Interest
Debentures (the "Junior Subordinated Debentures"), which are being issued by the
Company to the Trust in exchange for the net proceeds of the Offering and the
Common Securities. The Junior Subordinated Debentures will bear interest at a
specified rate, payable quarterly subject to an option to defer such interest
payments. The Preferred Securities will have a preference under certain
circumstances with respect to cash distributions over the Common Securities.
In connection with this opinion, we have examined and relied upon (i) the
Certificate of Trust of the Issuer, dated as of ___________, 1997, as filed in
the office of the Secretary of State of the State of Delaware on ____________,
the Trust Agreement, (ii) the Junior Subordinated Indenture Agreement (the
"Indenture"), between the Company and _____________ as trustee (the "Debenture
Trustee"), dated as of _____________ pursuant to which the Company will issue
the Junior Subordinated Debentures, (iii) the ___% Cumulative Trust Preferred
Securities Prospectus dated _____________, 1997 (the "Prospectus"), and the
related Prospectus Supplement dated ____________, 1997 (the
<PAGE>
Page 2
"Prospectus Supplement), (iv) the form of Preferred Securities Certificate, (v)
the form of Common Securities Certificate, (vi) the form of Junior Subordinated
Debentures, (vii) the form of the Guarantee Agreement between the Company and
the Indenture trustee (the "Guarantee Trustee") for the benefit of the holders,
from time to time, of the Preferred Securities, (vii) the Expense Agreement
between _____________ and ____________, dated __________, 1997, and (ix) such
other agreements executed and delivered in connection with the transaction. In
addition, we have examined and considered such instruments, documents and other
corporate records of the Company and of the Issuer and such matters of fact and
law which we deem necessary for the purpose of the opinion expressed below.
In our examination we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents.
In rendering our opinion, we have also relied upon the Internal Revenue Code of
1986, as amended (the "Code"), administrative rulings, judicial decisions,
treasury regulations, and such authorities as we have deemed appropriate. The
statutory provisions, regulations, interpretations, and other authorities upon
which our opinion is based are subject to change, and such change could apply
retroactively. We will not undertake to advise you as to the effect that any
change in law, or interpretation thereof that could have an effect on the
opinions expressed herein. In addition, there can be no assurance that
positions contrary to those stated in our opinion will not be taken by the
Internal Revenue Service.
We express no opinions as to the laws of any jurisdiction other than the federal
laws of the United States of America.
We have reviewed the "Certain Federal Income Tax Consequences" section contained
in the Prospectus and in our opinion it accurately describes the material
federal income tax consequences that may be relevant to the purchase, ownership
and disposition of the Preferred Securities.
Except as set forth above, we express no other opinion as to the tax
consequences, whether federal, state, local or foreign of the Offering.
We hereby consent to the use of our name under the heading "Validity of
Securities" in the Prospectus Supplement and "Certain Federal Income Tax
Consequences" and "Legal Matters" in the Prospectus and to the filing of this
opinion as an exhibit to the Registration Statement in connection with the
Offering. We are furnishing this opinion to you solely in connection with the
Offering and this opinion is not to be used, circulated, quoted or otherwise
referred to for any other purpose.
Very truly yours,
<PAGE>
EXHIBIT 12
COMMERCIAL FEDERAL CORPORATION
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Dollars in Thousands)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Three Months Ended
September 30, 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 $ (6,532) $ 17,737 $ 82,268 $ 54,327 $ 15,248 $ 56,197 $ 73,489
Fixed charges 82,683 84,822 329,262 305,506 256,999 277,347 326,202
-------- -------- -------- -------- -------- -------- --------
Total earnings for computation $ 76,151 $102,559 $411,530 $359,833 $272,247 $333,544 $399,691
======== ======== ======== ======== ======== ======== ========
Total earnings for computation excluding interest on deposits $ 21,361 $ 49,416 $197,490 $179,670 $129,690 $194,044 $222,794
======== ======== ======== ======== ======== ======== ========
COMPUTATION OF FIXED CHARGES:
- -----------------------------
Net rental expense $ 567 $ 657 $ 2,834 $ 2,939 $ 2,690 $ 2,289 $ 2,025
======== ======== ======== ======== ======== ======== ========
Portion of rentals deemed representative of interest $ 189 $ 219 $ 945 $ 980 $ 897 $ 763 $ 675
-------- -------- -------- -------- -------- -------- --------
Interest:
Interest on deposits 54,790 53,143 214,040 180,163 142,557 139,500 176,897
Interest on borrowings 27,704 31,460 114,277 124,363 113,545 137,084 175,630
-------- -------- -------- -------- -------- -------- --------
Total interest 82,494 84,603 328,317 304,526 256,102 276,584 352,527
-------- -------- -------- -------- -------- -------- --------
Total fixed charges $ 82,683 $ 84,822 $329,262 $305,506 $256,999 $277,347 $353,202
======== ======== ======== ======== ======== ======== ========
Total fixed charges excluding interest on deposits $ 27,893 $ 31,679 $115,222 $125,343 $114,442 $137,847 $176,305
======== ======== ======== ======== ======== ======== ========
RATIO OF EARNINGS TO FIXED CHARGES:
- -----------------------------------
Excluding interest on deposits .77x 1.56x 1.71x 1.43x 1.13x 1.41x 1.26x
Including interest on deposits .92x 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 Registration Statement of
Commercial Federal Corporation 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 Statement.
/s/Deloitte & Touche LLP
Deloitte & Touche LLP
Omaha, Nebraska
January 27, 1997
