<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 16, 1997
REGISTRATION NOS. 333-
18521
AND 333-18521-01
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
ARVIN INDUSTRIES, INC. ARVIN CAPITAL I
(EXACT NAME OF REGISTRANT AS (EXACT NAME OF REGISTRANT AS SPECIFIED
SPECIFIED IN ITS CHARTER) IN ITS CHARTER)
INDIANA DELAWARE
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
35-0550190 35-6637632
(IRS EMPLOYER IDENTIFICATION NO.) (IRS EMPLOYER IDENTIFICATION NO.)
ONE NOBLITT PLAZA
BOX 3000
COLUMBUS, INDIANA 47202-3000
(812) 379-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
RONALD R. SNYDER
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
ARVIN INDUSTRIES, INC.
ONE NOBLITT PLAZA
BOX 3000
COLUMBUS, INDIANA 47202-3000
(812) 379-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
FREDERICK L. HARTMANN PAUL W. THEISS
SCHIFF HARDIN & WAITE MAYER, BROWN & PLATT
7200 SEARS TOWER 190 SOUTH LASALLE STREET
CHICAGO, ILLINOIS 60606 CHICAGO, ILLINOIS 60603
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practical after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
---------------
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 THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JANUARY 16, 1997
PROSPECTUS
$100,000,000
LOGO ARVIN CAPITAL I
% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
ARVIN INDUSTRIES, INC.
----------
The % Capital Securities (the "Capital Securities") offered hereby
represent preferred undivided beneficial interests in the assets of Arvin
Capital I, a statutory business trust created under the laws of the State of
Delaware (the "Trust"). Arvin Industries, Inc., an Indiana corporation ("Arvin"
or the "Company"), will directly or indirectly own all the common securities
(the "Common Securities" and, together with the Capital Securities, the "Trust
Securities") representing undivided beneficial interests in the assets of the
Trust. The Trust exists for the sole purpose of issuing the Trust Securities
and investing the proceeds thereof in an equivalent amount of % Junior
Subordinated Deferrable Interest Debentures due , 2027 (the "Subordinated
Debentures") of Arvin. Upon an event of default under the Declaration (as
defined herein), the holders of Capital Securities will have a preference over
the holders of the Common Securities with respect to payments of distributions
and payments upon liquidation, redemption and otherwise.
Holders of the Capital Securities are entitled to receive cumulative cash
distributions at an annual rate of % of the liquidation amount of $1,000 per
Capital Security, accruing from the date of original issuance and payable semi-
annually in
(continued on next page)
SEE "RISK FACTORS" COMMENCING ON PAGE 9 OF THIS PROSPECTUS FOR CERTAIN
INFORMATION RELEVANT TO AN INVESTMENT IN THE CAPITAL SECURITIES, INCLUDING THE
PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS OF
THE CAPITAL SECURITIES MAY BE DEFERRED AND THE RELATED UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES OF SUCH DEFERRAL.
----------
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.
<TABLE>
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<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE (1) COMMISSION (2) TRUST (3)(4)
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<S> <C> <C> <C>
Per Capital Security............. $1,000.00 (3) $1,000.00
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Total............................ $100,000,000 (3) $100,000,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued distributions, if any, from , 1997.
(2) The Trust and the Company have agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."
(3) In view of the fact that the proceeds of the sale of the Capital Securities
will be invested in the Subordinated Debentures, Arvin has agreed to pay to
the Underwriters, as compensation (the "Underwriters' Compensation") for
their arranging the investment therein of such proceeds, $ per Capital
Security (or $ in the aggregate). See "Underwriting."
(4) Expenses of the offering which are payable by Arvin are estimated to be
$400,000.
----------
The Capital Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that delivery of the Capital Securities will be made only in book-
entry form through the facilities of The Depository Trust Company, on or about
, 1997.
----------
MERRILL LYNCH & CO. LEHMAN BROTHERS
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
----------
The date of this Prospectus is , 1997.
<PAGE>
(continued from previous page)
arrears on and of each year, commencing , 1997
("distributions"). The distribution rate and the distribution and other
payment dates for the Capital Securities will correspond to the interest rate
and interest and other payment dates on the Subordinated Debentures, which
will be the only assets of the Trust. As a result, if principal or interest is
not paid on the Subordinated Debentures, no amounts will be paid on the
Capital Securities. The payment of distributions out of moneys held by the
Trust and payments on liquidation of the Trust or the redemption of Capital
Securities, as set forth below, are guaranteed by the Company (the
"Guarantee") if and to the extent the Trust has funds available therefor. The
Company's obligations under the Guarantee, taken together with its back-up
undertakings, consisting of obligations of the Company (including the
obligation to pay expenses of the Trust) as set forth in the Declaration, the
Indenture (as defined herein) and the Subordinated Debentures issued to the
Trust, provide a full and unconditional guarantee by the Company of payments
due on the Capital Securities. See "Effect of Obligations Under the
Subordinated Debentures and the Guarantee" and "Description of the Guarantee."
If the Company does not make principal or interest payments on the
Subordinated Debentures as a result of the Company's election to extend the
interest payment period on the Subordinated Debentures as described below, or
otherwise, the Trust will not have sufficient funds to make distributions on
the Capital Securities, in which event the Guarantee will not apply to such
distributions until the Company has made such principal or interest payments.
The obligations of the Company under the Subordinated Debentures are unsecured
and will be subordinate and junior in right of payment, to the extent set
forth herein, to all existing and future Senior Indebtedness (as defined
herein) of the Company. At September 29, 1996, the aggregate amount of Senior
Indebtedness of the Company was approximately $472 million. The Company's
obligations under the Subordinated Debentures will also be effectively
subordinated to all existing and future obligations of Arvin's subsidiaries.
The Company has the right to defer payments of interest on the Subordinated
Debentures by extending the interest payment period on the Subordinated
Debentures, at any time and from time to time, for up to 10 consecutive semi-
annual interest payment periods (each, an "Extension Period") provided that no
Extension Period may extend beyond the Maturity Date (as defined herein). If
interest payments are so deferred, distributions on the Capital Securities
will also be deferred. During any Extension Period, distributions will
continue to accrue with interest thereon (to the extent permitted by
applicable law) at an annual rate of % per annum compounded semi-annually,
and during any Extension Period, holders of Capital Securities will be
required to include deferred interest income in their gross income for United
States federal income tax purposes in advance of receipt of the cash
distributions with respect to such deferred interest payments. There could be
multiple Extension Periods of varying lengths throughout the term of the
Subordinated Debentures. See "Risk Factors--Option to Extend Interest Payment
Period" and "--Tax Consequences of Extension of Interest Payment Period,"
"Description of the Subordinated Debentures--Option to Extend Interest Payment
Period," and "United States Federal Income Taxation--Original Issue Discount."
The Subordinated Debentures are redeemable prior to maturity at the option
of the Company (i) on or after , 2007, in whole or in part, from
time to time, or (ii) prior to , 2007, in whole (but not in part) within
90 days following the occurrence of a Tax Event (as defined herein). If the
Company redeems Subordinated Debentures, the Trust must redeem Trust
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Subordinated Debentures so redeemed at the Redemption
Price (as defined herein). See "Description of the Capital Securities--
Redemption" and "--Tax Event Redemption." The outstanding Capital Securities
will be redeemed upon maturity of the Subordinated Debentures. The
Subordinated Debentures will mature on , 2027.
At any time, the Company will have the right to dissolve the Trust and,
after satisfaction of liabilities to creditors of the Trust as required by
applicable law, cause the Subordinated Debentures to be distributed to the
holders of the Trust Securities, on a pro rata basis, in liquidation of the
Trust. See "Description of the Capital Securities--Distribution of the
Subordinated Debentures."
In the event of any other voluntary or involuntary liquidation, dissolution,
winding up or termination of the Trust, the holders of the Capital Securities
will be entitled to receive for each Capital Security, solely out of the
assets of the Trust available for distribution to such holders, after payment
(or provision for payment) of all liabilities to creditors, a liquidation
amount of $1,000 plus accrued and unpaid distributions thereon (including
interest thereon) to the date of payment, unless, in connection with such
liquidation, dissolution, winding up or termination, the Subordinated
Debentures are distributed to the holders of the Capital Securities. See
"Description of the Capital Securities--Liquidation Distribution upon
Dissolution."
The Capital Securities will be represented by global Capital Securities
registered in the name of The Depository Trust Company ("DTC") or its nominee.
Beneficial interests in the global Capital Securities will be shown on, and
transfers thereof will be effected only through, records maintained by
participants in DTC. Except as provided herein, Capital Securities in
definitive form will not be issued. See "Description of the Capital
Securities--Book-Entry Issuance--The Depository Trust Company."
---------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
2
<PAGE>
AVAILABLE INFORMATION
This Prospectus constitutes a part of a combined Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") filed by Arvin and the Trust with the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Trust Securities, the Subordinated
Debentures and the Guarantee (the "Offered Securities"). 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 SEC. Reference is made to the Registration Statement and to
the exhibits relating thereto for further information with respect to the
Company, the Trust and the Offered Securities. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the SEC or incorporated by
reference herein are not necessarily complete, and, in each instance,
reference is made to the copy of such document so filed for a more complete
description of the matter involved. Each such statement is qualified in its
entirety by such reference.
Arvin is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the SEC.
Reports, proxy statements and other information filed by Arvin with the SEC
may be inspected and copied at the public reference facilities maintained by
the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the SEC's Regional Offices located at Suite 1400, Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60661 and at the 13th Floor, Seven World
Trade Center, New York, New York 10048. Copies of such material may be
obtained from the public reference section of the SEC, 450 Fifth Street, N.W.
Washington, D.C. 20549, at prescribed rates. Such reports, proxy statements
and other information concerning Arvin may also be inspected at the offices of
the New York Stock Exchange, 20 Broad Street, New York, New York 10005 and the
Chicago Stock Exchange, 440 South LaSalle Street, Chicago, Illinois 60605, on
which exchanges the Company's Common Shares are listed. Such information may
also be accessed electronically by means of the SEC's home page on the World
Wide Web located at http://www.sec.gov.
No separate financial statements of the Trust have been included or
incorporated by reference herein. Arvin does not believe that such financial
statements would be material to holders of the Capital Securities because (i)
all of the voting securities of the Trust will be owned, directly or
indirectly, by Arvin, a reporting company under the Exchange Act, (ii) the
Trust has no independent operations but exists for the sole purpose of issuing
securities representing undivided beneficial interests in the assets of the
Trust and investing the proceeds thereof in Subordinated Debentures issued by
Arvin, and (iii) the obligations of the Trust under the Capital Securities
are, if and to the extent that the Trust has funds available to meet such
obligations, fully and unconditionally guaranteed by Arvin. See "Description
of the Subordinated Debentures" and "Description of the Guarantee."
The Trust is not currently subject to the informational reporting
requirements of the Exchange Act. The Trust will become subject to such
requirements upon the effectiveness of the Registration Statement, although it
intends to seek and expects to receive exemptions therefrom.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by Arvin with the SEC pursuant to
the Exchange Act are incorporated herein by reference:
1. Arvin's Annual Report on Form 10-K for the year ended December 31,
1995;
2. Arvin's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1996, June 30, 1996 and September 29, 1996; and
3. Arvin's two Current Reports on Form 8-K, both dated May 10, 1996.
All documents subsequently filed by Arvin pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the Capital Securities offered
3
<PAGE>
hereby, shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document 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.
Arvin will provide without charge to each person to whom a copy of this
Prospectus has been delivered, on the written or oral request of such person,
a copy of any or all of the documents referred to above which have been or may
be incorporated in this Prospectus by reference (other than exhibits to such
documents which are not specifically incorporated by reference into the
information that this Prospectus incorporates). Requests for such copies
should be directed to John W. Brown, Vice President--Public Relations, Arvin
Industries, Inc., P.O. Box 3000, Columbus, Indiana 47202-3000, telephone 812-
379-3000.
4
<PAGE>
PROSPECTUS SUMMARY
This summary is qualified in its entirety by the more detailed information
and financial statements appearing elsewhere, or incorporated by reference, in
this Prospectus.
THE COMPANY
Arvin Industries, Inc. is a leading worldwide manufacturer of vehicle exhaust
systems and ride control products for both original equipment and replacement
customers. Since its founding in 1919, Arvin has grown through internal
development, acquisitions and a number of international joint ventures. At
September 29, 1996, the Company had total assets of approximately $1.4 billion
and shareholders' equity of approximately $415 million.
THE TRUST
The Trust is a statutory business trust created under Delaware law pursuant
to (i) a declaration of trust executed by the Company as sponsor (the
"Sponsor") of the Trust and the trustees of the Trust (the "Trustees") and (ii)
the filing of a certificate of trust with the Secretary of State of the State
of Delaware on December 18, 1996. The Trust exists for the exclusive purposes
of (i) issuing and selling the Capital Securities and Common Securities, (ii)
using the gross proceeds from the sale of the Trust Securities to acquire the
Subordinated Debentures and (iii) engaging in only those other activities
necessary or incidental thereto. All of the Common Securities will be directly
or indirectly owned by the Company. The Common Securities will rank pari passu,
and payments will be made thereon pro rata, with the Capital Securities, except
that, if a Declaration Event of Default (as defined herein) has occurred and is
continuing, the rights of the holders of the Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the Capital
Securities. The Company will acquire Common Securities in an aggregate
liquidation amount equal to at least 3% of the total capital of the Trust.
The Trust's affairs will be conducted by the Trustees appointed by the
Company as the holder of all of the Common Securities. The Company, as the
holder of the Common Securities, will be entitled to appoint, remove or replace
any of, or increase or reduce the number of, the Trustees. The duties and
obligations of the Trustees shall be governed by the Declaration (as defined
herein). The Trust will initially have three Trustees. Two of the initial
Trustees (the "Administrative Trustees") will be employees or officers of or
otherwise affiliated with the Company. The third initial Trustee (the
"Institutional Trustee") will be Wilmington Trust Company, which shall act as
institutional trustee and as indenture trustee for the purposes of compliance
with the provisions of Trust Indenture Act of 1939, as amended. The Company
will pay all fees and expenses related to the Trust and the offering of the
Trust Securities.
The principal corporate trust office of the Institutional Trustee, Wilmington
Trust Company, is at Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890, Attention: Corporate Trust Administration. The address for the
Trust is c/o Arvin Industries, Inc., the Sponsor of the Trust, at the Company's
corporate headquarters located at One Noblitt Plaza, Box 3000, Columbus,
Indiana 47202-3000; telephone 812-379-3000.
5
<PAGE>
THE OFFERING
Capital Securities Offered. 100,000 % Capital Securities evidencing
preferred undivided beneficial interests in the assets of the Trust. Holders of
the Capital Securities will be entitled to receive cumulative cash
distributions at an annual rate of % of the liquidation amount of $1,000 per
Capital Security, accruing from the date of original issuance and payable semi-
annually in arrears on and of each year commencing on ,
1997. The distribution rate and the distribution and other payment dates for
the Capital Securities will correspond to the interest rate and interest and
other payment dates on the Subordinated Debentures, which will be the only
assets of the Trust. As a result, if principal or interest is not paid on the
Subordinated Debentures, no amounts will be paid on the Capital Securities. See
"Risk Factors--Ranking of Subordinate Obligations under the Guarantee and
Subordinated Debentures" and "Description of the Capital Securities."
Subordinated Debentures. The Trust will invest the proceeds from the issuance
of the Capital Securities and Common Securities in an equivalent amount of %
Subordinated Debentures of the Company. The Subordinated Debentures will rank
subordinate and junior in right of payment to all Senior Indebtedness of Arvin.
The Company's obligations under the Subordinated Debentures will also be
effectively subordinated to all existing and future obligations of Arvin's
subsidiaries. There are no terms in the Indenture (as defined herein) that
limit Arvin's ability to incur additional Senior Indebtedness. See "Description
of the Subordinated Debentures--Subordination."
Guarantee. Payment of distributions out of moneys held by the Trust, and
payments on liquidation of the Trust or the redemption of Capital Securities,
are guaranteed by Arvin if and to the extent the Trust has funds available
therefor. If the Company does not make principal or interest payments on the
Subordinated Debentures, the Trust will not have sufficient funds to make
distributions on the Capital Securities, in which event the Guarantee shall not
apply to such distribution until the Trust has sufficient funds available
therefor. See "Description of the Guarantee" and "Effect of Obligations under
the Subordinated Debentures and the Guarantee." The obligations of Arvin under
the Guarantee are subordinate and junior in right of payment to all other
liabilities of Arvin and rank pari passu with the most senior preferred stock,
if any, issued from time to time by the Company. See "Risk Factors--Ranking of
Subordinate Obligations under the Guarantee and Subordinated Debentures" and
"Description of the Guarantee."
Right to Defer Interest. The Company has the right to defer payments of
interest on the Subordinated Debentures by extending the interest payment
period on the Subordinated Debentures, at any time and from time to time, for
up to 10 consecutive semi-annual interest payment periods. If interest payments
on the Subordinated Debentures are so deferred, distributions on the Capital
Securities will also be deferred. During any Extension Period, distributions
will continue to accrue with interest thereon (to the extent permitted by
applicable law) as described herein. There could be multiple Extension Periods
of varying lengths during the term of the Subordinated Debentures. During an
Extension Period, holders of Capital Securities will be required to include
deferred interest income allocated to their Capital Securities in their gross
income (as original issue discount ("OID")) even though the cash payments
attributable thereto have not been made. See "Description of the Subordinated
Debentures--Option to Extend Interest Payment Period" and "United States
Federal Income Taxation--Original Issue Discount."
Redemption. The Subordinated Debentures are redeemable by the Company (i) on
or after , 2007, in whole or, from time to time, in part, or (ii)
prior to , 2007, in whole but not in part, within 90 days following the
occurrence of a Tax Event. If the Subordinated Debentures are redeemed, the
Trust must redeem Trust Securities having an aggregate liquidation amount equal
to the aggregate principal amount of the Subordinated Debentures so redeemed.
The Trust Securities will be redeemed upon maturity of the Subordinated
Debentures. The applicable Redemption Prices will be determined as provided
under "Description of the Capital Securities--Redemption" and "--Tax Event
Redemption" and "Description of the Subordinated Debentures--Redemption."
6
<PAGE>
Right to Dissolve the Trust. At any time, the Company will have the right to
dissolve the Trust and, after satisfaction of liabilities to creditors of the
Trust as required by applicable law, cause the Subordinated Debentures to be
distributed to the holders of the Trust Securities in liquidation of the Trust.
See "Description of the Capital Securities--Distribution of the Subordinated
Debentures."
Use Of Proceeds. The proceeds from the sale of Capital Securities by the
Trust will be invested in the Subordinated Debentures of the Company. The
Company expects to use a portion of the net proceeds from the sale of such
Subordinated Debentures to the Trust to repay approximately $44.1 million of
short-term borrowings incurred in connection with the Company's December 27,
1996 payment of approximately $64.5 million to redeem its outstanding 7 1/2%
Convertible Subordinated Debentures due 2014 and for general corporate
purposes. Such general corporate purposes are expected to include the Company's
exercise of options to purchase the remaining ownership interests in several
entities partially owned by the Company conducting business in the European
automotive components markets. The aggregate amount of payments expected to be
required for the exercise of the options will not be known for several months,
but is currently expected to be approximately $30 million. Until such net
proceeds are used for this purpose, they are expected to be applied to reduce
the Company's outstanding short-term borrowings. The Company's short-term
borrowings at January 14, 1997 are on an overnight basis and bear interest at a
weighted average interest rate of 5.36 percent.
7
<PAGE>
SUMMARY FINANCIAL INFORMATION
The following summary financial information should be read in conjunction
with the consolidated financial statements of the Company and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995. See "Incorporation of Certain Documents by Reference." The
summary operating results, financial position and cash flow information for and
as of the end of each of the fiscal years in the five-year period ended
December 31, 1995, are derived from the audited consolidated financial
statements of the Company. Amounts for 1994 and prior periods have been
restated for discontinued operations. The summary operating results, financial
position and cash flow information for and as of the end of each of the nine-
month periods ended September 29, 1996 and October 1, 1995 have been derived
from the unaudited consolidated financial statements of the Company and in the
opinion of management include all adjustments which are necessary to present
fairly the operating results, financial position and cash flow information of
the Company for the periods and at the dates presented. Except for the
restructuring and special charges and credits described in the Company's
Quarterly Report on Form 10-Q for the quarter ended September 29, 1996 and in
the Company's Annual Report on Form 10-K for the year ended December 31, 1995,
all such adjustments are of a normal recurring nature. The summary financial
information for the nine-month period ended September 29, 1996 is not
necessarily indicative of the results to be expected for the full year ending
December 29, 1996.
<TABLE>
<CAPTION>
AT OR FOR THE
NINE-MONTH
PERIOD ENDED AT OR FOR THE FISCAL YEAR ENDED
------------------- --------------------------------------------------
SEPT. 29, OCT. 1, DEC. 31, JAN. 1, JAN. 2, JAN. 3, DEC. 29,
1996 1995 1995 1995 1994 1993 1991
--------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS (1)
Net sales.............. $1,652.0 $1,465.9 $1,966.4 $1,849.5 $1,640.8 $1,587.2 $1,373.4
Operating income (2)... 93.4 69.8 99.5 104.1 113.1 107.9 77.5
Net interest expense... 29.3 31.5 41.2 40.1 33.0 34.1 36.5
Earnings from
continuing operations. 28.3 10.5 17.9 24.6 38.4 36.4 17.9
FINANCIAL POSITION
Cash and equivalents... $ 25.7 $ 56.2 $ 15.2 $ 11.1 $ 35.1 $ 6.4 $ 5.5
Total assets........... 1,429.8 1,341.0 1,291.0 1,231.5 1,175.5 1,110.6 1,086.2
Total debt............. 416.0 460.8 402.3 441.4 440.1 409.1 369.9
Shareholders' equity... 414.8 395.3 395.1 396.3 420.6 398.4(3) 374.1
CASH FLOW INFORMATION
Depreciation and
amortization.......... $ 58.9 $ 56.9 $ 74.9 $ 78.2 $ 70.0 $ 68.9 $ 63.8
Capital expenditures
(net)................. 48.1 61.6 98.6 103.7 82.7 98.6 72.6
RATIOS
Operating income margin
(2)................... 5.7% 4.8% 5.1% 5.6% 6.9% 6.8% 5.6%
Operating income(2)/Net
interest expense...... 3.2 to 1 2.2 to 1 2.4 to 1 2.6 to 1 3.4 to 1 3.2 to 1 2.1 to 1
Total debt/Total
capitalization........ 48.1% 51.8% 48.5% 50.7% 49.3% 50.3% 49.1%
</TABLE>
- --------
(1) From continuing operations.
(2) Reflects income from continuing operations prior to expenses unrelated to
the Company's operating segments.
(3) The Company adopted FAS 106 and FAS 112 in 1992 and recorded a $33.5
million charge net of tax, which is not reflected in operating income but
is reflected in shareholders' equity.
8
<PAGE>
RISK FACTORS
Prospective purchasers of Capital Securities should consider carefully all
of the information contained in this Prospectus including the information in
the documents incorporated by reference and, in particular, should evaluate
the specific factors set forth below for risks involved with an investment in
the Capital Securities.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND SUBORDINATED
DEBENTURES
The Company's obligations under the Guarantee are unsecured and will be
subordinate and junior in right of payment to all other liabilities of Arvin
and pari passu with the most senior preferred stock, if any, issued from time
to time by Arvin. The obligations of the Company under the Subordinated
Debentures are subordinate and junior in right of payment to all present and
future Senior Indebtedness of Arvin and pari passu with obligations to or
rights of Arvin's general unsecured creditors other than holders of Senior
Indebtedness. As of September 29, 1996, Senior Indebtedness aggregated
approximately $472 million. The Company's obligations under the Subordinated
Debentures will also be effectively subordinated to all existing and furture
obligations of Arvin's subsidiaries. There are no terms in the Capital
Securities, the Subordinated Debentures or the Guarantee that limit Arvin's
ability to incur additional indebtedness, including indebtedness that ranks
senior to the Subordinated Debentures and the Guarantee. See "Description of
the Guarantee--Status of the Guarantee" and "Description of the Subordinated
Debentures--Subordination."
RIGHTS UNDER THE GUARANTEE
If the Company were to default on its obligation to pay amounts payable on
the Subordinated Debentures or its other payment obligations to the Trust, the
Trust would lack available funds for the payment of distributions or amounts
payable on redemption of the Capital Securities or otherwise, and, in such
event, holders of the Capital Securities would not be able to rely on the
Guarantee for payment of such amounts. Instead, holders of the Capital
Securities would rely on the enforcement (i) by the Institutional Trustee of
its rights as registered holder of the Subordinated Debentures against the
Company pursuant to the terms of the Subordinated Debentures or (ii) by such
holder of its right against the Company to enforce payments on the
Subordinated Debentures. See "Description of the Guarantee" and "Description
of the Subordinated Debentures."
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Declaration Event of Default occurs and is continuing, then the holders
of Capital Securities would rely on the enforcement by the Institutional
Trustee of its rights as a holder of the Subordinated Debentures against
Arvin. In addition, the holders of a majority in liquidation amount of the
Capital Securities will have the right to direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee or to direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee to exercise the remedies available to it as a holder of
the Subordinated Debentures. If the Institutional Trustee fails to enforce its
rights with respect to the Subordinated Debentures held by the Trust, any
record holder of Capital Securities may, to the fullest extent permitted by
law, institute legal proceedings directly against the Company to enforce the
Institutional Trustee's rights under such Subordinated Debentures without
first instituting any legal proceedings against such Institutional Trustee or
any other person or entity. In addition, if a Declaration Event of Default has
occurred and is continuing and such event is attributable to the failure of
the Company to pay interest or principal on the Subordinated Debentures on the
date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a record holder of Capital
Securities may directly institute a proceeding against the Company for
enforcement of payment to such holder of the principal of or interest on the
Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of the Capital Securities held by such holder (a "Direct
Action") on or after the respective due dates specified in the Subordinated
Debentures. In connection with such Direct Action, Arvin will be subrogated to
the rights of such record holder of Capital Securities to the extent of any
payment made by Arvin to such holder of Capital Securities in such Direct
Action. The record holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of the Subordinated
Debentures. The record holder in the case of the issuance of one or more
global
9
<PAGE>
Capital Securities certificates will be The Depository Trust Company acting at
the direction of the beneficial owners of the Capital Securities. See
"Description of the Capital Securities--Declaration Events of Default."
TRUST DISTRIBUTIONS DEPENDENT ON THE COMPANY'S PAYMENTS ON SUBORDINATED
DEBENTURES
The Trust's ability to make distributions and other payments on the Capital
Securities is entirely dependent upon the Company making interest and other
payments on the Subordinated Debentures. If the Company does not make payments
on the Subordinated Debentures for any reason, including as a result of the
Company's election to defer the payment of interest on the Subordinated
Debentures by extending the interest payment period on the Subordinated
Debentures, the Trust will not make payments on the Trust Securities. In such
an event, holders of the Capital Securities would not be able to rely on the
Guarantee because distributions and other payments on the Capital Securities
are subject to the Guarantee only if and to the extent that the Trust has funds
available therefor. See "Description of the Guarantee--General" and "Effect of
Obligations under the Subordinated Debentures and the Guarantee."
FACTORS AFFECTING PRODUCTION VOLUMES; CYCLICALITY
Historically, the North American and European automotive industries have
experienced periodic, cyclical downturns, most recently in the 1991-92 calendar
years in North America and in the 1993-94 calendar years in Europe. No
assurance can be given as to when the next cyclical downturn will occur or as
to the duration or severity thereof. North American production and European
production, which accounted for approximately 58% and 32%, respectively, of the
Company's consolidated sales in fiscal 1995, could face a significant decline
in production volumes as a result of rising interest rates, a general economic
downturn, rising fuel prices or general fuel unavailability, legislative
changes, environmental concerns, emissions and safety issues, labor and/or
trade disruptions or other factors. In addition, a prolonged strike at a major
original equipment customer of the Company would likely result in a significant
decline in original equipment production volumes. A significant decline in such
production volumes as a result of a strike, the loss of a principal customer or
any of the other factors described above could have a material adverse effect
on the Company and consequently on its ability to make payments on the
Subordinated Debentures.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company has the right under the Indenture to defer payments of interest
on the Subordinated Debentures by extending the interest payment period at any
time, and from time to time, on the Subordinated Debentures. As a consequence
of such an extension, semi-annual distributions on the Capital Securities would
be deferred (but despite such deferral, to the extent permitted by law, would
continue to accrue with interest thereon compounded semi-annually) by the Trust
during any such Extension Period. The Company has the right to defer payments
of interest on the Subordinated Debentures, from time to time, but no Extension
Period may be more than 10 consecutive semi-annual periods or extend beyond the
Maturity Date (as defined herein) of the Subordinated Debentures. There could
be multiple Extension Periods of varying lengths during the term of the
Subordinated Debentures. In the event that the Company exercises its right to
defer interest payments, then during any Extension Period (a) the Company shall
not declare or pay any dividend on, or make any distribution with respect to,
or redeem, purchase or acquire, or make a liquidation payment with respect to,
any of its capital stock, (b) the Company shall not, directly or indirectly,
and shall not allow any of its subsidiaries to, make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company that rank pari passu with or junior to the
Subordinated Debentures, and (c) the Company shall not make guarantee payments
with respect to the foregoing (other than pursuant to the Guarantee); provided,
however, that the restriction in clause (a) above does not apply (i) to
repurchases or acquisitions of common shares of the Company as contemplated by
any employment arrangement, benefit plan or other similar contract with or for
the benefit of employees, officers or directors entered into in the ordinary
course of business, (ii) as a result of an exchange or conversion of any class
or series of the Company's capital stock for the Company's common shares,
provided that such class or series of the Company's capital stock was
outstanding prior to the date upon which the Company gives notice of its
election of such Extension Period, (iii) to the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions
10
<PAGE>
of such capital stock or the security being converted or exchanged, provided
that such capital stock or security was outstanding prior to the date upon
which the Company gives notice of its election of such Extension Period, or
(iv) to the payment of any stock dividend by the Company where the dividend is
paid in the form of the same stock as that on which the dividend is paid. Prior
to the termination of any such Extension Period, the Company may further extend
the interest payment period; provided that each Extension Period, if any, may
not exceed 10 consecutive semi-annual interest payment periods or extend beyond
the Maturity Date of the Subordinated Debentures. Upon the termination of any
Extension Period and the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the above requirements. At the end
of the Extension Period, Arvin will pay all interest accrued and unpaid on the
Subordinated Debentures to the holders in whose names the Subordinated
Debentures are registered on the first record date after the end of the
Extension Period. The Company has no current intention of exercising its right
to defer payments of interest by extending the interest payment period on the
Subordinated Debentures. However, should the Company determine to exercise such
right in the future, the market price of the Capital Securities is likely to be
adversely affected. See "Description of the Capital Securities--Distributions"
and "Description of the Subordinated Debentures--Option to Extend Interest
Payment Period."
TAX CONSEQUENCES OF EXTENSION OF INTEREST PAYMENT PERIOD
Should the Company exercise its right to defer payments of interest by
extending the interest payment period, each holder of Capital Securities will
accrue income (as original issue discount ("OID")) in respect of the deferred
interest allocable to its Capital Securities for United States federal income
tax purposes. Such income will be allocated but not distributed to record
holders of the Capital Securities. As a result, each such holder of Capital
Securities will recognize income for United States federal income tax purposes
in advance of the receipt of cash and will not receive the cash from the Trust
related to such income if such holder disposes of its Capital Securities prior
to the record date for the date on which distributions of such amounts are
made. A holder that disposes of its Capital Securities during an Extension
Period, therefore, might not receive the same return on its investment as a
holder that continues to hold its Capital Securities. In addition, as a result
of the existence of the Company's right to defer interest payments, the market
price of the Capital Securities (which represent an undivided beneficial
interest in the Subordinated Debentures) may be more volatile than other
securities on which OID accrues that do not have such rights. See "United
States Federal Income Taxation--Original Issue Discount."
TAX EVENT REDEMPTION
Prior to , 2007, the Company will have the right, within 90 days following
the occurrence of a Tax Event, to redeem the Subordinated Debentures, in whole
(but not in part), in which event the Trust will redeem all outstanding Trust
Securities. Any such redemption shall be at a price equal to the Make-Whole
Amount (as defined in "Description of the Capital Securities--Redemption")
together with accrued interest to but excluding the date fixed for redemption.
See "Description of the Capital Securities--Tax Event Redemption."
DISTRIBUTION OF THE SUBORDINATED DEBENTURES
At any time, the Company will have the right to dissolve the Trust and, after
satisfaction of the liabilities to creditors of the Trust as required by
applicable law, cause the Subordinated Debentures to be distributed to the
holders of the Capital Securities in liquidation of the Trust. Under current
United States federal income tax law and interpretation and assuming, as
expected, that the Trust is treated as a grantor trust, a distribution of the
Subordinated Debentures should not be a taxable event to holders of the Capital
Securities. Should there be a change in law, a change in legal interpretation,
a Tax Event or other circumstances, however, the distribution could be a
taxable event to the holders of the Capital Securities. In addition, a
dissolution of the Trust in which holders of the Capital Securities receive
cash would be a taxable event to such holders. See "United States Federal
Income Taxation--Receipt of Subordinated Debentures or Cash upon Dissolution of
the Trust."
There can be no assurance as to the market prices for the Capital Securities
or the Subordinated Debentures that may be distributed in exchange for Capital
Securities if a dissolution or liquidation of the Trust were to
11
<PAGE>
occur. Accordingly, the Capital Securities that an investor may purchase,
whether pursuant to the offer made hereby or in the secondary market, or the
Subordinated Debentures that a holder of Capital Securities may receive on
dissolution and liquidation of the Trust, may trade at a discount to the price
that the investor paid to purchase the Capital Securities offered hereby.
Because holders of Capital Securities may receive Subordinated Debentures upon
any election by the Company to dissolve the Trust and cause the Subordinated
Debentures to be distributed to the holders of the Capital Securities,
prospective purchasers of Capital Securities are also making an investment
decision with regard to the Subordinated Debentures and should review carefully
all the information regarding the Subordinated Debentures and the Company
contained in this Prospectus. See "Description of the Capital Securities--
Distribution of the Subordinated Debentures" and "Description of the
Subordinated Debentures."
PROPOSED TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"), the
revenue portion of President Clinton's fiscal 1997 budget proposal, was
released. The Bill would, among other things, treat as equity, instruments
issued by a corporation that have a maximum term of more than 20 years and that
are not shown as indebtedness on the consolidated balance sheet of the issuer.
The above-described provisions of the Bill were proposed to be effective
generally for instruments issued on or after December 7, 1995. 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 views expressed in the Joint Statement. Under current law, the
Subordinated Debentures will be treated as indebtedness of the Company and the
Company will be able to deduct interest on the Subordinated Debentures
beneficially held by the holders of the Capital Securities. However, if the
provision of the Bill regarding a 20-year term is enacted with retroactive
effect with regard to the Subordinated Debentures, the Company will not be
entitled to an interest deduction with respect to the Subordinated Debentures.
There can be no assurance that current or future legislative proposals, adverse
judicial decisions, final legislation or official administrative pronouncements
will not affect the ability of the Company to deduct interest on the
Subordinated Debentures, giving rise to a Tax Event which would permit the
Company to cause the redemption of the Capital Securities prior to ,
2007 (the first date on which the Company would otherwise be able to cause a
redemption of the Capital Securities). See "Description of the Capital
Securities--Tax Event Redemption" and "United States Federal Income Taxation."
OPTIONAL REDEMPTION OF SUBORDINATED DEBENTURES
At the option of the Company, the Subordinated Debentures may be redeemed, in
whole or in part, at any time on or after , 2007, at a
redemption price determined as provided under "Description of the Subordinated
Debentures--Redemption." Investors in the Capital Securities should assume that
the Company will exercise its redemption option if it is in the interest of the
Company to redeem the Subordinated Debentures. If Subordinated Debentures are
redeemed, the Trust must redeem Trust Securities having an aggregate
liquidation amount equal to the aggregate principal amount of Subordinated
Debentures so redeemed. See "Description of the Capital Securities--
Redemption." See also "Description of the Capital Securities--Tax Event
Redemption."
LIMITED VOTING RIGHTS
Holders of Capital Securities will have only limited voting rights, primarily
in connection with directing the activities of the Institutional Trustee as the
holder of the Subordinated Debentures. Such holders will not be entitled to
vote to appoint, remove or replace, or to increase or decrease the number of,
the Trustees. Voting rights with respect to Trustee matters are vested
exclusively in the holder of the Common Securities. See "Description of the
Capital Securities--Voting Rights."
12
<PAGE>
TRADING PRICE
The Capital Securities may trade at a price that does not fully reflect the
value of accrued but unpaid interest with respect to the underlying
Subordinated Debentures. A holder who disposes of his Capital Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Subordinated Debentures through the
date of disposition in income as ordinary income (i.e., OID), and to add such
amount to his adjusted tax basis in his pro rata share of the underlying
Subordinated Debentures deemed disposed of. To the extent the selling price is
less than the holder's adjusted tax basis (which will include, in the form of
OID, all accrued but unpaid interest), a holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes. See
"United States Federal Income Taxation--Original Issue Discount" and "--Sales
of Capital Securities."
ABSENCE OF PUBLIC MARKET FOR SECURITIES
Since the Capital Securities will be newly issued, there is no current market
for them. There can be no assurance that an active trading market for the
Capital Securities will develop or that, if such market develops, the market
price will equal or exceed the public offering price set forth on the cover
page of this Prospectus.
THE TRUST
Arvin Capital I is a statutory business trust created under Delaware law
pursuant to a declaration of trust, dated as of December 18, 1996, and the
filing of a certificate of trust with the Secretary of State of the State of
Delaware on December 18, 1996. Such declaration will be amended and restated in
its entirety (as so amended and restated, the "Declaration") by execution of an
Amended and Restated Declaration of Trust substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
Declaration will be qualified as an indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). Upon issuance of the Capital
Securities, the purchasers thereof will own all of the Capital Securities. See
"Description of the Capital Securities." Simultaneously with the issuance of
the Capital Securities, Arvin will acquire Common Securities in an aggregate
liquidation amount equal to at least 3% of the total capital of the Trust. The
Trust exists for the exclusive purposes of (i) issuing the Trust Securities
representing undivided beneficial interests in the assets of the Trust, (ii)
investing the gross proceeds of the Trust Securities in the Subordinated
Debentures and (iii) engaging in only those other activities necessary or
incidental thereto. The Trust has a term of approximately 55 years, but may
dissolve earlier as provided in the Declaration.
Pursuant to the Declaration, the number of Trustees will initially be three.
Under the Declaration, Arvin, as holder of a majority in liquidation amount of
the Common Securities, will have the right to increase or decrease, from time
to time, the number of Trustees. The Declaration further provides, however,
that there must always be (i) one Trustee which is either a resident of the
State of Delaware or an entity which has its principal place of business in
Delaware (the "Delaware Trustee"), (ii) at least one Trustee who is an employee
or officer of, or is affiliated with, Arvin (an "Administrative Trustee"), and
(iii) one Trustee which is a financial institution with combined capital and
surplus of at least $50,000,000 and which acts as institutional trustee and as
indenture trustee for purposes of compliance with the Trust Indenture Act. The
same entity may serve as Delaware Trustee and Institutional Trustee. Initially,
Wilmington Trust Company, a Delaware banking corporation, will be the
Institutional Trustee until removed or replaced by the holder of the Common
Securities. For purposes of compliance with the provisions of the Trust
Indenture Act, Wilmington Trust Company will also act as trustee (the
"Guarantee Trustee") under the Guarantee and as the Debt Trustee (as defined
herein) under the Indenture. See "Description of the Guarantee" and
"Description of the Capital Securities--Voting Rights."
The Institutional Trustee will hold title to the Subordinated Debentures for
the benefit of the holders of the Trust Securities, and the Institutional
Trustee will have the power to exercise all rights, powers and privileges of a
holder of Subordinated Debentures under the Indenture. In addition, the
Institutional Trustee will maintain exclusive control of a segregated non-
interest bearing bank account (the "Property Account") to hold all payments
made in respect of the Subordinated Debentures for the benefit of the holders
of the Trust Securities. The Institutional Trustee will make payments of
distributions and payments on liquidation, redemption and
13
<PAGE>
otherwise to the holders of the Trust Securities out of funds from the Property
Account. The Guarantee Trustee will hold the Guarantee for the benefit of the
holders of the Capital Securities. The Company, as the direct or indirect
holder of all the Common Securities, will have the right (subject to the terms
of the Declaration) to appoint, remove or replace any Trustee and to increase
or decrease the number of Trustees; provided, that (i) if the Institutional
Trustee does not have its principal place of business in Delaware, the number
of Trustees shall be at least three, and (ii) there will always be at least one
Administrative Trustee, one Institutional Trustee which satisfies the
requirements of the Trust Indenture Act, and one Trustee who, if a natural
person, is a resident of Delaware or, if not a natural person, is an entity
which has its principal place of business in Delaware, as required under the
Delaware Business Trust Act (the "Trust Act"). Arvin will pay all fees and
expenses related to the Trust and the offering of the Trust Securities. See
"Description of the Subordinated Debentures--Miscellaneous."
The rights of the holders of the Capital Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Trust Act and the Trust Indenture Act. See "Description of the
Capital Securities."
THE COMPANY
OVERVIEW
Arvin is a diversified international manufacturer and supplier of automotive
parts and a variety of other products through operating entities in the U.S.
and numerous other countries. The Company is a worldwide leader in automotive
exhaust systems and ride control products for the original equipment ("OE") and
replacement markets. The Company's consolidated revenues were approximately $2
billion in fiscal 1995.
Since its founding in 1919, Arvin has grown through internal development,
acquisitions and a number of international joint ventures. In recent years, the
Company's strategy has been to strengthen its automotive parts businesses by
achieving a mix of sales to both original equipment manufacturers ("OEMs") and
replacement market parts suppliers on a global basis. Recently, management has
implemented a series of strategic initiatives to increase the Company's global
competitive position within the automotive parts marketplace.
The Company classifies its business based on the two primary markets it
serves: Automotive Original Equipment and Automotive Replacement. In fiscal
1995, Arvin derived approximately 68% of its total revenues from the OE market,
with the remaining 32% coming from replacement market sales.
THE AUTOMOTIVE ORIGINAL EQUIPMENT SEGMENT
The principal products and primary customers of the Automotive Original
Equipment segment are set forth below. The Company believes that it is the
leading exhaust system supplier to OE customers in North America and Europe,
and among the top three OE ride control suppliers in these markets.
<TABLE>
<CAPTION>
PRINCIPAL PRODUCTS PRIMARY CUSTOMERS
------------------ -----------------
<S> <C> <C>
Exhaust Systems Chrysler Nissan
--Mufflers Fiat Renault
--Exhaust and Tail Pipes Ford Saturn
--Catalytic Converters General Motors TRW (airbag sensors)
--Tubular Manifolds Honda Toyota/Nummi
Ride Control Products Mazda Volkswagen/SEAT
--Shock Absorbers Mercedes Benz Volvo
--Struts Mitsubishi
Gas Springs
Vacuum Actuators
Metal Tubular Parts
Coated Coil Steel and Aluminum
Press-Molded Thermoplastics
Vinyl-Metal Stampings
</TABLE>
14
<PAGE>
Arvin's OE segment has undergone a significant transformation in the last
decade, moving to a fully integrated engineering, development and production
operation. This transformation has been driven by the shift in customer
requirements and a change in the capabilities required to be a successful,
long term participant in this market.
Arvin competes with other independent parts suppliers and with
manufacturers' captive parts operations. The Company has significantly
enhanced its delivery capabilities geographically since the late 1980s through
both acquisitions and the formation of a number of international joint
ventures. Arvin believes that its aggressive capital spending program has
resulted in world-class manufacturing operations, capable of delivering
outstanding value and quality to its customers.
THE AUTOMOTIVE REPLACEMENT SEGMENT
The principal products, brand names and primary customers of the Automotive
Replacement segment are set forth below. The Company believes that it is among
the top two replacement exhaust and ride control manufacturers in both North
America and Europe.
<TABLE>
<CAPTION>
PRINCIPAL PRODUCTS BRAND NAMES PRIMARY CUSTOMERS
------------------ ----------- -----------------
<S> <C> <C>
Mufflers Mufflers Retailers
Maremont Sears
Exhaust and Tail Pipes Cherry Bomb Canadian Tire
TIMAX Pep Boys
Catalytic Converters ANSA AutoZone
ROSI
Shock Absorbers TESH Wholesale Distributors
Parts, Inc.
MacPherson Struts Shock Absorbers United Auto Parts
Gabriel General Parts
Gas Springs
Gas Springs Installers
Strong Arm Meineke
Kwik-Fit
</TABLE>
The Company's replacement market operations compete with both OEMs and
independent suppliers in North America and Europe, and serve the market
through its own sales force as well as a network of manufacturers'
representatives. The Company's competitive position has been enhanced by
rigorous attention to lead time reduction, with some product offerings
dropping from seven days to about one day. The foregoing has enabled the
Company to increase its order fill rate and to provide quick order turnaround
through more responsive manufacturing operations. These enhanced manufacturing
processes have also had a positive impact on the cost and quality of the
product.
15
<PAGE>
CAPITALIZATION
The following table sets forth the actual capitalization of the Company at
September 29, 1996, and as adjusted to reflect the application of the
estimated net proceeds from the sale of the Capital Securities. See "Use of
Proceeds." The table should be read in conjunction with the Company's
consolidated financial statements and notes thereto included in the documents
incorporated by reference herein. See "Incorporation of Certain Documents by
Reference."
<TABLE>
<CAPTION>
AT SEPTEMBER 29,
1996
---------------------
ACTUAL AS ADJUSTED
-------- -----------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Short-term debt (including current maturities of long-
term debt).............................................. $ 59,650 $ 24,853
Long-term debt:
Capitalized lease obligations.......................... 3,899 3,899
7.94% notes due 2005................................... 50,000 50,000
6 7/8% notes due 2001.................................. 74,904 74,904
9.8%-9.9% medium term notes due 1998................... 45,000 45,000
10% medium term notes due 2000......................... 49,768 49,768
7 1/2% convertible subordinated debentures due 2014.... 63,803 --
9 1/8% sinking fund debentures due 2017................ 28,424 28,424
10 3/8% euro-sterling notes due 2018................... 36,541 36,541
Other.................................................. 3,962 3,962
-------- --------
Total long-term debt..................................... 356,301 292,498
Company-obligated mandatorily redeemable capital
securities of trust
subsidiary (1).......................................... -- 100,000
Shareholders' equity:
Capital stock:
Common shares ($2.50 par value)........................ 60,681 60,681
Capital in excess of par value......................... 207,784 207,784
Retained earnings...................................... 211,717 210,794
Cumulative translation adjustment...................... (24,991) (24,991)
Common shares in treasury (at cost).................... (40,359) (40,359)
-------- --------
Total shareholders' equity............................... 414,832 413,909
-------- --------
Total capitalization..................................... $830,783 $831,260
======== ========
</TABLE>
- --------
(1) As described herein, the sole asset of the Trust will be the % Junior
Subordinated Deferrable Interest Debentures due 2027 of Arvin with a
principal amount of approximately $103,100,000, and upon redemption of
such debt, the Capital Securities will be mandatorily redeemable.
16
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
The following table sets forth the Company's ratio of earnings to fixed
charges and ratio of earnings to combined fixed charges and preferred stock
dividends for the periods indicated:
<TABLE>
<CAPTION>
NINE-MONTH PERIOD
ENDED FISCAL YEAR ENDED
----------------- -----------------------------------------
SEPT. 29, OCT. 1, DEC. 31, JAN. 1, JAN. 2, JAN. 3, DEC. 29,
1996 1995 1995 1995 1994 1993 1991
--------- ------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges.......... 2.3 1.6 1.6 1.8 2.5 2.3 1.7
Ratio of Earnings to
Combined Fixed Charges
and Preferred
Dividends.............. 2.3 1.6 1.6 1.8 2.5 1.9 1.3
</TABLE>
For purposes of calculating the ratios, "earnings" consist of earnings from
continuing operations before income taxes, adjusted for the portion of fixed
charges deducted from such earnings. "Fixed charges" consist of interest on
all indebtedness (including capital lease obligations and capitalized
interest), amortization of debt expense and the percentage of rental expense
on operating leases deemed representative of the interest factor. The ratios
of earnings to fixed charges, before special charges, for the nine months
ended September 29, 1996 and October 1, 1995 were 2.5 and 1.9 to 1,
respectively. The ratios of earnings to fixed charges, before the
restructuring and special charges, for the 1995 and 1994 fiscal years were 1.9
and 2.4 to 1, respectively. The above computations do not include any fixed
charges related to the Company's guarantee of debt for Calspan SRL
Corporation. The debt guarantee was $18.0 million at September 29, 1996 and
$21.7 million at December 31, 1995.
A statement setting forth the computation of the unaudited ratios of
earnings to fixed charges and earnings to combined fixed charges and preferred
dividends is filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated with the
Company's financial statements with the Capital Securities accounted for and
captioned in the consolidated balance sheet directly above shareholders'
equity.
USE OF PROCEEDS
The Trust will use all proceeds from the sale of the Capital Securities to
purchase the Subordinated Debentures from the Company. Arvin intends to use
the net proceeds from the sale of the Subordinated Debentures to repay
approximately $44.1 million of short-term borrowings incurred in connection
with the Company's December 27, 1996 payment of approximately $64.5 million to
redeem its outstanding 7 1/2% Convertible Subordinated Debentures due 2014,
and for general corporate purposes. Such general corporate purposes are
expected to include the Company's exercise of options to purchase the
remaining ownership interests in several entities partially owned by the
Company conducting business in the European automotive components markets. The
aggregate amount of payments expected to be required for the exercise of the
options will not be known for several months, but is currently expected to be
approximately $30 million. Until such net proceeds are used for this purpose,
they are expected to be applied to reduce the Company's outstanding short-term
borrowings. The Company's short-term borrowings at January 14, 1997 are on an
overnight basis and bear interest at a weighted average interest rate of 5.36
percent.
17
<PAGE>
DESCRIPTION OF THE CAPITAL SECURITIES
The Capital Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Institutional Trustee, Wilmington Trust Company, will act
as indenture trustee under the Declaration for purposes of compliance with the
provisions of the Trust Indenture Act. The terms of the Capital Securities
will include those stated in the Declaration (including the annex and exhibits
thereto), and those required to be made part of the Declaration by the Trust
Indenture Act. The following summary of the principal terms and provisions of
the Capital Securities does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Declaration (a copy of which is
filed as an exhibit to the Registration Statement of which this Prospectus is
a part), the Trust Act and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Administrative Trustees to issue, on behalf
of the Trust, the Trust Securities, which represent undivided beneficial
interests in the assets of the Trust. The Common Securities will have
equivalent terms to and will rank pari passu, and payments will be made
thereon on a pro rata basis, with the Capital Securities, except that upon the
occurrence and during the continuance of a Declaration Event of Default (as
defined herein), the rights of the holders of the Common Securities to receive
payment of periodic distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the Capital
Securities. In addition, holders of the Common Securities have the exclusive
right (subject to the terms of the Declaration) to appoint, remove or replace
any of the Trustees. All of the Common Securities will be directly or
indirectly owned by the Company.
The Declaration does not permit the issuance by the Trust of any securities
other than the Trust Securities or the incurrence of any indebtedness by the
Trust. Pursuant to the Declaration, the Institutional Trustee will hold the
Subordinated Debentures purchased by the Trust for the benefit of the holders
of the Trust Securities. The payment of distributions out of money held by the
Trust, and payments upon redemption of the Capital Securities or liquidation
of the Trust, are guaranteed by Arvin to the extent described under
"Description of the Guarantee." The Guarantee, when taken together with the
back-up undertakings, consisting of obligations of the Company (including the
obligation to pay expenses of the Trust) set forth in the Declaration, the
Indenture and the Subordinated Debentures issued to the Trust, provide a full
and unconditional guarantee by the Company of the Capital Securities. The
Guarantee will be held by Wilmington Trust Company, the Guarantee Trustee, for
the benefit of the holders of the Capital Securities. The Guarantee only
covers payment of distributions when the Company has made the corresponding
payment of interest or principal on the Subordinated Debentures held by the
Trust. In the absence of such payment of interest or principal, the remedy of
a holder of Capital Securities is to vote to direct the Institutional Trustee
to enforce the Institutional Trustee's rights as the holder of the
Subordinated Debentures or, under certain circumstances, to take direct action
against the Company. See "--Declaration Events of Default," "--Voting Rights,"
"Description of the Guarantee" and "Effect of Obligations under the
Subordinated Debentures and the Guarantee."
DISTRIBUTIONS
Distributions on the Capital Securities will be fixed at a rate per annum of
% of the stated liquidation amount of $1,000 per Capital Security.
Distributions in arrears for more than one semi-annual period will (to the
extent permitted by applicable law) bear interest thereon from and including
the last day of such period at the rate per annum of % thereof compounded
semi-annually. The term "distributions" as used herein includes any such
interest payable unless otherwise stated. The amount of distributions payable
for any period will be computed on the basis of a 360-day year of twelve 30-
day months.
Distributions on the Capital Securities will be cumulative, will accrue from
, 1997, and will be payable semi-annually in arrears on
and of each year,
18
<PAGE>
commencing 1997, when, as and if available for payment, and will
be made by the Institutional Trustee, except as otherwise described below.
Arvin has the right under the Indenture to defer payments of interest on the
Subordinated Debentures by extending the interest payment period from time to
time on the Subordinated Debentures, which right, if exercised, would defer
semi-annual distributions on the Capital Securities (although to the extent
permitted by law, such distributions would continue to accrue with interest
since interest would continue to accrue on the Subordinated Debentures) during
any such Extension Period. The Company has the right to defer payments of
interest on the Subordinated Debentures, from time to time, for up to 10
consecutive semi-annual periods, provided that no Extension Period may extend
beyond the Maturity Date of the Subordinated Debentures. There could be
multiple Extension Periods of varying lengths during the term of the
Subordinated Debentures. In the event that the Company exercises this right,
then during any Extension Period (a) the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock, (b) the Company shall not, directly or indirectly, and shall not allow
any of its subsidiaries to, make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Company that rank pari passu with or junior to the Subordinated
Debentures, and (c) the Company shall not make any guarantee payments with
respect to the foregoing; provided, however, that the restriction in clause
(a) above does not apply (i) to repurchases or acquisitions of common shares
of the Company as contemplated by any employment arrangement, benefit plan or
similar contract with or for the benefit of employees, officers or directors
entered into in the ordinary course of business, (ii) as a result of an
exchange or conversion of any class or series of the Company's capital stock
for the Company's common shares, provided that such class or series of the
Company's capital stock was outstanding prior to the date upon which the
Company gives notice of its election of such Extension Period, (iii) to the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, provided that such capital stock or
security was outstanding prior to the date upon which the Company gives notice
of its election of such Extension Period, or (iv) to the payment of any stock
dividend by the Company where the dividend is paid in the form of the same
stock as that on which the dividend is being paid. Prior to the termination of
any such Extension Period, the Company may further extend the interest payment
period; provided that each Extension Period, if any, may not exceed 10
consecutive semi-annual periods and may not extend beyond the Maturity Date of
the Subordinated Debentures. Upon the termination of any Extension Period and
the payment of all amounts then due, Arvin may commence a new Extension
Period, subject to the above requirements. See "Description of the
Subordinated Debentures--Interest" and "--Option to Extend Interest Payment
Period." If distributions are deferred, the deferred distributions and accrued
interest thereon shall be paid to holders of record of the Capital Securities
as they appear on the books and records of the Trust on the record date next
following the termination of such deferral period.
Distributions on the Capital Securities must be paid on the dates payable to
the extent that the Trust has funds available for the payment of such
distributions in the Property Account. The Trust's funds available for
distribution to the holders of the Capital Securities will be limited to
payments received from Arvin on the Subordinated Debentures. See "Description
of the Subordinated Debentures." The payment of distributions out of moneys
held by the Trust is guaranteed by Arvin to the extent set forth under
"Description of the Guarantee." The Guarantee, when taken together with the
back-up undertakings, consisting of obligations of the Company (including the
obligation to pay expenses of the Trust) as set forth in the Declaration, the
Indenture and the Subordinated Debentures issued to the Trust, provides a full
and unconditional guarantee by the Company of the Capital Securities.
Distributions on the Capital Securities will be payable to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which, as long as the Capital Securities remain in global form,
will be one Business Day (as defined below) prior to the relevant payment
dates. Such distributions will be paid through the Institutional Trustee who
will hold amounts received in respect of the Subordinated
19
<PAGE>
Debentures in the Property Account for the benefit of the holders of the Trust
Securities. Subject to any applicable laws and regulations and the provisions
of the Declaration, each such payment will be made as described under "--Book-
Entry Issuance--The Depository Trust Company." In the event that the Capital
Securities do not continue to remain in global form, the relevant record dates
for the Capital Securities shall conform to the rules of any securities
exchange on which the securities are listed and, if none, shall be selected by
the Administrative Trustees, which dates shall be at least one Business Day
but less than 60 Business Days prior to the relevant payment dates.
Distributions payable on any Capital Securities that are not punctually paid
on any distribution payment date, as a result of the Company's having failed
to make a payment under the Subordinated Debentures, will cease to be payable
to the person in whose name such Capital Securities are registered on the
relevant record date, and such defaulted distribution will instead be payable
to the person in whose name such Capital Securities are registered on the
special record date or other specified date determined in accordance with the
Indenture. In the event that any date on which distributions are to be made on
the Capital Securities is not a Business Day, then payment of the
distributions payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect
of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. A "Business Day" shall mean any day other than a day on which
state or federal banking institutions in New York, New York or Wilmington,
Delaware, are authorized or required by law to close.
REDEMPTION
Upon the repayment of the Subordinated Debentures, whether at maturity or
upon redemption, the proceeds from such repayment or redemption shall
simultaneously be applied to redeem Trust Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Subordinated
Debentures so repaid or redeemed; provided, that holders of Trust Securities
shall be given not less than 30 nor more than 60 days notice prior to the date
fixed for such redemption. The redemption price for each Capital Security (the
"Redemption Price") shall equal the liquidation amount of $1,000 plus
accumulated and unpaid distributions thereon to but excluding the date of
redemption (the "Redemption Date") and the related amount of the premium, if
any, paid by the Company upon the concurrent redemption of Subordinated
Debentures. See "Description of the Subordinated Debentures--Redemption." In
the event that fewer than all of the outstanding Trust Securities are to be
redeemed, the Trust Securities will be redeemed pro rata to each holder
according to the aggregate liquidation amount of Trust Securities held by the
relevant holder in relation to the aggregate liquidation amount of all Trust
Securities outstanding. See "--Book-Entry Issuance--The Depository Trust
Company" for a description of procedures of The Depository Trust Company in
the event of redemption. The amount of premium, if any, paid by the Company
upon the redemption of all or any part of the Subordinated Debentures to be
redeemed shall be allocated pro rata to the redemption of the Capital
Securities and the Common Securities.
The Company has the right to redeem the Subordinated Debentures (i) on or
after , 2007, in whole or in part from time to time, or (ii) prior to
, 2007, in whole (but not in part) within 90 days following the
occurrence of a Tax Event. A redemption of the Subordinated Debentures would
cause a mandatory redemption of the Capital Securities and the Common
Securities.
20
<PAGE>
The Redemption Price in the case of a redemption under (i) above shall equal
the following prices, expressed in percentages of the liquidation amount of
$1,000 per Capital Security, together with accrued distributions to but
excluding the Redemption Date, if the Capital Securities are redeemed during
the 12-month period beginning of the years indicated below:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2007........................................................... %
2008........................................................... %
2009........................................................... %
2010........................................................... %
2011........................................................... %
2012........................................................... %
2013........................................................... %
2014........................................................... %
2015........................................................... %
2016........................................................... %
</TABLE>
and at 100% on or after , 2017.
The Redemption Price, in the case of a redemption prior to , 2007
following a Tax Event as described under (ii) above shall equal for each
Capital Security the Make-Whole Amount for a corresponding $1,000 in principal
amount of Subordinated Debentures, together with accrued distributions to but
excluding the Redemption Date. The "Make-Whole Amount" shall be equal to the
greater of (i) 100% of the principal amount of such Subordinated Debentures or
(ii) as determined by a Quotation Agent (as defined below), the sum of the
present values of (A) the principal amount and premium payable as part of the
Redemption Price with respect to an optional redemption of such Subordinated
Debentures on , 2007, and (B) the scheduled payments of interest
from the Redemption Date to , 2007 (the "Remaining Life"), in each
case discounted to the Redemption Date on a semi-annual basis (assuming a 360-
day year consisting of 30-day months) at the Adjusted Treasury Rate (as
defined below).
"Adjusted Treasury Rate" means, with respect to any Redemption Date, the
Treasury Rate (as defined below) plus (i) 1.50% if such Redemption Date occurs
on or before , 1998 or (ii) 0.50% if such Redemption Date occurs
after , 1998.
"Treasury Rate" means (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Remaining Life (if no
maturity is within three months before or after the Remaining Life, yields for
the two published maturities most closely corresponding to the Remaining Life
shall be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the
nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such Redemption Date. The Treasury
Rate shall be calculated on the third Business Day preceding the Redemption
Date.
"Comparable Treasury Issue" means, with respect to any Redemption Date, the
United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of comparable maturity to the
Remaining Life. If no United States Treasury security
21
<PAGE>
has a maturity which is within a period from three months before to three
months after , 2007, the two most closely corresponding United
States Treasury securities shall be used as the Comparable Treasury Issue, and
the Treasury Rate shall be interpolated or extrapolated on a straight-line
basis, rounding to the nearest month using such securities.
"Quotation Agent" means Merrill Lynch Government Securities, Inc. and its
successors; provided, however, that if the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any other
Primary Treasury Dealer selected by the Debt Trustee after consultation with
the Company.
"Comparable Treasury Price" means, with respect to any Redemption Date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such Redemption Date, as set forth in the most recent
weekly statistical release (or any successor release) published by the Federal
Reserve and designated "H.15(519)" or (ii) if such release (or any successor
release) is not published or does not contain such prices during the week
preceding such Business Day, (A) the average of five Reference Treasury Dealer
Quotations for such Redemption Date, after excluding the highest and lowest
such Reference Treasury Dealer Quotations, or (B) if the Debt Trustee obtains
fewer than three such Reference Treasury Dealer Quotations, the average of all
such Reference Treasury Dealer Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Debt Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Debt Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.
TAX EVENT REDEMPTION
"Tax Event" means that the Administrative Trustees shall have received an
opinion of an independent tax counsel experienced in such matters to the
effect that, as a result of (a) 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 (b) any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change
is effective or such pronouncement or decision is announced on or after the
date of original issuance of the Capital Securities, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days after the
date thereof, subject to United States federal income tax with respect to
income accrued or received on the Subordinated Debentures, (ii) the Trust is,
or will be within 90 days after the date thereof, subject to more than a de
minimis amount of taxes, duties or other governmental charges, or (iii)
interest payable to the Trust on the Subordinated Debentures is not, or within
90 days of the date thereof will not be, deductible, in whole or in part, by
the Company for United States federal income tax purposes.
If a Tax Event shall occur and be continuing, the Company shall have the
right prior to , 2007, upon not less than 30 nor more than 60 days
notice, to redeem the Subordinated Debentures, in whole (but not in part), for
the applicable Redemption Price within 90 days following the occurrence of
such Tax Event, and, following such redemption, all Trust Securities shall be
redeemed by the Trust at the applicable Redemption Price. See "--Redemption"
and "Description of the Subordinated Debentures--Redemption."
On March 19, 1996, the Bill, the revenue portion of President Clinton's
fiscal 1997 budget proposal, was released. The Bill would, among other things,
treat as equity, instruments issued by a corporation that have a maximum term
of more than 20 years and that are not shown as indebtedness on the
consolidated balance sheet of the issuer. The above-described provisions of
the Bill were proposed to be effective generally for instruments
22
<PAGE>
issued on or after December 7, 1995. However, on March 29, 1996, the Chairmen
of the Senate Finance and House Ways and Means Committees issued 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 views expressed in the Joint
Statement. Under current law, it is likely that the Subordinated Debentures
will be treated as indebtedness of the Company and the Company will be able to
deduct interest on the Subordinated Debentures beneficially held by the holders
of the Capital Securities. However, if the provision of the Bill regarding a
20-year term is enacted with retroactive effect with regard to the Subordinated
Debentures, the Company will not be entitled to an interest deduction with
respect to the Subordinated Debentures. There can be no assurance that current
or future legislative proposals, adverse judicial decisions, final legislation
or official administrative pronouncements will not affect the ability of the
Company to deduct interest on the Subordinated Debentures, giving rise to a Tax
Event which would permit the Company to cause the redemption of the Capital
Securities prior to , 2007 (the first date on which the Company
would otherwise be able to cause a redemption of the Capital Securities). See
"--Tax Event Redemption" and "United States Federal Income Taxation."
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Capital Securities
unless all accrued and unpaid distributions have been paid on all Capital
Securities for all semi-annual distribution periods terminating on or prior to
the date of redemption.
If the Trust gives a notice of redemption in respect of Capital Securities
(which notice will be irrevocable), then, by 12:00 noon, New York City time, on
the redemption date, provided that Arvin has paid to the Institutional Trustee
a sufficient amount of cash in connection with the related redemption or
maturity of the Subordinated Debentures, the Trust will irrevocably deposit
with the Depositary (as defined herein) funds sufficient to pay the applicable
Redemption Price and will give the Depositary irrevocable instructions and
authority to pay the Redemption Price to the holders of the Capital Securities.
See "--Book-Entry Issuance-- The Depository Trust Company." If notice of
redemption shall have been given and funds deposited as required, then,
immediately prior to the close of business on the date of such deposit,
distributions will cease to accrue and all rights of holders of the Capital
Securities so called for redemption will cease, except the right of the holders
of such Capital Securities to receive the Redemption Price but without interest
on such Redemption Price. In the event that any date fixed for redemption of
Capital Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that is a Business
Day (without any interest or other payment in respect of any such delay),
except that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day. In the event that the
Company fails to repay the Subordinated Debentures on maturity or payment of
the Redemption Price in respect of Capital Securities is improperly withheld or
refused and not paid either by the Trust, or by Arvin pursuant to the
Guarantee, distributions on such Capital Securities will continue to accrue at
the then applicable rate from the original redemption date to the date of
payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Capital Securities are to
be redeemed, the Capital Securities will be redeemed as described under "--
Book-Entry Issuance--The Depository Trust Company."
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), Arvin or its subsidiaries may at any
time, and from time to time, purchase outstanding Capital Securities by tender,
in the open market or by private agreement.
DISTRIBUTION OF THE SUBORDINATED DEBENTURES
At any time, the Company will have the right to dissolve the Trust and, after
satisfaction of the liabilities to creditors of the Trust as required by
applicable law, cause the Subordinated Debentures to be distributed to the
23
<PAGE>
holders of the Trust Securities in liquidation of the Trust. Under current
United States federal income tax law and interpretation and assuming, as
expected, that the Trust is treated as a grantor trust, a distribution of the
Subordinated Debentures should not be a taxable event to holders of the
Capital Securities. Should there be a change in law, a change in legal
interpretation, a Tax Event or other circumstances, however, the distribution
could be a taxable event to the holders of the Capital Securities. In
addition, a dissolution of the Trust in which holders of the Capital
Securities receive cash would be a taxable event to such holders. See "United
States Federal Income Taxation--Receipt of Subordinated Debentures or Cash
upon Dissolution of the Trust."
After the date for any distribution of Subordinated Debentures upon
dissolution of the Trust, (i) the Capital Securities will no longer be deemed
to be outstanding, and (ii) the record holders of the Capital Securities will
receive a registered global certificate or certificates representing the
Subordinated Debentures to be delivered upon such distribution in exchange for
the Capital Securities held by such holders.
There can be no assurance as to the market prices for either the Capital
Securities or the Subordinated Debentures that may be distributed in exchange
for the Capital Securities if a dissolution and liquidation of the Trust were
to occur. Accordingly, the Capital Securities that an investor may purchase,
whether pursuant to the offer made hereby or in the secondary market, or the
Subordinated Debentures that an investor may receive if a dissolution and
liquidation of the Trust were to occur, may trade at a discount to the price
that the investor paid to purchase the Capital Securities offered hereby.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any other voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each, a "Liquidation"), holders of the
Capital Securities will be entitled to receive out of the assets of the Trust,
after satisfaction of liabilities to creditors of the Trust as required by
applicable law, distributions in an amount equal to the aggregate of the
stated liquidation amount of $1,000 per Capital Security plus accrued and
unpaid distributions thereon to the date of payment (the "Liquidation
Distribution"), unless, in connection with such Liquidation, Subordinated
Debentures in an aggregate stated principal amount equal to the aggregate
stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid distributions on, the Capital Securities have been distributed on a pro
rata basis to the holders of the Capital Securities in exchange for such
Capital Securities. The Company will covenant not to cause or permit the
dissolution, winding-up or termination of the Trust, except in connection with
such a distribution of the Subordinated Debentures or certain mergers,
consolidations or amalgamations. See "Description of the Subordinated
Debentures--Certain Covenants of the Company."
If, upon any such Liquidation, the Liquidation Distribution can be paid only
in part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Capital Securities shall be paid on a pro rata basis. The holder
of the Common Securities will be entitled to receive distributions upon any
such liquidation pro rata with the holders of the Capital Securities, except
that if a Declaration Event of Default has occurred and is continuing, the
Capital Securities shall have a preference over the Common Securities with
regard to such distributions.
The Guarantee, when taken together with the back-up undertakings, consisting
of obligations of the Company (including the obligation to pay expenses of the
Trust) as set forth in the Declaration, the Indenture and the Subordinated
Debentures issued to the Trust, provide a full and unconditional guarantee by
the Company of the Capital Securities.
DISSOLUTION
Pursuant to the Declaration, the Trust shall dissolve upon the earliest of
(i) , 2052, (ii) the bankruptcy of the Sponsor, (iii) the
filing of a certificate of dissolution or its equivalent with respect to the
Sponsor, the filing of a certificate of cancellation with respect to the Trust
after obtaining the consent of the holders of at least a majority in
liquidation amount of the Trust Securities or the revocation of the charter of
the Sponsor and the expiration of 90 days after the date of revocation without
a reinstatement thereof, (iv) at the election of the Sponsor (which election
is optional and wholly within the discretion of the Sponsor), upon
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satisfaction of the liabilities of creditors of the Trust as required by
applicable law, provided that all of the Subordinated Debentures are
distributed to holders of the Capital Securities in liquidation of the Trust,
(v) the entry of a decree of a judicial dissolution of the Sponsor or the
Trust, or (vi) the redemption of all the Trust Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of Default")
constitutes an event of default under the Declaration with respect to the Trust
Securities (a "Declaration Event of Default"); provided, that pursuant to the
Declaration, the holder of the Common Securities will be deemed to have waived
any Declaration Event of Default with respect to the Common Securities until
all Declaration Events of Default with respect to the Capital Securities have
been cured, waived or otherwise eliminated. Until such Declaration Event of
Default with respect to the Capital Securities has been so cured, waived, or
otherwise eliminated, the Institutional Trustee will be deemed to be acting
solely on behalf of the holders of the Capital Securities and only the holders
of the Capital Securities will have the right to direct the Institutional
Trustee with respect to certain matters under the Declaration, and therefore
the Indenture.
Upon the occurrence of an Indenture Event of Default, the Institutional
Trustee, as the sole holder of the Subordinated Debentures, will have the right
under the Indenture to declare the principal of and interest on the
Subordinated Debentures to be immediately due and payable. The principal amount
of the Subordinated Debentures will become immediately due and payable, without
any declaration or other action by the Institutional Trustee or any other
person, upon the occurrence of certain Indenture Events of Default relating to
the voluntary or involuntary bankruptcy of the Company. Each of the Company and
the Administrative Trustees, on behalf of the Trust, are required to file
annually with the Institutional Trustee an officer's certificate as to the
compliance of the Company and the Trust with all conditions and covenants under
the Declaration.
If the Institutional Trustee fails to enforce its rights with respect to the
Subordinated Debentures held by the Trust, any record holder of Capital
Securities may, to the fullest extent permitted by law, institute legal
proceedings directly against the Company to enforce the Institutional Trustee's
rights under such Subordinated Debentures without first instituting any legal
proceedings against such Insitutional Trustee or any other person or entity. In
addition, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of the Company to pay interest,
principal or other required payments on the Subordinated Debentures issued to
the Trust on the date such interest, principal or other payment is otherwise
payable, then a record holder of Capital Securities may institute a proceeding
directly against the Company for enforcement of payment on Subordinated
Debentures, on or after the respective due dates specified in the Subordinated
Debentures, having a principal amount equal to the aggregate liquidation amount
of the Capital Securities held by such holder. In connection with such Direct
Action, the Company will be subrogated to the rights of such record holder of
Capital Securities to the extent of any payment made by the Company to such
record holder of Capital Securities. The record holder in the case of the
issuance of one or more global Capital Securities certificates will be The
Depository Trust Company acting at the direction of the beneficial owners of
the Capital Securities.
VOTING RIGHTS
Except as described herein, under the Trust Act, the Trust Indenture Act and
under "Description of the Guarantee--Modification of the Guarantee; Assignment"
and as otherwise required by law and the Declaration, the holders of the
Capital Securities will have no voting rights.
Subject to the requirement of the Institutional Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of this
paragraph, the holders of a majority in aggregate liquidation amount of the
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Institutional
Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Subordinated Debentures, to (i)
exercise the remedies available under the Indenture with respect to the
Subordinated Debentures, (ii) waive any past Indenture Event of Default that is
waivable under the Indenture, or
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(iii) exercise any right to rescind or annul a declaration that the principal
of all the Subordinated Debentures shall be due and payable or consent to any
amendment, modification or termination of the Indenture or the Subordinated
Debentures, where such consent would be required; provided, however, that,
where a consent or action under the Indenture would require the consent or act
of the holders of greater than a majority in principal amount of Subordinated
Debentures affected thereby (a "Super-Majority"), the Institutional Trustee may
only give such consent or take such action at the written direction of the
holders of at least the proportion in liquidation amount of the Capital
Securities which the relevant Super-Majority represents of the aggregate
principal amount of the Subordinated Debentures outstanding. The Institutional
Trustee shall notify all holders of the Capital Securities of any notice of
default received from the Indenture Trustee with respect to the Subordinated
Debentures. Except with respect to directing the time, method and place of
conducting a proceeding for a remedy, the Institutional Trustee shall not take
any of the actions described in clauses (i), (ii) or (iii) above unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect
that, as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes.
In the event the consent of the Institutional Trustee, as the holder of the
Subordinated Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture, the Institutional
Trustee shall request the direction of the holders of the Trust Securities with
respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by a
majority in liquidation amount of the Trust Securities voting together as a
single class; provided, however, that where a consent under the Indenture would
require the consent of a Super-Majority, the Institutional Trustee may only
give such consent at the direction of the holders of at least the proportion in
liquidation amount of the Trust Securities which the relevant Super-Majority
represents of the aggregate principal amount of the Subordinated Debentures
outstanding. The Institutional Trustee shall not take any such action in
accordance with the directions of the holders of the Trust Securities unless
the Institutional Trustee has obtained an opinion of tax counsel to the effect
that, as a result of such action, the Trust will not fail to be classified as a
grantor trust for the purposes of United States federal income tax.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Capital Securities may be
given at a separate meeting of holders of Capital Securities convened for such
purpose, at a meeting of all of the holders of Trust Securities or pursuant to
written consent. The Administrative Trustees will cause a notice of any meeting
at which holders of Capital Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Capital Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a
description of any resolution proposed for adoption at such meeting on which
such holders are entitled to vote or of such matter upon which written consent
is sought; and (iii) instructions for the delivery of proxies or consents. No
vote or consent of the holders of Capital Securities will be required for the
Trust to redeem and cancel Capital Securities or distribute Subordinated
Debentures in accordance with the Declaration.
Notwithstanding that holders of Capital Securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securities that are owned at such time by Arvin or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, Arvin, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if such Capital Securities were
not outstanding.
The procedures by which holders of Capital Securities may exercise their
voting rights are described below. See "--Book-Entry Issuance--The Depository
Trust Company."
Holders of the Capital Securities will have no rights to appoint or remove
the Trustees, who may be appointed, removed or replaced solely by Arvin as the
direct or indirect holder of all of the Common Securities.
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MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by the Administrative
Trustees (and in certain circumstances the Institutional Trustee), provided
that, if any proposed amendment provides for, or the Administrative Trustees
otherwise propose to effect, (i) any action that would materially adversely
affect the powers, preferences or special rights of the holders of Trust
Securities, whether by way of amendment to the Declaration or otherwise or (ii)
the dissolution, winding-up or termination of the Trust other than pursuant to
the terms of the Declaration, then the holders of the Trust Securities voting
together as a single class will be entitled to vote on such amendment or
proposal, and such amendment or proposal shall not be effective except with the
approval of at least a majority in liquidation amount of the Trust Securities
affected thereby; provided, that, if any amendment or proposal referred to in
clause (i) above would materially adversely affect only the Capital Securities
or the Common Securities, then only the affected class will be entitled to vote
on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of a majority in liquidation amount of such
class of Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States federal income taxation as other
than a grantor trust, (ii) reduce or otherwise materially adversely affect the
powers of the Institutional Trustee in contravention of the Trust Indenture Act
or (iii) cause the Trust to be deemed an "investment company" which is required
to be registered under the Investment Company Act of 1940, as amended (the
"1940 Act").
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not 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 corporation or other body, except as described below or as
otherwise described in the Declaration. The Trust may, with the consent of the
Administrative Trustees and without the consent of the holders of the Trust
Securities or the Institutional Trustee, consolidate, amalgamate, merge with or
into, or be replaced by a trust organized as such under the laws of any State
of the United States; provided, that (i) if the Trust is not the survivor, such
successor entity either (x) expressly assumes all of the obligations of the
Trust under the Trust Securities or (y) substitutes for the Capital Securities
other securities having substantially the same terms as the Trust Securities
(the "Successor Securities"), so long as the Successor Securities rank the same
as the Trust Securities rank with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Company expressly acknowledges
a trustee of such successor entity possessing the same powers and duties as the
Institutional Trustee as the holder of the Subordinated Debentures, (iii) the
Capital Securities or any Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or with another organization on which the Capital
Securities are then listed or quoted, (iv) such merger, consolidation,
amalgamation or replacement does not cause the Capital Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation
or replacement does not adversely affect the rights, preferences and privileges
of the holders of the Trust Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of the holders'
interests in the new entity), (vi) such successor entity has a purpose
substantially identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation or replacement, Arvin has received an opinion of an
independent counsel to the Trust experienced in such matters to the effect
that, (A) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the holders of the
Trust Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of the holders' interests in the new
entity), (B) following such merger, consolidation, amalgamation or replacement,
neither the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act and (C) the Trust will continue to be
classified as a grantor trust for federal income tax purposes, and (viii) Arvin
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding
the foregoing, the Trust shall not, except with the consent of holders of 100
percent in liquidation amount of the Trust Securities,
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consolidate, amalgamate, merge with or into, or be replaced by any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it, if such consolidation, amalgamation, merger or
replacement would cause the Trust or the Successor Entity to be classified as
other than a grantor trust for United States federal income tax purposes.
EXPENSES AND TAXES
In the Indenture, the Company has agreed to pay all costs and expenses of
the Trust (including costs and expenses relating to the organization of the
Trust and the offering, sale and issuance of the Trust Securities, the fees
and expenses of the Trustees and the costs and expenses relating to the
operation of the Trust) and to pay any and all taxes and all costs and
expenses with respect thereto (other than United States withholding taxes) to
which the Trust might become subject. The foregoing obligations of the Company
under the Indenture are for the benefit of, and shall be enforceable by, any
person to whom any such debts, obligations, costs, expenses and taxes are owed
(a "Creditor") whether or not such Creditor has received notice thereof. Any
such Creditor may enforce such obligations of the Company directly against the
Company, and the Company has irrevocably waived any right or remedy to require
that any such Creditor take any action against the Trust or any other person
before proceeding against the Company. The Company has also agreed in the
Indenture to execute such additional agreements as may be necessary or
desirable to give full effect to the foregoing.
BOOK-ENTRY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary (the
"Depositary") for the Capital Securities. The Capital Securities will
initially be issued as fully registered securities registered in the name of
Cede & Co. (DTC's nominee). One or more fully registered global Capital
Securities certificates, representing the total aggregate number of Capital
Securities, will be issued and will be delivered to DTC.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in the global Capital Securities
as represented by a global certificate.
DTC has advised the Company and the Trust that it 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. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-
entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct Participants in DTC
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others, such as securities brokers and dealers, banks and trust
companies that clear transactions through or maintain a direct or indirect
custodial relationship with a Direct Participant ("Indirect Participants").
The rules applicable to DTC and its Participants are on file with the SEC.
Purchases of Capital Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Capital
Securities on DTC's records. The ownership interest of each actual purchaser
of each Capital Security ("Beneficial Owner") is in turn to be recorded on the
Direct Participants' and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC 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 Capital Securities. Transfers of ownership interests in the Capital
Securities are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial
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Owners. Beneficial Owners will not receive certificates representing their
ownership interests in the Capital Securities, except in the event that use of
the book-entry system for the Capital Securities is discontinued.
To facilitate subsequent transfers, all the Capital Securities deposited by
Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Capital Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge
of the actual Beneficial Owners of the Capital Securities. DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Capital Securities are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of Beneficial Owners that are their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements that may be in effect from time to time.
Redemption notices will be sent to Cede & Co. If less than all of the
Capital Securities are being redeemed, DTC will determine the amount of the
interest of each Participant to be redeemed in accordance with its procedures.
Although voting with respect to the Capital Securities is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will itself consent
or vote with respect to Capital Securities. Under its usual procedures, DTC
would mail an omnibus proxy to the Trust as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to
those Direct Participants to whose accounts the Capital Securities are
credited on the record date (identified in a listing attached to the Omnibus
Proxy). The Company and the Trust believe that the arrangements among DTC,
Direct and Indirect Participants, and Beneficial Owners will enable the
Beneficial Owners to exercise rights equivalent in substance to the rights
that can be directly exercised by a holder of a beneficial interest in the
Trust.
Distribution payments on the Capital Securities will be made to DTC in
immediately available funds. DTC's practice is to credit Direct Participants'
accounts on the relevant payment date in accordance with their respective
holdings shown on DTC's records unless DTC 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, as is the case with securities held for the account of customers in
bearer form or registered in "street name," and will be the responsibility of
such Participants and not of DTC, the Trust or Arvin, subject to any statutory
or regulatory requirements to the contrary that may be in effect from time to
time. Payment of distributions to DTC is the responsibility of the Trust,
disbursement of such payments to Direct Participants is the responsibility of
DTC, and disbursement of such payments to the Beneficial Owners is the
responsibility of Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner in a global Capital Security
certificate will not be entitled to receive physical delivery of Capital
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Capital Securities.
DTC may discontinue providing its services as securities depositary with
respect to the Capital Securities at any time by giving reasonable notice to
the Trust. Under such circumstances, in the event that a successor securities
depositary is not obtained, Capital Securities certificates are required to be
printed and delivered. Additionally, the Administrative Trustees (with the
consent of the Company) may decide to discontinue use of
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the system of book-entry transfers through DTC (or any successor depositary)
with respect to the Capital Securities. In that event, certificates for the
Capital Securities will be printed and delivered. In each of the above
circumstances, the Company will appoint a paying agent with respect to the
Capital Securities.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Arvin and the Trust believe to be reliable,
but neither the Company nor the Trust takes responsibility for the accuracy
thereof.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
The Institutional Trustee, prior to the occurrence of a default with respect
to the Trust Securities and after the curing of any defaults that may have
occurred, undertakes to perform only such duties as are specifically set forth
in the Declaration and the Indenture, in the terms of the Trust Securities or
in the Trust Indenture Act and, after default, shall exercise the same degree
of care and skill as a prudent individual would exercise in the conduct of his
or her own affairs. Subject to such provisions, the Institutional Trustee is
under no obligation to exercise any of the powers vested in it by the
Declaration at the request of any holder of Capital Securities, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The holders of Capital Securities will not be
required to offer such indemnity in the event such holders, by exercising their
voting rights, direct the Institutional Trustee to take any action it is
empowered to take under the Declaration following a Declaration Event of
Default. The Institutional Trustee also serves as trustee under the Guarantee
and the Indenture. The Company and its affiliates may have banking
relationships with the Institutional Trustee in the ordinary course of
business.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities represented by a Global
Security (as defined herein) shall be made to DTC, which shall credit the
relevant accounts at DTC on the applicable distribution dates. In the event
that the certificates for the Capital Securities are not in book-entry form,
the Trust will maintain an office or agency in the Borough of Manhattan, New
York, New York, where the Capital Securities may be presented for payment
("Paying Agent"). If Arvin fails to appoint or maintain another entity as
Paying Agent, the Institutional Trustee will act as such.
In the event that the Capital Securities do not remain in book-entry form,
registration of transfers of Capital Securities will be effected without charge
by or on behalf of the Trust, but upon payment (with the giving of such
indemnity as the Administrative Trustees may require) in respect of any tax or
other government charges that may be imposed in relation to it. The Trust will
not be required to register or cause to be registered the transfer of Capital
Securities after such Capital Securities have been called for redemption.
GOVERNING LAW
The Declaration and the Capital Securities will be governed by, and construed
in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to operate the Trust
in such a way so that the Trust will not be required to register as an
"investment company" under the 1940 Act or characterized as other than a
grantor trust for United States federal income tax purposes. The Company is
authorized and directed to conduct its affairs so that the Subordinated
Debentures will be treated as indebtedness of Arvin for United States federal
income tax purposes. In this connection, Arvin and the Administrative Trustees
are authorized to take any action, not inconsistent with applicable law, the
certificate of trust of the Trust or the amended and restated articles of
incorporation of Arvin, that each of the Company and the Administrative
Trustees determine in their discretion to be necessary or desirable to achieve
such end, as long as such action does not adversely affect the interests of the
holders of the Capital Securities or vary the terms thereof.
Holders of the Capital Securities have no preemptive or similar rights.
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DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the Guarantee that
will be executed and delivered by Arvin for the benefit of the holders from
time to time of the Capital Securities. The Guarantee will be qualified as an
indenture under the Trust Indenture Act. The Guarantee Trustee, Wilmington
Trust Company, will act as independent indenture trustee for Trust Indenture
Act purposes under the Guarantee. The terms of the Guarantee will be those set
forth in the Guarantee and those made part of the Guarantee by the Trust
Indenture Act. The following summary of certain provisions of the Guarantee
does not purport to be complete and is subject to and qualified in its
entirety by reference to the provisions of the form of Guarantee, a copy of
which has been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, and the Trust Indenture Act. The Guarantee will be
held by the Guarantee Trustee for the benefit of the holders of the Capital
Securities.
GENERAL
Pursuant to the Guarantee, the Company will irrevocably and unconditionally
agree, to the extent set forth therein, to pay in full to the holders of the
Capital Securities the Guarantee Payments (as defined herein) (except to the
extent paid by the Trust), as and when due, regardless of any defense, right
of set-off or counterclaim that the Trust may have or assert. The following
payments or distributions with respect to the Capital Securities to the extent
not paid by the Trust (the "Guarantee Payments") will be subject to the
Guarantee (without duplication): (i) any accrued and unpaid distributions that
are required to be paid on the Capital Securities, to the extent the Trust
shall have funds available therefor, (ii) the Redemption Price, including all
accrued and unpaid distributions to the date of the redemption, to the extent
the Trust has funds available therefor, with respect to any Capital Securities
called for redemption by the Trust and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Subordinated Debentures to the holders of Capital
Securities or the redemption of all of the Capital Securities upon maturity or
redemption of the Subordinated Debentures), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid distributions on such
Capital Securities to the date of payment, to the extent the Trust has funds
available therefor, and (b) the amount of assets of the Trust remaining for
distribution to holders of Capital Securities in liquidation of the Trust. The
Company's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by Arvin to the holders of Capital Securities
or by causing the Trust to pay such amounts to such holders.
The Guarantee will not apply to any payment of distributions on the Capital
Securities except to the extent the Trust shall have funds available therefor.
If Arvin does not make interest or principal payments on the Subordinated
Debentures purchased by the Trust, the Trust will not pay distributions on the
Capital Securities issued by the Trust and will not have funds available
therefor.
Arvin will also irrevocably and unconditionally agree to guarantee the
obligations of the Trust with respect to the Common Securities (the "Common
Securities Guarantee") to the same extent as the Guarantee, except that upon
the occurrence and during the continuation of an Event of Default under the
Indenture, holders of Capital Securities under the Guarantee shall have
priority over holders of Common Securities under the Common Securities
Guarantee with respect to distributions and payments on liquidation,
redemption or otherwise.
CERTAIN COVENANTS OF THE COMPANY
In the Guarantee, Arvin will covenant that, so long as any Capital
Securities remain outstanding, if there shall have occurred any event of
default under the Guarantee or a Declaration Event of Default, then (a) Arvin
shall not declare or pay any dividend on, make any distribution with respect
to, or redeem, purchase or acquire, or make a liquidation payment with respect
to, any of its capital stock, (b) Arvin shall not, directly or indirectly, and
shall not allow any of its subsidiaries to, make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company that rank pari passu with or junior to the
Subordinated Debentures and (c) the Company shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Guarantee);
provided, however, that the restriction in clause (a) above does
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not apply (i) to repurchases or acquisitions of common shares of the Company as
contemplated by any employment arrangement, benefit plan or other similar
contract with or for the benefit of employees, officers or directors entered
into in the ordinary course of business, (ii) as a result of an exchange or
conversion of any class or series of Arvin capital stock for Arvin common
shares, provided that such class or series of Arvin capital stock was
outstanding prior to the occurrence of such event of default under the
Guarantee or such Declaration Event of Default, (iii) to the purchase of
fractional interests in shares of the Company's capital stock pursuant to
conversion or exchange provisions of such Company capital stock or the security
being converted or exchanged, provided that such Arvin capital stock or
security was outstanding prior to the occurrence of such event of default under
the Guarantee or such Declaration Event of Default, or (iv) to the payment of
any stock dividend where the dividend is paid in the form of the same stock as
that on which the dividend is paid.
MODIFICATION OF THE GUARANTEE; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights of
holders of Capital Securities (in which case no consent of such holders will be
required), the Guarantee may be amended only with the prior approval of the
holders of not less than a majority in liquidation amount of the outstanding
Capital Securities. The manner of obtaining any such approval of holders of the
Capital Securities is set forth under "Description of the Capital Securities--
Voting Rights." All guarantees and agreements contained in the Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of the
Company and shall inure to the benefit of the holders of the Capital Securities
then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of a majority in liquidation amount of the Capital Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of the Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under the Guarantee.
If the Guarantee Trustee fails to enforce the Guarantee, any record holder of
Capital Securities may institute a legal proceeding directly against the
Company to enforce the Guarantee Trustee's rights under the Guarantee without
first instituting a legal proceeding against the Trust, the Guarantee Trustee
or any other person or entity. In addition, if the Company has failed to make a
Guarantee Payment, a record holder of Capital Securities may directly institute
a proceeding against the Company for enforcement of the Guarantee for such
payment to the record holder of the Capital Securities of the principal of or
interest on the Subordinated Debentures on or after the respective due dates
specified in the Subordinated Debentures, and the amount of the payment will be
based on the holder's pro rata share of the amount due and owing on all of the
Capital Securities. The Company has waived any right or remedy to require that
any action be brought first against the Trust or any other person or entity
before proceeding directly against the Company. The record holder in the case
of the issuance of one or more global Capital Securities certificates will be
DTC acting at the direction of its Direct Participants, who in turn will be
acting at the direction of the beneficial owners of the Capital Securities.
The Company will be required to provide annually to the Guarantee Trustee a
statement as to the performance by the Company of certain of its obligations
under the Guarantee and as to any default in such performance.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default, undertakes to
perform only such duties as are specifically set forth in the Guarantee and,
after default, shall exercise the same degree of care and skill as a prudent
individual would exercise in the conduct of his or her own affairs. Subject to
such provisions, 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
Capital Securities, unless offered reasonable indemnity against the costs,
expenses and
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liabilities which might be incurred thereby. The Guarantee Trustee also serves
as Institutional Trustee and Debt Trustee. The Company and its affiliates may
have a banking relationship with the Guarantee Trustee in the ordinary course
of business.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate as to the Capital Securities (a) upon full
payment of the Redemption Price of all Capital Securities, (b) upon
distribution of the Subordinated Debentures held by the Trust to the holders of
all the Capital Securities, or (c) upon full payment of the amounts payable in
accordance with the Declaration upon dissolution of the Trust. The Guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any holder of Capital Securities must restore payment of any sums paid
under such Capital Securities or the Guarantee.
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of Arvin and will rank
(i) subordinate and junior in right of payment to all other liabilities of
Arvin, including the Subordinated Debentures, except those liabilities of Arvin
made pari passu or subordinate by their terms, (ii) pari passu with the most
senior preferred stock, if any, now or hereafter issued by Arvin and with any
guarantee now or hereafter entered into by Arvin in respect of any preferred
stock of any affiliate of Arvin, and (iii) senior to Arvin's common shares. The
terms of the Capital Securities provide that each holder of Capital Securities
by acceptance thereof agrees to the subordination provisions and other terms of
the Guarantee.
The Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly
against the Company to enforce its rights under the guarantee without
instituting a legal proceeding against any other person or entity).
GOVERNING LAW
The Guarantee will be governed by, and construed in accordance with, the
internal laws of the State of New York.
DESCRIPTION OF THE SUBORDINATED DEBENTURES
Set forth below is a description of the terms of the Subordinated Debentures
in which the Trust will invest the proceeds from the issuance and sale of the
Trust Securities. The following summary of the principal terms does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, the Indenture, dated as of , 1997, between Arvin and
Wilmington Trust Company, as Trustee (the "Debt Trustee"), as supplemented by a
First Supplemental Indenture, dated as of , 1997 (as so
supplemented, the "Indenture"), the forms of which are filed as Exhibits to the
Registration Statement of which this Prospectus forms a part. The terms of the
Subordinated Debentures will include those stated in the Indenture and those
made a part of the Indenture by reference to the Trust Indenture Act. Certain
capitalized terms used herein are defined in the Indenture.
The Company will have the right, at any time, to dissolve the Trust and,
after satisfaction of the liabilities to creditors of the Trust as required by
applicable law, cause the Subordinated Debentures to be distributed to the
holders of the Trust Securities in liquidation of the Trust. See "Description
of the Capital Securities--Distribution of the Subordinated Debentures."
GENERAL
The Subordinated Debentures will be issued as unsecured subordinated debt
under the Indenture. The Indenture does not limit the aggregate principal
amount of debt securities which may be issued thereunder and
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<PAGE>
provides that the debt securities may be issued thereunder from time to time in
one or more series. However, the Subordinated Debentures, as a separate series
of debt securities, will be limited in aggregate principal amount to
$103,100,000, such amount being the sum of the aggregate stated liquidation
amount of the Capital Securities and the Common Securities.
The Subordinated Debentures are not entitled to the benefit of any sinking
fund. The entire principal amount of the Subordinated Debentures will mature
and become due and payable, together with any accrued and unpaid interest
thereon including Additional Interest (as defined herein), if any, on
, 2027.
If Subordinated Debentures are distributed to holders of Capital Securities
in liquidation of such holders' interests in the Trust, the Company presently
anticipates that such Subordinated Debentures will initially be issued in the
form of one or more Global Securities. As described herein, under certain
limited circumstances, Subordinated Debentures may be issued in certificated
form in exchange for a Global Security. See "--Book-Entry and Settlement." In
the event that Subordinated Debentures are issued in certificated form, such
Subordinated Debentures will be in denominations of $1,000 and integral
multiples thereof and may be transferred or exchanged at the offices described
below. Payments on Subordinated Debentures issued as a Global Security will be
made to DTC, a successor depositary or, in the event that no depositary is
used, to a Paying Agent for the Subordinated Debentures. In the event
Subordinated Debentures are issued in certificated form, principal and interest
will be payable, the transfer of the Subordinated Debentures will be
registrable and Subordinated Debentures will be exchangeable for Subordinated
Debentures of other denominations of a like aggregate principal amount at the
corporate trust office of the Debt Trustee in Wilmington, Delaware; provided,
that payment of interest may be made at the option of Arvin by check mailed to
the address of the persons entitled thereto or by wire transfer to an account
appropriately designated by the persons entitled thereto. Notwithstanding the
foregoing, so long as the holder of any Subordinated Debentures is the
Institutional Trustee, the payment of principal and interest on the
Subordinated Debentures held by the Institutional Trustee will be made at such
place and to such account as may be designated by the Institutional Trustee.
The Indenture does not contain provisions that afford holders of the
Subordinated Debentures protection in the event of a highly leveraged
transaction or similar transaction involving Arvin that may adversely affect
such holders.
SUBORDINATION
The Indenture provides that the Subordinated Debentures are subordinated and
junior in right of payment to all Senior Indebtedness of Arvin, whether now
existing or hereafter incurred. No payment of principal (including redemption
payments, if any), premium, if any, or interest on, the Subordinated Debentures
may be made if (i) any Senior Indebtedness of Arvin is not paid when due, and
any applicable grace period with respect to such default has ended and such
default has not been cured or waived or ceased to exist, or (ii) the maturity
of any Senior Indebtedness of Arvin has been accelerated because of a default.
Upon any payment by or distribution of assets of Arvin to creditors upon any
dissolution, winding-up, liquidation or reorganization, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings,
all amounts due on all Senior Indebtedness of Arvin must be paid in full, or
payment provided for in money in accordance with its terms, before the holders
of Subordinated Debentures are entitled to receive or retain any payment. Upon
payment in full of all amounts due on Senior Indebtedness then outstanding, the
rights of the holders of the Subordinated Debentures will be subrogated to the
rights of the holders of Senior Indebtedness of Arvin to receive payments or
distributions applicable to Senior Indebtedness until all amounts owing on the
Subordinated Debentures are paid in full.
The term "Senior Indebtedness" means, with respect to Arvin, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of
Arvin for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by Arvin, (ii) all
capital lease obligations of Arvin, (iii) all obligations of Arvin issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of Arvin and all obligations of Arvin under any title retention
agreement (but excluding trade
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<PAGE>
accounts payable arising in the ordinary course of business), (iv) all
obligations of Arvin for the reimbursement on any letter of credit, banker's
acceptance, security purchase facility or similar credit transaction, (v) all
obligations of the type referred to in clauses (i) through (iv) above of other
persons for the payment of which Arvin is responsible or liable as obligor,
guarantor or otherwise, (vi) all obligations of the type referred to in clauses
(i) through (v) above of other persons secured by any lien on any property or
asset of Arvin (whether or not such obligation is assumed by Arvin) and (vii)
all obligations of the Company under guarantees in respect of operating lease
payments of its subsidiaries or under guarantees in respect of the obligations
of any trust, partnership or other entity that has been or is established as a
lease financing entity of the Company ("a Lease Financing Entity") which
guarantees were, in either case, incurred in connection with the issuance by
such Lease Financing Entity of indebtedness or other securities, except in each
case for (1) any such indebtedness that is by its terms subordinated to or pari
passu with the debt securities issued under the Indenture, and (2) any
indebtedness between or among the Company and its affiliates, including all
other debt securities and guarantees in respect of those debt securities (other
than guarantees referred to in clause (vii) above) issued to any trust, or a
trustee of such trust, partnership or other entity affiliated with Arvin that
is a financing entity of Arvin (a "financing entity") in connection with the
issuance by such financing entity of securities that are similar to the Capital
Securities. Such Senior Indebtedness shall continue to be Senior Indebtedness
and be entitled to the benefits of the subordination provisions irrespective of
any amendment, modification or waiver of any term of such Senior Indebtedness.
The Indenture does not limit the aggregate amount of Senior Indebtedness that
may be issued by Arvin. As of September 29, 1996, Senior Indebtedness of Arvin
aggregated approximately $472 million. The Company's obligations under the
Subordinated Debentures will also be effectively subordinated to all existing
and future obligations of Arvin's subsidiaries.
CERTAIN COVENANTS OF THE COMPANY
If (i) there shall have occurred any event that would constitute an Indenture
Event of Default or (ii) Arvin shall be in default with respect to its payment
of any obligations under the Guarantee or the Common Securities Guarantee, or
(iii) Arvin shall have given notice of its election to defer payments of
interest on the Subordinated Debentures by extending the interest payment
period, and such period, or any extension thereof, shall be continuing, then
(a) the Company shall not declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock, (b) the Company shall not, directly or
indirectly, and shall not allow any of its subsidiaries to, make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company that rank pari passu with or junior to
the Subordinated Debentures, and (c) Arvin shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Guarantee);
provided, however, that the restriction in clause (a) above does not apply (i)
to repurchases or acquisitions of common shares of the Company as contemplated
by any employment arrangement, benefit plan or other similar contract with or
for the benefit of employees, officers or directors entered into in the
ordinary course of business, (ii) as a result of an exchange or conversion of
any class or series of the Company's capital stock for the Company's common
shares, provided that such class or series of the Company's capital stock was
outstanding prior to the occurrence of such Indenture Event of Default or the
date upon which the Company gives notice of its election of such Extension
Period, as applicable, (iii) to the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
provided that such capital stock or security was outstanding prior to the
occurrence of such Indenture Event of Default or the date upon which the
Company gives notice of its election of such Extension Period, as applicable,
or (iv) to the payment of any stock dividend by the Company where the dividend
is paid in the form of the same stock as that on which the dividend is paid.
For so long as the Trust Securities remain outstanding, Arvin will covenant
(i) to directly or indirectly maintain 100% ownership of the Common Securities
of the Trust; provided, however, that any permitted successor of Arvin under
the Indenture may succeed to the Company's ownership of such Common Securities,
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(ii) not to cause, as sponsor of the Trust, or to permit, as holder of the
Common Securities, the dissolution, winding-up or termination of the Trust,
except in connection with a distribution of the Subordinated Debentures as
provided in the Declaration and in connection with certain mergers,
consolidations or amalgamations, each as permitted by the Declaration, and
(iii) to use its reasonable efforts to cause the Trust (a) to remain a
statutory business trust, except in connection with the distribution of
Subordinated Debentures to the holders of Trust Securities upon dissolution of
the Trust, the redemption of all of the Trust Securities of the Trust, or
certain mergers, consolidations or amalgamations, each as permitted by the
Declaration, and (b) to otherwise continue to be classified for United States
federal income tax purposes as a grantor trust.
REDEMPTION
Arvin shall have the right to redeem the Subordinated Debentures, (i) in
whole or in part, from time to time, on or after , 2007, or (ii)
prior to , 2007, in whole (but not in part) within 90 days following
the occurrence of a Tax Event, upon not less than 30 nor more than 60-days'
notice, in each case at the Redemption Price described below. See "Description
of the Capital Securities--Tax Event Redemption." Arvin is prohibited from
redeeming the Subordinated Debentures in part unless all accrued but unpaid
interest has been paid on all outstanding Subordinated Debentures for all semi-
annual interest periods terminating on or prior to the Redemption Date. The
proceeds of any such redemption will be used by the Trust to redeem the Capital
Securities.
The Redemption Price in the case of a redemption under (i) above shall equal
the following prices, expressed in percentages of the principal amount of the
Subordinated Debentures, together with accrued interest to but excluding the
Redemption Date, if the Subordinated Debentures are redeemed during the 12-
month period beginning of the years indicated below:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2007........................................................... %
2008........................................................... %
2009........................................................... %
2010........................................................... %
2011........................................................... %
2012........................................................... %
2013........................................................... %
2014........................................................... %
2015........................................................... %
2016........................................................... %
</TABLE>
and at 100% on or after , 2017.
The Redemption Price, in the case of a redemption prior to , 2007
following a Tax Event as described under (ii) above, shall equal the Make-Whole
Amount (as defined under "Description of the Capital Securities--Redemption"),
together with accrued interest to but excluding the Redemption Date.
PROPOSED TAX LEGISLATION
Certain tax law changes have been proposed that may, if enacted, deny
corporate issuers a deduction for interest in respect of certain debt
obligations, such as the Subordinated Debentures. See "United States Federal
Income Taxation--Proposed Tax Law Changes."
INTEREST
Each Subordinated Debenture shall bear interest at the rate of % per
annum from the original date of issuance, payable semi-annually in arrears on
, and of each year (each an "Interest
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Payment Date"), commencing , 1997, to the person in whose name
such Subordinated Debenture is registered, subject to certain exceptions, at
the close of business on the Business Day next preceding such Interest Payment
Date. In the event the Subordinated Debentures shall not continue to remain in
book-entry form, Arvin shall have the right to select record dates, which shall
be at least one Business Day before an Interest Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Subordinated Debentures is not a Business Day, then
payment of the interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, then such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Arvin shall have the right at any time, and from time to time, to defer
payments of interest on the Subordinated Debentures by extending the interest
payment period for a period not exceeding 10 consecutive semi-annual interest
payment periods (but not beyond the maturity date of the Subordinated
Debentures), at the end of which Extension Period, Arvin shall pay all interest
then accrued and unpaid (including any Additional Interest) together with
interest thereon compounded semi-annually at the rate specified for the
Subordinated Debentures to the extent permitted by applicable law ("Compound
Interest"). In the event the Company exercises this right, then during any
Extension Period, (a) the Company shall not declare or pay any dividend on,
make any distribution with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to any of its capital stock, (b) the Company
shall not, directly or indirectly, and shall not allow any of its subsidiaries
to, make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Company that rank pari
passu with or junior to the Subordinated Debentures and (c) the Company shall
not make any guarantee payments with respect to the foregoing (other than
pursuant to the Guarantee); provided, however, that, the restriction in clause
(a) above does not apply (i) to repurchases or acquisitions of common shares of
the Company as contemplated by any employment arrangement, benefit plan or
other similar contract with or for the benefit of employees, officers or
directors entered into in the ordinary course of business, (ii) as a result of
an exchange or conversion of any class or series of the Company's capital stock
for the Company's common shares, provided that such class or series of the
Company's capital stock was outstanding prior to the date upon which the
Company gives notice of its election of such Extension Period, (iii) to the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such Company capital stock
or the security being converted or exchanged, provided that such capital stock
or security was outstanding prior to the date upon which the Company gives
notice of its election of such Extension Period, or (iv) to the payment of any
stock dividend by the Company where the dividend is paid in the form of the
same stock as that on which the dividend is paid. Prior to the termination of
any such Extension Period, Arvin may further defer payments of interest by
extending the interest payment period; provided, however, that, such Extension
Period, including all such previous and further extensions, may not exceed 10
consecutive semi-annual interest payment periods or extend beyond the maturity
date of the Subordinated Debentures. Upon the termination of any Extension
Period and the payment of all amounts then due, Arvin may commence a new
Extension Period, subject to the requirements set forth in this section. No
interest during an Extension Period, except at the end thereof, shall be due
and payable. At the end of the Extension Period, Arvin will pay all interest
accrued and unpaid on the Subordinated Debentures, including any Additional
Interest and Compound Interest, to the holders in whose names the Subordinated
Debentures are registered on the first record date after the end of the
Extension Period. Arvin has no present intention of exercising its right to
defer payments of interest by extending the interest payment period on the
Subordinated Debentures. See "--Certain Covenants to the Company."
If the Institutional Trustee shall be the sole holder of the Subordinated
Debentures, Arvin shall give the Administrative Trustees and the Institutional
Trustee notice of its election of such Extension Period at least one
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Business Day before the earlier of (i) the next succeeding date on which
distributions on the Capital Securities are payable or (ii) the date the
Administrative Trustees are required to give notice to any applicable stock
exchange or self-regulatory organization or to holders of the Capital
Securities of the record date or the date such distribution is payable. The
Administrative Trustees shall give notice of Arvin's selection of such
Extension Period to the holders of the Capital Securities. If the Institutional
Trustee is not the sole holder of the Subordinated Debentures, Arvin shall give
the holders of the Subordinated Debentures notice of its election of such
Extension Period at least ten Business Days prior to the earlier of (i) the
next succeeding Interest Payment Date or (ii) the date upon which Arvin is
required to give notice to any applicable stock exchange or self-regulatory
organization or to holders of the Subordinated Debentures of the record or
payment date of such related interest payment.
ADDITIONAL INTEREST
If, at any time while the Institutional Trustee is the holder of any
Subordinated Debentures, the Trust or the Institutional Trustee shall be
required to pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States, or
any other taxing authority, then, in any such case, Arvin will pay as
additional interest ("Additional Interest") on the Subordinated Debentures held
by the Institutional Trustee such additional amounts as shall be required so
that the net amounts received and retained by the Trust and the Institutional
Trustee after paying any such taxes, duties, assessments or other governmental
charges will equal the amounts the Trust and the Institutional Trustee would
have received had no such taxes, duties, assessments or other governmental
charges been imposed.
INDENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to the Subordinated Debentures:
(a) default in payment of interest on the Subordinated Debentures,
including any Additional Interest in respect thereof, when due and
continuance of such default for a period of 30 days; provided, however,
that a valid extension of the interest payment period by Arvin shall not
constitute a default in the payment of interest for this purpose; or
(b) default in payment of principal or premium, if any, on the
Subordinated Debentures when due whether at maturity, upon redemption, by
declaration or otherwise; or
(c) failure to observe or perform any other covenant or agreement with
respect to the Subordinated Debentures contained in the Indenture or
established pursuant thereto for 90 days after written notice of such
failure shall have given to Arvin by the Debt Trustee or to Arvin and the
Debt Trustee by the holders of at least 25% in principal amount of the
outstanding Subordinated Debentures; or
(d) certain events of bankruptcy or reorganization of the Company; or
(e) the voluntary or involuntary dissolution, winding-up or termination
of the Trust, except in connection with the distribution of Subordinated
Debentures to the holders of Capital Securities upon dissolution of the
Trust, the redemption of all outstanding Trust Securities of the Trust and
certain mergers, consolidations or amalgamations permitted by the
Declaration.
The Indenture provides that if an Event of Default described in clauses (a),
(b), (c) and (e) of the preceding paragraph occurs and is continuing with
respect to the Subordinated Debentures, either the Debt Trustee or the holders
of not less than 25% in aggregate principal amount of the outstanding
Subordinated Debentures may declare, by written notice to the Company, the
principal of all of the Subordinated Debentures immediately due and payable. If
an Event of Default described in clause (d) of the preceding paragraph occurs
and is continuing, then the principal amount of the Subordinated Debentures,
together with the principal amount of all other series of debt securities
issued under the Indenture, will become immediately due and payable, without
any declaration or action on the part of the Debt Trustee or any holder of the
Subordinated Debentures.
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Under the Indenture, the holders of a majority in aggregate principal amount
of the Subordinated Debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Debt Trustee
with respect to the Subordinated Debentures. The holders of a majority in
aggregate principal amount of the Subordinated Debentures may also waive, on
behalf of the holders of all of the Subordinated Debentures, any past default,
except (i) a default in the payment of principal, premium, if any, or interest
due otherwise than by acceleration (unless such default has been cured and a
sum sufficient to pay all matured installments of interest and principal, and
any applicable premium has been deposited with the Debt Trustee) or (ii) a
default in the covenants described in the first paragraph under "--Certain
Covenants of the Company." The holders of a majority in aggregate principal
amount of the Subordinated Debentures may annul any declaration accelerating
the maturity of the Subordinated Debentures made in accordance with the
preceding paragraph if all defaults (other than the non-payment of accelerated
principal) have been cured or waived and a sum sufficient to pay all matured
installments of interest, principal due (other than by acceleration) and
premium, if any, on the Subordinated Debentures has been paid or deposited with
the Debt Trustee.
Upon the occurrence of an Event of Default under the Indenture, holders of a
majority in principal amount of the Capital Securities will have the right to
direct the Institutional Trustee to exercise its rights and remedies under the
Indenture as sole holder of the Subordinated Debentures. In addition, if the
Event of Default is due to the failure of the Company to pay interest or
principal on the Subordinated Debentures, when due, holders of the Capital
Securities may institute a Direct Action against the Company. See "Description
of the Capital Securities--Declaration Event of Default," "--Voting Rights,"
and "Effect of Obligations under the Subordinated Debentures and the
Guarantee."
BOOK-ENTRY AND SETTLEMENT
If Subordinated Debentures are distributed to holders of Capital Securities
in liquidation of such holders' interests in the Trust, the Company anticipates
that the Subordinated Debentures will be issued in the form of one or more
global certificates (each a "Global Security") registered in the name of the
Depositary or its nominee. Except under the limited circumstances described
below, Subordinated Debentures represented by the Global Security will not be
exchangeable for, and will not otherwise be issuable as, Subordinated
Debentures in definitive form. The Global Securities described above may not be
transferred except 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 or to a successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in such a Global Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Subordinated
Debentures in definitive form and will not be considered the holders (as
defined in the Indenture) thereof for any purpose under the Indenture, and no
Global Security representing Subordinated Debentures shall be exchangeable,
except for another Global Security of like denomination and tenor to be
registered in the name of the Depositary or its nominee or to a successor
Depositary or its nominee. Accordingly, each Beneficial Owner must rely on the
procedures of the Depositary or if such person is not a Participant, on the
procedures of the Participant through which such person owns its interest to
exercise any rights of a holder under the Indenture.
THE DEPOSITARY
If Subordinated Debentures are distributed to holders of Capital Securities
in liquidation of such holders' interests in the Trust, it is expected that DTC
will act as securities depositary for the Subordinated Debentures. For a
description of DTC and the specific terms of the depositary arrangements, see
"Description of the Capital Securities--Book-Entry Issuance--The Depository
Trust Company." As of the date of this Prospectus, the description therein of
DTC's book-entry system and DTC's practices as they relate to purchases,
transfers,
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<PAGE>
notices and payments with respect to the Capital Securities apply in all
material respects to any debt obligations represented by one or more Global
Securities held by DTC. Arvin may appoint a successor to DTC or any successor
depositary in the event DTC or such successor depositary is unable or
unwilling to continue as a depositary for the Global Securities.
None of Arvin, the Trust, the Institutional Trustee, the Debt Trustee, any
paying agent and any other agent of Arvin, the Institutional Trustee or the
Debt Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security for such Subordinated Debentures or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Subordinated Debentures
registered in the names of persons other than the Depositary or its nominee
only if (i) the Depositary notifies Arvin that it is unwilling or unable to
continue as a depositary for such Global Security and no successor depositary
shall have been appointed, (ii) the Depositary, at any time, ceases to be a
clearing agency registered under the Exchange Act at which time the Depositary
is required to be so registered to act as such depositary and no successor
depositary shall have been appointed or (iii) Arvin, in its sole discretion,
determines that such Global Security shall be so exchangeable. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Subordinated Debentures registered in such names as the
Depositary shall direct. It is expected that such directions will be based
upon instructions received by the Depositary from its Participants with
respect to ownership of beneficial interests in such Global Security.
In the event the Subordinated Debentures are not represented by one or more
Global Securities, certificates evidencing Subordinated Debentures may be
presented for registration of transfer (with the form of transfer endorsed
thereon duly executed) or exchange, at the corporate trust office of the Debt
Trustee or such other location designated by Arvin for such purpose with
respect to the Subordinated Debentures without service charge and upon payment
of any taxes and other governmental charges as described in the Indenture.
Arvin has initially appointed the Debt Trustee as security registrar with
respect to the Subordinated Debentures. Arvin may at any time rescind the
designation of any such security registrar or approve a change in the location
through which any such security registrar acts, except that Arvin will be
required to maintain a transfer agent at the place of payment. Arvin may at
any time designate additional transfer agents with respect to the Subordinated
Debentures.
Arvin shall not be required to (i) issue, exchange or register the transfer
of Subordinated Debentures during a period beginning at the opening of
business 15 days before the date of the mailing of a notice of redemption of
less than all of the Subordinated Debentures and ending at the close of
business on the date of such mailing or (ii) register the transfer of or
exchange any Subordinated Debentures called for redemption.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting Arvin and the Debt Trustee,
with the consent of the holders of at least a majority in principal amount of
the Subordinated Debentures (and any other series of subordinated debt
securities under the Indenture affected thereby), to modify the Indenture or
any supplemental indenture affecting the rights of the holders of the
Subordinated Debentures; provided that no such modification may, without the
consent of the holder of each outstanding Subordinated Debenture (or, if
applicable, other series of subordinated debt securities) affected thereby,
(i) extend the fixed maturity of the Subordinated Debentures, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any premium payable upon the redemption thereof or
(ii) reduce the aforesaid percentage of Subordinated Debentures the consent of
the holders of which is required for any such modification. In the event that
the consent of the Institutional Trustee, as holder of the Subordinated
Debentures, is required with respect to any
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modification or amendment, the Institutional Trustee is required, under the
Declaration, to request the direction of the holders of the Trust Securities
with respect to such modification or amendment and to vote on such matter as
directed by the holders of a majority in liquidation amount of the Trust
Securities. See "Description of the Capital Securities--Voting Rights."
In addition, Arvin and the Debt Trustee may execute, without the consent of
holders of the Subordinated Debentures, any supplemental indenture for certain
other customary purposes, including the creation of any new series of debt
securities.
CONSOLIDATION, MERGER AND SALE
The Company shall not consolidate with, or merge into, any corporation or
convey or transfer its properties and assets substantially as an entirety to
any entity unless (a) the successor entity is a corporation organized under the
laws of any state in the United States or the District of Columbia and
expressly assumes the obligations of the Company under the Indenture, and (b)
immediately thereafter no Event of Default and no event which, after notice or
lapse of time, or both, would become an Event of Default under the Indenture
shall have occurred and be continuing. Upon any such consolidation, merger,
conveyance or transfer, the successor corporation shall succeed to, and be
substituted for, the Company under the Indenture and thereafter the predecessor
corporation shall be relieved of all obligations and covenants under the
Indenture and the Subordinated Debentures.
DEFEASANCE AND DISCHARGE
The Indenture provides that the Company, at the Company's option, will be
discharged from any and all obligations in respect of the Subordinated
Debentures (except for certain obligations to register the transfer or exchange
of Subordinated Debentures, replace stolen, lost or mutilated Subordinated
Debentures, maintain paying agencies and hold moneys for payment in trust) if
the Company deposits, in trust with the Debt Trustee, money or U.S. government
obligations which through the payment of interest thereon and principal thereof
in accordance with their terms will provide money, in an amount sufficient to
pay all the principal of, and interest and premium, if any, on, the
Subordinated Debentures on the dates such payments are due in accordance with
the terms of such Subordinated Debentures. To exercise any such option, the
Company is required to deliver to the Debt Trustee an opinion of counsel, based
upon then applicable U.S. federal income tax law, to the effect that the
deposit and related defeasance would not cause the holders of the Subordinated
Debentures to recognize income, gain or loss for federal income tax purposes
and will be subject to United States federal income tax on the same amount and
in the same manner and at the same times as would have been the case if such
deposit, defeasance or discharge had not occurred.
GOVERNING LAW
The Indenture and the Subordinated Debentures will be governed by, and
construed in accordance with, the internal laws of the State of New York.
INFORMATION CONCERNING THE DEBT TRUSTEE
The Debt Trustee, prior to default, undertakes to perform only such duties as
are specifically set forth in the Indenture and, after default, shall exercise
the same degree of care and skill as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Debt Trustee
is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Subordinated Debentures, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby; but the foregoing shall not
relieve the Debt Trustee, upon the occurrence of an Indenture Event of Default,
from the obligation to exercise the rights and powers vested in it by the
Indenture and to use, in such exercise, the same degree of care and skill as a
prudent individual would use in the conduct of his or her own affairs. The Debt
Trustee is not required to expend or risk its own funds or otherwise incur
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personal financial liability in the performance of its duties if the Debt
Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
The Company and its affiliates may have normal banking relationships with the
Debt Trustee in the ordinary course of business.
MISCELLANEOUS
The Indenture provides that Arvin will pay (i) all fees and expenses related
to the offering of the Trust Securities and the Subordinated Debentures and the
organization, operation and termination of the Trust, including the fees and
expenses of the Trustees, and (ii) any and all taxes of the Trust (other than
United States withholding taxes attributable to the Trust or its assets).
The Company will have the right at all times to assign any of its rights or
obligations under the Indenture to a direct or indirect wholly-owned subsidiary
of Arvin; provided that, in the event of any such assignment, Arvin will remain
liable for all such obligations. Subject to the foregoing, the Indenture will
be binding upon and inure to the benefit of the parties thereto and their
respective successors and assigns. The Indenture provides that it may not
otherwise be assigned by the parties thereto.
EFFECT OF OBLIGATIONS UNDER THE
SUBORDINATED DEBENTURES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Trust is to (i)
issue the Trust Securities evidencing undivided beneficial interests in the
assets of the Trust, (ii) invest the proceeds from such issuance and sale in
the Subordinated Debentures and (iii) engage in only those other activities
necessary or incidental thereto.
As long as payments of interest and other payments are made when due on the
Subordinated Debentures, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because: (i) the
aggregate principal amount of Subordinated Debentures will be equal to the sum
of the aggregate liquidation amount of the Trust Securities; (ii) the interest
rate and the interest and other payment dates on the Subordinated Debentures
will match the distribution rate and distribution and other payment dates for
the Capital Securities; (iii) Arvin shall pay any costs, expenses, debts and
obligations (other than with respect to the Trust Securities) related to the
Trust and (iv) the Declaration provides that the Trustees shall not cause or
permit the Trust to, among other things, engage in any activity that is not
consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Capital Securities (to the extent funds therefor are
available) are guaranteed by Arvin as and to the extent set forth under
"Description of the Guarantee." If Arvin does not make interest and/or
principal payments on the Subordinated Debentures purchased by the Trust, the
Trust will not have sufficient funds to pay distributions on the Capital
Securities. The Guarantee will not apply to the payment of distributions and
other payments on the Capital Securities unless and until the Trust has
sufficient funds to make such distributions or other payments. The Guarantee
will constitute an unsecured obligation of the Company and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Company except those made pari passu or subordinate by their terms, (ii) pari
passu with the most senior preferred stock now or hereafter issued by the
Company and with any guarantee now or hereafter entered into by the Company in
respect of any preferred stock of any affiliate of the Company and (iii) senior
to the Company's common shares.
The Guarantee, when taken together with the back-up undertakings, consisting
of obligations of the Company as set forth in the Declaration (including the
obligation to pay expenses of the Trust), the Indenture and the Subordinated
Debentures issued to the Trust, provide a full and unconditional guarantee by
the Company of the Capital Securities. If the Guarantee Trustee fails to
enforce the Guarantee, any record holder of Capital Securities may institute a
legal proceeding directly against the Company to enforce the Guarantee
Trustee's rights
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under the Guarantee without first instituting a legal proceeding against the
Trust, the Guarantee Trustee or any other person or entity. In addition, if the
Company has failed to make a Guarantee Payment, a record holder of Capital
Securities may directly institute a proceeding against the Company for
enforcement of the Guarantee for such payment to the record holder of the
Capital Securities of the principal of or interest on the Subordinated
Debentures on or after the respective due dates specified in the Subordinated
Debentures, and the amount of the payment will be based on the holder's pro
rata share of the amount due and owing on all of the Capital Securities. The
Company has waived any right or remedy to require that any action be brought
first against the Trust or any other person or entity before proceeding
directly against the Company. The record holder in the case of the issuance of
one or more global Capital Securities certificates will be DTC acting at the
direction of its Direct Participants, who in turn will be acting at the
direction of the beneficial owners of the Capital Securities.
If the Institutional Trustee fails to enforce its rights with respect to the
Subordinated Debentures held by the Trust, any record holder of Capital
Securities may, to the fullest extent permitted by law, institute legal
proceedings directly against the Company to enforce the Institutional Trustee's
rights under the Subordinated Debentures without first instituting any legal
proceedings against the Institutional Trustee or any other person or entity. In
addition, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of the Company to pay interest,
principal or other required payment on the Subordinated Debentures on the date
such interest, principal or other payment is otherwise payable, then a record
holder of Capital Securities may institute Direct Action against the Company
for enforcement of payment on the Subordinated Debentures on or after the
respective due dates specified in the Subordinated Debentures. To the extent
the Company makes a payment to a record holder of Capital Securities in
connection with proceedings by such record holder directly against the Company,
the Company will be subrogated to the rights of the record holder of Capital
Securities to the extent of payments made by the Company to the record holder.
The record holder in the case of the issuance of one or more global Capital
Securities certificates will be DTC acting at the direction of its Direct
Participants, who in turn will be acting at the direction of the beneficial
owners of the Capital Securities.
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UNITED STATES FEDERAL INCOME TAXATION
GENERAL
In the opinion of Schiff Hardin & Waite, special tax counsel to the Company
and the Trust, the following is a summary of certain of the material United
States federal income tax consequences of the purchase, ownership and
disposition of Capital Securities. Unless otherwise stated, this summary deals
only with Capital Securities held as capital assets by holders who purchase
the Capital Securities upon original issuance ("Initial Holders"). It does not
deal with special classes of holders such as banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies,
dealers in securities or currencies, tax-exempt investors, or persons that
will hold the Capital Securities as a position in a "straddle," as part of a
"synthetic security" or "hedge," as part of a "conversion transaction" or
other integrated investment, or as other than a capital asset. This summary
also does not address the tax consequences to persons that have a functional
currency other than the U.S. Dollar or the tax consequences to shareholders,
partners or beneficiaries of a holder of Capital Securities. Further, it does
not include any description of any alternative minimum tax consequences or the
tax laws of any state or local government or of any foreign government that
may be applicable to the Capital Securities. This summary is based on the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations
thereunder and administrative and judicial interpretations thereof, as of the
date hereof, all of which are subject to change, possibly on a retroactive
basis.
CLASSIFICATION OF THE SUBORDINATED DEBENTURES
In connection with the issuance of the Subordinated Debentures, Schiff
Hardin & Waite, special tax counsel to the Company and the Trust, will render
its opinion generally to the effect that under then current law and assuming
full compliance with the terms of the Indenture (and certain other documents),
and based on certain facts and assumptions contained in such opinion, the
Subordinated Debentures will be classified for United States federal income
tax purposes as indebtedness of Arvin.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Capital Securities, Schiff Hardin &
Waite, special tax counsel to the Company and the Trust, will render its
opinion generally to the effect that, under then current law and assuming full
compliance with the terms of the Declaration and the Indenture (and certain
other documents), and based on certain facts and assumptions contained in such
opinion, the Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a
corporation.
Accordingly, for United States federal income tax purposes, each holder of
Capital Securities generally will be considered the owner of an undivided
interest in the Subordinated Debentures, and each holder will be required to
include in its gross income any OID accrued with respect to its allocable
share of those Subordinated Debentures.
ORIGINAL ISSUE DISCOUNT
Because the Company has the option, under the terms of the Subordinated Debt
Securities, to defer payments of interest by extending interest payment
periods for up to 10 semi-annual periods, all of the stated interest payments
on the Subordinated Debentures will be treated as "original issue discount."
Holders of debt instruments issued with OID must include that discount in
income on an economic accrual basis before the receipt of cash attributable to
the interest, regardless of their method of tax accounting. Generally, all of
a holder's taxable interest income with respect to the Subordinated Debentures
will be accounted for as OID, and actual distributions of stated interest will
not be separately reported as taxable income. The amount of OID that accrues
in any month will approximately equal the amount of the interest that accrues
on the Subordinated Debentures in that month at the stated interest rate. In
the event that the interest payment period is extended, holders will continue
to accrue OID approximately equal to the amount of the interest payment due at
the end of
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the extended interest payment period on an economic accrual basis over the
length of the extended interest period.
Because income on the Capital Securities will constitute OID, corporate
holders of Capital Securities will not be entitled to a dividends-received
deduction with respect to any income recognized with respect to the Capital
Securities.
MARKET DISCOUNT AND BOND PREMIUM
Holders of Capital Securities other than Initial Holders may be considered to
have acquired their undivided interests in the Subordinated Debentures with
market discount or acquisition premium as such phrases are defined for United
States federal income tax purposes. Such holders are advised to consult their
tax advisors as to the income tax consequences of the acquisition, ownership
and disposition of the Capital Securities.
RECEIPT OF SUBORDINATED DEBENTURES OR CASH UPON DISSOLUTION OF THE TRUST
At any time, the Company will have the right to dissolve the Trust and, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, cause the Subordinated Debentures to be distributed to holders in exchange
for the Trust Securities and in liquidation of the Trust. See "Description of
the Capital Securities--Distribution of the Subordinated Debentures." Under
current law, such a distribution, for United States federal income tax
purposes, would be treated as a non-taxable event to each holder, and each
holder would receive an aggregate tax basis in the Subordinated Debentures
equal to such holder's aggregate tax basis in its Capital Securities. A
holder's holding period in the Subordinated Debentures so received upon
dissolution of the Trust would include the period during which the Capital
Securities were held by such holder. If, however, the related special event is
a Tax Event which results in the Trust being treated as an association taxable
as a corporation, the distribution would likely constitute a taxable event to
holders of the Capital Securities.
Under certain circumstances described herein (see "Description of the Capital
Securities"), the Subordinated Debentures may be redeemed for cash and the
proceeds of such redemption distributed to holders in redemption of their
Capital Securities. Under current law, such a redemption would, for United
States federal income tax purposes, constitute a taxable disposition of the
redeemed Capital Securities, and a holder could recognize gain or loss as if it
sold such redeemed Capital Securities for cash. See "--Sales of Capital
Securities."
SALES OF CAPITAL SECURITIES
A holder that sells Capital Securities will recognize gain or loss equal to
the difference between its adjusted tax basis in the Capital Securities and the
amount realized on the sale of such Capital Securities. A holder's adjusted tax
basis in the Capital Securities generally will be its initial purchase price
increased by OID previously includable in such holder's gross income to the
date of disposition and decreased by payments received on the Capital
Securities. Such gain or loss generally will be a capital gain or loss and
generally will be a long-term capital gain or loss if the Capital Securities
have been held for more than one year.
The Capital Securities may trade at a price that does not accurately reflect
the value of accrued but unpaid interest with respect to the underlying
Subordinated Debentures. A holder who disposes of his Capital Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Subordinated Debentures through the
date of disposition in income as ordinary income, and to add such amount to his
adjusted tax basis in his pro rata share of the underlying Subordinated
Debentures deemed disposed of. To the extent the selling price is less than the
holder's adjusted tax basis (which will include, in the form of OID, all
accrued but unpaid interest) a holder will recognize a capital loss. Subject to
certain limited exceptions, capital losses cannot be applied to offset ordinary
income for United States federal income tax purposes.
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UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
beneficial owner of Capital Securities that is not a U.S. person. For purposes
of this discussion, a "U.S. person" means a citizen or resident of the United
States, a corporation or partnership created or organized in the United States
or under the law of the United States or of any State or political subdivision
of the foregoing, any estate whose income is includible in gross income for
U.S. federal income tax purposes regardless of its source or a "United States
Trust." A "United States Trust" is (a) for taxable years beginning after
December 31, 1996, or if the trustee elects to apply the following definition
to an earlier taxable year, any trust if, and only if, (i) a court within the
United States is able to exercise primary supervision over the administration
of the trust and (ii) one or more U.S. trustees have the authority to control
all substantial decisions of the trust, and (b) for all other taxable years,
any trust whose income is includible in gross income for United States federal
income tax purposes regardless of its source.
Under present United States federal income tax law: (i) payments by the Trust
or any of its paying agents to any holder of a Capital Security who or which is
a United States Alien Holder will not be subject to United States federal
withholding tax; provided that, (a) the beneficial owner of the Capital
Security does not actually or constructively own 10 percent or more of the
total combined voting power of all classes of stock of Arvin entitled to vote,
(b) the beneficial owner of the Capital Security is not a controlled foreign
corporation that is related to the Company through stock ownership, and (c)
either (A) the beneficial owner of the Capital Security certifies to the Trust
or its agent, under penalties of perjury, that it is not a United States holder
and provides its name and address or (B) a securities clearing organization,
bank or other financial institution that holds customers' securities in the
ordinary course of its trade or business (a "Financial Institution"), and holds
the Capital Security in such capacity, that certifies to the Trust or its
agent, under penalties of perjury, that such statement has been received from
the beneficial owner by it or by a Financial Institution between it and the
beneficial owner and furnishes the Trust or its agent with a copy thereof; and
(ii) a United States Alien Holder of a Capital Security will not be subject to
United States federal withholding tax on any gain realized upon the sale or
other disposition of a Capital Security.
Gain recognized on the disposition of Capital Securities will be subject to
United States federal income tax if (i) such gain is effectively connected with
a trade or business conducted by such United States Alien Holder within the
United States (in which case the branch profits tax may also apply if the
United States Alien Holder is a foreign corporation), or (ii) in the case of a
United States Alien Holder that is an individual, such United States Alien
Holder is present in the United States for a period or periods aggregating 183
days or more in the taxable year of the sale or exchange and certain other
conditions are met.
If a United States Alien Holder is engaged in a trade or business within the
United States and interest (including original issue discount) and premium, if
any, on Capital Securities is effectively connected with the conduct of such
trade or business, such United States Alien Holder may be subject to United
States federal income tax on such interest (including original issue discount)
and premium at ordinary federal income tax rates on a net basis (in which case
the branch profits tax may also apply if the United States Alien Holder is a
foreign corporation).
On April 15, 1996, proposed Treasury Regulations (the "Proposed Regulations")
were issued which, if adopted in final form, could affect the United States
taxation of United States Alien Holders, including changing the certification
requirements. The Proposed Regulations are generally proposed to be effective
for payments after 1997, regardless of the issue date of the note with respect
to which such payments were made. It cannot be predicted at this time whether
the Proposed Regulations will become effective as proposed or what, if any,
modifications may be made to them.
PROPOSED TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996, the revenue
portion of President Clinton's fiscal 1997 budget proposal, was released. The
Bill would, among other things, treat as equity, instruments issued
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by a corporation that have a maximum term of more than 20 years and that are
not shown as indebtedness on the consolidated balance sheet of the issuer. The
above-described provisions of the Bill were proposed to be effective generally
for instruments issued on or after December 7, 1995. However, on March 29,
1996, the Chairmen of the Senate Finance and House Ways and Means Committees
issued 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 views expressed in the
Joint Statement. Under current law, the Subordinated Debentures will be treated
as indebtedness of the Company and the Company will be able to deduct interest
on the Subordinated Debentures beneficially held by the holders of the Capital
Securities. However, if the provision of the Bill regarding a 20-year term is
enacted with retroactive effect with regard to the Subordinated Debentures, the
Company will not be entitled to an interest deduction with respect to the
Subordinated Debentures. There can be no assurance that current or future
legislative proposals, adverse judicial decisions, final legislation or
official administrative pronouncements will not affect the ability of the
Company to deduct interest on the Subordinated Debentures, giving rise to a Tax
Event which would permit the Company to cause the redemption of the Capital
Securities prior to , 2007 (the first date on which the Company
would otherwise be able to cause a redemption of Capital Securities) as
described more fully under "Description of Capital Securities--Redemption" and
"--Tax Event Redemption."
INFORMATION REPORTING TO HOLDERS
Generally, income on the Capital Securities will be reported to holders on
Forms 1099, which forms should be mailed to holders of Capital Securities by
January 31 following each calendar year.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Capital Securities may
be subject to a "backup" withholding tax of 31 percent unless the holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the holder's United States federal income tax,
provided the required information is provided to the Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR 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.
ERISA CONSIDERATIONS
Each fiduciary of a pension, profit sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "Plan"), should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an investment
in the Capital Securities. Accordingly, among other factors, the fiduciary
should consider whether the investment would satisfy the prudence and
diversification requirements of ERISA and would be consistent with the
documents and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well as
individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from engaging in certain transactions involving "plan
assets" with persons who are "parties in interest" under ERISA or "disqualified
persons" under the Code ("Parties in Interest") with respect to such Plans. A
violation of these "prohibited
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transaction" rules may result in an excise tax or other liabilities under
ERISA and/or Section 4975 of the Code for such persons, unless exemptive
relief is available under an applicable statutory or administrative exemption.
Employee benefit plans that are governmental plans (as defined in Section
3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA)
and foreign plans (as described in Section 4(b)(4) of ERISA) are not subject
to the requirements of ERISA or Section 4975 of the Code but are subject to
certain other legal restrictions.
Under a regulation (the "Plan Assets Regulation") issued by U.S. Department
of Labor (the "DOL"), the assets of the Trust would be deemed to be "plan
assets" of a Plan for purposes of ERISA and Section 4975 of the Code if "plan
assets" of the Plan were used to acquire an equity interest in the Trust and
no exception were applicable under the Plan Assets Regulation. An "equity
interest" is defined under the Plan Assets Regulation as any interest in an
entity other than an instrument that is treated as indebtedness under
applicable local law and that has no substantial equity features and
specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets Regulation, the assets
of the Trust would not be deemed to be "plan assets" of investing Plans if,
immediately after the most recent acquisition of any equity interest in the
Trust, less than 25% of the value of each class of equity interests in the
Trust were held by Plans, including plans not subject to ERISA or Section 4975
of the Code (such as governmental, church and foreign plans), and entities
whose underlying assets include "plan assets" of any Plan (collectively,
"Benefit Plan Investors"), or if the Capital Securities were "publicly-offered
securities" for purposes of the Plan Assets Regulation. No assurance can be
given that the value of the Capital Securities held by Benefit Plan Investors
will be less than 25% of the total value of such Capital Securities at the
completion of the initial offering or thereafter, and no monitoring or other
measures will be taken with respect to the satisfaction of the conditions to
this exception. In addition, no assurance can be given that the Capital
Securities would be considered to be "publicly-offered securities" under the
Plan Assets Regulation. All of the Common Securities will be purchased and
initially held by the Company.
Certain transactions involving the Trust could be deemed to constitute
direct or indirect prohibited transactions under Section 406 of ERISA and
Section 4975 of the Code with respect to a Plan if the Capital Securities were
acquired with "plan assets" of such Plan and assets of the Trust were deemed
to be "plan assets" of Plans investing in the Trust. In addition,
notwithstanding the plan asset status of the Trust, a Plan's acquisition of
Capital Securities could give rise to a prohibited transaction under Section
406 of ERISA and Section 4975 of the Code if the Company, the Institutional
Trustee or any Administrative Trustee is a Party in Interest to such Plan and
no exemption is available.
The DOL has issued prohibited transaction class exemptions ("PTCEs") that
may provide exemptive relief with respect to the acquisition and holding of
the Capital Securities by Plans. These class exemptions include PTCE 84-14
(respecting transactions determined by independent qualified professional
asset managers), PTCE 96-23 (respecting transactions determined by in-house
asset managers), PTCE 90-1 (for certain transactions involving insurance
company separate accounts), PTCE 91-38 (for certain transactions involving
bank collective funds), and PTCE 95-60 (for certain transactions involving
insurance company general accounts). There can be no assurance that these (or
any other exemption) will provide an exemption from all of the potential
prohibited transactions involving the Trust. By purchasing Capital Securities,
each purchaser shall be deemed to represent that its purchase will not
constitute a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code.
Due to the complexity of these rules, and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is
particularly important that fiduciaries or other persons considering
purchasing the Capital Securities on behalf of, or with "plan assets" of, any
Plan consult with their counsel regarding the potential consequences if the
assets of the Trust were deemed to be "plan assets," and the availability of
exemptive relief under the exemptions described above or any other applicable
exemption with respect to any of the potential prohibited transactions
described above.
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UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement"), the Trust has agreed to sell to each of the
underwriters named below (the "Underwriters"), and each of the Underwriters,
for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated, Lehman Brothers
Inc., Dean Witter Reynolds Inc., A.G. Edwards & Sons, Inc., PaineWebber
Incorporated and Salomon Brothers Inc are acting as representatives (the
"Representatives"), has severally agreed to purchase the number of Capital
Securities set forth opposite its name below. In the Underwriting Agreement,
the several Underwriters have agreed, subject to the terms and conditions set
forth therein, to purchase all of the Capital Securities offered hereby if any
of the Capital Securities are purchased. In the event of default by an
Underwriter, the Underwriting Agreement provides that, in certain
circumstances, the purchase commitments of the nondefaulting Underwriters may
be increased or the Underwriting Agreement may be terminated.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER CAPITAL SECURITIES
----------- ------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.....................................
Lehman Brothers Inc...................................
Dean Witter Reynolds Inc..............................
A.G. Edwards & Sons, Inc..............................
PaineWebber Incorporated..............................
Salomon Brothers Inc..................................
-------
Total............................................ 100,000
=======
</TABLE>
The Underwriters propose to offer the Capital Securities in part directly to
the public at the initial public offering price, as set forth on the cover page
of this Prospectus, and in part to certain securities dealers at such price
less a concession of $ per Capital Security. The Underwriters may allow, and
such dealers may reallow, a concession not in excess of $ per Capital
Security to certain brokers and dealers. After the Capital Securities are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the Representatives.
In view of the fact that the proceeds of the sale of the Capital Securities
will be used to purchase the Subordinated Debentures of Arvin, the Underwriting
Agreement provides that Arvin will pay as compensation ("Underwriters'
Compensation") to the Underwriters for the Underwriters' arranging the
investment therein of such proceeds, an amount in immediately available funds
of $ per Capital Security (or $ in the aggregate) for the accounts of the
several Underwriters.
During a period of 30 days from the date of the pricing of the Capital
Securities, neither the Trust nor Arvin will, without the prior written consent
of the Representatives, directly or indirectly, sell, offer to sell, contract
to sell, grant any option for the sale of, or otherwise dispose of, any Capital
Securities, any security convertible into or exchangeable into or exercisable
for Capital Securities or the Subordinated Debentures or any debentures
substantially similar to the Subordinated Debentures or any equity securities
substantially similar to the Capital Securities (except for the Subordinated
Debentures and the Capital Securities offered hereby).
Because the National Association of Securities Dealers, Inc. (the "NASD") is
expected to view the Capital Securities offered hereby as interests in a direct
participation program, the offering is being made in compliance with Rule 2810
of the NASD's Conduct Rules. The Underwriters will not confirm sales to any
accounts over which they exercise discretionary authority without the prior
written approval of the transaction by the customer.
Prior to this offering, there has been no public market for the Capital
Securities. The Representatives have advised Arvin that the Underwriters intend
to make a market in the Capital Securities, but they are not obligated to do so
and may discontinue such market making activities, if commenced, at any time
without notice. No assurance can be given as to the liquidity of the trading
market for the Capital Securities.
49
<PAGE>
Arvin and the Trust have agreed to indemnify the Underwriters against, or to
contribute to payments that the Underwriters may be required to make in respect
of, certain liabilities, including liabilities under the Securities Act.
Certain of the Underwriters engage in transactions with, and, from time to
time, have performed services for, Arvin in the ordinary course of business.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company and the Trust by
Schiff Hardin & Waite, Chicago, Illinois, and for the Underwriters by Mayer,
Brown & Platt, Chicago, Illinois. Certain matters of Delaware law relating to
the validity of the Capital Securities will be passed upon by Richards, Layton
& Finger, P.A., Wilmington, Delaware, special Delaware counsel to the Company
and the Trust.
EXPERTS
The financial statements of the Company incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of Arvin Industries, Inc. for the
year ended December 31, 1995 include the financial statements of Space
Industries International, Inc. (an approximately 70% owned subsidiary) through
September 29, 1995, the date of its sale. The financial statements of the
Company have been so incorporated in reliance on the report of Price Waterhouse
LLP, independent accountants, and, with respect to the financial statements of
Space Industries International, Inc. as of January 1, 1995 and for the years
ended January 1, 1995 and January 2, 1994, in reliance on the report of KPMG
Peat Marwick LLP, independent accountants, given on the authority of such firms
as experts in auditing and accounting.
50
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPO-
RATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE TRUST OR THE UN-
DERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 3
Incorporation of Certain Documents by Reference........................... 3
Prospectus Summary........................................................ 5
Risk Factors.............................................................. 9
The Trust................................................................. 13
The Company............................................................... 14
Capitalization............................................................ 16
Ratios of Earnings to Fixed Charges And Earnings to Combined Fixed Charges
and Preferred Dividends.................................................. 17
Accounting Treatment...................................................... 17
Use of Proceeds........................................................... 17
Description of the Capital Securities..................................... 18
Description of the Guarantee.............................................. 31
Description of the Subordinated Debentures................................ 33
Effect of Obligations Under the Subordinated Debentures and the Guarantee. 42
United States Federal Income Taxation..................................... 44
ERISA Considerations...................................................... 47
Underwriting.............................................................. 49
Legal Matters............................................................. 50
Experts................................................................... 50
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$100,000,000
LOGO
ARVIN CAPITAL I
% CAPITAL SECURITIES
GUARANTEED TO THE EXTENT SET
FORTH HEREIN BY
ARVIN INDUSTRIES, INC.
----------------
PROSPECTUS
----------------
MERRILL LYNCH & CO.
LEHMAN BROTHERS
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
An itemized statement of the estimated amount of the expenses, other than
underwriting discounts and commissions, incurred and to be incurred by Arvin
Industries, Inc. ("Arvin") in connection with the issuance and distribution of
the Securities registered pursuant to this registration statement is as
follows:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee................... $ 30,304
Printing and engraving expenses................................. 70,000
Accounting fees and expenses.................................... 35,000
Legal fees and expenses......................................... 140,000
Trustee and agent fees and expenses............................. 20,000
Rating agency fees.............................................. 75,000
Blue sky fees, expenses and legal fees.......................... 15,000
NASD filing fees and expenses................................... 10,500
Miscellaneous................................................... 4,196
--------
Total....................................................... $400,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 8 of the Amended and Restated By-Laws of Arvin, as amended, and
Article 10 of its Restated Articles of Incorporation, as amended, both provide
for indemnification of officers and directors of Arvin against expenses
incurred by any of them in certain stated proceedings and under certain stated
conditions.
Chapter 37 of the Indiana Business Corporation Law authorizes every Indiana
corporation to indemnify its officers and directors under certain
circumstances against liability incurred in connection with the defense of
proceedings in which they are made parties, or threatened to be made parties,
by reason of such relationship to the corporation, except where they are
adjudged liable for specific types of negligence or misconduct in the
performance of their duties to the corporation. Chapter 37 also requires every
Indiana corporation to indemnify any of its directors and, unless such
corporation's articles of incorporation provide otherwise, any of its officers
who were wholly successful, on the merits or otherwise, in the defense of any
such proceeding against reasonable expenses incurred by such director in
connection with such proceeding.
Officers and directors of Arvin are presently covered by insurance which
(with certain exceptions and within certain limitations) indemnifies them
against any losses or liabilities arising from any alleged "wrongful act,"
including any breach of duty, neglect, error, misstatement, misleading
statement, omission or other acts done or wrongfully attempted.
The Declaration of Trust of Arvin Capital I (the "Trust") provides that to
the fullest extent permitted by applicable law, the Sponsor shall indemnify
and hold harmless each of the Administrative Trustees of the Trust, any
Affiliate of any such Administrative Trustee, any officer, director,
shareholder, member, partner, employee, representative or agent of any such
Administrative Trustee, or any employee or agent of the Trust or its
Affiliates (each a "Company Indemnified Person"), from and against any loss,
damage or claim incurred by such Company Indemnified Person by reason of any
act or omission performed or omitted by such Company Indemnified Person in
good faith on behalf of the Trust and in a manner such Company Indemnified
Person reasonably believed to be in or not opposed to the best interests of
the Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was illegal. The Declaration of Trust
also provides that, to the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by a Company Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Company prior to the final disposition of such claim,
demand, action suit or proceeding upon receipt by the Company of any
undertaking by or on behalf of the Company Indemnified Person to repay
II-1
<PAGE>
such amount if it shall be determined that the Company Indemnified Person is
not entitled to be indemnified as authorized in the Declaration of Trust. The
Declaration of Trust further provides that no Company Indemnified Person shall
be liable, responsible or accountable in damages or otherwise to the Trust or
any Covered Person (as defined therein) or for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such Company
Indemnified Person in good faith on behalf of the Trust and in a manner such
Company Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Company Indemnified Person by the Declaration of
Trust or by law, except that a Company Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Company Indemnified
Person's gross negligence or willful misconduct with respect to acts or
omissions. In addition, certain sections of the form of Purchase Agreement
filed as an Exhibit hereto provides for indemnification of the Registrants and
their directors and officers by the underwriters or agents against certain
liabilities, including certain liabilities under the 1933 Act.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S> <C>
1.1 Form of Purchase Agreement for offering of Capital Securi-
ties
4.1* Certificate of Trust of Arvin Capital I
4.2* Declaration of Trust of Arvin Capital I
4.3 Form of Amended and Restated Declaration of Trust of Arvin
Capital I
4.4 Form of Indenture between Arvin Industries, Inc. and Wil-
mington Trust Company, as Trustee
4.5 Form of Supplemental Indenture between Arvin Industries,
Inc. and Wilmington Trust Company, as Trustee in connec-
tion with the issuance of the Junior Subordinated Defer-
rable Interest Debentures
4.6 Form of Capital Security Certificate (included in Exhibit
4.3)
4.7 Form of Capital Securities Guarantee Agreement
4.8 Form of Junior Subordinated Deferrable Interest Debenture
(included in Exhibit 4.5)
5.1 Opinion of Schiff Hardin & Waite
5.2 Opinion of Richards, Layton & Finger, P.A.
8.1 Opinion of Schiff Hardin & Waite
12.1* Computations of Ratio of Earnings to Fixed Charges and Ra-
tio of Earnings to Combined Fixed Charges and Capital
Dividends
23.1 Consent of Price Waterhouse LLP
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Schiff Hardin & Waite (included in Exhibits 5.1
and 8.1)
23.4 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2)
24.1* Powers of Attorney (included on the signature page and in
Exhibit 4.2)
25.1 Statement of Eligibility on Form T-1 under the Trust In-
denture Act of 1939, as amended, of Wilmington Trust Com-
pany, as Debt Trustee under the Indenture
25.2 Statement of Eligibility on Form T-1 under the Trust In-
denture Act of 1939, as amended, of Wilmington Trust Com-
pany, as Institutional Trustee under the Declaration of
Trust of Arvin Capital I
25.3 Statement of Eligibility on Form T-1 under the Trust In-
denture Act of 1939, as amended, of Wilmington Trust Com-
pany, as Guarantee Trustee under the Capital Securities
Guarantee for the benefit of the holders of Capital Secu-
rities of Arvin Capital I
</TABLE>
- --------
*Previously filed.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(a) that, for purposes of determining any liability under the Securities
Act of 1933, each filing of a registrant's annual report pursuant to
Sections 13(a) or 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.
(b) 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 registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.
(c) for the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions described under Item 15 above, or
otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in such Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrants 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
registrants will, unless in the opinion of their counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by them is against
public policy as expressed in such Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
ARVIN INDUSTRIES, INC., HAS DULY CAUSED THIS AMENDMENT TO REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF COLUMBUS AND STATE OF INDIANA, ON THIS 10TH DAY OF
JANUARY, 1997.
Arvin Industries, Inc.
Byron O. Pond
By: _________________________________
Byron O. Pond
Chairman and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Byron O. Pond Chairman and Chief Executive January 10, 1997
____________________________________ Officer
Byron O. Pond
Richard A . Smith Vice President-Finance, January 10, 1997
. __________________________________ Chief Financial Officer
Richard A. Smith and Director
William M. Lowe Controller and Chief January 10, 1997
____________________________________ Accounting Officer
William M. Lowe
Joseph P. Allen* Director January 10, 1997
____________________________________
Joseph P. Allen
James K. Baker* Director January 10, 1997
____________________________________
James K. Baker
Steven C. Beering* Director January 10, 1997
____________________________________
Steven C. Beering
Joseph P. Flannery* Director January 10, 1997
____________________________________
Joseph P. Flannery
William D. George, Jr.* Director January 10, 1997
____________________________________
William D. George, Jr.
Ivan W. Gorr* Director January 10, 1997
____________________________________
Ivan W. Gorr
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Richard W. Hanselman* Director January 10, 1997
____________________________________
Richard W. Hanselman
V. William Hunt* Director January 10, 1997
____________________________________
V. William Hunt
Don J. Kacek* Director January 10, 1997
____________________________________
Don J. Kacek
Frederick R. Meyer* Director January 10, 1997
____________________________________
Frederick R. Meyer
Arthur R. Velasquez* Director January 10, 1997
____________________________________
Arthur R. Velasquez
- --------
* By Richard A. Smith, as attorney-in-fact
Richard A. Smith
________________________
Richard A. Smith
</TABLE>
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
ARVIN CAPITAL I, HAS DULY CAUSED THIS AMENDMENT TO REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY
OF COLUMBUS AND STATE OF INDIANA, ON THIS 10TH DAY OF JANUARY, 1997.
Arvin Capital I
By: Arvin Industries, Inc.
Richard A. Smith
By: _________________________________
Richard A. Smith, Vice
President--Finance and Chief
Financial Officer
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------- ----------- ----------
<C> <S> <C>
1.1 Form of Purchase Agreement for offering of Capital Se-
curities
4.1* Certificate of Trust of Arvin Capital I
4.2* Declaration of Trust of Arvin Capital I
4.3 Form of Amended and Restated Declaration of Trust of
Arvin Capital I
4.4 Form of Indenture between Arvin Industries, Inc. and
Wilmington Trust Company, as Trustee
4.5 Form of Supplemental Indenture between Arvin Indus-
tries, Inc. and Wilmington Trust Company, as Trustee
in connection with the issuance of the Junior Subordi-
nated Deferrable Interest Debentures
4.6 Form of Capital Security Certificate (included in Ex-
hibit 4.3)
4.7 Form of Capital Securities Guarantee Agreement
4.8 Form of Junior Subordinated Deferrable Interest Deben-
ture (included in Exhibit 4.5)
5.1 Opinion of Schiff Hardin & Waite
5.2 Opinion of Richards, Layton & Finger, P.A.
8.1 Opinion of Schiff Hardin & Waite
12.1* Computations of Ratio of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed Charges and Capi-
tal Dividends
23.1 Consent of Price Waterhouse LLP
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Schiff Hardin & Waite (included in Exhibits
5.1 and 8.1)
23.4 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2)
24.1* Powers of Attorney (included on the signature page and
in Exhibit 4.2)
25.1 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Wilmington Trust
Company, as Debt Trustee under the Indenture
25.2 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Wilmington Trust
Company, as Institutional Trustee under the Declara-
tion of Trust of Arvin Capital I
25.3 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Wilmington Trust
Company, as Guarantee Trustee under the Capital Secu-
rities Guarantee for the benefit of the holders of
Capital Securities of Arvin Capital I
</TABLE>
- --------
*Previously filed.
<PAGE>
EXHIBIT 1.1
DRAFT 1/15/97
ARVIN INDUSTRIES, INC.
(AN INDIANA CORPORATION); AND
ARVIN CAPITAL I
(A DELAWARE STATUTORY BUSINESS TRUST)
100,000
CAPITAL SECURITIES ____%
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
PURCHASE AGREEMENT
Dated: _______________, 1997
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
<S> <C>
PURCHASE AGREEMENT......................................................... 1
SECTION 1. Representations and Warranties.............................. 4
(a) Representations and Warranties by the Offerors.............. 4
(i) Compliance with Registration Requirements.......... 4
(ii) Incorporated Documents............................. 5
(iii) Independent Accountants............................ 6
(iv) Financial Statements............................... 6
(v) No Material Adverse Change in Business............. 6
(vi) Good Standing of the Company....................... 7
(vii) Good Standing of Subsidiaries...................... 7
(viii) Capitalization; Descriptions....................... 8
(ix) Existence and Good Standing of the Trust........... 8
(x) Common Securities.................................. 8
(xi) Capital Stock...................................... 9
(xii) Authorization of Declaration....................... 9
(xiii) Guarantee Agreements............................... 9
(xiv) Capital Securities................................. 9
(xv) Authorization of Indenture......................... 10
(xvi) Authorization of Subordinated Debentures........... 10
(xvii) Authorization of Agreement......................... 10
(xviii) Absence of Defaults and Conflicts.................. 10
(xix) Absence of Labor Dispute........................... 11
(xx) Absence of Proceedings............................. 11
(xxi) Accuracy of Exhibits............................... 12
(xxii) Possession of Intellectual Property................ 12
(xxiii) Absence of Further Requirements.................... 12
(xxiv) Possession of Licenses and Permits................. 13
(xxv) Title to Property.................................. 13
(xxvi) Compliance with Cuba Act........................... 14
(xxvii) Investment Company Act............................. 14
(xxviii) Environmental Laws................................. 14
(xxix) Price Stabilization................................ 15
(xxx) Taxes.............................................. 15
(b) Officer and Trustee Certificates............................ 15
SECTION 2. Sale and Delivery to Underwriters; Closing.................. 15
(a) Capital Securities..... .................................... 15
(b) Commission.................................................. 16
(c) Payment..................................................... 16
(d) Denominations; Registration................................. 17
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 3. Covenants of the Offerors................................... 17
(a) Compliance with Securities Regulations and
Commission Requests......................................... 17
(b) Filing of Amendments........................................ 17
(c) Delivery of Registration Statements......................... 18
(d) Delivery of Prospectuses.................................... 18
(e) Continued Compliance with Securities Laws................... 18
(f) Blue Sky Qualifications..................................... 19
(g) Rule 158.................................................... 19
(h) Use of Proceeds............................................. 19
(i) Listing..................................................... 19
(j) Restriction on Sale of Securities........................... 20
(k) Existence and Good Standing of the Trust.................... 20
(l) Reporting Requirements...................................... 20
(m) Existence and Good Standing of the Trust.................... 20
SECTION 4. Payment of Expenses......................................... 20
(a) Expenses.................................................... 20
(b) Termination of Agreement.................................... 21
SECTION 5. Conditions of Underwriters' Obligations..................... 22
(a) Effectiveness of Registration Statement..................... 22
(b) Opinion of Counsel for Offerors............................. 22
(c) Opinion of General Counsel for Company...................... 22
(d) Opinion of Special Delaware Counsel for Offerors............ 22
(e) Opinion of Counsel for Institutional Trustee, Debt Trustee
and Guarantee Trustee....................................... 23
(f) Opinion of Counsel for Underwriters......................... 23
(g) Officer and Trustee Certificates............................ 23
(h) Accountant's Comfort Letter................................. 24
(i) Bring-down Comfort Letter................................... 24
(j) Maintenance of Rating....................................... 24
(k) Approval of Listing......................................... 25
(l) No Objection................................................ 25
(m) Additional Documents........................................ 25
(n) Termination of Agreement.................................... 25
SECTION 6. Indemnification............................................. 25
(a) Indemnification of Underwriters............................. 25
(b) Indemnification of Company, Trust, Officers, Directors and
Trustees.................................................... 26
(c) Actions against Parties; Notification....................... 27
(d) Settlement without Consent if Failure to Reimburse.......... 28
SECTION 7. Contribution................................................ 28
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery................................................... 29
SECTION 9. Termination of Agreement................................... 30
(a) Termination; General....................................... 30
(b) Liabilities................................................ 30
SECTION 10. Default by One or More of the Underwriters................. 30
SECTION 11. Notices.................................................... 31
SECTION 12. Parties.................................................... 31
SECTION 13. GOVERNING LAW AND TIME..................................... 32
SECTION 14. Effect of Headings......................................... 32
Schedule A - List of Underwriters................................. Sch. A-1
Schedule B - Pricing Information.................................. Sch. B-1
Schedule C - List of subsidiaries................................. Sch. C-1
Schedule D - Environmental Matters................................ Sch. D-1
Exhibit A - Form of Opinion of Offerors' Counsel to be Delivered
Pursuant to Section 5(b).................................. A-1
Exhibit B - Form Of Opinion Of Company's General Counsel To Be
Delivered Pursuant To Section 5(c)........................ B-1
Exhibit C - Form of Opinion of Special Delaware Counsel For The
Company and The Trust To Be Delivered Pursuant to
Section 5(d).............................................. C-1
Exhibit D - Form Of Opinion Of Counsel For Institutional Trustee,
Guarantee Trustee And Debt Trustee To Be Delivered
Pursuant To Section 5(e).................................. D-1
</TABLE>
iii
<PAGE>
ARVIN INDUSTRIES, INC.
(an Indiana corporation); and
ARVIN CAPITAL I
(a Delaware statutory business trust)
100,000
____% Capital Securities
(Liquidation Amount $1,000 Per Capital Security)
PURCHASE AGREEMENT
------------------
________ __, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
LEHMAN BROTHERS INC.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Arvin Capital I (the "Trust"), a statutory business trust created under
the Business Trust Act (the "Delaware Act") of the State of Delaware (Chapter
38, Title 12 of the Delaware Code, 12 Del. C. (S)(S) 3801 et seq.), and Arvin
Industries, Inc., an Indiana corporation (the "Company" and, together with the
Trust, the "Offerors") confirm their agreement (the "Agreement") with Merrill
<PAGE>
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch"), Lehman Brothers Inc., Dean Witter Reynolds Inc., A.G. Edwards & Sons,
Inc., PaineWebber Incorporated, Salomon Brothers Inc and each of the other
Underwriters named in Schedule A hereto (collectively, the "Underwriters," which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Merrill Lynch, Lehman Brothers Inc., Dean Witter
Reynolds Inc., A.G. Edwards & Sons, Inc., PaineWebber Incorporated and Salomon
Brothers Inc are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Trust, and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of __% Capital Securities (liquidation amount $1,000 per
preferred security) of the Trust (the "Capital Securities") set forth in
Schedule A hereto. The Capital Securities are more fully described in the
Prospectus (as defined below).
The Capital Securities will be guaranteed by the Company, to the extent set
forth in the Prospectus, with respect to distributions and amounts payable upon
liquidation or redemption (the "Capital Securities Guarantee") pursuant to the
Capital Securities Guarantee Agreement (the "Capital Securities Guarantee
Agreement") to be dated as of Closing Time (as defined below), executed and
delivered by the Company and Wilmington Trust Company, as trustee (the
"Guarantee Trustee"), for the benefit of the holders from time to time of the
Capital Securities, and entitled to the benefits of certain backup undertakings
described in the Prospectus with respect to the Company's agreement pursuant to
the Supplemental Indenture (as defined below) to pay all expenses relating to
the administration of the Trust. The Offerors each understand that the
Underwriters propose to make a public offering of the Capital Securities as soon
as they deem advisable after this Agreement has been executed and delivered, and
the Declaration (as defined below), the Indenture (as defined below), and the
Capital Securities Guarantee Agreement have been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"). The entire proceeds from the
sale of the Capital Securities will be combined with the entire proceeds from
the sale by the Trust to the Company of its common securities (the "Common
Securities" and, together with the Capital Securities, the "Trust Securities")
(such Common Securities guaranteed by the Company, to the extent set forth in
the Prospectus, with respect to distributions and amounts payable upon
liquidation or redemption (the "Common Securities Guarantee" and, together with
the Capital Securities Guarantee, the "Guarantees") pursuant to the Common
Securities Guarantee Agreement (the "Common Securities Guarantee Agreement" and,
together with the Capital Securities Guarantee Agreement, the "Guarantee
Agreements"), to be dated as of Closing Time, executed and delivered by the
Company for the benefit of the holders from time to time of the Common
Securities) and will be used by the Trust to purchase $___ of __% Junior
Subordinated
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Deferrable Interest Debentures due 2027 (the "Subordinated Debentures") issued
by the Company. The Trust Securities will be issued pursuant to the Amended and
Restated Declaration of Trust of the Trust, to be dated as of Closing Time (the
"Declaration"), among the Company, as sponsor, Wilmington Trust Company, as
institutional trustee (the "Institutional Trustee"), and Richard A. Smith and
A.R. Sales, as administrative trustees (the "Administrative Trustees" and,
together with the Institutional Trustee, the "Trustees"), and the holders from
time to time of undivided beneficial interests in the assets of the Trust. The
Subordinated Debentures will be issued pursuant to an indenture, to be dated as
of Closing Time (the "Base Indenture"), between the Company and Wilmington Trust
Company, as trustee (the "Debt Trustee") and a supplement to the Base Indenture,
to be dated as of Closing Time (the "Supplemental Indenture", and together with
the Base Indenture and any other amendments or supplements thereto, the
"Indenture") between the Company and the Debt Trustee. The Capital Securities,
the Capital Securities Guarantee, and the Subordinated Debentures are
hereinafter collectively referred to as the "Securities."
The Offerors have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Nos. 333-18521 and
333-18521-01) covering the registration of the Securities under the Securities
Act of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses. Promptly after execution and delivery of this
Agreement, the Offerors will either (i) prepare and file a prospectus in
accordance with the provisions of Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or
(ii) if the Offerors have elected to rely upon Rule 434 ("Rule 434") of the 1933
Act Regulations, prepare and file a term sheet (a "Term Sheet") in accordance
with the provisions of Rule 434 and Rule 424(b). The information included in
such prospectus or in such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective (A)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information"
or (B) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434
Information." Each prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto, schedules thereto, if any, and the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it
became effective and including the Rule 430A Information and the Rule 434
Information,
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as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus, including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the
form first furnished to the Underwriters for use in connection with the offering
of the Securities, is herein called the "Prospectus." If Rule 434 is relied on,
the term "Prospectus" shall refer to the preliminary prospectus dated _______,
1997 together with the Term Sheet and all references in this Agreement to the
date of the Prospectus shall mean the date of the Term Sheet. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Offerors. The Offerors jointly
and severally represent and warrant to each Underwriter as of the date hereof,
and as of the Closing Time referred to in Section 2(c) hereof, and agree with
each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the Offerors
meets the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are
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pending or, to the knowledge of the Offerors, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules
and regulations of the Commission under the 1939 Act (the "1939 Act
Regulations") and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Neither
the Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the
Closing Time, included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading. If Rule 434 is used, the Offerors will
comply with the requirements of Rule 434. The representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Offerors in writing by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with the offering of the Securities was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T under
the 1933 Act Regulations.
(ii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectus, at the
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time the Registration Statement became effective, at the time the
Prospectus was issued and at the Closing Time, did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied, except as specifically set forth
therein, on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement
present fairly in accordance with GAAP the information required to be
stated therein. The Company's ratios of earnings to fixed charges (actual
and, if any, pro forma) and ratios of earnings to combined fixed charges
and preferred dividends (actual and, if any, pro forma) included in the
Prospectus under the caption "Ratio of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Dividends" and in Exhibit
12 to the Registration Statement have been calculated in compliance with
Item 503(d) of Regulation S-K of the Commission. The financial information
and statistical data set forth in the Prospectus under the captions
"Summary Financial Information" and "Capitalization" present fairly the
information shown therein and have been derived from the audited financial
statements included in the Registration Statement.
(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, or the Trust, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
entered into (x) by the Trust, or (y) by the Company or any of its other
subsidiaries, other (in the case of clause (y) only) than those in the
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ordinary course of business, which are material with respect to the Company
and its subsidiaries considered as one enterprise, and (C) except for
regular quarterly dividends on the Company's Common Stock, par value $2.50
per share (the "Common Stock"), in amounts per share that are consistent
with past practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Indiana and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under this Agreement, the Declaration, the Indenture and each of the
Guarantees and the Guarantee Agreements and to purchase, own and hold the
Common Securities issued by the Trust; and the Company is duly qualified as
a foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant subsidiary"
of the Company (as such term is defined in Rule 1-02 of Regulation S-X)
(each a "Subsidiary," and collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of
each such Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such subsidiary. The only
subsidiaries of the Company are (A) the subsidiaries listed on Schedule C
hereto and (B) certain other subsidiaries which, considered in the
aggregate as a single Subsidiary, do not constitute a
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"significant subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization; Descriptions. The authorized, issued and
outstanding capital stock of the Company is as set forth in the Prospectus
in the column entitled "Actual" under the caption "Capitalization" (except
for subsequent issuances, if any, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or pursuant to the
exercise of convertible securities or options referred to in the Prospectus
or except for the funding of employee benefit plans referred to in the
Prospectus). The Capital Securities, the Common Securities, the
Subordinated Debentures and the Declaration conform to all statements
relating thereto contained in the Prospectus.
(ix) Existence and Good Standing of the Trust. The Trust has been
duly created and is validly existing in good standing as a business trust
under the Delaware Act with the power and authority to own property and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement, the Trust Securities and the
Declaration; each of the Administrative Trustees of the Trust is an
employee of the Company and has been duly authorized by the Company to
execute and deliver the Declaration; the Trust is duly qualified to
transact business as a foreign corporation in good standing in each
jurisdiction in which such qualification is necessary, except to the extent
that the failure to so qualify would not have a Material Adverse Effect on
the Trust; the Trust is not a party to or otherwise bound by any agreement
other than those described in the Prospectus; the Trust is and will be
classified for United State federal income tax purposes as a grantor trust
and not as an association taxable as a corporation; and the Trust is and
will be treated as a consolidated subsidiary of the Company pursuant to
GAAP. The Trust has no subsidiaries.
(x) Common Securities. The Common Securities have been duly
authorized by the Declaration and, when issued and delivered by the Trust
to the Company in accordance with the terms of the Declaration and against
payment therefor as described in the Prospectus, will be validly issued
undivided beneficial interests in the assets of the Trust; the issuance of
the Common Securities is not subject to preemptive of other similar rights;
no holder of Common Securities will be subject to personal liability by
reason of being such a holder; and at the Closing Time, all of the issued
and outstanding Common Securities will be directly owned by the Company
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
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(xi) Capital Stock. All of the outstanding shares of capital stock
of the Company have been duly authorized and validly issued and are fully
paid and non-assessable; no holder thereof is or will be subject to
personal liability solely by reason of being such a holder; and none of the
outstanding shares of capital stock of the Company was issued in violation
of the preemptive or other similar rights of any securityholder of the
Company.
(xii) Authorization of Declaration. The Declaration has been duly
authorized by the Company and, at the Closing Time, will have been duly
executed and delivered by the Company and the Administrative Trustees, and
the Declaration will, at the Closing Time, be a valid and binding
obligation of the Company and the Administrative Trustees, enforceable
against the Company and the Administrative Trustees in accordance with its
terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors rights generally or by general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or
in equity) (the "Bankruptcy Exceptions"); and the Declaration has been duly
qualified under the 1939 Act.
(xiii) Guarantee Agreements. Each of the Guarantee Agreements has been
duly authorized by the Company and, when validly executed and delivered by
the Company, and, in the case of the Capital Securities Guarantee by the
Guarantee Trustee, will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms
except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions, and each of the Guarantees and the Guarantee
Agreements conforms to all statements relating thereto contained in the
Prospectus; and the Capital Securities Guarantee Agreement has been duly
qualified under the 1939 Act.
(xiv) Capital Securities. The Capital Securities have been duly
authorized by the Declaration and, when authenticated in the manner
provided for in the Declaration and issued and delivered pursuant to this
Agreement against payment of the consideration set forth herein, will be
validly issued and (subject to the terms of the Declaration) fully paid and
nonassessable undivided beneficial interests in the assets of the Trust;
the issuance of the Capital Securities is not subject to preemptive or
other similar rights; and holders of Capital Securities will be entitled to
the same
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limitation of personal liability extended to stockholders of private
corporations for profit incorporated under the General Corporation Law of
the State of Delaware.
(xv) Authorization of Indenture. The Indenture has been duly
authorized by the Company and, when validly executed and delivered by the
Company, and assuming the due authorization, execution and delivery of the
Indenture by the Debt Trustee, will constitute a valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms except to the extent that enforcement thereof may be limited
by the Bankruptcy Exceptions; the Indenture conforms to all statements
relating thereto contained in the Prospectus; and the Indenture has been
duly qualified under the 1939 Act.
(xvi) Authorization of Subordinated Debentures. The Subordinated
Debentures have been duly authorized by the Company and, at the Closing
Time, will have been duly executed by the Company and, when authenticated
in the manner provided for in the Indenture and delivered against payment
therefor as described in the Prospectus, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions, and will be in the form contemplated
by, and entitled to the benefits of, the Indenture. The Subordinated
Debentures are subordinate and junior in right of payment to all "senior
indebtedness" (as defined in the Supplemental Indenture) of the Company.
(xvii) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by each of the Offerors.
(xviii) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws; the Trust is
not in violation of the Declaration or its certificate of trust filed with
the State of Delaware December 18, 1996 (the "Certificate of Trust");
except for such defaults that would not result in a Material Adverse
Effect, none of the Company, any of its subsidiaries, or the Trust is in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, joint
venture agreement, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company, any of its
subsidiaries, or the Trust is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company, any of its
subsidiaries, or the Trust is subject (collectively, "Agreements and
Instruments")
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and the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as described in
the Prospectus under the caption "Use of Proceeds"), and compliance by the
Offerors with their respective obligations hereunder and thereunder have
been duly authorized by all necessary action (corporate or otherwise) and
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company, any of its subsidiaries, or the Trust pursuant to
the Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation of
either the provisions of the charter or by-laws of the Company or any of
its subsidiaries, or the Declaration or the Certificate of Trust, or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its subsidiaries,
or the Trust or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require (whether with
or without the giving of notice or passage of time or both) the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company, any of its subsidiaries, or the Trust.
(xix) Absence of Work Stoppage or Strike. No work stoppage or strike
involving the employees of the Company or any of its subsidiaries exists
or, to the knowledge of the Company, is imminent, and the Company is not
aware of any existing or imminent labor disturbance involving the employees
of any of its or any of its subsidiaries' principal suppliers,
manufacturers, customers or contractors, which, in any such case, may
reasonably be expected to result in a Material Adverse Effect.
(xx) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company or the Trust, threatened, against or affecting the Company or
any of its subsidiaries which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which might
reasonably be expected to result in a Material
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Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of
the transactions contemplated in this Agreement or the performance by the
Offerors of their obligations hereunder; the aggregate of all pending legal
or governmental proceedings to which the Company or any of its subsidiaries
is a party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, would not, if
adversely determined, result in a Material Adverse Effect. There is no
action, suit, proceeding, inquiry or investigation before or brought by any
court or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company or the Trust, threatened, against or
affecting the Trust.
(xxi) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as required.
(xxii) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xxiii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Offerors of their
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as
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have been already obtained or as may be required under the 1933 Act, the
1933 Act Regulations, the 1939 Act, the 1939 Act Regulations or state
securities laws.
(xxiv) Possession of Licenses and Permits. The Company, its
subsidiaries, and the Trust possess such permits, licenses, approvals,
consents and other authorizations (collectively, "Governmental Licenses")
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by them;
the Company, its subsidiaries, and the Trust are in compliance with the
terms and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and effect
would not have a Material Adverse Effect; and neither the Company, nor any
of its subsidiaries, nor the Trust has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(xxv) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (A) are
described in the Prospectus or (B) do not, singly or in the aggregate,
materially affect the value of or interfere with the use made and proposed
to be made of the real property of the Company and its subsidiaries;
considered as one enterprise; and all of the leases and subleases material
to the business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries holds
properties described in the Prospectus, are in full force and effect, and
neither the Company nor any of its subsidiaries has any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any of its subsidiaries under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or its subsidiaries to the continued possession of the leased or
subleased premises under any such lease or sublease. The Trust does not
own, lease or sublease any properties and after giving effect to the
transactions contemplated herein and in the Registration Statement the
Trust will not lease or
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sublease any properties and the only property owned by the Trust will be
the Subordinated Debentures.
(xxvi) Compliance with Cuba Act. Each of the Offerors has complied
with, and is and will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with Cuba, codified as
Section 517.075 of the Florida statutes, and the rules and regulations
thereunder (collectively, the "Cuba Act") or is exempt therefrom.
(xxvii) Investment Company Act. Neither the Company nor the Trust is,
and upon the issuance and sale of the Securities as herein contemplated and
the application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
(xxviii) Environmental Laws. Except as described in Schedule D hereto
and except as would not, singly or in the aggregate, result in a Material
Adverse Effect, (A) neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (C) there are no
pending or threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its subsidiaries and (D) there are no events
or circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
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(xxix) Price Stabilization. The Offerors have not taken and will not
take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or manipulation of
the price of the Securities.
(xxx) Taxes. The Company and each of its subsidiaries have filed all
federal, foreign, state and local income and franchise tax returns required
to be filed and have paid all taxes shown thereon as due, and there is no
material tax deficiency which has been or is reasonably likely to be
asserted against the Company or any of its subsidiaries; all material tax
liabilities of the Company and its subsidiaries are adequately provided for
on the books of the Company and its subsidiaries.
(xxxi) Registration Rights. There are no contracts, agreements or
understandings between the Trust or the Company and any person granting
such person the right to require the Trust or the Company to file a
registration statement under the 1933 Act with respect to any securities of
the Trust or the Company owned or to be owned by such person or to require
the Trust or the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by the
Trust or the Company under the 1933 Act.
(b) Officer and Trustee Certificates. Any certificate signed by any
officer of the Company or any of its subsidiaries, or by a Trustee of the Trust
that is delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company or the Trust, as
the case may be, to each Underwriter as to the matters stated therein.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Capital Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Trust agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Trust, at
the price per security set forth in Schedule B, the number of Capital Securities
set forth in Schedule A opposite the name of such Underwriter (except as
otherwise provided in Schedule B), plus any additional number of Capital
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
The purchase price per security to be paid by the several Underwriters for
the Capital Securities shall be an amount equal
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to the initial public offering price per security. The initial public offering
price per Capital Security shall be a fixed price to be determined by agreement
between the Representatives and the Offerors. The initial public offering price
per security and the purchase price per security are set forth in Schedule B.
(b) Commission. As compensation to the Underwriters for their commitments
hereunder and in view of the fact that the proceeds of the sale of the Capital
Securities will be used to purchase the Subordinated Debentures of the Company,
the Company hereby agrees to pay at Closing Time (as defined below) to the
Representatives, for the accounts of the several Underwriters, a commission per
Capital Security determined by agreement between the Representatives and the
Company for the Capital Securities to be delivered by the Trust hereunder at
Closing Time. The commission is set forth in Schedule B.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Capital Securities shall be made at the offices of
Mayer, Brown & Platt, 190 South LaSalle Street, Chicago, Illinois 60603, or at
such other place as shall be agreed upon by the Representatives, the Company,
and the Trust, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representatives, the Company, and the Trust (such time and
date of payment and delivery being herein called the "Closing Time").
Payment shall be made to the Trust by wire transfer of immediately
available funds to a bank account designated by the Trust, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Capital Securities to be purchased by them. It is
understood that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Capital Securities which it has agreed to purchase. Merrill
Lynch, individually and not as representative of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the Capital
Securities to be purchased by any Underwriter whose funds have not been received
by the Closing Time but such payment shall not relieve such Underwriter from its
obligations hereunder.
At Closing Time the Company will pay, or cause to be paid, the commission
payable at such time under this Section 2 to the Representatives on behalf of
the Underwriters by wire transfer of immediately available funds.
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(d) Denominations; Registration. Global certificates for the Capital
Securities shall be in such denominations and registered in such names as the
Representatives may request in writing at least one full business day before the
Closing Time. The certificates for the Capital Securities will be made available
at the facilities of the Depository Trust Company in The City of New York not
later than 10:00 A.M. (Eastern time) on the business day prior to the Closing
Time.
SECTION 3. Covenants of the Offerors. Each of the Offerors jointly and
severally covenants with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Offerors, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify the Representatives
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus,
or of the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Offerors will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such steps as
they deem necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, they will promptly file such
prospectus. The Offerors will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Offerors will give the Representatives
notice of their intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not
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file or use any such document to which the Representatives or counsel for
the Underwriters shall object.
(c) Delivery of Registration Statements. The Offerors have furnished
or will deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to
be incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Representatives,
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Offerors have delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Offerors hereby consent
to the use of such copies for purposes permitted by the 1933 Act. The
Offerors will furnish to each Underwriter, without charge, during the
period when the Prospectus is required to be delivered under the 1933 Act
or the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Offerors will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement and in the Prospectus.
If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Offerors, to amend the
Registration Statement or amend or supplement the Prospectus in order that
the Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be
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necessary, in the opinion of such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations,
the Offerors will promptly prepare and file with the Commission, subject to
Section 3(b), such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Offerors will furnish to
the Underwriters such number of copies of such amendment or supplement as
the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Offerors will use their reasonable
best efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions as the Representatives may designate
and to maintain such qualifications in effect for a period of not less than
one year from the later of the effective date of the Registration Statement
and any Rule 462(b) Registration Statement; provided, however, that neither
the Company nor the Trust shall be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Offerors will file such statements
and reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for a period of not less than one year from
the effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(g) Rule 158. The Company and the Trust will each timely file such
reports pursuant to the 1934 Act as are necessary in order to make
generally available to their respective securityholders as soon as
practicable an earnings statement for the purposes of, and to provide the
benefits contemplated by, the last paragraph of Section 11(a) of the 1933
Act.
(h) Use of Proceeds. The Trust will use the proceeds received by it
from the sale of the Trust Securities in the manner specified in the
Prospectus under "Use of Proceeds." The Company will use the proceeds
received by it from the sale of the Subordinated Debentures in the manner
specified in the Prospectus under "Use of Proceeds".
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(i) Restriction on Sale of Securities. During a period of 30 days from
the date hereof, neither the Trust nor the Company will, without the prior
written consent of Merrill Lynch, directly or indirectly, sell, offer to
sell, grant any option for the sale of, or otherwise dispose of, any
Capital Securities, any security convertible into or exchangeable into or
exercisable for Capital Securities or the Subordinated Debentures or any
subordinated debt securities substantially similar to the Subordinated
Debentures or equity securities substantially similar to the Capital
Securities (except for the Subordinated Debentures and the Capital
Securities issued pursuant to this Agreement).
(j) Existence and Good Standing of the Trust. So long as any Capital
Securities are outstanding, the Trust will continue its existence in good
standing as a business trust under the Delaware Act with power and
authority to own property and conduct its business as described in the
Prospectus and the Trust will remain duly qualified to transact business as
a foreign corporation in good standing in each jurisdiction in which such
qualification is necessary, except to the extent that the failure to so
qualify would not have a Material Adverse Effect on the Trust.
(k) Reporting Requirements. The Offerors, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the
1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
expenses incident to the performance of each Offerors'
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obligations under this Agreement, including, but not limited to, (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing, and delivery to the Underwriters of
this Agreement, any Agreement among Underwriters and such other documents as may
be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Capital Securities to the Underwriters, the Common
Securities to the Company, and the Subordinated Debentures to the Trust,
including any stock or other transfer taxes and any stamp or other duties
payable upon the sale, issuance, or delivery of the Securities, (iv) the fees
and disbursements of the Offeror's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectus and any amendments
or supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities,
(ix) any fees charged by securities rating services for rating the Securities,
(x) the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriters in connection with, the review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Securities, (xi) the fees and expenses of the Debt Trustee, including the
fees and disbursements of counsel for the Debt Trustee in connection with the
Indenture and the Subordinated Debentures, (xiii) the fees and expenses of the
Institutional Trustee, and the Guarantee Trustee, including the fees and
disbursements of counsel for the Institutional Trustee in connection with the
Declaration and the Certificate of Trust, and (xiv) the cost of qualifying the
Capital Securities with The Depository Trust Company.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
reasonable out-of-pocket expenses, including the fees and disbursements of
counsel for the Underwriters.
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SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Offerors contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary, or any Trustee
of the Trust delivered pursuant to the provisions hereof, to the performance by
the Offerors of their covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a post-
effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A) or, if
the Offerors have elected to rely upon Rule 434, a Term Sheet shall have
been filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Offerors. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Schiff Hardin & Waite, counsel for the Offerors, in form
and substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A hereto.
(c) Opinion of General Counsel for Company. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Ronald R. Snyder, Vice President, General Counsel, and Secretary
for the Company, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters to the effect set forth in Exhibit B
hereto.
(d) Opinion of Special Delaware Counsel for Offerors. At Closing
Time, the Representatives shall have received the favorable opinion, dated
as of Closing Time, of Richards, Layton & Finger, P.A., special Delaware
counsel for the Offerors, in form and substance satisfactory to counsel for
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the Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters to the effect set forth in Exhibit C
hereto.
(e) Opinion of Counsel for Institutional Trustee, Debt Trustee and
Guarantee Trustee. At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of Richards,
Layton & Finger, P.A., counsel for the Institutional Trustee, the Debt
Trustee, and the Guarantee Trustee, in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters to the effect set forth in
Exhibit D hereto.
(f) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Mayer, Brown & Platt, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters with respect to the validity of the Capital Securities,
the Registration Statement, the Prospectus and other related matters as the
Underwriters may reasonably request. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York and the federal law of the United
States and the General Corporation Law of the State of Delaware, upon the
opinions of counsel satisfactory to the Representatives. Such counsel may
also state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries, and of Trustees of the Trust, and
certificates of public officials.
(g) Officer and Trustee Certificates. At Closing Time, there shall
not have been, since the date hereof or since the respective dates as of
which information is given in the Prospectus, (i) any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business, and the Representatives shall have received a certificate of
the President or a Vice President of the Company and of the chief financial
or chief accounting officer of the Company, dated as of Closing Time, to
the effect that (A) there has been no such material adverse change, (B) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of
Closing Time, (C) the
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Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to Closing Time, and (D)
no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been instituted or
are pending or are contemplated by the Commission; or (ii) any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Trust, and the
Representatives shall have received a certificate of an Administrative
Trustee of the Trust, dated as of Closing Time, to the effect that (A)
there has been no such material adverse change, (B) the representations and
warranties in Section 1(a) hereof are true and correct with the same force
and effect as though expressly made at and as of Closing Time, (C) the
Trust has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing Time, and (D) no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.
(h) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Representatives shall have received from Price
Waterhouse L.L.P. a letter dated such date, in form and substance
satisfactory to the Representatives, together with signed or reproduced
copies of such letter for each of the other Underwriters containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus.
(i) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from Price Waterhouse L.L.P. a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (h) of this Section, except that
the specified date referred to shall be a date not more than three calendar
days prior to Closing Time.
(j) Maintenance of Rating. At Closing Time, the Capital Securities
shall be rated at least ___ by Moody's Investor's Service and __ by
Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., and the
Company shall have delivered to the Representatives a letter dated the
Closing Time, from each such rating agency, or other evidence satisfactory
to the Representatives, confirming that the Capital Securities have such
ratings; and since the date of this Agreement, there shall not have
occurred a downgrading in the rating assigned to the Capital Securities or
any of the
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Company's other securities by any "nationally recognized statistical rating
agency", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such organization shall have publicly
announced that it has under surveillance or review its rating of the
Capital Securities or any of the Company's other securities.
(k) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(l) Additional Documents. At Closing Time counsel for the
Underwriters shall have been furnished with such documents and opinions as
they may require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as herein contemplated, or in order to evidence
the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Offerors in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Representatives by notice to the
Offerors at any time at or prior to Closing Time and such termination shall
be without liability of any party to any other party, except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. The Offerors jointly and severally
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434
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Information, if applicable, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Trust, Officers, Directors and Trustees.
Each Underwriter severally agrees to indemnify and hold harmless the Trust, each
of the Trustees of the Trust, the Company, the Company's directors, each of the
Company's officers who signed the Registration Statement, and each person, if
any, who controls the Trust or the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged
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untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall
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<PAGE>
be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Offerors on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Offerors on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Offerors on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Trust and
the total underwriting commission received by the Underwriters, in each case as
set forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of the Securities as set forth on such cover.
The relative fault of the Offerors on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Offerors or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
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The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each Trustee of the Trust, and each person, if any,
who controls the Company or the Trust, within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company and the Trust. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Capital Securities set forth opposite their respective names
in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries or in
certificates of Trustees of the Trust submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling person, or by or on behalf of the
Company or the Trust, and shall survive delivery of the Capital Securities to
the Underwriters.
29
<PAGE>
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Representatives may terminate this Agreement,
by notice to the Offerors, at any time at or prior to Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, or the Trust, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Representatives, impracticable to market the Capital
Securities or to enforce contracts for the sale of the Capital Securities, or
(iii) if trading in any securities of the Company or the Trust has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Time to purchase the Capital Securities
which it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Capital Securities to be
30
<PAGE>
purchased on such date, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof
in the proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Capital Securities to be purchased on such date, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement either the Representatives or the Offerors shall have the right
to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of ________________;
and notices to the Trust and the Company shall be directed to them at One
Noblitt Plaza, Post Office Box 3000, Columbus, Indiana, 47202, attention of
Ronald R. Snyder, Esq., Vice President, General Counsel and Secretary, with a
copy to Schiff Hardin & Waite, 7200 Sears Tower, Chicago, Illinois 60606,
attention of Frederick L. Hartmann, Esq.
SECTION 12. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters, the Company and the Trust, and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and the Trust, and their respective
successors and the controlling persons and officers, directors and trustees
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company, and the Trust, and their respective successors, and
said controlling persons and officers, directors and trustees and their heirs
and legal representatives, and for the benefit of no other
31
<PAGE>
person, firm or corporation. No purchaser of Capital Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
32
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters, the Company and the Trust in accordance with
its terms.
Very truly yours,
ARVIN INDUSTRIES, INC.
By:_____________________________
Name:
Title:
ARVIN CAPITAL I
By: Arvin Industries, Inc.
_____________________________
33
<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
LEHMAN BROTHERS INC.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _____________________________________
Authorized Signatory
For themselves and as Representatives of the
other Underwriters named in Schedule A hereto.
34
<PAGE>
SCHEDULE A
List of Underwriters
Number of
Capital
Name of Underwriter Securities
------------------- ----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . .
Lehman Brothers Inc. . . . . . . . . . . . . . . . . . . . . .
Dean Witter Reynolds Inc. . . . . . . . . . . . . . . . . . . .
A.G. Edwards & Sons, Inc. . . . . . . . . . . . . . . . . . . .
PaineWebber Incorporated . . . . . . . . . . . . . . . . . . .
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . . . .
_______
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
Sch A-1
<PAGE>
SCHEDULE B
Arvin Industries, Inc.
Arvin Capital I
100,000
____% Capital Securities
1. The initial public offering price per security for the Capital
Securities, determined as provided in Section 2, shall be $____________.
2. The purchase price per security for the Capital Securities to be paid
by the several Underwriters shall be $____________.
3. The compensation per Capital Securities to be paid by the Company to
the several Underwriters in respect of their commitments hereunder shall be
$____________.
Sch B-1
<PAGE>
SCHEDULE C
List of Subsidiaries
State or Other
Jurisdiction of
Company Name Incorporation
- ------------ ---------------
Maremont Corporation Delaware
Maremont Exhaust Products, Inc. Delaware
Gabriel Europe, Inc. Delaware
Q International, Inc. Delaware
Gabriel Ride Control Products, Inc. Delaware
Roll Coater, Inc. Indiana
Arvin International Holdings, Inc. Indiana
AVM, Inc. South Carolina
Arvin Automotive of Canada Canada
Arvin Ride Control Products, Inc. Canada
Arvin Finance Company of Canada Canada
Arvin Canada Holding, Ltd. Canada
Arvin de Mexico S.A. de C.V. Mexico
Arvin-Exhaust B.V. The Netherlands
Arvin International Holland B.V. The Netherlands
Arvin-Exhaust S.A. Spain
A.P. Amortiguadores, S.A. Spain
Arvin France S.A. France
Arvin International U.K., PLC United Kingdom
Arvin Exhaust Ltd. United Kingdom
Arvin Investment U.K., Ltd. United Kingdom
Timax U.K., Ltd. United Kingdom
Gabriel S.A. (Pty.) Ltd. South Africa
Sch C-1
<PAGE>
SCHEDULE D
Environmental Matters
Sch D-1
<PAGE>
Exhibit A
FORM OF OPINION OF OFFERORS' COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing as a
corporation under the laws of the State of Indiana and a certificate of
existence has been issued with respect thereto as of a recent date pursuant to
Section 23-1-18-9 of the Indiana Business Corporation Law.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(iii) To the best of our knowledge and information, the Company is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(iv) Each of Maremont Corporation, Roll Coater, Inc. and Arvin
International, Inc. has been duly incorporated and is validly existing as a
corporation under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus; all of the issued and
outstanding capital stock of each such Subsidiary which is held by the Company
or by any direct or indirect subsidiary of the Company has been duly authorized
and validly issued.
(v) The Purchase Agreement has been duly authorized, executed and
delivered by each of the Company and the Trust.
A-1
<PAGE>
(vi) The Indenture has been duly authorized, executed and delivered by
the Company and has been duly qualified under the 1939 Act and constitutes a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited by the
Bankruptcy Exceptions. The Indenture conforms as to legal matters to the
description thereof in the Prospectus.
(vii) The issuance and delivery of the Subordinated Debentures have been
duly authorized and the Subordinated Debentures have been duly executed and
delivered by the Company and, when authenticated by the Trustee in the manner
provided in the Indenture and delivered against payment therefor as provided
in the Purchase Agreement, the Subordinated Debentures will constitute valid and
binding obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by the Bankruptcy Exceptions. The
Subordinated Debentures conform as to legal matters to the description thereof
in the Prospectus.
(viii) The issuance and delivery of the Capital Securities have been duly
authorized and when delivered to and paid for by the Underwriters pursuant to
the Purchase Agreement will be validly issued, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust; the holders of the
Capital Securities will be entitled to the same limitation of personal liability
under Delaware law as is extended to stockholders of private corporations for
profit; and under the Declaration and the Delaware Act the issuance of the
Capital Securities is not subject to preemptive or other similar rights. We
bring to your attention that the Capital Security holders may be obligated,
pursuant to the Declaration, to (a) provide indemnity and/or security in
connection with, and pay taxes or governmental charges arising from, transfers
or exchanges of the Capital Securities certificates and the issuance of
replacement Capital Securities certificates, and (b) provide security and
indemnity in connection with requests of or directions to the Institutional
Trustee to exercise its rights and remedies under the Declaration. The Capital
Securities conform as to legal matters to the descriptions thereof in the
Prospectus.
(ix) All of the Common Securities have been duly authorized by the
Declaration and are duly and validly issued undivided beneficial interests in
the assets of the Trust and are owned by the Company, free and clear of all
liens, encumbrances, equities or claims; the Common Securities conform as to
legal matters to the description thereof in the Prospectus; under the
Declaration and the Delaware Act the issuance of the Common Securities is not
subject to
A-2
<PAGE>
preemptive or other similar rights.
(x) The Declaration has been duly authorized, executed and delivered by
the Company and the Administrative Trustees, and constitutes a valid and binding
obligation of the Company and each of the Administrative Trustees and is
enforceable against the Company and each of the Administrative Trustees in
accordance with its terms, except as enforcement thereof may be limited by the
Bankruptcy Exceptions. The Declaration conforms as to legal matters to the
description thereof in the Prospectus. The Declaration has been duly qualified
under the 1939 Act.
(xi) Each of the Guarantee Agreements has been duly authorized, executed
and delivered, and the Capital Securities Guarantee Agreement constitutes a
valid and legally binding obligation of the Company, enforceable in accordance
with its terms, except as enforcement thereof may be limited by the Bankruptcy
Exceptions. The Capital Securities Guarantee Agreement has been duly qualified
under the 1939 Act. The Guarantees and the Guarantee Agreements conform as to
legal matters to the descriptions thereof in the Prospectus.
(xii) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act; all filings required under
the laws of the State of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made; and the Trust is duly
qualified for the transaction of business and is in good standing under the laws
of each jurisdiction in which it owns or leases properties or conducts any
business, except to the extent that the failure to so qualify or be in good
standing would not have a Material Adverse Effect.
(xiii) Under the Delaware Act and the Declaration, the Trust has the
trust power and authority to (a) execute and deliver, and to perform
its obligations under, the Purchase Agreement, (b) issue and perform its
obligations under the Trust Securities and (c) purchase and hold the
Subordinated Debentures.
(xiv) Under the Delaware Act, the Certificate attached to the Declaration
as Exhibit A-1 is an appropriate form of certificate to evidence ownership of
Capital Securities.
A-3
<PAGE>
(xviii) Neither the Company nor the Trust is an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined in the
1940 Act.
(xx) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and, to the best of our knowledge and
information, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or threatened by the Commission.
(xxi) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectus, excluding the documents incorporated by reference
therein, and each amendment or supplement to the Registration Statement and
Prospectus, excluding the documents incorporated by reference therein, as of
their respective effective or issue dates (other than the financial statements
and supporting schedules included therein or omitted therefrom, as to which we
need express no opinion) complied as to form in all material respects with the
requirements of the 1933 Act, the 1933 Act Regulations, the 1939 Act and the
1939 Act Regulations.
(xxii) The documents incorporated by reference in the Prospectus (other
than the financial statements and supporting schedules included therein or
omitted therefrom, as to which we need express no opinion), when they were filed
with the Commission complied as to form in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commission
thereunder.
(xxiii) To the best of our knowledge and information, there are no legal or
governmental proceedings pending or threatened which are required to be
disclosed in the Registration Statement,
A-4
<PAGE>
other than those disclosed in the Prospectus or in any document incorporated by
reference therein.
(xxiv) Our opinion set forth under "United States Federal Income
Taxation" is confirmed.
(xxv) All descriptions in the Registration Statement of contracts and
other documents to which the Company, its subsidiaries, or the Trust are a party
are accurate in all material respects; to the best of our knowledge and
information, there are no franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof are correct in all
material respects.
(xxvi) To the best of our knowledge and information, neither the Company
nor any Subsidiary is in violation of its charter or by-laws, the Trust is not
in violation of the Declaration and no default by the Company, any Subsidiary,
or the Trust exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(xxvii) To the best of our knowledge and information, there are no
persons with registration or other similar rights to have any securities
registered by the Company or the Trust under the Registration Statement.
(xxviii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency (other than under the 1933 Act, the 1933 Act Regulations,
the 1939 Act and the 1939 Act Regulations, which have been obtained, or as may
be required under the securities or blue sky laws of the various states, as to
which we express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Purchase Agreement, the offering,
issuance, sale or delivery of the Securities, the issuance and sale of the
Common Securities, or the performance by the Company and the Trust of their
respective obligations pursuant to the Purchase Agreement.
(xxix) The execution, delivery and performance of the Purchase Agreement,
the Declaration, the Indenture, and the Guarantee Agreements, the consummation
by the Company and the Trust of the transactions contemplated thereby and in the
Registration Statement (including the issuance and sale of the Securities), the
filing of the
A-5
<PAGE>
Certificate of Trust with the Secretary of State of the State of Delaware, and
compliance by the Company and the Trust with the terms of the foregoing do not
and will not, whether with or without the giving of notice or lapse of time or
both, conflict with or constitute a breach of, or a default or Repayment Event
(as defined in Section 1(a)(xviii) of the Purchase Agreement) under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or the Trust pursuant to, any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument known to us to which the Company or the Trust is
a party or by which it or either of them may be bound, or to which any of the
property or assets of the Company or the Trust is subject (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
have a Material Adverse Effect), nor will such action result in any violation of
the provisions of the charter or by-laws of the Company, or the Declaration, or
any applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to us, of any government, government instrumentality, or court (other
than the securities or blue sky laws of the various states, as to which we
express no opinion) (except for the indemnification provisions which may be
unenforceable as against public policy under certain circumstances), having
jurisdiction over the Company or the Trust or any of their respective
properties, assets or operations.
Nothing has come to our attention that leads us to believe that the
Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no statement),
at the time such Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom, as to which we need
make no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time, included
or includes an untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters of
Delaware law relating to the Trust, the Capital Securities and the Declaration,
upon the opinion of Richards, Layton & Finger, P.A., special Delaware counsel to
the Company and the Trust, which shall be delivered in accordance with Section
5(d)
A-6
<PAGE>
of the Purchase Agreement, and (B), as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible
officers of the Company, the Trustees and public officials. Such opinion shall
not state that it is to be governed or qualified by, or that it is otherwise
subject to, any treatise, written policy or other document relating to legal
opinions, including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991).
A-7
<PAGE>
Exhibit B
FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
(i) To the best of my knowledge and information, the Company is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, except where the
failure to so qualify would not in the aggregate have a material adverse effect
on the business or assets of the Company and its subsidiaries considered as one
enterprise.
(ii) Each Subsidiary has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or to be in good standing would not
result in a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued, is fully paid and non-
assessable and, to the best of my knowledge and information, is owned by the
Company directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such Subsidiary.
(iii) Nothing has come to my attention that would lead me to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which I need make no statement),
at the time such Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom, as to which I need
make no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time, included
or includes an untrue
B-1
<PAGE>
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(iv) To the best of my knowledge and information, no authorization,
approval consent or order of any court or governmental authority or agency is
required in connection with the consummation by the Company of the transactions
contemplated by the Purchase Agreement, except such as may be required under the
1933 Act, the 1933 Act Regulations, the 1939 Act and the 1939 Act Regulations or
state securities laws.
(v) To the best of my knowledge and information, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the
Company or any subsidiary, or the Trust is a party, or to which the property of
the Company or any subsidiary, or the Trust is subject, before or brought by any
court or governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the properties or
assets thereof or the consummation of the transactions contemplated in the
Purchase Agreement or the performance by the Company or the Trust of their
respective obligations thereunder.
(vi) To the best of my knowledge and information, no default exists in the
due performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument described, referred to, or filed or incorporated by
reference in the Registration Statement, at the time it became effective or at
the Closing Time, which defaults in the aggregate are material to the Company
and its subsidiaries considered as one enterprise, or to the Trust.
B-2
<PAGE>
Exhibit C
FORM OF OPINION OF SPECIAL DELAWARE
COUNSEL FOR THE COMPANY AND THE
TRUST TO BE DELIVERED PURSUANT
TO SECTION 5(d)
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act, and all filings required
under the laws of the State of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made.
(ii) Under the Delaware Act and the Declaration, the Trust has the trust
power and authority to own property and conduct its business, all as described
in the Prospectus.
(iii) The Declaration constitutes a valid and binding obligation of the
Company and the Trustees, and is enforceable against the Company and the
Trustees, in accordance with its terms, subject to (i) applicable bankruptcy,
insolvency, reorganization, liquidation, moratorium, receivership, fraudulent
conveyance or transfer and other similar laws relating to or affecting the
rights and remedies of creditors generally, (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether considered
and applied in a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions relating to
indemnification or contribution.
(iv) Under the Delaware Act and the Declaration, the Trust has the trust
power and authority to (a) execute and deliver, and to perform its obligations
under the Purchase Agreement, (b) issue, and perform its obligations under, the
Trust Securities and (c) purchase and hold the Subordinated Debentures.
(v) Under the Delaware Act and the Declaration, the execution and delivery
by the Trust of the Purchase Agreement and the performance by the Trust of its
obligations thereunder, have been duly authorized by all necessary trust action
on the part of the Trust.
(vi) Under the Delaware Act, the Certificate attached to the Declaration
as Exhibit A-1 is an appropriate form of certificate to evidence ownership of
Capital Securities; the Capital Securities have been duly authorized by the
Declaration and are duly and validly issued, subject to the qualifications set
forth herein, and fully paid and nonassessable undivided beneficial interests
in the assets of the Trust; the holders of the Capital Securities, as beneficial
owners of the Trust, will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware; we note that the
holders of the Capital Securities may be obligated, pursuant to the Declaration,
to (i) provide indemnity and/or security in connection with, and pay taxes or
governmental charges arising from, transfers or exchanges of Capital Securities
certificates and the issuance of replacement Capital Securities certificates and
(ii) provide security and indemnity in connection with requests of or
directions
C-1
<PAGE>
to the Institutional Trustee to exercise its rights and remedies under the
Declaration.
(vii) The Common Securities have been duly authorized by the Declaration
and are duly and validly issued undivided beneficial interests in the assets of
the Trust.
(viii) Under the Delaware Act and the Declaration, the issuance of the
Trust Securities is not subject to preemptive or other similar rights.
(ix) The issuance and sale by the Trust of the Trust Securities, the
purchase by the Trust of the Subordinated Debentures, the execution, delivery
and performance by the Trust of the Purchase Agreement, the consummation by the
Trust of the transactions contemplated thereby and compliance by the Trust with
its obligations thereunder do not violate (i) any of the provisions of the
Certificate of Trust or the Declaration or (ii) any applicable Delaware law or
administrative regulation.
C-2
<PAGE>
Exhibit D
FORM OF OPINION OF COUNSEL FOR
INSTITUTIONAL TRUSTEE, GUARANTEE
TRUSTEE AND DEBT TRUSTEE
TO BE DELIVERED PURSUANT TO
SECTION 5(e)
(i) Wilmington Trust Company is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the State of Delaware with all necessary power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of the
Declaration, the Guarantee Agreements and the Indenture.
(ii) The execution, delivery and performance by the Institutional Trustee
of the Declaration, the execution, delivery and performance by the Guarantee
Trustee of the Guarantee Agreements and the execution, delivery and performance
by the Debt Trustee of the Indenture have been duly authorized by all necessary
corporate action on the part of the Institutional Trustee, the Guarantee Trustee
and the Debt Trustee, respectively. The Declaration, the Guarantee Agreements
and the Indenture have been duly executed and delivered by the Institutional
Trustee, the Guarantee Trustee and the Debt Trustee, respectively, and the
Declaration constitutes a legal, valid and binding obligation of the
Institutional Trustee, and is enforceable against the Institutional Trustee
with its terms, subject to (i) applicable bankruptcy, insolvency,
reorganization, liquidation, moratorium, receivership, fraudulent conveyance or
transfer and other similar laws relating to or affecting the rights and remedies
of creditors generally, (ii) principles of equity, including applicable law
relating to fiduciary duties (regardless of whether considered and applied in a
proceeding in equity or at law), and (iii) the effect of applicable public
policy on the enforceability of provisions relating to indemnification or
contribution.
(iii) The execution, delivery and performance of the Declaration, the
Guarantee Agreement and the Indenture by the Institutional Trustee, the
Guarantee Trustee and the Debt Trustee, respectively, do not conflict with or
constitute a breach of the charter or bylaws of the Institutional Trustee, the
Guarantee Trustee or the Debt Trustee, respectively, or, to the best of our
knowledge, without independent investigation, the terms of any indenture or
other agreement or instrument to which the Institutional Trustee, the Guarantee
Trustee or the Debt Trustee, respectively, is a party or is bound or any
judgment, order or decree to be applicable to the Institutional Trustee, the
Guarantee Trustee or the Debt Trustee, respectively, of any court, regulatory
body, administrative agency, governmental body or arbitrator having jurisdiction
over the Institutional Trustee, the Guarantee Trustee or the Debt Trustee,
respectively.
D-1
<PAGE>
(iv) No consent, approval or authorization of, or registration with or
notice to, any federal or Delaware State banking authority is required for the
execution, delivery or performance by the Institutional Trustee, the Guarantee
Trustee or the Debt Trustee of the Declaration, the Guarantee Agreements or the
Indenture, respectively.
D-2
<PAGE>
EXHIBIT 4.3
====================================
AMENDED AND RESTATED DECLARATION
OF TRUST
ARVIN CAPITAL I
DATED AS OF _____________, 199__
====================================
<PAGE>
TABLE OF CONTENTS *
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions......................................................... 1
SECTION 1.2 Interpretation...................................................... 6
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.................................... 7
SECTION 2.2 Lists of Holders of Securities...................................... 7
SECTION 2.3 Reports by the Institutional Trustee................................ 7
SECTION 2.4 Periodic Reports to Institutional Trustee........................... 8
SECTION 2.5 Evidence of Compliance with Conditions Precedent.................... 8
SECTION 2.6 Events of Default; Waiver........................................... 8
SECTION 2.7 Event of Default; Notice............................................ 9
ARTICLE III
ORGANIZATION
SECTION 3.1 Name................................................................ 10
SECTION 3.2 Office.............................................................. 10
SECTION 3.3 Purpose............................................................. 10
SECTION 3.4 Authority........................................................... 10
SECTION 3.5 Title to Property of the Trust...................................... 11
SECTION 3.6 Powers and Duties of the Administrative Trustees.................... 11
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees................ 13
SECTION 3.8 Powers and Duties of the Institutional Trustee...................... 14
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.... 16
SECTION 3.10 Certain Rights of the Institutional Trustee......................... 17
SECTION 3.11 Delaware Trustee.................................................... 19
SECTION 3.12 Execution of Documents.............................................. 19
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.............. 19
SECTION 3.14 Duration of Trust................................................... 19
SECTION 3.15 Mergers............................................................. 19
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities............................. 21
SECTION 4.2 Responsibilities of the Sponsor..................................... 21
</TABLE>
_____________
* This Table of Contents does not constitute part of the Declaration and shall
not affect the interpretation of any of its terms or provisions.
<PAGE>
<TABLE>
<S> <C>
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.................................................. 22
SECTION 5.2 Delaware Trustee.................................................... 22
SECTION 5.3 Institutional Trustee; Eligibility.................................. 22
SECTION 5.4 Qualifications of Administrative Trustees and Delaware Trustee
Generally........................................................... 23
SECTION 5.5 Initial Trustees.................................................... 23
SECTION 5.6 Appointment, Removal and Resignation of Trustees.................... 24
SECTION 5.7 Vacancies among Trustees............................................ 25
SECTION 5.8 Effect of Vacancies................................................. 25
SECTION 5.9 Meetings............................................................ 25
SECTION 5.10 Delegation of Power................................................. 26
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business......... 26
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions....................................................... 26
SECTION 6.2 Payments under Indenture or Pursuant to Direct Actions.............. 26
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities............................. 27
SECTION 7.2 Paying Agent........................................................ 27
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust................................................ 28
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.............................................. 29
SECTION 9.2 Transfer of Certificates............................................ 29
SECTION 9.3 Deemed Security Holders............................................. 29
SECTION 9.4 Book Entry Interests................................................ 30
SECTION 9.5 Notices to Clearing Agency.......................................... 30
SECTION 9.6 Appointment of Successor Clearing Agency............................ 30
SECTION 9.7 Definitive Capital Security Certificates............................ 31
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates................... 31
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability........................................................... 32
SECTION 10.2 Exculpation......................................................... 32
SECTION 10.3 Fiduciary Duty...................................................... 33
SECTION 10.4 Indemnification..................................................... 36
SECTION 10.5 Outside Businesses.................................................. 35
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year......................................................... 36
SECTION 11.2 Certain Accounting Matters.......................................... 36
SECTION 11.3 Banking............................................................. 37
SECTION 11.4 Withholding......................................................... 37
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.......................................................... 37
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.... 39
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee
and Delaware Trustee................................................ 40
SECTION 13.2 Representations and Warranties of Delaware Trustee.................. 41
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices............................................................. 42
SECTION 14.2 Governing Law....................................................... 43
SECTION 14.3 Intention of the Parties............................................ 43
SECTION 14.4 Headings............................................................ 43
SECTION 14.5 Successors and Assigns.............................................. 43
SECTION 14.6 Partial Enforceability.............................................. 43
SECTION 14.7 Counterparts........................................................ 43
SECTION 14.8 Incorporation by Reference of Annex I............................... 43
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C>
ANNEX AND EXHIBITS
ANNEX I TERMS OF SECURITIES.................................................. I-1
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE................................. A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE.................................. A2-1
EXHIBIT B SPECIMEN OF DEBENTURE................................................ B-1
EXHIBIT C UNDERWRITING AGREEMENT............................................... C-1
</TABLE>
-iv-
<PAGE>
<TABLE>
<CAPTION>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
<S> <C>
310(a)................................................... 5.3(a)
310(c)................................................... Inapplicable
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(f)................................................... Inapplicable
315(a)................................................... 3.9(b)
315(c)................................................... 3.9(a)
315(d)................................................... 3.9(a)
316(a)................................................... Annex I
316(c)................................................... 3.6(e)
</TABLE>
_______________
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
-v-
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
ARVIN CAPITAL I
THIS AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration")
dated and effective as of _______________, 199__, by and among Arvin Industries,
Inc., an Indiana corporation, as Sponsor, and __________________,
_____________________, and Wilmington Trust Company, a Delaware banking
corporation, not in their individual capacities, but solely as trustees of the
Trust, as defined below (collectively, the "Trustees"), and the holders, from
time to time, of undivided beneficial interests in the Trust to be issued
pursuant to this Declaration.
WHEREAS, the Trustees and the Sponsor established Arvin Capital I (the
"Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust, dated as of December ___, 1996 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on December ___, 1996, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Delaware Business Trust Act,
and that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will be
held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
-----------
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of, and Annexes and Exhibits
to, this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and
<PAGE>
(f) a reference to the singular includes the plural and vice versa.
"Administrative Trustee" means any Trustee other than the
----------------------
Institutional Trustee and the Delaware Trustee.
"Affiliate" has the same meaning as given to that term in Rule 405 of
---------
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
------------------
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
-------------------
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a day on which state or
------------
federal banking institutions in New York, New York or Wilmington, Delaware are
authorized or required by law, executive order or regulation to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
------------------
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time,
or any successor legislation.
"Capital Securities" has the meaning specified in Section 7.1.
------------------
"Capital Securities Guarantee" means the guarantee agreement to be
----------------------------
dated as of ______________, 199__, of the Sponsor in respect of the Capital
Securities.
"Capital Security Beneficial Owner" means, with respect to a Book
---------------------------------
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Capital Security Certificate" means a certificate representing a
----------------------------
Capital Security substantially in the form of Exhibit A-1.
"Certificate" means a Common Security Certificate or a Capital
-----------
Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
---------------
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Capital Securities and in whose name or in the name of a nominee of
that organization a Global Certificate shall be registered and which shall
undertake to effect book entry transfers and pledges of the Capital
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means ______________, 199__.
------------
"Code" means the Internal Revenue Code of 1986, as amended from time
----
to time, or any successor legislation. A reference to a specific section of the
Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
----------
"Common Securities Guarantee" means the guarantee agreement to be
---------------------------
dated as of ________________, 199__ of the Sponsor in respect to the Common
Securities.
"Common Securities" has the meaning specified in Section 7.1.
-----------------
-2-
<PAGE>
"Common Security Certificate" means a definitive certificate in fully
---------------------------
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Administrative Trustee, (b)
--------------------------
any Affiliate of any Administrative Trustee, (c) any officers, directors,
shareholders, members, partners, employees, representatives, or agents of any
Administrative Trustee or any Affiliate thereof, or (d) any officer, employee or
agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional Trustee
----------------------
at which the corporate trust business of the Institutional Trustee and the
Capital Securities Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this
Declaration is located at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001.
"Covered Person" means: (a) any officer, director, shareholder,
--------------
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Arvin Industries, Inc. in its capacity as
----------------
issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued by the
----------
Debenture Issuer under the Indenture to be held by the Institutional Trustee,
for which a specimen certificate is included as Exhibit B.
"Debt Trustee" means Wilmington Trust Company, not in its individual
------------
capacity but solely as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Definitive Capital Security Certificates" has the meaning set forth
-----------------------------------------
in Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
----------------
"Direction" by a Person means a written direction signed: (a) if the
---------
Person is a natural person, by that Person; or (b) in any other case, in the
name of such Person by one or more Authorized Officers of that Person.
"Distribution" means a distribution payable to Holders of Securities
------------
in accordance with Section 6.1.
"Event of Default" in respect of the Securities means an Event of
----------------
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
----------------------------
10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
-----------
-3-
<PAGE>
"Global Certificate" has the meaning set forth in Section 9.4.
------------------
"Holder" means a Person in whose name a Certificate representing a
------
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
------------------
Indemnified Person.
"Indenture" means the Indenture dated as of ______________, 199__,
---------
between the Debenture Issuer and the Debt Trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" means the Trustee meeting the eligibility
---------------------
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
-----------------------------
3.8(c).
"Investment Company" means an investment company as defined in the
------------------
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
----------------------
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
------------
"List of Holders" has the meaning set forth in Section 2.2.
---------------
"Majority in liquidation amount of the Securities" means, except as
------------------------------------------------
provided in the terms of the Capital Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Capital Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
-4-
<PAGE>
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(i).
------------
"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.
"Pricing Agreement" means the pricing agreement in substantially the
-----------------
form attached as Exhibit A to the Underwriting Agreement among the Trust, Arvin
Industries, Inc., an Indiana corporation, and the underwriters designated by the
Administrative Trustees with respect to the offer and sale of the Capital
Securities.
"Quorum" means a majority of the Administrative Trustees or, if there
------
are only two Administrative Trustees, both of them.
"Related Party" means, with respect to the Sponsor, any direct or
-------------
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
-------------------
Trustee, the chairman of the board of directors, the president, any vice-
president, any assistant vice-president, the secretary, any assistant secretary,
the treasurer, any assistant treasurer, any trust officer or assistant trust
officer or other officer of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers 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.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or any
---------
successor rule thereunder.
"Securities" means the Common Securities and the Capital Securities.
----------
-5-
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time, or any successor legislation.
"Securities Guarantee" means each of the Common Securities Guarantee
--------------------
and the Capital Securities Guarantee.
"Sponsor" means Arvin Industries, Inc., an Indiana corporation, or any
-------
successor entity in a merger, consolidation or amalgamation, in its capacity as
sponsor of the Trust.
"Successor Institutional Trustee" means a successor Trustee possessing
-------------------------------
the qualifications to act as Institutional Trustee under Section 5.3(a).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
--------------
"Tax Event" has the meaning set forth in Annex I hereto.
---------
"10% in liquidation amount of the Securities" means, except as
-------------------------------------------
provided in the terms of the Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding Capital Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of 10%
or more of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
--------------------
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
------- --------
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the
----------------------
offering and sale of Capital Securities in substantially the form of Exhibit
C.
SECTION 1.2 Interpretation.
--------------
References to the neuter gender include the masculine and feminine,
where appropriate. Terms which relate to accounting matters shall be interpreted
in accordance with generally accepted accounting principles in effect from time
to time. References to any statute mean such statute, as amended at the time,
and include any successor legislation. The word "or" is not exclusive, and the
words "herein," "hereof," and "hereunder" refer to this Declaration as a whole.
-6-
<PAGE>
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is
a trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by (S)(S) 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the Trust's classification as a grantor trust for
United States Federal income tax purposes and shall not affect the nature of the
Securities as equity securities representing undivided beneficial interests in
the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
------------------------------
(a) Each of the Sponsor and the Administrative Trustees, on
behalf of the Trust, shall provide the Institutional Trustee (i) within fourteen
(14) days after each record date for payment of Distributions, a list, in such
form as the Institutional Trustee may reasonably require, of the names and
addresses of the Holders of the Securities ("List of Holders") as of such record
date, provided that neither the Sponsor nor the Administrative Trustees, on
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behalf of the Trust, shall be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most recent List of Holders
given to the Institutional Trustee by the Sponsor and the Administrative
Trustees, on behalf of the Trust, and (ii) at any other time, within thirty (30)
days of receipt by the Trust of a written request from the Institutional Trustee
for a List of Holders as of a date no more than fourteen (14) days before such
List of Holders is given to the Institutional Trustee. The Institutional Trustee
shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it receives in
the capacity as Paying Agent (if acting in such capacity); provided that the
-------- ----
Institutional Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations
under (S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
------------------------------------
On or before July 15 of each year (commencing with the year of the
first anniversary of the issuance of the Capital Securities), the
Institutional Trustee shall provide to the Holders of the Capital Securities
such reports as are required by (S) 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by (S) 313 of the Trust Indenture Act. The
Institutional Trustee shall also comply with the requirements of (S) 313(d) of
the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Institutional Trustee.
-----------------------------------------
Each of the Sponsor and the Administrative Trustees, on behalf of the
Trust, shall provide to the Institutional Trustee such documents, reports and
information as required by (S) 314 (if any) and the compliance certificate
required by (S) 314 of the Trust Indenture Act in the form, in the manner and at
the times required by (S) 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Sponsor and the Administrative Trustees, on behalf of the
Trust, shall provide to the Institutional Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Declaration that
relate to any of the matters set forth in (S) 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to (S)
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
-------------------------
(a) The Holders of a Majority in liquidation amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital
Securities and its consequences, provided that, if the underlying Event of
-------------
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Capital Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act, and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Capital Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Capital Securities of an Event of Default with respect to the Capital
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
-------- ----
Default under the Indenture:
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(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event of
Default under the Declaration as provided below in this Section 2.6(b), the
Event of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration as provided below
in this Section 2.6(b), the Event of Default under the Declaration may only
be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
- --------
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Institutional Trustee will be deemed to be acting solely on behalf of the
Holders of the Capital Securities and only the Holders of the Capital Securities
will have the right to direct the Institutional Trustee in accordance with the
terms of the Securities. The foregoing provisions of this Section 2.6(b) shall
be in lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act,
and such (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Declaration and the Securities, as permitted
by the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist, and any Event
of Default with respect to the Common Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Capital
Securities constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu
of (S) 316(a)(1)(B) of the Trust Indenture Act, and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
------------------------
(a) The Institutional Trustee shall, within ninety (90) days
after the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Securities, notices of all defaults with
respect to the Securities known to the Institutional Trustee, unless such
defaults have been cured before the giving of such notice (the term "defaults"
for the purposes of this Section 2.7(a) being hereby defined to be an Event of
Default as defined in the Indenture, not including any periods of grace provided
for therein and irrespective of the giving of any notice provided therein);
provided that, except for a default in the payment of principal of (or premium,
- -------- ----
if any) or interest on any of the Debentures or in the payment of any sinking
fund installment established for the Debentures, the Institutional Trustee shall
be protected in withholding such notice if and so long as a the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officer of the Institutional Trustee in good faith deter mines that
the withholding of such notice is in the interests of the Holders of the
Securities.
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(b) The Institutional Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 6.01(a)(1) and 6.01(a)(2) of the
Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
----
The Trust is named "Arvin Capital I," as such name may be modified
from time to time by the Administrative Trustees following written notice to the
Holders of Securities. The Trust's activities may be conducted under the name
of the Trust or any other name deemed advisable by the Administrative Trustees.
SECTION 3.2 Office.
------
The address of the principal office of the Trust is c/o Arvin
Industries, Inc., One Noblitt Plaza, Box 3000, Columbus, Indiana 47202. On ten
(10) Business Days' prior written notice to the Holders of Securities, the
Administrative Trustees may designate another principal office.
SECTION 3.3 Purpose.
-------
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
The Trust will be classified as a grantor trust for United States
federal income tax purposes under Subpart E of Subchapter J of the Code,
pursuant to which the owners of the Capital Securities and the Common
Securities will be the owners of the Trust for United States federal income tax
purposes, and such owners will include directly in their gross income the
income, deductions and credits of the Trust as if the Trust did not exist. By
the acceptance of this Trust, none of the Trustees, the Sponsor, the Holders of
the Capital Securities or Common Securities or the Capital Securities
Beneficial Owners will take any position for United States federal income tax
purposes which is contrary to the classification of the Trust as a grantor
trust.
SECTION 3.4 Authority.
---------
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Administrative Trustees shall
have exclusive and complete authority to carry out the purposes of the Trust.
An action taken by the Administrative Trustees in accordance with their powers
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shall constitute the act of and serve to bind the Trust, and an action taken by
the Institutional Trustee, on behalf of the Trust, in accordance with its powers
shall constitute the act of and serve to bind the Trust. In dealing with a
Trustee or the Trustees acting on behalf of the Trust, no Person shall be
required to inquire into the authority of such Trustee or Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of a Trustee or the Trustees as set forth in this
Declaration.
SECTION 3.5 Title to Property of the Trust.
------------------------------
Legal title to all assets of the Trust shall be vested in the
Institutional Trustee and shall be administered by the Institutional Trustee for
the benefit of the Holders in accordance with this Declaration. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Administrative Trustees.
------------------------------------------------
The Administrative Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Capital Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
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Trust may issue no more than one series of Capital Securities and no more than
one series of Common Securities, and, provided further, that there shall be no
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interests in the Trust other than the Securities, and the issuance of the
Securities shall be limited to a one-time, simultaneous issuance of both the
Capital Securities and the Common Securities on the Closing Date;
(b) in the event that any action referred to below is required,
by the rules and regulations of the Commission or state securities or blue sky
laws, to be taken by the Trustees, on behalf of the Trust, in connection with
the issue and sale of the Capital Securities, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any amendments
thereto, pertaining to the Capital Securities, the Capital Securities
Guarantee and the Debentures; and
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Capital Securities in any State in
which the Sponsor has determined to qualify or register such Capital
Securities for sale;
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(c) to acquire the Debentures with the proceeds of the sale of
the Capital Securities and the Common Securities; provided, however, that the
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Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Institutional Trustee for the benefit of the Holders
of the Capital Securities and the Holders of the Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt
written notice of the occurrence of a Tax Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of (S)316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Capital Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Administrative Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(f), the Institutional
Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by (S) 314(a)(4) of the
Trust Indenture Act to the Institutional Trustee, which certificate may be
executed by any Administrative Trustee;
(k) to incur expenses that are necessary or incidental to carry
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar
and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed on behalf of the Trust;
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(o) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes,
provided that such action does not materially adversely affect the interests of
- -------- ----
Holders; and
(q) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Administrative Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Administrative Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall have
none of the powers or the authority of the Institutional Trustee set forth in
Section 3.8.
Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
(a) The Trust shall not, and the Trustees (including the
Institutional Trustee) shall cause the Trust not to, engage in any activity
other than as required or authorized by this Declaration. In particular, the
Trust shall not and the Trustees (including the Institutional Trustee) shall
cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
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(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all the
Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have received an opinion
of counsel to the effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes the
Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
----------------------------------------------
(a) The legal title to the Debentures shall be owned by and held
of record in the name of the Institutional Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with
Section 5.6. Such vesting and cessation of title shall be effective whether or
not conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right,
title and interest in the Debentures to the Administrative Trustees or to the
Delaware Trustee (if the Institutional Trustee does not also act as Delaware
Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Institutional Trustee Account") in the name of and
under the exclusive control of the Institutional Trustee on behalf of the
Holders of the Securities and, upon the receipt of payments of funds made
in respect of the Debentures held by the Institutional Trustee, deposit
such funds into the Institutional Trustee Account and make payments to the
Holders of the Capital Securities and Holders of the Common Securities
from the Institutional Trustee Account in accordance with Section 6.1.
Funds in the Institutional Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. The Institutional Trustee
Account shall be an account that is maintained with a banking institution
the rating on whose long-term unsecured indebtedness, as assigned by a
"nationally recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities Act, is at
least investment grade;
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(ii) engage in such ministerial activities as shall be necessary
or appropriate to effect the redemption of the Capital Securities and the
Common Securities to the extent the Debentures are redeemed or mature;
and
(iii) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as shall be necessary or appropriate
to effect the distribution of the Debentures to Holders of Securities upon
the occurrence of certain special events (as may be defined in the terms of
the Securities) arising from a change in law or a change in legal
interpretation or other specified circumstances pursuant to the terms of
the Securities.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a Responsible
Officer of the Institutional Trustee has actual knowledge or the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act.
(f) The Institutional Trustee shall not resign as a Trustee
unless either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of Securities pursuant to the
terms of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default actually known to a Responsible
Officer of the Institutional Trustee occurs and is continuing, the Institutional
Trustee shall, for the benefit of Holders of the Securities, enforce its rights
as holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Institutional Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments, on behalf of the Trust, with respect to all Securities,
and any such Paying Agent shall comply with (S) 317(b) of the Trust Indenture
Act. Any Paying Agent may be removed by the Institutional Trustee at any time
and a successor Paying Agent or additional Paying Agents may be appointed at any
time by the Institutional Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
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SECTION 3.9 Certain Duties and Responsibilities of the Institutional
--------------------------------------------------------
Trustee.
- -------
(a) The Institutional 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 Declaration and in the terms of the Securities, and no implied
covenants shall be read into this Declaration against the Institutional Trustee.
In case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6), the Institutional Trustee shall exercise such of the
rights and powers vested in it by this Declaration, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Institutional 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 an 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 Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the terms of the Securities, and the Institutional
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Declaration and
in the terms of the Securities, and no implied covenants or
obligations shall be read into this Declaration against the
Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional 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 Institutional Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Institutional Trustee, the
Institutional Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Declaration;
(ii) the Institutional Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Institutional Trustee, unless it shall be proved that the Institutional
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Institutional 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 Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional 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 it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the
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terms of this Declaration or indemnity reasonably satisfactory to the
Institutional Trustee against such risk or liability is not reasonably
assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property for
its own account, subject to the protections and limitations on liability
afforded to the Institutional Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability
for or with respect to the value, genuineness, existence or sufficiency of
the Debentures or the payment of any taxes or assessments levied thereon or
in connection therewith;
(vii) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree with
the Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional Trustee
Account maintained by the Institutional Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the Sponsor
with their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Administrative Trustees or the Sponsor.
SECTION 3.10 Certain Rights of the Institutional Trustee.
-------------------------------------------
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document 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 Sponsor or the Administrative
Trustees contemplated by this Declaration shall be sufficiently evidenced
by a Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the Administrative
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
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(v) the Institutional Trustee may consult with counsel or other
experts and the written advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise 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 accordance with such advice or opinion; such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of its
employees. The Institutional Trustee shall have the right at any time to
seek instructions concerning the administration of this Declaration from
any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity which would
satisfy a reasonable person in the position of the Institutional Trustee,
against the costs, expenses (includ ing attorneys' fees and expenses and
the expenses of the Institutional Trustee's agents, nominees or custodians)
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
Institutional Trustee; provided, that, nothing contained in this Section
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3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, re quest,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys, and the Institutional
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;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action, and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively evi-
denced by the Institutional Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively
relying on or acting in or accordance with such instructions; and
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(xi) except as otherwise expressly provided by this Declaration,
the Institutional Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Institutional 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 Institutional
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 Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
----------------
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Administrative Trustees or the Institutional Trustee described in this
Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be
a Trustee for the sole and limited purpose of fulfilling the requirements of (S)
3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
----------------------
Except as otherwise required by the Business Trust Act, a majority of
or, if there are only two, any Administrative Trustee or, if there is only one,
such Administrative Trustee is authorized to execute, on behalf of the Trust,
any documents that the Administrative Trustees have the power and authority to
execute pursuant to Section 3.6; provided that, the registration statement
-------- ----
referred to in Section 3.6(b)(i), including any amendments thereto, if required,
by the rules and regulations of the Commission, to be signed by the Trustees on
behalf of the Trust, shall be signed by all of the Administrative Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
-----------------
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall exist for fifty-five years from the Closing Date.
SECTION 3.15 Mergers.
-------
(a) The Trust may not 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 Person, except as described in Section
3.15(b) and (c) and Annex I.
(b) The Trust may, with the consent of the Administrative
Trustees or, if there are more than two, a majority of the Administrative
Trustees, and without the consent of the Holders of the
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Securities, the Delaware Trustee or the Institutional Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State of the United States; provided that:
-------- ----
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Capital Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the
Capital Securities rank with respect to Distributions and payments
upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Capital Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with any other
organization on which the Capital Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Capital Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders' interests
in the new entity as a result of such merger, consolidation, amalgamation
or replacement);
(vi) such Successor Entity has a purpose substantially identical
to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of the
Holders' interest in the new entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
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(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Capital Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
---------------------------------------
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount equal to at least 3% of the capital
of the Trust, at the same time as the Capital Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
-------------------------------
In connection with the issue and sale of the Capital Securities and
subject to the provisions of Section 3.6(b), the Sponsor shall have the
exclusive right and responsibility to engage in the following activities:
(a) to prepare, execute and file with the Commission, on behalf
of the Trust, a registration statement on Form S-3 in relation to the Capital
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action
to qualify or register for sale all or part of the Capital Securities and to
do any and all such acts, and to prepare, execute and file any documents, on
behalf of the Trust, as the Sponsor deems necessary or advisable in order to
comply with the applicable laws of any such States; and
(c) to negotiate, execute and deliver, on behalf of the Trust,
the Underwriting Agreement and Pricing Agreement providing for the sale of the
Capital Securities.
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ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
------------------
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of Trustees;
(b) after the issuance of any Securities, the number of Trustees
may be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities or by written consent in lieu of a meeting;
provided however, that if the Institutional Trustee does not also act as
- -------- -------
Delaware Trustee, the number of Trustees shall be at least three (3); provided
--------
further that (1) one Trustee shall be the Delaware Trustee, as described in
- -------
Section 5.2 hereof; (2) there shall be at least one Trustee who is an employee
or officer of, or is affiliated with the Parent (an "Administrative Trustee");
and (3) one Trustee shall be the Institutional Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements.
SECTION 5.2 Delaware Trustee.
----------------
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware;
or
(b) 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 law,
provided that, if the Institutional Trustee has its principal place of business
- -------- ----
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee, and Section
3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
----------------------------------
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or other Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by federal, state,
territorial or District of Columbia authority. If such corporation or other
Person publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section
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5.3(a)(ii), the combined capital and surplus of such corporation or other
Person shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-7 and to the extent Rule 3a-7
requires a trustee having certain qualifications to hold title to the
"eligible assets" (as defined in Rule 3a-7) of the Trust, the Institutional
Trustee shall possess those qualifications.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of (S) 310(b) of the Trust Indenture
Act, the Institutional Trustee and the Holder of the Common Securities (as if it
were the obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in
all respects comply with the provisions of (S) 310(b) of the Trust Indenture
Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.4 Qualifications of Administrative Trustees and Delaware
------------------------------------------------------
Trustee Generally.
- -----------------
Each Administrative Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees.
----------------
The initial Administrative Trustees shall be:
Richard A. Smith
A. R. Sales
The initial Institutional Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
which shall also act as the initial Delaware Trustee.
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SECTION 5.6 Appointment, Removal and Resignation of Trustees.
-------------------------------------------------
(a) Subject to Section 5.6(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders
of a Majority in liquidation amount of the Common Securities, voting as a
class at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Institutional
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Institutional Trustee and delivered
to the Administrative Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 5.2
and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Administrative Trustees and the
Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
-------- -------
that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been
appointed and has accepted such appointment by instrument executed by
such Successor Institutional Trustee and delivered to the Trust, the
Sponsor, and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
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(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within sixty (60) days after delivery to the Sponsor and the Trust
of an instrument of resignation, the resigning Institutional Trustee or Delaware
Trustee, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Institutional Trustee or Successor Delaware Trustee,
as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Institutional Trustee or
Successor Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees, shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
-------------------
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee
shall not operate to annul the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of a Administrative Trustee in accordance with Section 5.6, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.
SECTION 5.9 Meetings.
--------
If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 48 hours before such meeting. Notice
of any telephonic meetings of the Administrative Trustees or any committee
thereof shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Administrative Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Administrative Trustee attends a meeting
for the express purpose of objecting to the transaction of any activity on the
ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting,
-------- ----
by the unanimous written consent of the Administrative Trustees. In the event
there is only one Administrative Trustee, any and all action of such
Administrative Trustee shall be evidenced by a written consent of such
Administrative Trustee.
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SECTION 5.10 Delegation of Power.
-------------------
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any Person into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any Person succeeding to all or substantially
all the corporate trust business of the Institutional Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Institutional Trustee
or the Delaware Trustee, as the case may be, hereunder, provided such Person
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
-------------
Holders shall receive Distributions in accordance with the applicable
terms of the relevant Holder's Securities. Distributions shall be made on the
Capital Securities and the Common Securities in accordance with the
preferences set forth in their respective terms. If and to the extent that the
Debenture Issuer makes a payment of interest (including Compounded Interest (as
defined in the Indenture) and Additional Interest (as defined in the
Indenture)), premium and/or principal on the Debentures held by the
Institutional Trustee (the amount of any such payment being a "Payment Amount"),
the Institutional Trustee shall and is directed, to the extent funds are
available for that purpose, to make a distribution (a "Distribution") of the
Payment Amount to Holders.
SECTION 6.2 Payments under Indenture or Pursuant to Direct Actions.
------------------------------------------------------
Any amount payable hereunder to any Holder of Capital Securities
shall be reduced by the amount of any corresponding payment such Holder (or a
Capital Security Beneficial Owner with respect to the Holder's Capital
Securities) has directly received pursuant to Section 6.4 of the Indenture or
Section 5(b) of the Securities.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
---------------------------------------
(a) The Administrative Trustees shall, on behalf of the Trust,
issue one class of preferred securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in Annex
I (the "Capital Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities"). The Trust shall issue no
securities or other interests in the assets of the Trust other than the
Capital Securities and the Common Securities.
(b) The Certificates shall be signed, on behalf of the Trust, by
an Administrative Trustee. Any such signature shall be the manual signature of
any present or any future Administrative Trustee. In case any Administrative
Trustee of the Trust who shall have signed any of the Certificates shall cease
to be such a Administrative Trustee before the Certificates so signed shall be
delivered by the Trust, such Certificates nevertheless may be delivered as
though the person who signed such Certificates had not ceased to be such
Administrative Trustee; and any Certificate may be signed, on behalf of the
Trust, by such persons who, at the actual date of execution of such Certificate
shall be the Administrative Trustees of the Trust, although at the date of the
execution and delivery of the Declaration any such person was not such an
Administrative Trustee. Certificates shall be printed, lithographed or engraved
or may be produced in any other manner as is reasonably acceptable to the
Administrative Trustees, as evidenced by their execution thereof, and may have
such letters, numbers or other marks of identification or designation and such
legends or endorsements as the Administrative Trustees may deem appropriate, or
as may be required to comply with any law or with any rule or regulation of any
stock exchange on which the Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of
the Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable, subject to Section 10.1(b) with respect to the
Common Securities. The issuance of the Securities as provided in this
Declaration is not subject to preemptive or other similar rights.
(e) Every Person, by virtue of having become a Holder or a
Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration, the Securities Guarantees and the
Indenture.
SECTION 7.2 Paying Agent.
------------
In the event that the Capital Securities are not in book-entry only
form, the Trust shall maintain in the Borough of Manhattan, City of New York,
State of New York, an office or agency where the Capital Securities may be
presented for payment ("Paying Agent"). The term "Paying Agent" includes any
additional paying agent. The Trust may change any Paying Agent without prior
notice to any Holder. The Trust shall notify the Institutional Trustee of the
name and address of any Agent not a party to this Declaration. If the Trust
fails to appoint or maintain another entity as Paying Agent, the Institutional
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Trustee shall act as such. The Trust or any of its Affiliates may act as Paying
Agent. The Trust shall act as Paying Agent for the Common Securities.
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.
(a) The Trust shall dissolve upon the earliest of:
(i) the bankruptcy of the Sponsor;
(ii) the filing of a certificate of dissolution or its equivalent
with respect to the Sponsor; the filing of a certificate of cancellation
with respect to the Trust after having obtained the consent of at least a
majority in liquidation amount of the Securities, voting together as a
single class, to file such certificate of cancellation; the revocation of
the Sponsor's charter and the expiration of ninety (90) days after the date
of revocation without a reinstatement thereof;
(iii) the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(iv) the time when all of the Securities shall have been called
for redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Securities;
(v) at the election of the Sponsor, after satisfaction of the
liabilities of creditors of the Trust as required by applicable law,
provided that all of the Debentures are distributed to the Holders of the
Capital Securities in liquidation of the Trust;
(vi) the time when all of the Administrative Trustees and the
Sponsor shall have consented to termination of the Trust, provided such
action is taken before the issuance of any Securities; or
(vii) the expiration of the term of the Trust, as set forth in
Section 3.14.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and the completion of the winding up of the
affairs of the Trust, the Trustees shall file a certificate of cancellation with
the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive
the termination of the Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
----------------------
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Capital Securities shall be
freely transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Certificates.
------------------------
The Administrative Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Administrative Trustees
may require) in respect of any tax or other governmental charges that may be
imposed in relation to it. Upon surrender for registration of transfer of any
Certificate, the Administrative Trustees shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer shall
be accompanied by a written instrument of transfer in form satisfactory to the
Administrative Trustees duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Certificate surrendered for registration of
transfer shall be canceled by the Administrative Trustees. A transferee of a
Certificate shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Certificate. By
acceptance of a Certificate, each transferee shall be deemed to have agreed to
be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
-----------------------
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
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SECTION 9.4 Book Entry Interests.
--------------------
Unless otherwise specified in the terms of the Capital Securities,
the Capital Securities Certificates, on original issuance, will be issued in
the form of one or more, fully registered, global Capital Security
Certificates (each, a "Global Certificate"), to be delivered to The Depository
Trust Company, the initial Clearing Agency, by, or on behalf of, the Trust.
Such Global Certificate(s) shall initially be registered on the books and
records of the Trust in the name of Cede & Co., the nominee of The Depository
Trust Company, and no Capital Security Beneficial Owner will receive a
definitive Capital Security Certificate representing such Capital Security
Beneficial Owner's interests in such Global Certificate(s), except as provided
in Section 9.7. Unless and until definitive, fully registered Capital
Security Certificates (the "Definitive Capital Security Certificates") have
been issued to the Capital Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Certificate(s) and receiving approvals,
votes or consents hereunder) as the Holder of the Capital Securities and
the sole holder of the Global Certificate(s) and shall have no obligation
to the Capital Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Capital Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Capital Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants. The Depository Trust Company will make book entry transfers
among the Clearing Agency Participants and receive and transmit payments of
Distributions on the Global Certificate(s) to such Clearing Agency
Participants.
SECTION 9.5 Notices to Clearing Agency.
--------------------------
Whenever a notice or other communication to the Capital Security
Holders is required under this Declaration, unless and until Definitive
Capital Security Certificates shall have been issued to the Capital Security
Beneficial Owners pursuant to Section 9.7, the Administrative Trustees shall
give all such notices and communications specified herein to be given to the
Capital Security Holders to the Clearing Agency, and shall have no notice
obligations to the Capital Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities, the
Administrative Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to such Capital Securities.
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SECTION 9.7 Definitive Capital Security Certificates.
-----------------------------------------
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities and a successor
Clearing Agency is not appointed within ninety (90) days after such
discontinuance pursuant to Section 9.6; or
(b) the Administrative Trustees elect, after consultation with the
Sponsor, to terminate the book entry system through the Clearing Agency with
respect to the Capital Securities,
then:
(i) Definitive Capital Security Certificates shall be prepared by
the Administrative Trustees, on behalf of the Trust, with respect to such
Capital Securities; and
(ii) upon surrender of the Global Certificate(s) by the Clearing
Agency, accompanied by registration instructions, the Administrative
Trustees shall cause Definitive Capital Security Certificates to be
delivered to Capital Security Beneficial Owners in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust
shall be liable for any delay in delivery of such instructions and each of
them may conclusively rely on, and shall be protected in relying on, said
instructions of the Clearing Agency. The Definitive Capital Security
Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Administrative
Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Administrative Trustees may deem
appropriate, or as may be required to comply with any law or with any rule
or regulation made pursuant thereto, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If:
(a) any mutilated Certificates should be surrendered to the
Administrative Trustees, or if the Administrative Trustees shall receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate; and
(b) there shall be delivered to the Administrative Trustees such
security or indemnity as may be required by them to keep each of them harmless;
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Administrative Trustee, on behalf of the Trust, shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Administrative Trustees may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive
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evidence of an ownership interest in the relevant Securities, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
---------
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon termination of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders
of the Capital Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith, on behalf of the Trust, and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's gross negligence (or in
the case of the Institutional Trustee, negligence, subject to the provisions of
Section 3.9) or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
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SECTION 10.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein or required by
applicable law:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provide terms that are, fair and reasonable to the Trust or any
Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Unless required by applicable law, whenever in this Declaration
an Indemnified Person is permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
---------------
(a)(i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed
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to be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a pleas of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the
best interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific cause upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Administrative Trustees by a majority vote of a quorum consisting of
such Administrative Trustees who were not parties to such action, suit or
proceedings, (2) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Administrative Trustees so
directs, by independent legal counsel in a written opinion, or (3) by the
Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Administrative Trustees by a majority vote of a quorum of
disinterested Administrative Trustees, (ii) if such a quorum is not
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obtainable, or, even if obtainable, if a quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a
written opinion or (iii) the Common Security Holder of the Trust, that,
based upon the facts known to the Administrative Trustees, counsel or the
Common Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person did
not believe to be in or not opposed to the best interests of the Trust, or,
with respect to any criminal proceeding, that such Company Indemnified
Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where the
Administrative Trustees, independent legal counsel or the Common Security
Holder reasonably determine that such person deliberately breached his duty
to the Trust or its Common or Capital Security Holders.
(vi) the indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or Capital Security Holders of the Trust or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this Section
10.4(a) shall be deemed to be provided by a contract between the Debenture
Issuer and each Company Indemnified Person who serves in such capacity at
any time while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any rights or
obligations then existing.
(vii) the Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) Institutional Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Institutional Trustee and
the Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability,
taxes or expense incurred without negligence or bad faith on its part, arising
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out of or in connection with the acceptance or administration or the trust or
trusts hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The obligation to indemnify as set forth in this Section
10.4(b) shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the
Delaware Trustee or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the
Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within ninety (90) days after
the end of each Fiscal Year of the Trust, annual financial statements of the
Trust, including a balance sheet of the Trust as of the end of such Fiscal Year,
and the related statements of income or loss.
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(c) The Administrative Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Administrative Trustees shall
endeavor to deliver all such statements within thirty (30) days after the end of
each Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Administrative Trustees, on behalf of the Trust, with any state or
local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Administrative Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Administrative Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrative Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld shall
be deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed over withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Administrative Trustees (or, if there are more than two
Administrative Trustees a majority of the Administrative Trustees);
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(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
(b) No amendment of this Declaration shall be made, and any such
purported amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment is permitted by,
and conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee or the Delaware Trustee, the Institutional Trustee or the Delaware
Trustee, as the case may be, shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise materially adversely affect the powers
of the Institutional Trustee in contravention of the Trust Indenture
Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) At such time after the Trust has issued any Securities that
remain outstanding, any amendment that would materially adversely affect the
rights, privileges or preferences of any Holder of Securities may be effected
only with such additional requirements as may be set forth in the terms of such
Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities.
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(f) The rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove Trustees
shall not be amended without the consent of the Holders of a Majority in
liquidation amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in Rule 3a-7 or written change in
interpretation or application of Rule 3a-7 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the right, preferences or privileges of the
Holders of Securities; and
(v) to modify, eliminate and add to any provision of this
Declaration, provided that such modification, elimination, or addition
would not adversely affect the rights, privileges, or preferences of any
Holder of the Securities.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
--------------------------------------------------------
Consent.
- -------
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration, the
terms of the Securities or the rules of any stock exchange on which the
Capital Securities may be listed or admitted for trading. The Administrative
Trustees shall call a meeting of the Holders of such class if directed to do so
by the Holders of at least 10% in liquidation amount of such class of
Securities. Such direction shall be given by delivering to the Administrative
Trustees one or more calls in a writing stating that the signing Holders of
Securities wish to call a meeting and indicating the general or specific purpose
for which the meeting is to be called. Any Holders of Securities calling a
meeting shall specify in writing the Certificates held by the Holders of
Securities exercising the right to call a meeting, and only those Securities
specified shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote at such meeting at least seven (7) days
and not more than sixty (60) days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any stock
exchange on which the Capital Securities may be listed or admitted for
trading, such vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a consent in
writing setting forth the action so
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taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Administrative Trustees may specify that any written ballot submitted
to the Security Holder for the purpose of taking any action without a
meeting shall be returned to the Trust within the time specified by the
Administrative Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of
eleven (11) months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the Holder of
Securities executing it. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall be governed by
the General Corporation Law of the State of Delaware relating to proxies,
and judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Administrative Trustees or by such other Person that the
Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Capital Securities are then listed or trading
otherwise provides, the Administrative Trustees, in their sole discretion,
shall establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee and
Delaware Trustee.
The Trustee which acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Institutional Trustee's acceptance of
its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a Delaware banking association
with trust powers, duly organized, validly existing and in good standing under
the laws of the State of Delaware, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, the
Declaration;
(b) the Institutional Trustee satisfies the requirements set forth
in Section 5.3(a);
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(c) the execution, delivery and performance by the Institutional
Trustee of the Declaration have been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. The Declaration has been duly
executed and delivered by the Institutional Trustee, and it constitutes a
legal, valid and binding obligation of the Institutional Trustee, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law);
(d) the execution, delivery and performance of the Declaration by
the Institutional Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Institutional Trustee; and
(e) no consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee, of the
Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
--------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that:
(a) the Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under the
laws of the State of Delaware, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, the
Declaration;
(b) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The Declaration
under Delaware law constitutes a legal, valid and binding obligation of the
Delaware Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency and other
similar laws affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by the
Delaware Trustee does not conflict with or constitute a breach of the Articles
of Organization or By-laws of the Delaware Trustee;
(d) no consent, approval or authorization of, or registration with
or notice to, any state or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration;
and
(e) the Delaware Trustee has its principal place of business in the
State of Delaware.
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<PAGE>
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Administrative Trustees
at the Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
ARVIN CAPITAL I
c/o Arvin Industries, Inc.
One Noblitt Plaza, Box 3000
Columbus, Indiana 47202
Attention: Administrative Trustees
(b) if given to the Institutional Trustee or the Delaware Trustee,
at the mailing address set forth below (or such other address as the
Institutional Trustee or the Delaware Trustee may give notice of to the Holders
of the Securities):
WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
(c) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
ARVIN INDUSTRIES, INC.
One Noblitt Plaza, Box 3000
Columbus, Indiana 47202
Attention: Treasurer
(d) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices 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.
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<PAGE>
SECTION 14.2 Governing Law.
-------------
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
--------
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 Successors and Assigns
----------------------
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each party hereto to one of such counterpart signature pages. All
of such counterpart signature pages shall be read as though one, and they shall
have the same force and effect as though all of the signers had signed a single
signature page
Section 14.8 Incorporation by Reference of Annex I
-------------------------------------
The terms and provisions of Annex I, attached hereto, are hereby
incorporated by reference in their entirety into this Declaration.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE HOLDER AND ALL OTHERS
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<PAGE>
HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND
PROVISIONS OF THIS DECLARATION AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND
OTHER TERMS OF THE SECURITIES GUARANTEES AND THE INDENTURE AND SHALL CONSTITUTE
THE AGREEMENT OF THE TRUST, THE DEPOSITARY OR ITS NOMINEE, THE TRUSTEES, SUCH
HOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS DECLARATION SHALL
BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST, THE DEPOSITARY OR ITS
NOMINEE, THE TRUSTEES, SUCH HOLDER AND SUCH OTHERS.
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
ARVIN INDUSTRIES, INC.
as Sponsor
By:_____________________________________________________
Name:___________________________________________________
Title:__________________________________________________
WILMINGTON TRUST COMPANY
not in its individual capacity
but solely as Institutional Trustee and Delaware Trustee
By:_____________________________________________________
Name:___________________________________________________
Title:__________________________________________________
________________________________________________________
Richard A. Smith,
not in his individual capacity
but solely as Administrative Trustee
________________________________________________________
A.R. Sales
not in his individual capacity
but solely as Administrative Trustee
<PAGE>
ANNEX I
TERMS OF
___% CAPITAL SECURITIES
___% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of ____________, 199__ (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
----------------------
(a) Capital Securities. One hundred thousand (100,000) Capital
-------------------
Securities of the Trust with an aggregate liquidation amount with respect to the
assets of the Trust of one hundred million dollars ($100,000,000) and a
liquidation amount with respect to the assets of the Trust of $1,000 per Capital
Security, are hereby designated, for the purposes of identification, only as
"___% Capital Securities (the "Capital Securities"). The Capital Security
Certificates evidencing the Capital Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or
practice.
(b) Common Securities. Three thousand one hundred (3,100)
-----------------
Common Securities of the Trust with an aggregate liquidation amount with respect
to the assets of the Trust of three million one hundred thousand dollars
($3,100,000) and a liquidation amount with respect to the assets of the Trust of
$1,000 per Common Security, are hereby designated, for the purposes of
identification only, as "___% Common Securities" (the "Common Securities"). The
Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice.
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate per
annum of ___% (the "Coupon Rate") of the stated liquidation amount of $1,000 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
semi-annual Distribution period will bear interest thereon from and including
the last day of such semi-annual Distribution period compounded semi-annually at
the Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full semi-annual Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full semi-annual
Distribution period for which
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Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed.
(b) Distributions on the Securities will be cumulative, will accrue
from ___________, 199_, and will be payable semi-annually in arrears, on
________________, and _________________ of each year, commencing _____________,
except as otherwise described below. The Debenture Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period from time to time on the Debentures for a period not exceeding ten (10)
consecutive semi-annual interest payment periods (each an "Extension Period"),
during which Extension Period no interest shall be due and payable on the
Debentures, provided that no Extension Period shall last beyond the
-------- ----
date of maturity of the Debentures. There may be multiple Extension Periods of
varying lengths during the term of the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Despite such deferral, semi-
annual Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the Coupon Rate compounded semi-annually
during any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period; provided
--------
that such Extension Period together with all such previous and further
- ----
extensions thereof may not exceed ten (10) consecutive semi-annual interest
payment periods or extend beyond the maturity date of the Debentures. Payments
of accrued Distributions will be payable to Holders as they appear on the books
and records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Capital Securities remain in book-entry only form,
the relevant record dates shall be one Business Day prior to the relevant
payment dates which payment dates correspond to the interest payment dates on
the Debentures. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Capital
Securities will be made as described under the heading "Description of the
Capital Securities -- Book-Entry Only Issuance - The Depository Trust Company"
in the Prospectus dated ___________, 199__ (the "Prospectus"), included in the
Registration Statement on Form S-3 of the Sponsor and the Trust. The relevant
record dates for the Common Securities shall be the same record dates as for the
Capital Securities. If the Capital Securities shall not continue to remain in
book-entry only form, the relevant record dates for the Capital Securities shall
conform to the rules of any securities exchange on which the securities are
listed and, if none, shall be selected by the Administrative Trustees, which
dates shall be at least one Business Day but fewer than sixty (60) Business Days
before the relevant payment dates, which payment dates correspond to the
interest payment dates on the Debentures. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Debenture Issuer having failed to make a payment under the
Debentures, will cease to be payable to the Person in whose name such Securities
are registered on the relevant record date, and such defaulted Distribution will
instead be payable to the Person in whose name such Securities are registered on
the special record date or other specified date determined in accordance with
the Indenture. If any date on which Distributions are payable on the Securities
is not a Business Day, then payment of the Distribution payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
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<PAGE>
(d) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or termination, as the case may be, will be
entitled to receive solely out of the assets of the Trust available for
distribution to Holders of Securities, after paying or making reasonable
provision to pay all claims against and obligations of the Trust in accordance
with Section 3808(e) of the Business Trust Act, an amount equal to the aggregate
of the stated liquidation amount of $1,000 per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, winding-up or
termination, and after paying or making reasonable provision to pay all claims
against and obligations of the Trust in accordance with Section 3808(e) of the
Business Trust Act, Debentures in an aggregate stated principal amount equal to
the aggregate stated liquidation amount of such Securities, with an interest
rate equal to the Coupon Rate, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on such Securities, shall
be distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities in accordance with Section 4(e) hereof.
If, upon any such liquidation, dissolution, winding-up or termination,
the Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Securities
shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
---------------------------
(a) Redemption of the Securities will occur simultaneously with any
repayment or redemption of the Debentures. The Debentures will mature on
_____________, 2027 and are redeemable as set forth in this Section 4. Upon the
repayment of the Debentures in whole or in part, whether at maturity or upon
redemption, the proceeds from such repayment or redemption shall be
simultaneously applied to redeem Securities having an aggregate liquidation
amount equal to the aggregate principal amount of the Debentures so repaid or
redeemed at the Maturity Redemption Price or the Redemption Price, as
applicable, as defined below. If fewer than all of the outstanding Capital
Securities are to be so redeemed, the Securities will be redeemed Pro Rata, and
the Capital Securities will be redeemed as described in Section 4(f)(i) below.
(b) Securities redeemed upon maturity of the Debentures will be redeemed at
a redemption price of $1,000 per Security, plus an amount equal to accrued and
unpaid Distributions thereon at the date of maturity, payable in cash (the
"Maturity Redemption Price").
(c) The Debenture Issuer shall have the right to redeem the Debentures, (i)
on or after January ___, 2007, in whole at any time or in part from time to
time, or (ii) in the event that a Tax Event shall occur and be continuing, then
prior to January ___, 2007, in whole (but not in part) within 90 days following
the occurrence of such Tax Event (as defined below), upon not less than 30 nor
more than 60 days' prior written notice, at the redemption price specified below
(the "Redemption Price"), plus any accrued and unpaid interest, including
Additional Interest, if any, thereon to the date of such redemption (the
"Redemption Date"); provided, however, that the Debenture Issuer shall not
redeem the Debentures in part unless all accrued but unpaid interest has been
paid in full on all of the Debentures outstanding for all semi-annual interest
periods terminating on or prior to the Redemption Date.
The Redemption Price, in the case of a redemption under (i) above, shall
equal the following prices, expressed in percentages of the principal amount of
the Debentures, if the Debentures are redeemed during the 12-month period
beginning January ___ of the years indicated below:
REDEMPTION
YEAR PRICE
---- -----
2007............................................. %
2008............................................. %
2009............................................. %
2010............................................. %
2011............................................. %
2012............................................. %
2013............................................. %
2014............................................. %
2115............................................. %
2116............................................. %
and at 100% on or after January ___, 2017.
The Redemption Price, in the case of a redemption prior to January __,
2007, following a Tax Event, as described under (ii) above, shall equal a "Make-
Whole Amount" equal to the greater of (i) 100% of the principal amount of the
Debentures or (ii) as determined by a Quotation Agent (as defined below), the
sum of the present values of (A) the principal amount and premium payable as
part of the Redemption Price with respect to an optional redemption of such
Debentures on January ___, 2007, and (B) the scheduled payments of interest from
the Redemption Date to January ___, 2007 (the "Remaining Life"), in each case
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of 30-day months) at the Adjusted Treasury Rate (as defined
below).
"Adjusted Treasury Rate" means, with respect to any Redemption Date,
the Treasury Rate (as defined below) plus (i) 1.50% if such Redemption Date
occurs on or before ____________, 1998 or (ii) 0.50% is such Redemption Date
occurs after ____________, 1998.
"Treasury Rate" means (i) the yield, under the heading which
represents the average for the immediately prior week, appearing in the most
recently published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Remaining Life (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue
(as defined below), calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date. The Treasury Rate shall be calculated
on the third Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means, with respect to any Redemption
Date, the United States Treasury security selected by the Quotation Agent as
having a maturity comparable to the Remaining Life that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
Remaining Life. If no United States Treasury security has a maturity which is
within a period from three months before to three months after January ___,
2007, the two most closely corresponding United States Treasury securities
shall be used as the Comparable Treasury Issue, and the Treasury Rate shall be
interpolated or extrapolated on a straight-line basis, rounding to the nearest
month using such securities.
"Quotation Agent" means Merrill Lynch Government Securities, Inc. and
its successors; provided, however, that if the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Debt Trustee after consultation
with the Company.
"Comparable Treasury Price" means, with respect to any Redemption
Date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third Business Day preceding such Redemption Date, as set forth in the most
recent weekly statistical release (or any successor release) published by the
Federal Reserve Board and designated "H.15(519)" or (ii) if such release (or any
successor release) is not published or does not contain such prices during the
week preceding such Business Day, (A) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (B) if the Debt Trustee
obtains fewer than three such Reference Treasury Dealer Quotations, the average
of all such Reference Treasury Dealer Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Debt Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Debt Trustee by such Reference Treasury Dealer at 5:00 p.m., New
York City time, on the third Business Day preceding such Redemption Date.
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"Tax Event" means that the Administrative Trustees shall have received
an opinion of independent tax counsel experienced in such matters to the effect
that, as a result of (a) 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
(b) any official administrative pronouncement or judicial decision interpreting
or applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the date of original
issuance of the Capital Securities, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days of the date thereof, subject to
United States federal income tax with respect to income accrued or received on
the Debentures, (ii) the Trust is, or will be within 90 days of the date
thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges, or (iii) interest payable to the Trust on the Debentures
is not, or within 90 days of the date thereof will not be, deductible, in whole
or in part, by the Debenture Issuer for United States federal income tax
purposes.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all semi-annual Distribution periods terminating on or before the
date of redemption.
(e) If the Sponsor makes the election referred to in Section
8.1(a)(v) of the Declaration, the Administrative Trustees shall dissolve the
Trust and, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, shall cause Debentures, held by the Institutional Trustee, having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued and unpaid
interest equal to accrued and unpaid Distributions on and having the same record
date for payment, as the Securities, to be distributed to the Holders of the
Securities in liquidation of such Holders' interests in the Trust. On and from
the date fixed by the Administrative Trustees for any distribution of Debentures
and dissolution of the Trust: (i) the Securities will no longer be deemed to be
outstanding, and (ii) the Depositary or its nominee (or any successor Depositary
or its nominee) will receive one or more global certificate or certificates
representing the Debentures to be delivered upon such distribution, and having
an aggregate principal amount equal to the aggregate stated liquidation amount
of, with an interest rate identical to the Coupon Rate of, and accrued and
unpaid interest equal to accrued and unpaid Distributions on such Securities.
Any certificates representing Securities, except for certificates representing
Capital Securities held by the Depositary or its nominee (or any successor
Clearing Agency or its nominee), will be deemed to represent beneficial
interests in the Debentures having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on such Securities until such certificates are presented to the
Debenture Issuer or its agent for transfer or reissue.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than thirty (30) nor more than sixty
(60) days before the date fixed for redemption or exchange thereof which,
in the case of a redemption, will be the date fixed for redemption of the
Debentures. For purposes of the calculation of
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<PAGE>
the date of redemption or exchange and the dates on which notices are given
pursuant to this Section 4(f)(i), a Redemption/ Distribution Notice shall
be deemed to be given on the day such notice is first mailed by first-class
mail, postage prepaid, to Holders of Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Securities at the address of each such Holder appearing in the books and
records of the Trust. No defect in the Redemption/ Distribution Notice or
in the mailing thereof of either with respect to any Holder shall affect
the validity of the redemption or exchange proceedings with respect to any
other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Capital Securities, it being understood that, in
respect of Capital Securities registered in the name of and held of
record by the Depositary or its nominee (or any successor Clearing Agency
or its nominee), the distribution of the proceeds of such redemption will
be made to each Clearing Agency Participant (or Person on whose behalf such
nominee holds such Securities) in accordance with the procedures applied by
such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Capital Securities are in book-entry
only form, with respect to the Capital Securities, by 12:00 noon, New York
City time, on the redemption date, provided that the Debenture Issuer has
paid the Institutional Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Debentures, the
Institutional Trustee will deposit irrevocably with the Depositary or its
nominee (or successor Clearing Agency or its nominee) funds sufficient to
pay the applicable Redemption Price with respect to the Capital Securities
and will give the Depositary irrevocable instructions and authority to pay
the Redemption Price to the Holders of the Capital Securities, and (B) with
respect to Capital Securities issued in definitive form and Common
Securities, provided that the Debenture Issuer has paid the Institutional
Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Institutional Trustee will
pay the relevant Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the redemption date. If a Redemption/
Distribution Notice shall have been given and funds deposited as required,
if applicable, then immediately prior to the close of business on the date
of such deposit, or on the redemption date, as applicable, distributions
will cease to accrue on the Securities so called for redemption and all
rights of Holders of such Securities so called for redemption will cease,
except the right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption Price. Neither
the Administrative Trustees nor the Trust shall be required to register or
cause to be registered the transfer of any Securities that have been so
called for redemption. If any date fixed for redemption of Securities is
not a Business Day, then payment of the Redemption Price payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of any Securities is improperly
withheld or refused and not paid either by the Institutional Trustee or by
the Sponsor as guarantor pursuant to the relevant Securities Guarantee,
Distributions on such Securities will continue to accrue from the original
redemption date to the actual date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes
of calculating the Redemption Price.
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<PAGE>
(iv) Redemption/Distribution Notices shall be sent by the
Administrative Trustees on behalf of the Trust to (A) in respect of the
Capital Securities, the Depositary or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificate(s) have been
issued or, if Definitive Capital Security Certificates have been issued, to
the Holder thereof, and (B) in respect of the Common Securities, to the
Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Sponsor or any of
its subsidiaries may at any time and from time to time purchase outstanding
Capital Securities by tender, in the open market or by private agreement.
5. Voting Rights - Capital Securities.
----------------------------------
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Capital Securities, voting
separately as a class, may direct the time, method, and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or direct the
exercise of any trust or power conferred upon the Institutional Trustee under
the Declaration, including the right to direct the Institutional Trustee, as
Holder of the Debentures, to (i) exercise the remedies available under the
Indenture with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under the Indenture or (iii) exercise any right
to rescind or annul a declaration that the principal of all the Debentures shall
be due and payable, or consent to any amendment, modification or termination of
the Indenture or the Debentures, where such consent would be required; provided,
--------
however, that, where a consent or action under the Indenture would require the
- -------
consent or act of the Holders of greater than a majority of the Holders in
principal amount of Debentures affected thereby (a "Super-Majority"), the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Capital Securities which the relevant Super-Majority represents of
the aggregate principal amount of the Debentures outstanding. The Institutional
Trustee shall not revoke any action previously authorized or approved by a vote
of the Holders of the Capital Securities. The Institutional Trustee shall notify
all Holders of the Capital Securities of any notice of default received from the
Debt Trustee with respect to the Debentures. Other than with respect to
directing the time, method and place of conducting any remedy available to the
Institutional Trustee or the Debt Trustee as set forth above, the Institutional
Trustee shall not take any action in accordance with the directions of the
Holders of the Capital Securities under this paragraph unless the Institutional
Trustee has obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be classified as
other than a grantor trust on account of such action. If the Institutional
Trustee fails to enforce its rights with respect to the Debentures held by the
Trust any Holder of Capital Securities may, to the fullest extent permitted by
law, institute legal proceedings directly against the Debenture Issuer to
enforce the Institutional Trustee's rights under the Debentures without first
instituting any legal proceedings against the Institutional Trustee or any other
person or entity. In addition, if an Event of Default under the Declaration has
occurred and is continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest, principal or other required payment on the
Debentures issued to the Trust on the date such interest, principal or other
required payment is otherwise payable (or, in the case of redemption, on the
redemption date), then a Holder of Capital Securities may directly institute a
proceeding against the Debenture Issuer for enforcement of payment to the Holder
of the Capital Securities of the principal, interest or other required
I-6
<PAGE>
payment on Debentures having a principal amount equal to the liquidation amount
of the Capital Securities of such Holder on or after the respective due dates
specified in the Debentures. In connection with such Direct Action, Arvin will
be subrogated to the rights of such Holder of Capital Securities to the extent
of any payment made by Arvin to such Holder of Capital Securities in such Direct
Action.
Any approval or direction of Holders of Capital Securities may be
given at a separate meeting of Holders of Capital Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Administrative Trustees will cause a notice of
any meeting at which Holders of Capital Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Capital Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought, and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Capital Securities will be
required for the Trust to redeem and cancel Capital Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
Notwithstanding that Holders of Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Sponsor or any Affiliate of the Sponsor
shall not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), (c) and 7 and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove, or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Event of Default with respect to the Capital Securities has been cured,
waived, or otherwise eliminated and subject to the requirements set forth in
this paragraph, the Holders of a Majority in liquidation amount of the Common
Securities, voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as Holder of the Debentures, to (i) exercise the remedies
available under the Indenture with respect to the Debentures, (ii) waive any
past default and its consequences that are waivable under the Indenture or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable or consent to any amendment,
modification or termination of the Indenture or the Debentures, where such
consent would be required; provided that, where a consent or action under the
-------- ----
Indenture would require the consent or act of a Super-Majority of the Holders of
the Debentures affected thereby, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion in liquidation amount of the Common Securities which the relevant
Super-Majority represents of the aggregate principal amount of the Debentures
outstanding. Pursuant to
I-7
<PAGE>
this Section 6(c), the Institutional Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Capital
Securities. Other than with respect to directing the time, method and place of
conducting any remedy available to the Institutional Trustee or the Debt Trustee
as set forth above, the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Institutional Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights with
respect to the Debentures held as assets of the Trust, any Holder of Common
Securities may, to the fullest extent permitted by law, institute legal
proceedings directly against any Person to enforce the Institutional Trustee's
rights under the Debentures, without first instituting a legal proceeding
against the Institutional Trustee or any other Person. Notwithstanding the
foregoing, if an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest, principal or other required payment on the Debentures on the
date such interest or principal is otherwise payable, a Holder of Common
Securities may directly institute a proceeding against the Debenture Issuer for
enforcement of payment to the Holder of the Common Securities of the principal,
interest or other required payment on the Debentures on or after the respective
due dates specified in the Debentures, and the amount of the payment will be
based on the Holder's pro rata share of the amount due and owing on all of the
Common Securities.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Trust Securities or pursuant to written
consent. The Administrative Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Administrative Trustees otherwise propose to effect, (i) any action that would
materially adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Declaration or otherwise, or (ii)
the dissolution, winding-up or termination of the Trust, other than as described
in Section 8.1 of the Declaration, then the Holders of outstanding Securities,
voting together as a single class, will be entitled to vote on such amendment
or proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of at
least a Majority in liquidation amount of the Securities; provided, however, if
-------- -------
any amendment or proposal referred to in clause (i) above would materially
adversely affect only the Capital Securities or only the Common Securities, then
only the affected class will be entitled to vote on such amendment or proposal
and such amendment or proposal shall not be effective except with the approval
of a Majority in liquidation amount of such class of Securities. Notwithstanding
the foregoing, no amendment or modification may be made to the Declaration if
such
I-8
<PAGE>
amendment or modification would (i) cause the Trust to be classified as other
than a grantor trust for United States federal income tax purposes, (ii) reduce
or otherwise adversely affect the powers of the Institutional Trustee, or (iii)
cause the Trust to be deemed an "investment company" which is required to be
registered under the Investment Company Act.
(b) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would re-
-------- -------
quire the consent of the holders of a Super-Majority of the Holders of the
Debentures, the Institutional Trustee may only give such consent at the
direction of the Holders of at least the proportion in liquidation amount of the
Securities which the relevant Super-Majority represents of the aggregate
principal amount of the Debentures outstanding; provided, further, that the
-------- -------
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 7(b) unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
8. Pro Rata.
--------
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the Capital
Securities pro rata according to the aggregate liquidation amount of Capital
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Capital Securities outstanding, and only after satisfaction of all
amounts owed to the Holders of the Capital Securities, to each Holder of Common
Securities pro rata according to the aggregate liquidation amount of Common
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Common Securities outstanding.
9. Ranking.
-------
The Capital Securities rank pari passu and payment thereon shall be
---- -----
made Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Debentures held
by the Institutional Trustee, the rights of Holders of the Common Securities
to payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Capital Securities.
I-9
<PAGE>
10. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Capital Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein, and to the provisions of the Indenture.
11. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
12. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Capital
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
I-10
<PAGE>
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[IF THE CAPITAL SECURITY CERTIFICATE IS TO BE A GLOBAL CERTIFICATE
INSERT - This Capital Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
Capital Security is exchangeable for Capital Securities registered in the name
of a person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration, and no transfer of this Capital
Security (other than a transfer of this Capital Security 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) may be registered except in
limited circumstances.
Unless this Capital Security is presented by an authorized
representative of the Depositary (55 Water Street, New York, New York) to the
Trust or its agent for registration of transfer, exchange or payment, and any
Capital Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of the Depositary and any
payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
Certificate Number Number of Capital Securities
CUSIP NO. [ ]
Certificate Evidencing Capital Securities
of
ARVIN CAPITAL I
____% Capital Securities
(liquidation amount $1,000 per Capital Security)
ARVIN CAPITAL I, a statutory business trust created under the laws of
the State of Delaware (the "Trust"), hereby certifies that ______________ (the
"Holder") is the registered owner of capital securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the ___% Capital Securities (liquidation amount $1,000 per Capital
Security) (the "Capital Securities"). The Capital Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Capital Securities are set forth in, and this
certificate and the Capital Securities represented hereby are issued and shall
in all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of ___________, 199__, as the same
may be amended from time to time (the "Declaration"), including the designation
of the terms of the Capital Securities as set forth in Annex I to the
Declaration. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. Th e Holder is entitled to the
A1-1
<PAGE>
benefits of the Capital Securities Guarantee to the extent provided therein.
The Sponsor will provide a copy of the Declaration, the Capital Securities
Guarantee and the Indenture to a Holder without charge upon written request to
the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Capital Securities
as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this
______ day of ___________, 199__.
ARVIN CAPITAL I
By:
----------------------------------------
Name:
-------------------------------------,
not in his individual capacity
but solely as Administrative Trustee
A1-2
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed at a rate
per annum of ___% (the "Coupon Rate") of the stated liquidation amount of $1,000
per Capital Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one semi-annual Distribution period will bear interest thereon
compounded semi-annually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full semi-annual Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full semi-annual Distribution period for which
distributions are computed, distributions will be computed on the basis of the
actual number of days elapsed.
Except as otherwise described below, distributions on the Capital
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semi-annually in arrears, on _____________ and _____________
of each year, commencing on ____________, 199__ to the Holders thereof as they
appear on the books and records of the Trust on the relevant record dates. The
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period from time to time on the Debentures for
a period not exceeding 10 consecutive semi-annual interest payment periods (each
an "Extension Period") provided that no Extension Period shall last beyond the
date of the maturity of the Debentures and, as a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, semi-annual
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded semi-annually during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period; provided
--------
that such Extension Period together with all such previous and further
- ----
extensions thereof may not exceed 10 consecutive semi-annual interest payment
periods or extend beyond the date of maturity of the Debentures. Payments of
accrued Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
The Capital Securities shall be redeemable as provided in the
Declaration.
A1-3
<PAGE>
------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints________________________________________________________
agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:______________________
Signature:_________________
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
A1-4
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
ARVIN CAPITAL I
______% Common Securities
(liquidation amount $1,000 per Common Security)
ARVIN CAPITAL I, a statutory business trust created under the laws of
the State of Delaware (the "Trust"), hereby certifies that _________________
(the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust desig-
nated the ______% Common Securities (liquidation amount $1,000 per Common
Security) (the "Common Securities"). The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of _____________, 199__, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common Securities
as set forth in Annex I to the Declaration. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Common Securities Guarantee to the extent
provided therein. The Sponsor will provide a copy of the Declaration, the Common
Securities Guarantee and the Indenture to a Holder without charge upon written
request to the Sponsor at its principal place of business. THE COMMON SECURITIES
ARE NOT TRANSFERRABLE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A2-1
<PAGE>
IN WITNESS WHEREOF, the Administrative Trustees of the Trust have
executed this certificate this ______ day of ____________, 199__.
ARVIN CAPITAL I
By:_____________________________________________
Name:__________________________________________,
not in his individual capacity
but solely as Administrative Trustee
A2-2
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of ___% (the "Coupon Rate") of the stated liquidation amount of $1,000
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one semi-annual Distribution period will bear interest thereon
compounded semi-annually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full semi-annual Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, distributions will be computed on the basis of the actual number
of days elapsed.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semi-annually in arrears, on ____________ and ___________ of
each year, commencing on _________, 199__, to the Holders thereof as they appear
on the books and records of the Trust on the relevant record dates. The
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period from time to time on the Debentures for
a period not exceeding 10 consecutive semi-annual interest payment periods (each
an "Extension Period") provided that no Extension Period shall last beyond the
date of the maturity of the Debentures and, as a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, semi-annual
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded semi-annually during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period; provided
--------
that such Extension Period together with all such previous and further
- ----
extensions thereof may not exceed 10 consecutive semi-annual interest payment
periods or extend beyond the date of maturity of the Debentures. Payments of
accrued Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
A2-3
<PAGE>
--------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints________________________________________________________
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:____________________
Signature:_______________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-4
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE>
EXHIBIT 4.4
================================================================================
ARVIN INDUSTRIES, INC.
ISSUER
AND
WILMINGTON TRUST COMPANY
TRUSTEE
INDENTURE
DATED AS OF _______________, 199__
SUBORDINATED DEBT SECURITIES
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions of Terms................................................. 1
ARTICLE II
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF DEBT SECURITIES
SECTION 2.1. Designation and Terms of Debt Securities............................. 6
SECTION 2.2. Form of Debt Securities and Trustee's Certificate.................... 8
SECTION 2.3. Denominations; Provisions for Payment................................ 8
SECTION 2.4. Execution and Authentication......................................... 9
SECTION 2.5. Registration of Transfer and Exchange................................ 10
SECTION 2.6. Temporary Securities................................................. 11
SECTION 2.7. Mutilated, Destroyed, Lost or Stolen Debt Securities................. 11
SECTION 2.8. Cancellation......................................................... 12
SECTION 2.9. Benefits of Indenture................................................ 12
SECTION 2.10. Authenticating Agent................................................. 13
SECTION 2.11. Global Securities.................................................... 13
ARTICLE III
REDEMPTION OF DEBT SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.1. Redemption........................................................... 14
SECTION 3.2. Notice of Redemption................................................. 14
SECTION 3.3. Payment Upon Redemption.............................................. 15
SECTION 3.4. Sinking Fund......................................................... 16
SECTION 3.5. Satisfaction of Sinking Fund Payments with Debt Securities........... 16
SECTION 3.6. Redemption of Debt Securities for Sinking Fund....................... 16
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.1. Payment of Principal, Premium and Interest........................... 17
SECTION 4.2. Maintenance of Office or Agency...................................... 17
SECTION 4.3. Paying Agents........................................................ 17
SECTION 4.4. Appointment to Fill Vacancy in Office of Trustee..................... 18
SECTION 4.5. Compliance with Consolidation Provisions............................. 18
SECTION 4.6. Limitation on Dividends.............................................. 18
SECTION 4.7. Covenants as to Arvin Trusts......................................... 19
SECTION 4.8. Corporate Existence.................................................. 19
SECTION 4.9. Notice of Default.................................................... 19
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE V
SEURITYHOLDERS, LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.1. Company to Furnish Trustee Names and Addresses of Securityholders.... 19
SECTION 5.2. Preservation Of Information; Communications With Securityholders..... 20
SECTION 5.3. Reports By the Company............................................... 20
SECTION 5.4. Reports by the Trustee............................................... 20
ARTICLE VI
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.1. Events of Default.................................................... 21
SECTION 6.2. Collection of Indebtedness and Suits for Enforcement by Trustee...... 23
SECTION 6.3. Application of Moneys Collected...................................... 24
SECTION 6.4. Limitation on Suits.................................................. 24
SECTION 6.5. Rights and Remedies Cumulative; Delay or Omission Not Waiver......... 25
SECTION 6.6. Control by Securityholders........................................... 26
SECTION 6.7. Undertaking to Pay Costs............................................. 26
ARTICLE VII
CONCERNING THE TRUSTEE
SECTION 7.1. Certain Duties and Responsibilities of Trustee....................... 27
SECTION 7.2. Certain Rights of Trustee............................................ 28
SECTION 7.3. Trustee Not Responsible for Recitals or Issuance of Debt Securities.. 29
SECTION 7.4. May Hold Debt Securities............................................. 29
SECTION 7.5. Moneys Held in Trust................................................. 29
SECTION 7.6. Compensation and Reimbursement....................................... 29
SECTION 7.7. Reliance on Officers' Certificate.................................... 30
SECTION 7.8. Qualification; Conflicting Interests................................. 30
SECTION 7.9. Corporate Trustee Required; Eligibility.............................. 30
SECTION 7.10. Resignation and Removal; Appointment of Successor.................... 31
SECTION 7.11. Acceptance of Appointment By Successor............................... 32
SECTION 7.12. Merger, Conversion, Consolidation or Succession to Business.......... 33
SECTION 7.13. Preferential Collection of Claims Against the Company................ 33
ARTICLE VIII
CONCERNING THE SECURITYHOLDERS
SECTION 8.1. Evidence of Action by Securityholders................................ 33
SECTION 8.2. Proof of Execution by Securityholders................................ 34
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 8.3. Who May be Deemed Owners............................................. 34
SECTION 8.4. Certain Debt Securities Owned by Company Disregarded................. 34
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without the Consent of Securityholders....... 35
SECTION 9.2. Supplemental Indentures With Consent of Securityholders.............. 36
SECTION 9.3. Effect of Supplemental Indentures.................................... 36
SECTION 9.4. Debt Securities Affected by Supplemental Indentures.................. 37
SECTION 9.5. Execution of Supplemental Indentures................................. 37
ARTICLE X
SUCCESSOR CORPORATION
SECTION 10.1. Company May Consolidate, Etc......................................... 37
SECTION 10.2. Successor Corporation Substituted.................................... 38
SECTION 10.3. Evidence of Consolidation, Etc. to Trustee........................... 38
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.1. Satisfaction and Discharge of Indenture.............................. 39
SECTION 11.2. Discharge of Obligations............................................. 39
SECTION 11.3. Deposited Moneys to be Held in Trust................................. 40
SECTION 11.4. Payment of Moneys Held by Paying Agents.............................. 40
SECTION 11.5. Repayment to Company................................................. 40
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.1. No Recourse.......................................................... 41
ARTICLE XIII
SUBORDINATION OF DEBT SECURITIES
SECTION 13.1. Agreement to Subordinate............................................. 41
SECTION 13.2. Default on Senior Indebtedness....................................... 41
SECTION 13.3. Liquidation; Dissolution; Bankruptcy................................. 42
SECTION 13.4. Subrogation.......................................................... 43
SECTION 13.5. Trustee to Effectuate Subordination.................................. 44
SECTION 13.6. Notice by the Company................................................ 44
SECTION 13.7. Rights of the Trustee; Holders of Senior Indebtedness................ 45
SECTION 13.8. Subordination May Not Be Impaired.................................... 45
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE XIV
MISCELLANEOUS PROVISIONS
SECTION 14.1. Effect on Successors and Assigns..................................... 46
SECTION 14.2. Actions by Successor................................................. 46
SECTION 14.3. Surrender of Company Powers.......................................... 46
SECTION 14.4. Notices.............................................................. 46
SECTION 14.5. Governing Law........................................................ 46
SECTION 14.6. Treatment of the Debt Securities as Debt............................. 46
SECTION 14.7. Compliance Certificates and Opinions................................. 47
SECTION 14.8. Payments on Business Days............................................ 47
SECTION 14.9. Conflict with Trust Indenture Act.................................... 47
SECTION 14.10. Counterparts......................................................... 47
SECTION 14.11. Separability......................................................... 47
SECTION 14.12. Assignment........................................................... 48
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
SECTION OF
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED INDENTURE
- ------------------- ---------------
<S> <C>
310(a)..................................................................... 7.9
310(b)..................................................................... 7.8
................................................................... 7.10
310(c)..............................................................Inapplicable
311(a).................................................................. 7.13(a)
311(b).................................................................. 7.13(b)
311(c)..............................................................Inapplicable
312(a)..................................................................... 5.1
................................................................. 5.2(a)
312(b)................................................................... 5.2(b)
312(c)................................................................... 5.2(c)
313(a)................................................................... 5.4(a)
313(b)................................................................... 5.4(b)
313(c)................................................................... 5.4(a)
................................................................. 5.4(b)
313(d)................................................................... 5.4(c)
314(a)..................................................................... 5.3
314(b)..............................................................Inapplicable
314(c)..................................................................... 14.6
314(d)..............................................................Inapplicable
314(e)..................................................................... 14.6
314(f)..............................................................Inapplicable
315(a)................................................................... 7.1(a)
................................................................... 7.2
315(b)..................................................................... 6.7
315(c)..................................................................... 7.1
315(d)................................................................... 7.1(b)
................................................................. 7.1(c)
315(e)..................................................................... 6.7
316(a)..................................................................... 6.6
................................................................... 8.4
316(b)..................................................................... 6.4
316(c)..................................................................... 8.1
317(a)..................................................................... 6.2
317(b)..................................................................... 4.3
318(a)..................................................................... 14.8
</TABLE>
_________________
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture and shall not have any bearing on the
interpretation of its terms or provisions.
v
<PAGE>
THIS INDENTURE, dated as of ________________, 199__, between ARVIN
INDUSTRIES, INC., an Indiana corporation (the "Company"), and WILMINGTON TRUST
COMPANY, a Delaware banking corporation, not in its individual capacity but
solely as trustee (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
debentures, notes or other evidences of indebtedness (the "Debt Securities"), to
be issued in one or more series as provided in this Indenture. This Indenture
is subject to the provisions of the Trust Indenture Act of 1939, as amended,
that are required to be part of this Indenture and shall, to the extent
applicable, be governed by such provisions. All things necessary to make this
Indenture a valid agreement of the Company, in accordance with its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Debt
Securities by the holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all holders of the Debt Securities or of any
series thereof, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions of Terms.
--------------------
The terms defined in this Section (except as otherwise expressly
provided in this Indenture or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section and shall include the plural
as well as the singular. All other terms used in this Indenture that are
defined in the Trust Indenture Act of 1939, as amended, or by reference therein
in the Securities Act of 1933, as amended (except as otherwise expressly
provided in this Indenture or unless the context otherwise requires), shall have
the meanings assigned to such terms in the Trust Indenture Act and in the
Securities Act as in force at the date of the execution of this instrument.
"Affiliate" means, with respect to a specified Person, (a) any Person
---------
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by or under common control with
the specified Person, (d) a partnership in which the specified Person is a
general partner, (e) any officer or director of the specified Person and (f) if
the specified Person is an individual, any entity of which the specified Person
is an officer, director or general partner.
"Arvin Trust" means Arvin Capital I, a Delaware business trust, or any
-----------
similar trust created for the purpose of issuing preferred securities in
connection with the issuance of Debt Securities under this Indenture.
"Authenticating Agent" means an authenticating agent with respect to
--------------------
all or any of the series of Debt Securities appointed with respect to all or
such series of the Debt Securities by the Trustee pursuant to Section 2.10.
<PAGE>
"Bankruptcy Law" means Title 11, United States Code, or any similar
--------------
federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company, or
------------------
any duly authorized committee of such board.
"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 and to be in full force and effect on the date of such
certification.
"Business Day" means, with respect to any series of Debt Securities,
------------
any day other than a day on which federal or state banking institutions in New
York, New York or Wilmington, Delaware are authorized or required by law,
executive order or regulation to close.
"Capital Securities" means undivided beneficial interests in the
------------------
assets of an Arvin Trust which rank pari passu with Common Securities issued by
such Arvin Trust; provided, however, that upon the occurence of an Event of
-------- -------
Default, the rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Capital Securities.
"Capital Securities Guarantee" means any guarantee that the Company
----------------------------
may enter into with Wilmington Trust Company or any other Person or Persons that
operates directly or indirectly for the benefit of holders of Capital Securities
of an Arvin Trust.
"Certificate" means a certificate signed by the principal executive
-----------
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company. The Certificate need not comply with the
provisions of Section 14.7.
"Commission" means the United States Securities and Exchange
----------
Commission, or any successor agency thereto.
"Common Securities" means undivided beneficial interests in the assets
-----------------
of an Arvin Trust which rank pari passu with Capital Securities issued by such
Arvin Trust; provided, however, that upon the occurrence of an Event of Default,
-------- -------
the rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and maturity are
subordinated to the rights of holders of Capital Securities.
"Common Securities Guarantee" means any guarantee that the Company may
---------------------------
enter into with an Arvin Trust or any other Person or Persons that operates
directly or indirectly for the benefit of holders of Common Securities of an
Arvin Trust.
"Company" means Arvin Industries, Inc., a corporation duly organized
-------
and existing under the laws of the State of Indiana, and, subject to the
provisions of Article X, shall also include its successors and assigns.
"Corporate Trust Office" means the office of the Trustee at which, at
----------------------
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate
Trust Department.
"Custodian" means any receiver, trustee, assignee, liquidator, or
---------
similar official under any Bankruptcy Law.
2
<PAGE>
"Debt Securities" means the Debt Securities authenticated and delivered
---------------
under this Indenture.
"Declaration" means, with respect to an Arvin Trust, the amended and
-----------
restated declaration of trust of such Arvin Trust or any other governing
instrument of such Arvin Trust.
"Default" means any event, act or condition that with notice or lapse
-------
of time, or both, would constitute an Event of Default.
"Defaulted Interest" has the meaning specified in Section 2.3.
------------------
"Depositary" means, with respect to Debt Securities of any series for
----------
which the Company shall determine that such Debt Securities will be issued as a
Global Security, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Exchange Act or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to either Section 2.1 or 2.11.
"Event of Default" means, with respect to Debt Securities of a
----------------
particular series, any event specified in Section 6.1, continued for the period
of time, if any, therein designated.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Global Security" means, with respect to any series of Debt Securities,
---------------
a Debt Security executed by the Company and delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction, all in accordance with
this Indenture, which shall be registered in the name of the Depositary or its
nominee.
"Governmental Obligations" means securities that are (i) direct
------------------------
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America that, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of
such depositary receipt; provided, however, that (except as required by law)
-------- -------
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the
custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.
"Guarantees" mean the Capital Securities Guarantee and the Common
----------
Securities Guarantee.
"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.
"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 in accordance with the terms hereof and shall
include the form and terms of particular series of Debt Securities established
as contemplated hereunder.
3
<PAGE>
"Institutional Trustee" has the meaning set forth in the Declaration of
---------------------
the applicable Arvin Trust.
"Interest Payment Date", when used with respect to any installment of
---------------------
interest on a Debt Security of a particular series, means the date specified in
such Debt Security or in a Board Resolution, an Officers' Certificate or an
indenture supplemental hereto with respect to such series as the fixed date on
which an installment of interest with respect to Debt Securities of that series
is due and payable.
"Officers' Certificate" means a certificate signed by the President or
---------------------
any Vice President and by the Treasurer or an Assistant Treasurer or the
Controller or an Assistant Controller or the Secretary or an Assistant Secretary
of the Company that is delivered to the Trustee in accordance with the terms
hereof. Each such certificate shall include the statements provided for in
Section 14.7, if and to the extent required by the provisions of such Section.
"Opinion of Counsel" means an opinion in writing of legal counsel, who
------------------
may be an employee of or counsel for the Company, that is delivered to the
Trustee in accordance with the terms hereof. Each such opinion shall include the
statements provided for in Section 14.7, if and to the extent required by the
provisions of such Section.
"Outstanding", when used with reference to Debt Securities of any
-----------
series, means, subject to the provisions of Section 8.4, as of any particular
time, all Debt Securities of that series theretofore authenticated and delivered
by the Trustee under this Indenture, except (a) Debt Securities theretofore
canceled by the Trustee or any paying agent, or delivered to the Trustee or any
paying agent for cancellation or that have previously been canceled; (b) Debt
Securities or portions thereof for the payment or redemption of which moneys or
Governmental Obligations in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the Company
shall act as its own paying agent); provided, however, that if such Debt
-------- -------
Securities or portions of such Debt Securities are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given as provided in
Section 3.2, or provision satisfactory to the Trustee shall have been made for
giving such notice; (c) Debt Securities in lieu of or in substitution for which
other Debt Securities shall have been authenticated and delivered pursuant to
the terms of Section 2.7; and (d) Debt Securities, except to the extent provided
in Sections 11.1 and 11.2, with respect to which the Company has effected
defeasance and/or covenant defeasance as provided in Article XI.
"Person" means any individual, corporation, partnership, limited
------
liability company, joint venture, joint-stock company, unincorporated
organization or government or any agency or political subdivision thereof.
"Predecessor Security" of any particular Debt Security means every
--------------------
previous Debt Security evidencing all or a portion of the same debt and
guarantee as that evidenced by such particular Debt Security; and, for the
purposes of this definition, any Debt Security authenticated and delivered under
Section 2.7 in lieu of a lost, destroyed or stolen Debt Security shall be deemed
to evidence the same debt as the lost, destroyed or stolen Debt Security.
4
<PAGE>
"Responsible Officer," when used with respect to the Trustee, means the
-------------------
chairman or any vice-chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the Treasurer, any assistant treasurer, any trust officer or
assistant trust officer or other officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended from time
--------------
to time, or any successor legislation.
"Securityholder", "Holder of Debt Securities", "Registered Holder", or
-------------- ------------------------- -----------------
other similar term, means the Person or Persons in whose name or names a
particular Debt Security shall be registered on the books of the Company kept
for that purpose in accordance with the terms of this Indenture.
"Security Register" and "Security Registrar" have the respective
----------------- ------------------
meanings set forth in Section 2.5.
"Senior Indebtedness" means, with respect to the Company, (i) the
-------------------
principal, premium, if any, and interest in respect of (A) indebtedness of the
Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by the Company, (ii) all
capital lease obligations of the Company, (iii) all obligations of the Company
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of the Company and all obligations of the Company under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of the Company for the
reimbursement on any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction; (v) all obligations of the type referred
to in clauses (i) through (iv) of other Persons for the payment of which the
Company is responsible or liable as obligor, guarantor or otherwise, (vi) all
obligations of the type referred to in clauses (i) through (v) of other Persons
secured by any lien on any property or asset of the Company (whether or not such
obligation is assumed by the Company), and (vii) all obligations of the Company
under guarantees in respect of operating lease payments of its Subsidiaries or
under guarantees in respect of the obligations of any trust, partnership or
other entity that has been or is established as a lease financing entity of the
Company ("a Lease Financing Entity") which guarantees were, in either case,
incurred in connection with the issuance by such Lease Financing Entity of
indebtedness or other securities, including without limitation all obligations
of the Company under that certain Guarantee Agreement dated as of July 27, 1995,
as amended from time to time, by the Company in favor of State Street Bank and
Trust Company of Connecticut, National Association, and under that certain
Guarantee Agreement dated as of November 28, 1995, as amended from time to time,
by the Company in favor of State Street Bank and Trust Company of Connecticut,
National Association; except in each case for (1) any such indebtedness that is
by its terms subordinated to or pari passu with the Debt Securities, and (2) any
indebtedness between or among the Company and its Affiliates, including all
other debt securities and guarantees in respect of those debt
5
<PAGE>
securities (other than guarantees referred to in clause (vii) herein) issued to
any trust, or a trustee of such trust, partnership, or other entity affiliated
with the Company that is a financing entity of the Company (a "financing
entity") in connection with the issuance by such financing entity of securities
that are similar to the Capital Securities.
"Subsidiary" means, with respect to any Person, (i) any corporation at
----------
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, (ii) any general
partnership, joint venture or similar entity, at least a majority of whose
outstanding partnership or similar interests shall at the time be owned by such
Person, or by one or more of its Subsidiaries, or by such Person and one or more
of its Subsidiaries and (iii) any limited partnership of which such Person or
any of its Subsidiaries is a general partner.
"Trustee" means Wilmington Trust Company and, subject to the provisions
-------
of Article VII, shall also include its successors and assigns, and, if at any
time there is more than one Person acting in such capacity hereunder, "Trustee"
shall mean each such Person. The term "Trustee," as used with respect to a
particular series of Debt Securities, shall mean the trustee with respect to
that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, subject to
-------------------
the provisions of Sections 9.1, 9.2 and 10.1, as in effect at the date of
execution of this instrument.
"Trust Securities" means Common Securities and Capital Securities.
----------------
"Voting Stock", as applied to stock of any Person, means shares,
------------
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent) of such Person, other than shares,
interests, participations or other equivalents having such power only by reason
of the occurrence of a contingency.
ARTICLE II
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF DEBT SECURITIES
SECTION 2.1. Designation and Terms of Debt Securities.
----------------------------------------
The aggregate principal amount of Debt Securities that may be
authenticated and delivered under this Indenture is unlimited. The Debt
Securities may be issued in one or more series up to the aggregate principal
amount of Debt Securities of that series from time to time authorized by or
pursuant to a Board Resolution of the Company, or pursuant to one or more
indentures supplemental hereto. Prior to the initial issuance of Debt
Securities of any series, there shall be established in or pursuant to a Board
Resolution of the Company, and set forth in an Officers' Certificate, or
established in one or more indentures supplemental hereto:
(a) the title of the series of Debt Security (which shall distinguish
the Debt Securities of that series from all other series of Debt Securities);
(b) any limit upon the aggregate principal amount of the Debt
Securities of that series that may be authenticated and delivered under this
Indenture (except for Debt Securities authenticated and
6
<PAGE>
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Debt Securities of that series);
(c) the date or dates on which the principal of the Debt Securities of
that series is payable;
(d) the rate or rates at which the Debt Securities of that series shall
bear interest or the manner of calculation of such rate or rates, if any;
(e) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the manner of
determination of such Interest Payment Dates and the record date for the
determination of holders to whom interest is payable on any such Interest
Payment Dates;
(f) the right, if any, to defer the interest payment periods and the
duration of such extension;
(g) the period or periods within which, the price or prices at which,
and the terms and conditions upon which, Debt Securities of that series may be
redeemed, in whole or in part, at the option of the Company;
(h) the obligation, if any, of the Company to redeem or purchase Debt
Securities of that series pursuant to any sinking fund or analogous provisions
(including payments made in cash in participation of future sinking fund
obligations) or at the option of a holder thereof and the period or periods
within which, the price or prices at which, and the terms and conditions upon
which, Debt Securities of that series shall be redeemed or purchased, in whole
or in part, pursuant to such obligation;
(i) the form of the Debt Securities of that series, including the form
of the Certificate of Authentication for such series;
(j) if other than denominations of one thousand U.S. dollars ($1,000)
or any integral multiple thereof, the denominations in which the Debt Securities
of that series shall be issuable;
(k) whether the Debt Securities are issuable as a Global Security and,
in such case, the identity of the Depositary for such series; and
(l) any and all other terms with respect to such series (which terms
shall not be inconsistent with the terms of this Indenture), including any terms
which may be required by or advisable under United States laws or regulations or
advisable in connection with the marketing of Debt Securities of that series.
All Debt Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to any such Board Resolution or in any indentures supplemental hereto.
If any of the terms of a 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
7
<PAGE>
of the Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of such series.
SECTION 2.2. Form of Debt Securities and Trustee's Certificate.
-------------------------------------------------
The Debt Securities of any series and the Trustee's certificate of
authentication to be borne by such Debt Securities shall be substantially of the
tenor and purport as set forth in one or more indentures supplemental hereto or
as provided in a Board Resolution and as set forth in an Officers' Certificate,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Debt Securities of that series may be listed, or
to conform to usage.
SECTION 2.3. Denominations; Provisions for Payment.
-------------------------------------
The Debt Securities shall be issuable as registered Debt Securities and
in the denominations of one thousand U.S. dollars ($1,000) or any integral
multiple thereof, subject to Section 2.1(j). The Debt Securities of a particular
series shall bear interest payable on the Interest Payment Dates and at the rate
specified with respect to that series. The principal of and the interest on the
Debt Securities of any series, as well as any premium thereon in case of
redemption thereof prior to maturity, shall be payable in the coin or currency
of the United States of America that at the time of such payment is legal tender
for public and private debt, at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, the City and State of New York.
Each Debt Security shall be dated the date of its authentication. Interest on
the Debt Securities shall be computed on the basis of a 360-day year composed of
twelve 30-day months.
The interest installment on any Debt Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for Debt
Securities of that series shall be paid to the Person in whose name said Debt
Security (or one or more Predecessor Debt Securities) is registered at the close
of business on the regular record date for such interest installment. In the
event that any Debt Security of a particular series or portion thereof is called
for redemption and the redemption date is subsequent to a regular record date
with respect to any Interest Payment Date and prior to such Interest Payment
Date, interest on such Debt Security will be paid upon presentation and
surrender of such Debt Security as provided in Section 3.3.
Any interest on any Debt Security that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date for Debt
Securities of that 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 shall be paid
by the Company, at its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on Debt
Securities to the Persons in whose names such Debt Securities (or their
respective Predecessor Debt Securities) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner: the Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each such Debt Security and the
8
<PAGE>
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 not be more than 15 nor
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
Securityholder at his or her address as it appears in the Security Register
not less than 10 days prior to 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 such Debt Securities (or their
respective Predecessor Debt Securities) are registered on such special
record date and shall be no longer payable pursuant to the following clause
(2).
(2) The Company may make payment of any Defaulted Interest on any Debt
Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debt Securities may
be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustees of the proposed payment
pursuant to this clause, such manner of payment shall be deemed practicable
by the Trustee.
Unless otherwise provided in a Board Resolution, in an Officers'
Certificate or in one or more indentures supplemental hereto establishing the
terms of any series of Debt Securities pursuant to Section 2.1 hereof, the term
"regular record date" as used in this Section with respect to a series of Debt
Securities with respect to any Interest Payment Date for such series shall mean
either the fifteenth day of the month immediately preceding the month in which
an Interest Payment Date established for such series pursuant to Section 2.1
shall occur, if such Interest Payment Date is the first day of a month, or the
last day of the month immediately preceding the month in which an Interest
Payment Date established for such series pursuant to Section 2.1 hereof shall
occur, if such Interest Payment Date is the fifteenth day of a month, whether or
not such date is a Business Day.
Subject to the foregoing provisions of this Section, each Debt Security
of a series delivered under this Indenture upon transfer of or in exchange for
or in lieu of any other Debt Security of such series shall carry the rights to
interest accrued and unpaid, and to accrue, that were carried by such other Debt
Security.
SECTION 2.4. Execution and Authentication.
----------------------------
The Debt Securities shall be signed on behalf of the Company by its
President or one of its Vice Presidents, under its corporate seal attested by
its Secretary or one of its Assistant Secretaries. Signatures may be in the form
of a manual or facsimile signature. The Company may use the facsimile signature
of any Person who shall have been President or Vice President thereof, or of any
Person who shall have been a Secretary or Assistant Secretary thereof,
notwithstanding the fact that at the time the Debt Securities shall be
authenticated and delivered or disposed of such Person shall have ceased to be
the President or a Vice President, or the Secretary or an Assistant Secretary,
of the Company. The seal of the
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Company may be in the form of a facsimile of such seal and may be impressed,
affixed, imprinted or otherwise reproduced on the Debt Securities. The Debt
Securities may contain such notations, legends or endorsements required by law,
stock exchange rule or usage. Each Debt Security shall be dated the date of its
authentication by the Trustee.
A Debt Security shall not be valid until authenticated manually by an
authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Debt Security so authenticated
has been duly authenticated and delivered hereunder and that the holder is
entitled to the benefits of this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debt Securities of any series executed
by the Company to the Trustee for authentication, together with a written order
of the Company for the authentication and delivery of such Debt Securities,
signed by its President or any Vice President and its Treasurer or any Assistant
Treasurer, and the Trustee in accordance with such written order shall
authenticate and deliver such Debt Securities.
In authenticating such Debt Securities and accepting the additional
responsibilities under this Indenture in relation to such Debt Securities, the
Trustee shall be entitled to receive, and (subject to Section 7.1) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form and
terms thereof have been established in conformity with the provisions of this
Indenture.
The Trustee shall not be required to authenticate such Debt Securities
if the issue of such Debt Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Debt Securities and this
Indenture or otherwise in a manner that is not reasonably acceptable to the
Trustee.
SECTION 2.5. Registration of Transfer and Exchange.
-------------------------------------
(a) Debt Securities of any series may be exchanged upon presentation
thereof at the Corporate Trust Office or such other location designated by the
Company pursuant to Section 4.2 for other Debt Securities of such series of
authorized denominations, and for a like aggregate principal amount, upon
payment of a sum sufficient to cover any tax or other governmental charge in
relation thereto, all as provided in this Section. In respect of any Debt
Securities so surrendered for exchange, the Company shall execute, the Trustee
shall authenticate and such office or agency shall deliver in exchange therefor
the Debt Security or Debt Securities of the same series that the Securityholder
making the exchange shall be entitled to receive, bearing numbers not
contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at the Corporate Trust
Office or such other location designated by the Company pursuant to Section 4.2
a register or registers (herein referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall register the Debt Securities and the transfers of Debt Securities as in
this Article provided and which at all reasonable times shall be open for
inspection by the Trustee. The registrar for the purpose of registering Debt
Securities and the transfer of Debt Securities as herein provided shall be
appointed as authorized by a Board Resolution (the "Security Registrar").
Upon surrender for transfer of any Debt Security at the Corporate Trust
Office or such other location designated by the Company pursuant to Section 4.2,
the Company shall execute, the Trustee shall
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authenticate, and such office or agency shall deliver in the name of the
transferee or transferees a new Debt Security or Debt Securities of the same
series as the Debt Security presented for a like aggregate principal amount.
All Debt Securities presented or surrendered for exchange or
registration of transfer, as provided in this Section, shall be accompanied (if
so required by the Company or the Security Registrar) by a written instrument or
instruments of transfer, in form satisfactory to the Company or the Security
Registrar, duly executed by the registered holder or by such holder's duly
authorized attorney in writing.
(c) No service charge shall be made for any exchange or registration of
transfer of Debt Securities, or issue of new Debt Securities in case of partial
redemption of any series, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge in relation thereto,
other than exchanges pursuant to Section 2.6, Section 3.3(b) and Section 9.4 not
involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Debt Securities during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of less than all the Outstanding Debt Securities of the same series
and ending at the close of business on the day of such mailing, nor (ii) to
register the transfer of or exchange any Debt Securities of any series or
portions thereof called for redemption. The provisions of this Section 2.5 are,
with respect to any Global Security, subject to Section 2.11 hereof.
SECTION 2.6. Temporary Securities.
--------------------
Pending the preparation of definitive Debt Securities of any series,
the Company may execute, and the Trustee shall authenticate and deliver,
temporary Debt Securities (printed, lithographed or typewritten) of any
authorized denomination. Such temporary Debt Securities shall be substantially
in the form of the definitive Debt Securities in lieu of which they are issued,
but with such omissions, insertions and variations as may be appropriate for
temporary Debt Securities, all as may be determined by the Company. Every
temporary Debt Security of any series shall be executed by the Company and be
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Debt Securities of such
series. Without unnecessary delay the Company will execute and furnish
definitive Debt Securities of such series and thereupon any or all temporary
Debt Securities of such series may be surrendered in exchange therefor (without
charge to the holders), at the Corporate Trust Office or such location
designated by the Company pursuant to Section 4.2, and the Trustee shall
authenticate, and such Corporate Trust Office or location shall deliver, in
exchange for such temporary Debt Securities an equal aggregate principal amount
of definitive Debt Securities of such series, unless the Company advises the
Trustee to the effect that definitive Debt Securities need not be executed and
furnished until further notice from the Company. Until so exchanged, the
temporary Debt Securities of such series shall be entitled to the same benefits
under this Indenture as definitive Debt Securities of such series authenticated
and delivered hereunder.
SECTION 2.7. Mutilated, Destroyed, Lost or Stolen Debt Securities.
----------------------------------------------------
In case any temporary or definitive Debt Security shall become
mutilated or be destroyed, lost or stolen, the Company (subject to the next
succeeding sentence) shall execute, and upon the Company's request, the Trustee
(subject as aforesaid) shall authenticate and deliver, a new Debt Security of
the same series, bearing a number not contemporaneously outstanding, in exchange
and substitution for the mutilated
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Debt Security, or in lieu of and in substitution for the Debt Security so
destroyed, lost or stolen. In every case the applicant for a substituted Debt
Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee evidence to their satisfaction of the destruction, loss or theft of
the applicant's Debt Security and of the ownership thereof. The Trustee may
authenticate any such substituted Debt Security and deliver the same upon the
written request or authorization of any officer of the Company. Upon the
issuance of any substituted Debt Security, 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. In case any Debt Security that
has matured or is about to mature shall become mutilated or be destroyed, lost
or stolen, the Company may, instead of issuing a substitute Debt Security, pay
or authorize the payment of the same (without surrender thereof except in the
case of a mutilated Debt Security) if the applicant for such payment shall
furnish to the Company and the Trustee such security or indemnity as they may
require to save them harmless, and, in case of destruction, loss or theft,
evidence to the satisfaction of the Company and the Trustee of the destruction,
loss or theft of such Debt Security and of the ownership thereof.
Every replacement Debt Security issued pursuant to the provisions of
this Section shall constitute an additional contractual obligation of the
Company, whether or not the mutilated, destroyed, lost or stolen Debt Security
shall be found at any time, or be enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and
all other Debt Securities of the same series duly issued hereunder. All Debt
Securities shall be held and owned upon the express condition that the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Debt Securities, and shall preclude (to the
extent lawful) any and all other rights or remedies, notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
SECTION 2.8. Cancellation.
------------
All Debt Securities surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or any
paying agent, be delivered to the Trustee for cancellation, or, if surrendered
to the Trustee, shall be canceled by it, and no Debt Securities shall be issued
in lieu thereof except as expressly required or permitted by any of the
provisions of this Indenture. On request of the Company at the time of such
surrender, the Trustee shall deliver to the Company canceled Debt Securities
held by the Trustee. In the absence of such request the Trustee may dispose of
canceled Debt Securities in accordance with its standard procedures and deliver
a certificate of disposition to the Company. If the Company shall otherwise
acquire any of the Debt Securities, however, such acquisition shall not operate
as a redemption or satisfaction of the indebtedness represented by such Debt
Securities unless and until the same are delivered to the Trustee for
cancellation.
SECTION 2.9. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Debt Securities, express or
implied, shall give or be construed to give to any Person, other than the
parties hereto and the holders of the Debt Securities (and, with respect to the
provisions of Article XIII, the holders of Senior Indebtedness) any legal or
equitable right, remedy or claim under or in respect of this Indenture, or under
any covenant, condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties hereto and
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of the holders of the Debt Securities (and, with respect to the provisions of
Article XIII, the holders of Senior Indebtedness).
SECTION 2.10. Authenticating Agent.
--------------------
So long as any of the Debt Securities of any series remain Outstanding,
there may be an Authenticating Agent for any or all such series of Debt
Securities which the Trustee shall have the right to appoint. Said
Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Debt Securities of such series issued upon exchange, transfer or
partial redemption thereof, and Debt 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. All references in
this Indenture to the authentication of Debt Securities by the Trustee shall be
deemed to include authentication by an Authenticating Agent for such series.
Each Authenticating Agent shall be acceptable to the Company and shall be a
corporation that has a combined capital and surplus, as most recently reported
or determined by it, sufficient under the laws of any jurisdiction under which
it is organized or in which it is doing business to conduct a trust business,
and that is otherwise authorized under such laws to conduct such business and is
subject to supervision or examination by federal or state authorities. If at
any time any Authenticating Agent shall cease to be eligible in accordance with
these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. Global Securities.
-----------------
(a) If the Company shall establish pursuant to Section 2.1 that the
Debt Securities of a particular series are to be issued as a Global Security or
Global Securities, then the Company shall execute and the Trustee shall, in
accordance with Section 2.4, authenticate and deliver, a Global Security or
Global Securities that (i) shall represent, and shall be denominated in an
amount equal to the aggregate principal amount of, all of the Outstanding Debt
Securities of such series, (ii) shall be registered in the name of the
Depositary or its nominee, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction, and (iv) shall bear a
legend substantially to the following effect: "Except as otherwise provided in
Section 2.11 of the Indenture, this Debt Security may be transferred, in whole
but not in part, only to another nominee of the Depositary or to a successor
Depositary or to a nominee of such successor Depositary."
(b) Except as provided in clause (c), notwithstanding the provisions of
Section 2.5, the Global Security or Global Securities of a series may be
transferred, in whole but not in part and in the manner provided in Section 2.5,
only to another nominee of the Depositary for such series, or to a successor
Depositary for such series selected or approved by the Company or to a nominee
of such successor Depositary.
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(c) If at any time the Depositary for a series of the Debt Securities
notifies the Company that it is unwilling or unable to continue as Depositary
for such series or if at any time the Depositary for such series shall no longer
be registered or in good standing under the Exchange Act, or other applicable
statute or regulation, at a time when the Depositary is required to be so
registered to act as such Depositary and a successor Depositary for such series
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition, as the case may be, this Section 2.11
shall no longer be applicable to the Debt Securities of such series and the
Company will execute, and subject to Section 2.5, the Trustee will authenticate
and deliver the Debt Securities of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Security or Global Securities
of such series in exchange for such Global Security or Global Securities. In
addition, the Company may at any time determine that the Debt Securities of any
series shall no longer be represented by a Global Security or Global Securities
and that the provisions of this Section 2.11 shall no longer apply to the Debt
Securities of such series. In such event, the Company will execute and, subject
to Section 2.5, the Trustee, upon receipt of an Officers' Certificate evidencing
such determination by the Company, will authenticate and deliver the Debt
Securities of such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security or Global Securities of such series in
exchange for such Global Security or Global Securities. Upon the exchange of
the Global Security or Global Securities for such Debt Securities in definitive
registered form without coupons, in authorized denominations, the Global
Security or Global Securities shall be canceled by the Trustee. Such Debt
Securities in definitive registered form issued in exchange for the Global
Security or Global Securities pursuant to this Section 2.11(c) shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Debt Securities to
the Depositary for delivery to the Persons in whose names such Debt Securities
are so registered.
ARTICLE III
REDEMPTION OF DEBT SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.1. Redemption.
----------
The Company may redeem the Debt Securities of any series issued
hereunder on and after the dates and in accordance with the terms established
for such series pursuant to Section 2.1.
SECTION 3.2. Notice of Redemption.
--------------------
(a) In case the Company shall desire to exercise such right to redeem
all or, as the case may be, a portion of the Debt Securities of any series in
accordance with the right reserved so to do, the Company shall, or shall cause
the Trustee to, give notice of such redemption to holders of the Debt Securities
of such series to be redeemed by mailing, first class postage prepaid, a notice
of such redemption not less than 30 days and not more than 60 days before the
date fixed for redemption of that series to such holders at their last addresses
as they shall appear upon the Security Register unless a shorter period is
specified in the Debt Securities to be redeemed. Any notice that is mailed in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the registered holder receives the notice. In any case,
failure duly to give such notice to the holder of any Debt Security of any
series designated for redemption in whole or in part, or any defect in the
notice, shall not affect the validity of the proceedings for the redemption of
any other Debt Securities of such series or any other series. In the case of
any redemption
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of Debt Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Debt Securities or elsewhere in this Indenture,
the Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with any such restriction.
Each such notice of redemption shall specify the date fixed for
redemption and the redemption price at which Debt Securities of that series are
to be redeemed, and shall state that payment of the redemption price of such
Debt Securities to be redeemed will be made at the Corporate Trust Office, upon
presentation and surrender of such Debt Securities, that interest accrued to the
date fixed for redemption will be paid as specified in said notice, that from
and after said date interest will cease to accrue and that the redemption is for
a sinking fund, if such is the case. If less than all the Debt Securities of a
series are to be redeemed in whole or in part, the notice to the holders of Debt
Securities of that series to be redeemed shall specify the particular Debt
Securities to be so redeemed. In case any Debt Security is to be redeemed in
part only, the notice that relates to such Debt Security shall state the portion
of the principal amount thereof to be redeemed and shall state that on and after
the redemption date, upon surrender of such Debt Security, a new Debt Security
or Debt Securities of such series in principal amount equal to the unredeemed
portion thereof will be issued.
(b) If less than all the Debt Securities of a series are to be
redeemed, the Company shall give the Trustee at least 45 days' notice in advance
of the date fixed for redemption as to the aggregate principal amount of Debt
Securities of the series to be redeemed, and thereupon the Trustee shall select,
by lot or in such other manner as it shall deem appropriate and fair in its
discretion and that may provide for the selection of a portion or portions
(equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof)
of the principal amount of such Debt Securities of a denomination larger than
$1,000, the Debt Securities to be redeemed and shall thereafter promptly notify
the Company in writing of the numbers of the Debt Securities to be redeemed, in
whole or in part.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or any Vice President,
instruct the Trustee or any paying agent to call all or any part of the Debt
Securities of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may deem
advisable. In any case in which notice of redemption is to be given by the
Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as the
case may be, such Security Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section.
SECTION 3.3. Payment Upon Redemption.
-----------------------
(a) If the giving of notice of redemption shall have been completed as
above provided, the Debt Securities or portions of Debt Securities of the series
to be redeemed specified in such notice shall become due and payable on the date
and at the place stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption, and interest on
such Debt Securities or portions of Debt Securities shall cease to accrue on and
after the date fixed for redemption, unless the Company shall default in the
payment of such redemption price and accrued interest with respect to any such
Debt Security or portion thereof. On presentation and surrender of such Debt
Securities on or after the date fixed for redemption at the place of payment
specified in the notice, said Debt Securities shall be paid and redeemed at the
applicable redemption price for such series, together with interest accrued
thereon to the date
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fixed for redemption (but if the date fixed for redemption is an Interest
Payment Date, the interest installment payable on such date shall be payable to
the registered holder at the close of business on the applicable record date
pursuant to Section 2.3).
(b) Upon presentation of any Debt Security of such series that is to be
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Debt Security is presented shall
deliver to the holder thereof, at the expense of the Company, a new Debt
Security or Debt Securities of the same series, of authorized denominations in
principal amount equal to the unredeemed portion of the Debt Security so
presented.
SECTION 3.4. Sinking Fund.
-------------
The provisions of Sections 3.4, 3.5 and 3.6 shall be applicable to any
sinking fund for the retirement of Debt Securities of a series, except as
otherwise specified as contemplated by Section 2.1 for Debt Securities of such
series.
The minimum amount of any sinking fund payment provided for by the
terms of Debt Securities of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount provided
for by the terms of Debt Securities of any series is herein referred to as an
"optional sinking fund payment." If provided for by the terms of Debt
Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 3.5. Each sinking fund payment
shall be applied to the redemption of Debt Securities of any series as provided
for by the terms of Debt Securities of such series.
SECTION 3.5. Satisfaction of Sinking Fund Payments with Debt Securities.
----------------------------------------------------------
The Company (i) may deliver Outstanding Debt Securities of a series
(other than any Debt Securities previously called for redemption) and (ii) may
apply as a credit Debt Securities of a series that have been redeemed either at
the election of the Company pursuant to the terms of such Debt Securities or
through the application of permitted optional sinking fund payments pursuant to
the terms of such Debt Securities, in each case in satisfaction of all or any
part of any sinking fund payment with respect to the Debt Securities of such
series required to be made pursuant to the terms of such Debt Securities as
provided for by the terms of such series, provided that such Debt Securities
have not been previously so credited. Such Debt Securities shall be received
and credited for such purpose by the Trustee at the redemption price specified
in such Debt Securities for redemption through operation of the sinking fund and
the amount of such sinking fund payment shall be reduced accordingly.
SECTION 3.6. Redemption of Debt Securities for Sinking Fund.
----------------------------------------------
Not less than 45 days prior to each sinking fund payment date for any
series of Debt Securities, the Company will deliver to the Trustee (i) an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of the series, the portion
thereof, if any, that is to be satisfied by delivering and crediting Debt
Securities of that series pursuant to Section 3.5, and the basis for such credit
and (ii) any Debt Securities to be so delivered. Not less than 30 days before
each such sinking fund payment date, the Trustee shall select the Debt
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 3.2 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 3.2. Such
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notice having been duly given, the redemption of such Debt Securities shall be
made upon the terms and in the manner stated in Section 3.3.
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.1. Payment of Principal, Premium and Interest.
------------------------------------------
The Company will duly and punctually pay or cause to be paid the
principal of (and premium, if any) and interest on the Debt Securities of each
series at the time and place and in the manner provided herein and established
with respect to such Debt Securities.
SECTION 4.2. Maintenance of Office or Agency.
-------------------------------
So long as any series of the Debt Securities remain Outstanding, the
Company agrees to maintain an office or agency with respect to each such series
at such location or locations as may be designated as provided in this Section
4.2, where (i) Debt Securities of that series may be presented for payment, (ii)
Debt Securities of that series may be presented as hereinabove authorized for
registration of transfer and exchange, and (iii) notices and demands to or upon
the Company in respect of the Debt Securities of that series and this Indenture
may be given or served, such designation to continue with respect to such office
or agency until the Company shall, by written notice signed by its President or
a Vice President and delivered to the trustee, designate some other office or
agency for such purposes or any of them. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, 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,
notices and demands.
SECTION 4.3. Paying Agents.
-------------
(a) If the Company shall appoint one or more paying agents for all or
any series of the Debt Securities, other than the Trustee, the Company will
cause each such paying agent to execute and deliver to the Trustee an instrument
in which such agent shall agree with the Trustee, subject to the provisions of
this Section:
(1) that it will hold all sums held by it as such agent for the payment
of the principal of (and premium, if any) or interest on the Debt
Securities of that series (whether such sums have been paid to it by the
Company or by any other obligor of such Debt Securities) in trust for the
benefit of the Persons entitled thereto;
(2) that it will give the Trustee notice of any failure by the Company
(or by any other obligor of such Debt Securities) to make any payment of
the principal of (and premium, if any) or interest on the Debt Securities
of that series when the same shall be due and payable;
(3) that it will, at any time during the continuance of any failure
referred to in the preceding paragraph (a)(2) above, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such paying agent; and
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(4) that it will perform all other duties of paying agent as set forth
in this Indenture.
(b) If the Company shall act as its own paying agent with respect to
any series of the Debt Securities, it will on or before each due date of the
principal of (and premium, if any) or interest on Debt Securities of that
series, set aside, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay such principal (and premium, if any) or
interest so becoming due on Debt Securities of that series until such sums shall
be paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of such action, or any failure (by it or any other
obligor on such Debt Securities) to take such action. Whenever the Company
shall have one or more paying agents for any series of Debt Securities, it will,
prior to each due date of the principal of (and premium, if any) or interest on
any Debt Securities of that series, deposit with the paying agent a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such paying agent is the
Trustee) the Company will promptly notify the Trustee of this action or failure
so to act.
(c) Notwithstanding anything in this Section to the contrary, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.5, and (ii) 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 direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying agent, such sums to be held by the
Trustee upon the same terms and conditions 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.
SECTION 4.4. Appointment to Fill Vacancy in Office of Trustee.
------------------------------------------------
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 7.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 4.5. Compliance with Consolidation Provisions.
----------------------------------------
The Company will not, while any of the Debt Securities remain
Outstanding, consolidate with, or merge into, any other company or merge any
other company into itself, or sell or convey all or substantially all of its
property to any other company unless the provisions of Article X are complied
with.
SECTION 4.6. Limitation on Dividends.
-----------------------
If Debt Securities are issued to an Arvin Trust or a trustee of such
trust in connection with the issuance of Trust Securities by such Arvin Trust
and (a) there shall have occurred any event that would constitute an Event of
Default, or (b) the Company shall be in default with respect to its payment of
any obligations under the Capital Securities Guarantee or Common Securities
Guarantee relating to such Trust Securities, or (c) the Company shall have given
notice of its election to defer payments of interest on Debt Securities by
extending the interest payment period as provided in the Board Resolution and
Officers' Certificate or indenture supplemental hereto establishing such series
of Debt Securities, and such period, or any extension thereof, shall be
continuing, then (x) the Company shall not declare or pay any dividend on, make
any distribution with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (i)
repurchases or acquisitions of the Company's common
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shares as contemplated by any employment arrangement, benefit plan or other
similar contract with or for the benefit of employees, officers or directors
entered into in the ordinary course of business, (ii) as a result of an exchange
or conversion of any class or series of the Company's capital stock for the
Company's common shares, provided that such class or series of the Company's
capital stock was outstanding prior to the occurrence of such Event of Default
or the date upon which the Company gives notice of its election to extend the
interest payment period, as applicable, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such Company capital stock or the security being
converted or exchanged, provided that such Company capital stock or security was
outstanding prior to the occurrence of such Event of Default or the date upon
which the Company gives notice of its election to extend the interest payment
period, as applicable, or (iv) the payment of any stock dividend where the
dividend is paid in the form of the same stock as that on which the dividend is
paid), (y) the Company shall not directly or indirectly, and shall not allow any
of its Subsidiaries to, make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities issued by the Company
that rank pari passu with or junior to the Debt Securities, and (z) the Company
shall not make guarantee payments with respect to the foregoing (other than
pursuant to the Capital Securities Guarantee).
SECTION 4.7. Covenants as to Arvin Trusts.
----------------------------
In the event Debt Securities are issued to an Arvin Trust in connection
with the issuance of Trust Securities by such Arvin Trust, for so long as such
Trust Securities remain outstanding, the Company will (i) maintain 100% direct
or indirect ownership of the Common Securities of such Arvin Trust; provided,
--------
however, that any permitted successor of the Company under this Indenture may
- -------
succeed to the Company's ownership of the Common Securities, (ii) not cause, as
sponsor of such Arvin Trust, or permit, as holder of Common Securities of such
Arvin Trust, the dissolution, winding-up or termination of such Arvin Trust,
except in connection with a distribution of Debt Securities as provided in the
Declaration and in connection with certain mergers, consolidations or
amalgamations permitted by the Declaration, and (iii) use its reasonable efforts
to cause such Arvin Trust (a) to remain a statutory business trust, except in
connection with a distribution of Debt Securities to holders of Trust Securities
upon dissolution of such Arvin Trust, the redemption of all of the Trust
Securities of such Arvin Trust or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such Arvin Trust, and (b)
to otherwise continue to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 4.8. Corporate Existence.
-------------------
The Company will, subject to the provisions of Article X, at all times
maintain its corporate existence and right to carry on business and will duly
procure all renewals and extensions thereof, and, to the extent necessary or
desirable in the operation of its business, will use its best efforts to
maintain, preserve and renew all of its rights, powers, privileges and
franchises.
SECTION 4.9. Notice of Default.
-----------------
The Company shall file with the Trustee written notice of any Event of
Default within 30 Business Days of its becoming aware of such Event of Default.
ARTICLE V
SECURITYHOLDERS, LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.1. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Securityholders.
- ---------------
The Company will furnish or cause to be furnished to the Trustee (a) on
each regular record date (as defined in Section 2.3) a list, in such form as the
Trustee may reasonably require, of the names and addresses of the holders of
each series of Debt Securities as of such regular record date, provided,
--------
however, the Company shall not be obligated to furnish or cause such list to be
- -------
furnished at any time that the list shall not differ in any respect from the
most recent list furnished to the Trustee by the Company and (b) at such
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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;
provided, however, that in either case, no such list need be furnished for any
- -------- -------
series for which the Trustee shall be the Security Registrar.
SECTION 5.2. Preservation Of Information; Communications With
------------------------------------------------
Securityholders.
- ---------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debt Securities contained in the most recent list furnished to it as provided in
Section 5.1 and as to the names and addresses of holders of Debt Securities
received by the Trustee in its capacity as Security Registrar (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.1 upon receipt of a new list so furnished.
(c) Securityholders may communicate as provided in Section 312(b) of
the Trust Indenture Act with other Securityholders with respect to their rights
under this Indenture or under the Debt Securities.
SECTION 5.3. Reports By the Company.
----------------------
(a) The Company covenants and agrees to file with the Trustee, within
15 days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports that may be required pursuant to
Section 13 of the Exchange Act, in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable overnight delivery service that provides for
evidence of receipt, to the Securityholders, as their names and addresses appear
upon the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this Section as may
be required by rules and regulations prescribed from time to time by the
Commission.
20
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SECTION 5.4. Reports by the Trustee.
----------------------
(a) On or before July 15 in each year in which any of the Debt
Securities are Outstanding, the Trustee shall transmit by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear
upon the Security Register, a brief report dated as of the preceding May 15, if
and to the extent required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Sections 313(b) and 313(c) of the
Trust Indenture Act.
(c) A copy of each such report shall, at the time of such transmission
to Securityholders, be filed by the Trustee with the Company, with each stock
exchange upon which any Debt Securities are listed (if so listed) and also with
the Commission. The Company agrees to notify the Trustee when any Debt
Securities become listed on any stock exchange.
ARTICLE VI
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.1. Events of Default.
-----------------
(a) Whenever used herein with respect to Debt Securities of a
particular series, "Event of Default" means any one or more of the following
events that has occurred and is continuing:
(1) the Company defaults in the payment of any installment of interest
upon any of the Debt Securities of that series, as and when the same shall
become due and payable, and continuance of such default for a period of 30
days; provided, however, that a valid extension of an interest payment
-------- -------
period by the Company in accordance with the terms of the Debt Securities
of that series shall not constitute a default in the payment of interest
for this purpose;
(2) the Company defaults in the payment of the principal of (or
premium, if any, on) any of the Debt Securities of that series as and when
the same shall become due and payable whether at maturity, upon redemption,
by declaration or otherwise, or in any payment required by any sinking or
analogous fund established with respect to that series;
(3) the Company fails to observe or perform any other of its covenants
or agreements with respect to that series contained in this Indenture or
otherwise established with respect to that series of Debt Securities
pursuant to Section 2.1 for a period of 90 days after the date on which
written notice of such failure, requiring the same to be remedied and
stating that such notice is a "Notice of Default" hereunder, shall have
been given to the Company by the Trustee, by registered or certified mail,
or to the Company and the Trustee by the holders of at least 25% in
principal amount of the Debt Securities of that series at the time
Outstanding;
(4) the Company, pursuant to or within the meaning of any Bankruptcy
Law, (i) commences a voluntary case, (ii) consents to the entry of an order
for relief against it in an
21
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involuntary case, (iii) consents to the appointment of a Custodian of it or
for all or substantially all of its property or (iv) makes a general
assignment for the benefit of its creditors;
(5) a court of competent jurisdiction enters an order under any
Bankruptcy Law that (i) is for relief against the Company in an involuntary
case, (ii) appoints a Custodian of the Company for all or substantially all
of its property, or (iii) orders the liquidation of the Company, and the
order or decree remains unstayed and in effect for 90 days; or
(6) in the event Debt Securities are issued to an Arvin Trust or a
trustee of such trust in connection with the issuance of Trust Securities
by such Arvin Trust, such Arvin Trust shall have voluntarily or
involuntarily dissolved, wound-up its business or otherwise terminated its
existence, except in connection with (i) the distribution of Debt
Securities to holders of Trust Securities in liquidation of their interests
in such Arvin Trust, (ii) the redemption of all outstanding Trust
Securities of such Arvin Trust, and (iii) mergers, consolidations or
amalgamations, each as permitted by the Declaration of such Arvin Trust.
(b) If an Event of Default described in clauses 1, 2, 3 or 6 of this
Section 6.1 with respect to Debt Securities of any series at the time
outstanding occurs and is continuing, unless the principal of all the Debt
Securities of that series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Debt Securities of that series then Outstanding hereunder, by notice in writing
to the Company (and to the Trustee, if given by such Securityholders), may
declare the principal of all the Debt Securities of that series to be
immediately due and payable, and upon any such declaration the same shall become
and be immediately due and payable, notwithstanding anything contained in this
Indenture or in the Debt Securities of that series or established with respect
to that series pursuant to Section 2.1 to the contrary. If an Event of Default
specified in clause (4) or (5) of Section 6.1(a) occurs or is continuing, then
the principal amount of all the Debt Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholder.
(c) At any time after the principal of the Debt Securities of that
series shall have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the holders of a majority in aggregate principal amount of
the Debt Securities of that series then Outstanding hereunder, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if: (i) the Company has paid or deposited with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Debt
Securities of that series and the principal of (and premium, if any, on) any and
all Debt Securities of that series that shall have become due otherwise than by
acceleration (with interest upon such principal and premium, if any, and, to the
extent that such payment is enforceable under applicable law, upon overdue
installments of interest, at the rate per annum expressed in the Debt Securities
of that series to the date of such payment or deposit) and the amount payable to
the Trustee under Section 7.6, and (ii) any and all Events of Default with
respect to such series, other than the nonpayment of principal on Debt
Securities of that series that shall not have become due by their terms, shall
have been remedied or waived as provided in Section 6.6. No such rescission and
annulment shall extend to or shall affect any subsequent default or impair any
right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Debt Securities of that series under this Indenture and such
proceedings shall have been discontinued or
22
<PAGE>
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Company and the Trustee shall continue as though no such proceedings had been
taken.
SECTION 6.2. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
- -------
(a) The Company covenants that (1) in case it shall default in the
payment of any installment of interest on any of the Debt Securities of a
series, or any payment required by any sinking or analogous fund established
with respect to that series as and when the same shall have become due and
payable, and such default shall have continued for a period of 90 days, or (2)
in case it shall default in the payment of the principal of (or premium, if any,
on) any of the Debt Securities of a series when the same shall have become due
and payable, whether upon maturity of the Debt Securities of a series or upon
redemption or upon declaration or otherwise, then, upon demand of the Trustee,
the Company will pay to the Trustee, for the benefit of the holders of the Debt
Securities of that series, the whole amount that then shall have become due and
payable on all such Debt Securities for principal (and premium, if any) or
interest, or both, as the case may be, with interest upon the overdue principal
(and premium, if any) and (to the extent that payment of such interest is
enforceable under applicable law and, if the Debt Securities are held by an
Arvin Trust, without duplication of any other amounts paid by such Arvin Trust
in respect thereof) upon overdue installments of interest at the rate per annum
expressed in the Debt Securities of that series; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection and the amount payable to the Trustee under Section 7.6.
(b) If the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the Debt
Securities of that series and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company or
other obligor upon the Debt Securities of that series, wherever situated.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or judicial proceedings
affecting the Company or its creditors or property, the Trustee shall have power
to intervene in such proceedings and take any action therein that may be
permitted by the court and shall (except as may be otherwise provided by law) be
entitled to file such proofs of claim and other papers and documents as may be
necessary or advisable in order to have the claims of the Trustee and of the
holders of Debt Securities of such series allowed for the entire amount due and
payable by the Company under this Indenture at the date of institution of such
proceedings and for any additional amount that may become due and payable by the
Company after such date, and to collect and receive any moneys or other property
payable or deliverable on any such claim, and to distribute the same after the
deduction of the amount payable to the Trustee under Section 7.6; and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the holders of Debt Securities of such series to make such
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of such payments directly to such Securityholders, to pay to the Trustee
any amount due it under Section 7.6.
(d) All rights of action and of asserting claims under this Indenture,
or under any of the terms established with respect to Debt Securities of that
series, may be enforced by the Trustee without the
23
<PAGE>
possession of any of such Debt Securities, or the production thereof at any
trial or other proceeding relative thereto, and any such suit or 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 payment
to the Trustee of any amounts due under Section 7.6, be for the ratable benefit
of the holders of the Debt Securities of such series.
In case of an Event of Default, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debt Securities of that series or the rights of any holder thereof or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
SECTION 6.3. Application of Moneys Collected.
-------------------------------
Any moneys collected by the Trustee pursuant to this Article with
respect to a particular series of Debt Securities shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal (or premium, if any) or
interest, upon presentation of the Debt Securities of that series, and notation
thereon of the payment, if only partially paid, and upon surrender thereof if
fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 7.6;
SECOND: To the payment of all Senior Indebtedness of the Company if
and to the extent required by Article XIII; and
THIRD: To the payment of the amounts then due and unpaid upon Debt
Securities of such series for principal (and premium, if any) and interest,
in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Debt Securities for principal (and
premium, if any) and interest, respectively.
SECTION 6.4. Limitation on Suits.
-------------------
(a) No holder of any Debt Security of any series shall have any right
by virtue or by availing of any provision of this Indenture to institute any
suit, action or proceeding in equity or at law upon or under or with respect to
this Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless (i) such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof
with respect to the Debt Securities of such series specifying such Event of
Default, as hereinbefore provided; (ii) the holders of not less than 25% in
aggregate principal amount of the Debt Securities of such series then
Outstanding shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as trustee hereunder; (iii) such
holder or
24
<PAGE>
holders shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby; (iv) the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity, shall have failed to institute any such action, suit or
proceeding; and (v) during such 60 day period, the holders of not less than a
majority in principal amount of the Debt Securities of that series do not give
the Trustee a direction inconsistent with the request.
(b) Notwithstanding anything contained herein to the contrary or any
other provisions of this Indenture, the right of any holder of any Debt Security
to receive payment of the principal of (and premium, if any) and interest on
such Debt Security, as therein provided, on or after the respective due dates
expressed in such Debt Security (or in the case of redemption, on the redemption
date), or to institute suit for the enforcement of any such payment on or after
such respective dates or redemption date, shall not be impaired or affected
without the consent of such holder, and by accepting a Debt Security hereunder
it is expressly understood, intended and covenanted by the taker and holder of
every Debt Security of such series with every other such taker and holder and
the Trustee, that no one or more holders of Debt Securities of such series shall
have any right in any manner whatsoever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the
holders of any other of such Debt Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Debt Securities of such series. For
the protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
(c) Notwithstanding any provision of this Indenture to the contrary, in
the event that the Institutional Trustee, as the holder of record of Debt
Securities of any series held by an Arvin Trust, fails to enforce its rights
with respect to such Debt Securities under the Indenture, any holder of
Capital Securities may, to the fullest extent permitted by law, institute legal
proceedings directly against the Company to enforce the Institutional Trustee's
rights under the Indenture without first instituting proceedings against the
Institutional Trustee or any other person or entity. In addition, if an Event of
Default under the Declaration has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest, principal, or other
required payments on Debt Securities issued to an Arvin Trust on the date such
interest, principal or other required payment is otherwise payable (or, in the
case of redemption, on the redemption date), then a holder of record of the
Capital Securities may directly institute a proceeding against the Company for
enforcement of payment to such holder of the principal, interest or other
required payment on Debt Securities having a principal amount equal to the
liquidation amount of the Capital Securities held by such holder on or after the
respective due dates specified in the Debt Securities. In connection with such
proceeding, the Company will be subrogated to the rights of such record holder
of Capital Securities to the extent of any payment made by the Company to such
holder of Capital Securities in such proceeding.
SECTION 6.5. Rights and Remedies Cumulative; Delay or Omission Not Waiver.
------------------------------------------------------------
(a) Except as otherwise provided in Section 2.7, all powers and
remedies given by this Article to the Trustee or to the Securityholders shall,
to the extent permitted by law, be deemed cumulative and not exclusive of any
other powers and remedies available to the Trustee or the holders of the Debt
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Debt Securities.
25
<PAGE>
(b) No delay or omission of the Trustee or of any holder of any of the
Debt Securities to exercise any right or power accruing upon any Event of
Default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 6.4, every power
and remedy given by this Article or by law to the Trustee or the Securityholders
may be exercised from time to time, and as often as shall be deemed expedient,
by the Trustee or by the Securityholders.
SECTION 6.6. Control by Securityholders.
--------------------------
The holders of a majority in aggregate principal amount of the Debt
Securities of any or all series affected (voting as a class) at the time
Outstanding, determined in accordance with Section 8.4, 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 such series; provided, however, that such direction
-------- -------
shall not be in conflict with any rule of law or with this Indenture or be
unduly prejudicial to the rights of holders of Debt Securities of any other
series at the time Outstanding determined in accordance with Section 8.4.
Subject to the provisions of Section 7.1, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability. The
holders of a majority in aggregate principal amount of the Debt Securities of
any series at the time Outstanding affected thereby, determined in accordance
with Section 8.4, may on behalf of the holders of all of the Debt Securities of
such series waive any past default in the performance of any of the covenants
contained herein or established pursuant to Section 2.1 with respect to such
series and its consequences, except (i) a default in the payment of the
principal of, or premium, if any, or interest on, any of the Debt Securities of
that series as and when the same shall become due by the terms of such Debt
Securities otherwise than by acceleration (unless such default has been cured
and a sum sufficient to pay all matured installments of interest and principal
and any premium has been deposited with the Trustee (in accordance with Section
6.1(c)), or (ii) a default in the covenants contained in Section 4.6. Upon any
such waiver, the default covered thereby shall be deemed to be cured for all
purposes of this Indenture and the Company, the Trustee and the holders of the
Debt Securities of such series shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 6.7. Undertaking to Pay Costs.
------------------------
All parties to this Indenture agree, and each holder of any Debt
Securities by such holder's 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 Securityholder, or group of
Securityholders, holding more than 10% in aggregate principal amount of the
Outstanding Debt Securities of any series, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debt Security of such series, on or after
the respective due dates expressed in such Debt Security or established pursuant
to this Indenture.
26
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ARTICLE VII
CONCERNING THE TRUSTEE
SECTION 7.1. Certain Duties and Responsibilities of Trustee.
----------------------------------------------
(a) The Trustee, prior to the occurrence of an Event of Default with
respect to the Debt Securities of a series and after the curing of all Events of
Default with respect to the Debt Securities of that series that may have
occurred, shall undertake to perform with respect to the Debt Securities of such
series such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to the Debt Securities of
a series has occurred (that has not been cured or waived), the Trustee shall
exercise with respect to Debt Securities of that series 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 man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) 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) prior to the occurrence of an Event of Default with respect to
the Debt Securities of a series and after the curing or waiving of all such
Events of Default with respect to that series that may have occurred:
(A) the duties and obligations of the Trustee shall, with respect
to the Debt Securities of such series, be determined solely by the
express provisions of this Indenture, and the Trustee shall not be
liable with respect to the Debt Securities of such series except for
the performance of such duties and obligations as are specifically set
forth in this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(B) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to the Debt Securities of such series
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 Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
that by any provision 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 requirement of this
Indenture;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(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
the holders of not less than a majority in principal amount of the Debt
Securities of any series at the time Outstanding 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 Debt Securities of that series;
and
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(4) None of the provisions contained in this Indenture shall require
the 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 there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate indemnity
against such risk is not reasonably assured to it.
SECTION 7.2. Certain Rights of Trustee.
-------------------------
Except as otherwise provided in Section 7.1:
(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, consent, order, approval, bond, 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, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an Officers'
Certificate (unless other evidence in respect thereof is specifically prescribed
herein);
(c) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted hereunder in
good faith and in reliance thereon;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default with respect to a series of the Debt Securities (that has not been
cured or waived) to exercise with respect to Debt Securities of that series such
of the rights and powers vested in it by this Indenture, and to use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs;
(e) the Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(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, consent, order, approval, bond, security, or
other papers or documents, unless requested in writing so to do by the holders
of not less than a majority in principal amount of the Outstanding Debt
Securities of the particular series affected thereby (determined as provided in
Section 8.4); provided, however, that if the payment within a reasonable time to
-------- -------
the Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against such costs,
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expenses or liabilities as a condition to so proceeding. The reasonable expense
of every such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand; 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 7.3. Trustee Not Responsible for Recitals or Issuance of Debt
--------------------------------------------------------
Securities.
- ----------
(a) The recitals contained herein and in the Debt Securities shall be
taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debt Securities.
(c) The Trustee shall not be accountable for the use or application by
the Company of any of the Debt Securities or of the proceeds of such Debt
Securities, or for the use or application of any moneys paid over by the Trustee
in accordance with any provision of this Indenture or established pursuant to
Section 2.1, or for the use or application of any moneys received by any paying
agent other than the Trustee.
SECTION 7.4. May Hold Debt Securities.
------------------------
The Trustee or any paying agent or Security Registrar, in its
individual or any other capacity, may become the owner or pledgee of Debt
Securities with the same rights it would have if it were not Trustee, paying
agent or Security Registrar.
SECTION 7.5. Moneys Held in Trust.
--------------------
Subject to the provisions of Section 11.5, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder except such as it
may agree with the Company to pay thereon. So long as no Event of Default shall
have occurred and be continuing, all interest allowed on any such moneys shall
be paid from time to time upon the written order of the Company, signed by the
President or a Vice President or the Treasurer or an Assistant Treasurer of the
Company.
SECTION 7.6. Compensation and Reimbursement.
------------------------------
(a) The Company covenants and agrees to pay to the Trustee, and the
Trustee shall be entitled to, such reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), as the Company and the Trustee may from time to time agree in
writing, for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, and, except as otherwise expressly provided herein,
the Company will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of
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<PAGE>
its counsel and of all Persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Company also covenants to indemnify the Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part of the
Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate and
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the satisfaction and discharge of this Indenture. Such
additional indebtedness shall be secured by a lien prior to that of the Debt
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular Debt
Securities.
SECTION 7.7. Reliance on Officers' Certificate.
---------------------------------
Except as otherwise provided in Section 7.1, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting to take any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee, and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.
SECTION 7.8. Qualification; Conflicting Interests.
------------------------------------
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.
SECTION 7.9. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee with respect to the Debt
Securities issued hereunder which shall at all times be a corporation organized
and doing business under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least fifty million U.S. dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial or District of Columbia 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, 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. The
Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 7.10.
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SECTION 7.10. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) The Trustee or any successor hereafter appointed, may at any time
resign with respect to the Debt Securities of one or more series by giving
written notice thereof to the Company and by transmitting notice of resignation
by mail, first class postage prepaid, to the Securityholders of such series, as
their names and addresses appear upon the Security Register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
with respect to Debt Securities of such series by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing 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 Debt
Securities of such series, or any Securityholder of that series who has been a
bona fide holder of a Debt Security or Debt Securities for at least six months
may, subject to the provisions of Section 6.8, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon after such notice, if any, as it
may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any one of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of subsection
(a) of Section 7.8 after written request therefor by the Company or by any
Securityholder who has been a bona fide holder of a Debt Security or Debt
Securities for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.9 and shall fail to resign after written request
therefor by the Company or by any such Securityholder; or
(3) the Trustee shall become incapable of acting, or shall be adjudged
a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or
a receiver of the Trustee or of its property shall be appointed or
consented to, 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, the Company may remove
the Trustee with respect to all Debt Securities and appoint a successor
trustee by written instrument, in duplicate, executed by order of the Board
of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to
the provisions of Section 6.8, unless the Trustee's duty to resign is
stayed as provided herein, any Securityholder who has been a bona fide
holder of a Debt Security or Debt Securities for at least six months may,
on behalf of that holder and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the Debt
Securities of any series at the time Outstanding may at any time remove the
Trustee with respect to such series by so notifying the Trustee and the Company
and may appoint a successor Trustee for such series with the consent of the
Company.
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(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debt Securities of a series pursuant to
any of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Debt Securities of one or more series or all of
such series, and at any time there shall be only one Trustee with respect to the
Debt Securities of any particular series.
SECTION 7.11. Acceptance of Appointment By Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor trustee with
respect to all Debt Securities, every such successor trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor trustee all the rights, powers, and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor trustee with
respect to the Debt Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor trustee with respect to the Debt
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
Debt Securities of that or those series to which the appointment of such
successor trustee relates, (2) 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 Debt 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, 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 that no
Trustee shall be responsible for any act or failure to act on the part of any
other Trustee hereunder; 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, such retiring Trustee shall
with respect to the Debt Securities of that or those series to which the
appointment of such successor trustee relates have no further responsibility for
the exercise of rights and powers or for the performance of the duties and
obligations vested in the Trustee under this Indenture, 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 Debt 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, to the extent contemplated by such supplemental indenture,
the property and money held by such retiring Trustee hereunder with respect to
the Debt Securities of that or those series to which the appointment of such
successor trustee relates.
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(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 such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor trustee shall accept its appointment unless at the
time of such acceptance such successor trustee shall be qualified and eligible
under this Article.
(e) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first class postage prepaid, to the Securityholders,
as their names and addresses appear upon the Security Register. If the Company
fails to transmit such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
SECTION 7.12. 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 the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided that such corporation shall be
-------- ----
qualified under the provisions of Section 7.8 and eligible under the provisions
of Section 7.9, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any Debt 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 Debt Securities so authenticated with the same
effect as if such successor trustee had itself authenticated such Debt
Securities.
SECTION 7.13. Preferential Collection of Claims Against the Company.
-----------------------------------------------------
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent included
therein.
ARTICLE VIII
CONCERNING THE SECURITYHOLDERS
SECTION 8.1. Evidence of Action by Securityholders.
-------------------------------------
Whenever in this Indenture it is provided that the holders of a
majority or specified percentage in aggregate principal amount of the Debt
Securities of a particular series may take any action (including the making of
any demand or request, the giving of any notice, consent or waiver or the taking
of any other action), the fact that at the time of taking any such action the
holders of such majority or specified percentage of that series have joined
therein may be evidenced by any instrument or any number of instruments of
similar tenor executed by such holders of Debt Securities of that series in
Person or by agent or proxy appointed in writing.
If the Company shall solicit from the Securityholders of any series any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced
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<PAGE>
by an Officers' Certificate, fix in advance a record date for such series for
the determination of Securityholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other
action may be given before or after the record date, but only the
Securityholders of record at the close of business on the record date shall be
deemed to be Securityholders for the purposes of determining whether
Securityholders of the requisite proportion of Outstanding Debt Securities of
that series have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and for that
purpose the Outstanding Debt Securities of that series shall be computed as of
the record date; provided, however, that no such authorization, agreement or
-------- -------
consent by such Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
SECTION 8.2. Proof of Execution by Securityholders.
-------------------------------------
Subject to the provisions of Section 7.1, proof of the execution of any
instrument by a Securityholder (such proof will not require notarization) or his
agent or proxy and proof of the holding by any Person of any of the Debt
Securities shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Debt Securities shall be proved by the Security
Register of such Debt Securities or by a certificate of the Security Registrar
thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 8.3. Who May be Deemed Owners.
------------------------
Prior to the due presentment for registration of transfer of any Debt
Security, the Company, the Trustee, any paying agent and any Security Registrar
may deem and treat the Person in whose name such Debt Security shall be
registered upon the books of the Company as the absolute owner of such Debt
Security (whether or not such Debt Security shall be overdue and notwithstanding
any notice of ownership or writing thereon made by anyone other than the
Security Registrar) for the purpose of receiving payment of or on account of the
principal of, premium, if any, and (subject to Section 2.3) interest on such
Debt Security and for all other purposes; and neither the Company nor the
Trustee nor any paying agent nor any Security Registrar shall be affected by any
notice to the contrary.
SECTION 8.4. Certain Debt Securities Owned by Company Disregarded.
----------------------------------------------------
In determining whether the holders of the requisite aggregate principal
amount of Debt Securities of a particular series have concurred in any
direction, consent waiver under this Indenture, the Debt Securities of that
series that are owned by the Company or any other obligor on the Debt Securities
of that series or by any Person directly or indirectly controlling or controlled
by or under common control with the Company or any other obligor on the Debt
Securities of that series (other than an Arvin Trust) shall be disregarded and
deemed not to be Outstanding for the purpose of any such determination, except
that for the
34
<PAGE>
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Debt Securities of such series that the
Trustee actually knows are so owned shall be so disregarded. The Debt
Securities so owned that have been pledged in good faith may be regarded as
Outstanding for the purposes of this Section, if the pledgee shall establish to
the satisfaction of the Trustee the pledgee's right so to act with respect to
such Debt Securities and that the pledgee is not a Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any such other obligor. In case of a dispute as to such right, any
decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
SECTION 8.5. Actions Binding on Future Securityholders.
-----------------------------------------
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.1, of the taking of any action by the holders of a
majority or specified percentage in aggregate principal amount of the Debt
Securities of a particular series in connection with such action, any holder of
a Debt Security of that series that is shown by the evidence to be included in
the Debt Securities the holders of which have consented to such action may, by
filing written notice with the Trustee, and upon proof of holding as provided in
Section 8.2, revoke such action so far as concerns such Debt Security. Except as
aforesaid, any such action taken by the holder of any Debt Security shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Debt Security, and of any Debt Security issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Debt Security. Any action
taken by the holders of a majority or specified percentage in aggregate
principal amount of the Debt Securities of a particular series in connection
with such action shall be conclusively binding upon the Company, the Trustee and
the holders of all the Debt Securities of that series.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without the Consent of Securityholders.
--------------------------------------------------------------
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as then in effect), without the
consent of the Securityholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect or inconsistency herein or in the
Debt Securities of any series;
(b) to comply with Article X;
(c) to provide for uncertificated Debt Securities in addition to or in
place of certificated Debt Securities;
(d) to add to the covenants of the Company for the benefit of the
holders of all or any series of Debt Securities (and if such covenants are to be
for the benefit of less than all series of Debt 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;
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(e) to add to, delete from, or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Debt Securities, as herein set forth;
(f) to make any change that does not adversely affect the rights of any
Securityholder in any material respect; or
(g) to provide for the issuance of and establish the form and terms and
conditions of the Debt Securities of any series as provided in Section 2.1, to
establish the form of any certifications required to be furnished pursuant to
the terms of this Indenture or any series of Debt Securities, or to add to the
rights of the holders of any series of Debt Securities.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed by the Company and the Trustee without the consent of the
holders of any of the Debt Securities at the time Outstanding notwithstanding
any of the provisions of Section 9.2.
SECTION 9.2. Supplemental Indentures With Consent of Securityholders.
-------------------------------------------------------
With the consent (evidenced as provided in Section 8.1) of the holders
of not less than a majority in aggregate principal amount of the Debt Securities
of each series affected by such supplemental indenture or indentures at the time
Outstanding, the Company, when authorized by a Board Resolution, and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as then in effect) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of any supplemental indenture or of modifying in any manner not covered by
Section 9.1 the rights of the holders of the Debt Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
-------- -------
shall, without the consent of the holders of each Debt Security then Outstanding
and affected thereby, (i) extend the fixed maturity of any Debt Securities of
any series, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any premium payable upon the
redemption thereof, without the consent of the holder of each Debt Security so
affected or (ii) reduce the aforesaid percentage of Debt Securities, the holders
of which are required to consent to any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders of any
series affected thereby under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
SECTION 9.3. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture pursuant to the
provisions of this Article or of Section 10.1, this Indenture shall, with
respect to such series, be and be deemed to be modified and
36
<PAGE>
amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Indenture of the Trustee,
the Company and the holders of Debt Securities of the series affected thereby
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.4. Debt Securities Affected by Supplemental Indentures.
---------------------------------------------------
Debt Securities of any series, affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article or of Section 10.1, may bear a
notation in form approved by the Company, provided such form meets the
requirements of any securities exchange upon which such series may be listed, as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Debt Securities of that series so modified as to conform, in
the opinion of the Board of Directors of the Company, to any modification of
this Indenture contained in any such supplemental indenture may be prepared by
the Company, authenticated by the Trustee and delivered in exchange for the Debt
Securities of that series then Outstanding.
SECTION 9.5. Execution of Supplemental Indentures.
------------------------------------
Upon the request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders required
to consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental indenture. The Trustee, subject to
the provisions of Section 7.1, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article is
authorized or permitted by, and conforms to, the terms of this Article and that
it is proper for the Trustee under the provisions of this Article to join in the
execution thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Securityholders of all series affected thereby as their names and addresses
appear upon the Security Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
ARTICLE X
SUCCESSOR CORPORATION
SECTION 10.1. Company May Consolidate, Etc.
----------------------------
Nothing contained in this Indenture or in any of the Debt Securities
shall prevent any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the Company), or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance,
transfer or other disposition of the property of the Company or its successor or
successors as an entirety, or substantially as an entirety, to any other
corporation (whether or not affiliated with the Company or its successor or
successors)
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authorized to acquire and operate the same; provided, however, that (i) the
-------- -------
entity formed by such consolidation, or into which the Company shall have been
merged, or which shall have acquired such property (the "successor corporation")
shall be a corporation organized under a state of the United States or the
District of Columbia, (ii) upon such consolidation, merger, sale, conveyance,
transfer or other disposition, the successor corporation shall expressly assume,
by supplemental indenture (which shall conform to the provisions of the Trust
Indenture Act, as then in effect), satisfactory in form to the Trustee and
executed and delivered to the Trustee, the due and punctual payment of the
principal of (premium, if any) and interest on all of the Debt Securities of all
series in accordance with the terms of each series, according to their tenor and
the due and punctual performance and observance of all the covenants and
conditions of this Indenture with respect to each series or established with
respect to such series pursuant to Section 2.1 to be kept or performed by the
Company, and (iii) immediately following such consolidation, merger, sale,
conveyance, transfer or other disposition, no Event of Default and no event
which, after notice or lapse of time, or both, would become an Event of Default
shall have occurred and be continuing.
SECTION 10.2. Successor Corporation Substituted.
---------------------------------
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of the due and punctual payment of the
principal of, premium, if any, and interest on all of the Debt Securities of all
series Outstanding and the due and punctual performance of all of the covenants
and conditions of this Indenture or established with respect to each series of
the Debt Securities pursuant to Section 2.1 to be performed by the Company, with
respect to each series, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named as the
Company herein and thereupon the Company shall be relieved of all obligations
and covenants under this Indenture and the Debt Securities.
(b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition, such changes in phraseology and form (but not in
substance) may be made in the Debt Securities thereafter to be issued as may be
appropriate.
(c) Nothing contained in this Indenture or in any of the Debt
Securities shall prevent the Company from merging any other Person (whether or
not affiliated with the Company) into itself or acquiring by purchase or
otherwise all or any part of the property of any other Person (whether or not
affiliated with the Company).
SECTION 10.3. Evidence of Consolidation, Etc. to Trustee.
------------------------------------------
The Trustee, subject to the provisions of Section 7.1, may receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or other disposition, and any such assumption, comply
with the provisions of this Article.
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ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.1. Satisfaction and Discharge of Indenture.
---------------------------------------
If at any time: (a) the Company shall have delivered to the Trustee for
cancellation all Debt Securities of a series theretofore authenticated (other
than any Debt Securities that shall have been destroyed, lost or stolen and that
shall have been replaced or paid as provided in Section 2.7 and Debt Securities
for whose payment money or Governmental Obligations have theretofore been
deposited in trust or segregated and held in trust by the Company (and thereupon
repaid to the Company or discharged from such trust, as provided in Section
11.5)); or (b) all such Debt Securities of a particular series not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and the Company shall deposit or cause
to be deposited with the Trustee as trust funds the entire amount in moneys or
Governmental Obligations or a combination thereof, sufficient in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay at maturity or
upon redemption all Debt Securities of that series not theretofore delivered to
the Trustee for cancellation, including principal (and premium, if any) and
interest due or to become due to such date of maturity or date fixed for
redemption, as the case may be, and if the Company shall also pay or cause to be
paid all other sums payable hereunder with respect to such series by the
Company; and if the Company has delivered to the Trustee an Opinion of Counsel
based on the fact that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the date
hereof, there has been a change in the applicable United States federal income
tax law, in either case to the effect that, and such opinion shall confirm that,
the holders of the Debt Securities of such series will not recognize income,
gain or loss for United States federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to United States federal
income tax on the same amount and in the same manner and at the same times, as
would have been the case if such deposit, defeasance and discharge had not
occurred, then this Indenture shall thereupon cease to be of further effect with
respect to such series except for the provisions of Sections 2.3, 2.5, 2.7, 4.1,
4.2, 4.3 and 7.10, that shall survive until the date of maturity or redemption
date, as the case may be, and Sections 7.6 and 11.5, that shall survive to such
date and thereafter, and the Trustee, on demand of the Company and at the cost
and expense of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture with respect to such series.
SECTION 11.2. Discharge of Obligations.
------------------------
If at any time all Debt Securities of a particular series not
heretofore delivered to the Trustee for cancellation or that have not become due
and payable as described in Section 11.1 shall have been paid by the Company by
depositing irrevocably with the Trustee as trust funds the entire amount in
moneys or Governmental Obligations, or a combination thereof, sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof, delivered to the Trustee to pay at
maturity or upon redemption under arrangements satisfactory to the Trustee for
the giving of notice of redemption all such Debt Securities of that series not
theretofore delivered to the Trustee for cancellation, including principal (and
premium, if any) and interest due or to become due to such date of maturity or
date fixed for redemption, as the case may be, and if the Company shall also pay
or cause to be paid all other sums payable hereunder by the Company with respect
to such series, then after the date such moneys or
39
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Governmental Obligations, as the case may be, are deposited with the Trustee
then, and if the Company has delivered to the Trustee an Opinion of Counsel
based on the fact that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the date
hereof, there has been a change in the applicable United States federal income
tax law, in either case to the effect that, and such opinion shall confirm that,
the holders of the Debt Securities of such series will not recognize income,
gain or loss for United States federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to United States federal
income tax on the same amount and in the same manner and at the same times, as
would have been the case if such deposit, defeasance and discharge had not
occurred, the obligations of the Company, under this Indenture with respect to
such series shall cease to be of further effect except for the provisions of
Sections 2.3, 2.5, 2.7, 4.1, 4.2, 4.3, and 7.10 hereof that shall survive until
such Debt Securities shall mature and be paid, and Sections 7.6 and 11.5 shall
survive to such date and thereafter.
SECTION 11.3. Deposited Moneys to be Held in Trust.
------------------------------------
All moneys or Governmental Obligations deposited with the Trustee
pursuant to Sections 11.1 or 11.2 shall be held in trust and shall be available
for payment as due, either directly or through any paying agent (including the
Company acting as its own paying agent), to the holders of the particular series
of Debt Securities for the payment or redemption of which such moneys or
Governmental Obligations have been deposited with the Trustee.
SECTION 11.4. Payment of Moneys Held by Paying Agents.
---------------------------------------
In connection with the satisfaction and discharge of this Indenture, or
the Company's obligation with respect to the Debt Securities of a series, all
moneys or Governmental Obligations then held by any paying agent under the
provisions of this Indenture shall, upon demand of the Company, be paid to the
Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys or Governmental Obligations.
SECTION 11.5. Repayment to Company.
--------------------
Any moneys or Governmental Obligations deposited with any paying agent
or the Trustee, or then held by the Company, in trust for payment of principal
of or premium or interest on the Debt Securities of a particular series that are
not applied but remain unclaimed by the holders of such Debt Securities for at
least two years after the date upon which the principal of (and premium, if any)
or interest on such Debt Securities shall have respectively become due and
payable, shall be repaid to the Company on May 31 of each year or (if then held
by the Company) shall be discharged from such trust; and thereupon the paying
agent and the Trustee shall be released from all further liability with respect
to such moneys or Governmental Obligations, and the holder of any of the Debt
Securities entitled to receive such payment shall thereafter, as an unsecured
general creditor, look only to the Company for the payment thereof.
40
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ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.1. No Recourse.
-----------
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Debt Security, or for any claim based thereon or otherwise
in respect thereof, shall be had against any incorporator, stockholder, officer
or director, past, present or future as such, of the Company or of any
predecessor or successor corporation, either directly or through the Company or
any such predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of
any predecessor or successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debt Securities or implied herefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debt Securities or implied therefrom, are hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issuance of such Debt Securities.
ARTICLE XIII
SUBORDINATION OF DEBT SECURITIES
SECTION 13.1. Agreement to Subordinate.
------------------------
The Company covenants and agrees, and each holder of Debt Securities
issued hereunder, by such Securityholder's acceptance thereof, likewise
covenants and agrees, that all Debt Securities shall be issued subject to the
provisions of this Article XIII, and each Holder of a Debt Security, whether
upon original issue or upon transfer or assignment thereof, accepts and agrees
to be bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest on all Debt Securities issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
the prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article XIII shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 13.2. Default on Senior Indebtedness.
------------------------------
In the event that any default by the Company in the payment of
principal, premium, interest or any other payment due on any Senior Indebtedness
of the Company has occurred and is continuing and any applicable grace period
with respect to such default has expired and such default has not been cured or
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waived or ceased to exist, or in the event that the maturity of any Senior
Indebtedness of the Company has been accelerated because of a default, then, in
either case, no payment shall be made by the Company with respect to the
principal (including redemption and sinking fund payments) of, or premium, if
any, or interest on the Debt Securities.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 13.2, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
SECTION 13.3. Liquidation; Dissolution; Bankruptcy.
------------------------------------
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company on
account of the principal (and premium, if any) or interest on the Debt
Securities; and upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Securityholders or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XIII, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Securityholders or
by the Trustee under the Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness in
full, in money or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Securityholders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness of the
Company remaining unpaid to the extent necessary to pay such Senior Indebtedness
in
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full in money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the benefit of the holders of such
Senior Indebtedness.
For purposes of this Article XIII, the words "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, the payment of which
is subordinated at least to the extent provided in this Article XIII with
respect to the Debt Securities to the payment of all Senior Indebtedness of the
Company that may at the time be outstanding, provided that (i) such Senior
Indebtedness is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of such
Senior Indebtedness are not, without the consent of such holders, altered by
such reorganization or readjustment. The consolidation of the Company with, or
the merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article X of this Indenture shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section 13.3 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article X of this Indenture. Nothing in Section 13.2 or in this Section 13.3
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.6 of this Indenture.
SECTION 13.4. Subrogation.
-----------
Subject to the payment in full of all Senior Indebtedness of the
Company, the rights of the Securityholders shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company applicable to such Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Debt Securities shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the Securityholders or
the Trustee would be entitled except for the provisions of this Article XIII,
and no payment over pursuant to the provisions of this Article XIII to or for
the benefit of the holders of such Senior Indebtedness by Securityholders or the
Trustee, shall, as between the Company, its creditors other than holders of
Senior Indebtedness of the Company, and the holders of the Debt Securities, be
deemed to be a payment by the Company to or on account of such Senior
Indebtedness. It is understood that the provisions of this Article XIII are and
are intended solely for the purposes of defining the relative rights of the
holders of the Debt Securities, on the one hand, and the holders of such Senior
Indebtedness on the other hand.
Nothing contained in this Article XIII or elsewhere in this Indenture
or in the Debt Securities is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness of the
Company, and the holders of the Debt Securities, the obligation of the Company,
which is absolute and unconditional, to pay to the holders of the Debt
Securities the principal of (and premium, if any) and interest on the Debt
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
holders of the Debt Securities and creditors of the Company, other than the
holders of Senior Indebtedness of the Company, nor shall anything herein or
therein prevent the Trustee or the holder of any Debt Security from exercising
all remedies otherwise permitted by applicable law upon default under the
Indenture, subject to the rights, if any, under this Article XIII of the holders
of such Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.
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Upon any payment or distribution of assets of the Company referred to
in this Article XIII, the Trustee, subject to the provisions of Section 7.1 of
this Indenture, and the Securityholders shall be entitled to conclusively rely
upon any order or decree made by any court of competent jurisdiction in which
such dissolution, winding-up, liquidation or reorganization proceedings are
pending, or a certificate of the receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, delivered to
the Trustee or to the Securityholders, for the purposes of ascertaining the
Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XIII.
SECTION 13.5. Trustee to Effectuate Subordination.
-----------------------------------
Each Securityholder by such Securityholder's acceptance thereof
authorizes and directs the Trustee on such Securityholder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article XIII and appoints the Trustee such Securityholder's
attorney-in-fact for any and all such purposes.
SECTION 13.6. Notice by the Company.
---------------------
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Debt Securities
pursuant to the provisions of this Article XIII. 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 that would prohibit
the making of any payment of monies to or by the Trustee in respect of the Debt
Securities pursuant to the provisions of this Article XIII, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof
from the Company or a holder or holders of Senior Indebtedness of the Company or
from any trustee therefor; and before the receipt of any such written notice,
the Trustee, subject to the provisions of Section 7.1 of this Indenture, shall
be entitled in all respects to assume that no such facts exist; provided,
--------
however, that if the Trustee shall not have received the notice provided for in
- -------
this Section 13.6 at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest on
any Debt Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purposes for which they were received, and
shall not be affected by any notice to the contrary that may be received by it
within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 7.1 of the Indenture,
shall be entitled to conclusively rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness of the
Company (or a trustee on behalf of such holder), to establish that such notice
has been given by a holder of such Senior Indebtedness or a trustee on behalf of
any such holder or holders. 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 such Senior Indebtedness to participate in any payment or
distribution pursuant to this Article XIII, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of such Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article XIII, and, if
such evidence is not furnished, the
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Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 13.7. Rights of the Trustee; Holders of Senior Indebtedness.
-----------------------------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XIII in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XIII, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture or against the Trustee. The Trustee shall
not be deemed to owe any fiduciary duty to the holders of such Senior
Indebtedness and, subject to the provisions of Section 7.1 of this Indenture,
the Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall pay over or deliver to Securityholders, the Company or any other Person
money or assets to which any holder of such Senior Indebtedness shall be
entitled by virtue of this Article XIII or otherwise.
SECTION 13.8. Subordination May Not Be Impaired.
---------------------------------
No right of any present or future holder of any Senior Indebtedness of
the Company to enforce subordination as herein provided shall be at any time in
any way 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 otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Company may, at any time and from time
to time, without the consent of or notice to the Trustee or the Securityholders,
without incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article XIII or the obligations
hereunder of the holders of the Debt Securities to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
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ARTICLE XIV
MISCELLANEOUS PROVISIONS
SECTION 14.1. Effect on Successors and Assigns.
--------------------------------
All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company shall bind successors and
assigns of the Company, whether so expressed or not.
SECTION 14.2. Actions by Successor.
--------------------
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the
time be the lawful successor of the Company.
SECTION 14.3. Surrender of Company Powers.
---------------------------
The Company by instrument in writing executed by authority of 2/3 (two-
thirds) of the Board of Directors and delivered to the Trustee may surrender any
of the powers reserved to the Company, and thereupon such power so surrendered
shall terminate both as to the Company and as to any successor corporation.
SECTION 14.4. Notices.
-------
Except as otherwise expressly provided herein, any notice or demand
that by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Debt Securities to or on the Company
may be given or served by being deposited first class postage prepaid in a post-
office letterbox addressed (until another address is filed in writing by the
Company with the Trustee), as follows: Arvin Industries, Inc., One Noblitt
Plaza, Box 3000, Columbus, Indiana 47202, Attention: Treasurer. Any notice,
election, request or demand by the Company or any Securityholder to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made in writing at the Corporate Trust Office of the
Trustee.
SECTION 14.5. Governing Law.
-------------
This Indenture and each Debt Security shall be deemed to be a contract
made under the internal laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of said State.
SECTION 14.6. Treatment of the Debt Securities as Debt.
----------------------------------------
It is intended that the Debt Securities will be treated as indebtedness
and not as equity for federal income tax purposes. The provisions of this
Indenture shall be interpreted to further this intention.
46
<PAGE>
SECTION 14.7. Compliance Certificates and Opinions.
------------------------------------
(a) Upon any application or demand by the Company to the Trustee to
take any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent 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 have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion
need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture shall include (1) a statement that the Person making such
certificate or opinion has read such covenant or condition; (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 such Person, 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 or not, in the opinion of such
Person, such condition or covenant has been complied with.
SECTION 14.8. Payments on Business Days.
-------------------------
Except as provided pursuant to Section 2.1 pursuant to a Board
Resolution, and as set forth in an Officers' Certificate, or established in one
or more indentures supplemental to this Indenture, in any case where the date of
maturity of interest or principal of any Debt Security or the date of redemption
of any Debt Security shall not be a Business Day, then payment of interest or
principal (and premium, if any) may be made on the next succeeding Business Day
with the same force and effect as if made on the nominal date of maturity or
redemption, and no interest shall accrue for the period after such nominal date;
except that, if such Business Day is in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, as if made
on the nominal date of maturity or redemption.
SECTION 14.9. Conflict with Trust Indenture Act.
---------------------------------
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 14.10. Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
SECTION 14.11. Separability.
------------
In case any one or more of the provisions contained in this Indenture
or in the Debt Securities of any series shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Debt Securities, but this Indenture and such Debt Securities shall be
construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
47
<PAGE>
SECTION 14.12. Assignment.
----------
The Company will have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly-owned Subsidiary of the Company, provided that, in the event of any such
-------- ----
assignment, the Company will remain liable for all such obligations. Subject to
the foregoing, the Indenture is binding upon and inures to the benefit of the
parties thereto and their respective successors and assigns. This Indenture may
not otherwise be assigned by the parties thereto.
48
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ARVIN INDUSTRIES, INC.
By:_________________________________________
Name:
Title:
Attest:
By:_________________________
Name:
Title:
[Seal]
WILMINGTON TRUST COMPANY
not in its individual capacity
but solely as Trustee
By:_________________________________________
Name:
Title:
Attest:
By:_________________________
Name:
Title:
[Seal]
49
<PAGE>
STATE OF INDIANA )
) SS:
COUNTY OF __________ )
On the ____ day of ___________, 199__, before me personally came
__________ and __________ to me known, who, being by me duly sworn, did depose
and say that they are the __________ and __________, respectively, of ARVIN
INDUSTRIES, INC., one of the corporations described in and which executed the
above instrument; that they know the corporate seal of said corporation; that
the seal affixed to the said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that
they signed their respective names thereto by like authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal of
office this ____ day of _____________, 199__.
________________________________________
Notary Public
STATE OF DELAWARE )
)
COUNTY OF _______ )
On the ____ day of ____________, 199__, before me personally came
__________ and __________ to me known, who, being by me duly sworn, did depose
and say that they are __________ and __________, respectively, of
__________________________________, one of the corporations described in and
which executed the above instrument; that they know the corporate seal of said
corporation; that the seal affixed to the said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that they signed their respective names thereto by like
authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal of
office this ____ day of ___________, 199__.
_______________________________________
Notary Public
50
<PAGE>
EXHIBIT 4.5
FIRST SUPPLEMENTAL INDENTURE
BETWEEN
ARVIN INDUSTRIES, INC.
AND
WILMINGTON TRUST COMPANY
DATED AS OF ____________, 199___
=========================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS
SECTION 1.1 Definition of Terms........................................... 1
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1 Designation and Principal Amount.............................. 2
SECTION 2.2 Maturity...................................................... 3
SECTION 2.3 Form and Payment.............................................. 3
SECTION 2.4 Global Debenture.............................................. 3
SECTION 2.5 Interest...................................................... 4
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1 Redemption; Conditions to Redemption.......................... 5
SECTION 3.2 No Sinking Fund............................................... 6
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period.......................... 6
SECTION 4.2 Notice of Extension........................................... 6
ARTICLE V
EXPENSES
SECTION 5.1 Payment of Expenses........................................... 7
SECTION 5.2 Payment Upon Resignation or Removal........................... 7
ARTICLE VI
FORM OF DEBENTURE
SECTION 6.1 Form of Debenture............................................. 8
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE VII
ORIGINAL ISSUE OF DEBENTURES
SECTION 7.1 Original Issue of Debentures.................................. 14
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Ratification of Indenture..................................... 14
SECTION 8.2 Trustee Not Responsible for Recitals.......................... 14
SECTION 8.3 Governing Law................................................. 15
SECTION 8.4 Separability.................................................. 15
SECTION 8.5 Counterparts.................................................. 15
</TABLE>
ii
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of ____________, 199___ (the
"First Supplemental Indenture"), between Arvin Industries, Inc., an Indiana
corporation (the "Company"), and Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as trustee (the
"Trustee") under the Indenture dated as of _____________, 199___ between the
Company and the Trustee (the "Indenture").
W I T N E S S E T H:
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Company's unsecured junior
subordinated debt securities to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires
to provide for the establishment of a new series of its Debt Securities to be
known as its ___% Junior Subordinated Deferrable Interest Debentures due 2027
(the "Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the Indenture
and this First Supplemental Indenture;
WHEREAS, Arvin Capital I, a Delaware statutory business trust (the
"Trust"), has offered to the public $100,000,000 aggregate liquidation amount of
its ___% Capital Securities (the "Capital Securities"), representing undivided
beneficial interests in the assets of the Trust and proposes to invest the
proceeds from such offering, together with the proceeds of the issuance and sale
by the Trust to the Company of $3,100,000 aggregate liquidation amount of its
___% Common Securities, in $103,100,000 aggregate principal amount of the
Debentures; and
WHEREAS, the Company has requested that the Trustee execute and
deliver this First Supplemental Indenture and all requirements necessary to make
this First Supplemental Indenture a valid instrument in accordance with its
terms, and to make the Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the
Company, have been performed, and the execution and delivery of this First
Supplemental Indenture has been duly authorized in all respects;
NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definition of Terms.
-------------------
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when
used in this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture
has the same meaning throughout;
<PAGE>
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or
Article of this First Supplemental Indenture;
(e) headings are for convenience of reference only and do not
affect interpretation;
(f) the following terms have the meanings given to them in the
Declaration: (i) Administrative Trustee; (ii) Capital Security Certificate;
(iii) Clearing Agency; (iv) Delaware Trustee; (v) Distributions; (vi) Pricing
Agreement; (vii) Institutional Trustee; (viii) Tax Event; and (ix) Underwriting
Agreement;
(g) the following terms have the meanings given to them in this
Section 1.1(g):
"Additional Interest" shall have the meaning set forth in
Section 2.5.
"Compounded Interest" shall have the meaning set forth in
Section 4.1.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Declaration" means the Amended and Restated Declaration of Trust
of Arvin Capital I, a Delaware statutory business trust, dated as of
____________, 199___, including the Terms of Securities attached thereto as
Annex I.
"Deferred Interest" shall have the meaning set forth in
Section 4.1.
"Extended Interest Payment Period" shall have the meaning set
forth in Section 4.1.
"Global Debenture" shall have the meaning set forth in
Section 2.4.
"Maturity Date" means the date on which the Debentures mature and
on which the principal shall be due and payable together with all accrued
and unpaid interest thereon including Compounded Interest and Additional
Interest, if any.
"Non Book-Entry Capital Securities" shall have the meaning set
forth in Section 2.4.
"Redemption Price" shall have the meaning set forth in
Section 3.2.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1 Designation and Principal Amount.
--------------------------------
There is hereby authorized a series of Debt Securities designated
the "___% Junior Subordinated Deferrable Interest Debentures due 2037", limited
in aggregate principal amount to $103,100,000, which amount shall be as set
forth in any written order of the Company for the authentication and delivery of
Debentures pursuant to Section 2.4 of the Indenture.
2
<PAGE>
SECTION 2.2 Maturity.
--------
The Maturity Date is _______________, 2037.
SECTION 2.3 Form and Payment.
----------------
Except as provided in Section 2.4, the Debentures shall be issued
in fully registered certificated form without interest coupons. Principal and
interest on the Debentures issued in certificated form will be payable, the
transfer of such Debentures will be registrable and such Debentures will be
exchangeable for Debentures bearing identical terms and provisions at the office
or agency of the Trustee; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the holder at such address
as shall appear in the Security Register or by wire transfer to an account
appropriately designated by such holder. Notwithstanding the foregoing, so long
as the holder of any Debentures is the Institutional Trustee, the payment of the
principal of and interest (including Compounded Interest and Additional
Interest, if any) on such Debentures held by the Institutional Trustee will be
made at such place and to such account as may be designated by the Institutional
Trustee.
SECTION 2.4 Global Debenture.
----------------
(a) In the event that the Debentures are distributed to holders of
Capital Securities in liquidation of such holders' interests in the Trust:
(i) the Debentures may be presented to the Trustee by the
Institutional Trustee in exchange for a global Debenture in an aggregate
principal amount equal to the aggregate principal amount of all
outstanding Debentures (a "Global Debenture"), to be registered in the
name of the Depositary, or its nominee, and delivered by the Trustee to
the Depositary for crediting to the accounts of its participants pursuant
to the instructions of the Regular Trustees. The Company, upon any such
presentation, shall execute a Global Debenture in such aggregate principal
amount and deliver the same to the Trustee for authentication and delivery
in accordance with the Indenture and this First Supplemental Indenture.
Payments on the Debentures issued as a Global Debenture will be made to
the Depositary; and
(ii) if any Capital Securities are held in non book-entry
certificated form, the Debentures may be presented to the Trustee by the
Institutional Trustee and any Capital Security Certificate which
represents Capital Securities other than Capital Securities held by the
Clearing Agency or its nominee ("Non Book-Entry Capital Securities") will
be deemed to represent beneficial interests in Debentures presented to the
Trustee by the Institutional Trustee having an aggregate principal amount
equal to the aggregate liquidation amount of the Non Book-Entry Capital
Securities until such Capital Security Certificates are presented to the
Security Registrar for transfer or reissuance, at which time such Capital
Security Certificates will be cancelled and a Debenture, registered in the
name of the holder of the Capital Security Certificate or the transferee
of the holder of such Capital Security Certificate, as the case may be,
with an aggregate principal amount equal to the aggregate liquidation
amount of the Capital Security Certificate cancelled, will be executed by
the Company and delivered to the Trustee for authentication and delivery
in accordance with the Indenture and this First Supplemental Indenture. On
issue of such Debentures, Debentures with an equivalent aggregate
principal amount that were presented by the Institutional Trustee to the
Trustee will be deemed to have been cancelled.
3
<PAGE>
(b) A Global Debenture may be transferred, in whole but not in
part, only to another nominee of the Depositary, or to a successor Depositary
selected or approved by the Company or to a nominee of such successor
Depositary.
(c) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the Depositary
shall no longer be registered or in good standing under the Exchange Act, or
other applicable statute or regulation, and a successor Depositary is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, the Company will
execute, and, subject to Article II of the Indenture, the Trustee, upon written
notice from the Company, will authenticate and deliver the Debentures in
definitive registered form, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global Debenture in
exchange for such Global Debenture. In addition, the Company may at any time
determine, in its sole discretion, that the Debentures shall no longer be
represented by a Global Debenture. In such event the Company will execute, and
subject to Section 2.11(c) of the Indenture, the Trustee, upon receipt of an
Officers' Certificate evidencing such determination by the Company, will
authenticate and deliver the Debentures in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Debenture in exchange for such Global
Debenture. Upon the exchange of the Global Debenture for such Debentures in
definitive registered form without coupons, in authorized denominations, the
Global Debenture shall be cancelled by the Trustee. Such Debentures in
definitive registered form issued in exchange for the Global Debenture shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Debentures to the
Depositary for delivery to the Persons in whose names such Debentures are so
registered.
SECTION 2.5 Interest.
--------
(a) Each Debenture will bear interest at the rate of ___% per
annum (the "Coupon Rate") from the original date of issuance until the principal
thereof becomes due and payable, and on any overdue principal and (to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest, at the Coupon Rate, compounded semi-annually,
payable (subject to the provisions of Article IV) semi-annually in arrears on
and of each year (each, an "Interest
Payment Date"), commencing __________, to the Person in whose name such
Debenture or any predecessor Debenture is registered, at the close of business
on the regular record date for such interest installment, which, in respect of
any Debentures of which the Institutional Trustee is the holder of a Global
Debenture, shall be the close of business on the Business Day next preceding
that Interest Payment Date. Notwithstanding the foregoing sentence, if the
Capital Securities are no longer in book-entry only form or, except if the
Debentures are held by the Institutional Trustee, the Debentures are not
represented by a Global Debenture, the Company may select a regular record date
for such interest installment which shall be any date at least one Business Day
before an Interest Payment Date.
(b) The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. Except as provided in
the following sentence, the amount of interest payable for any period shorter
than a full semi-annual period for which interest is computed will be computed
on the basis of the actual number of days elapsed. In the event that any date on
which interest is payable on the Debentures is not a Business Day, then payment
of 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
4
<PAGE>
in respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(c) If, at any time while the Institutional Trustee is the holder
of any Debentures, the Trust or the Institutional Trustee is required to pay any
taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any case, the Company will pay as additional interest
("Additional Interest") on the Debentures held by the Institutional Trustee,
such additional amounts as shall be required so that the net amounts received
and retained by the Trust and the Institutional Trustee after paying such taxes,
duties, assessments or other governmental charges will be equal to the amounts
the Trust and the Institutional Trustee would have received had no such taxes,
duties, assessments or other governmental charges been imposed.
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1 Redemption; Conditions to Redemption.
(a) Subject to the provisions of Article III of the Indenture, the
Company shall have the right to redeem the Debentures, (i) on or after January
__, 2007, in whole at any time or in part from time to time, or (ii) in the
event that a Tax Event shall occur and be continuing, then prior to January __,
2007 in whole (but not in part) within 90 days following the occurrence of such
Tax Event, upon not less than 30 nor more than 60 days' prior written notice, at
the redemption price specified in Section 3.1(b) below (the "Redemption Price"),
plus any accrued and unpaid interest, including Additional Interest, if any,
thereon to the date of such redemption (the "Redemption Date"); provided,
however, that the Company shall not redeem the Debentures in part unless all
accrued but unpaid interest has been paid in full on all of the Debentures
Outstanding for all semi-annual interest payment periods terminating on or prior
to the Redemption Date. If the Debentures are only partially redeemed pursuant
to this Section 3.1(a), the Debentures will be redeemed pro rata or by lot or by
any other method utilized by the Trustee; provided, that if at the time of
redemption the Debentures are registered as a Global Debenture, the Depositary
shall determine, in accordance with its procedures, the principal amount of such
Debentures held by each holder of Debentures to be redeemed.
(b) The Redemption Price, in the case of a redemption under
Section 3.1(a)(i) above, shall equal the following prices, expressed in
percentages of the principal amount of the Debentures, if the Debentures are
redeemed during the 12-month period beginning January __ of the years indicated
below:
REDEMPTION
YEAR PRICE
---- -----
2007............................................... %
2008............................................... %
2009............................................... %
2010............................................... %
2011............................................... %
2012............................................... %
2013............................................... %
2014............................................... %
2015............................................... %
2016............................................... %
and at 100% on or after January ___, 2017.
The Redemption Price, in the case of a redemption prior to January __, 2007
following a Tax Event, as described under Section 3.1(a)(ii) above, shall equal
a "Make-Whole Amount" equal to the greater of (i) 100% of the principal amount
of the Debentures or (ii) as determined by a Quotation Agent (as defined below),
the sum of the present values of (A) the principal amount and premium payable as
part of the Redemption Price with respect to an optional redemption of such
Debentures on January ___, 2007, and (B) scheduled payments of interest from the
Redemption Date to January ___, 2007 (the "Remaining Life"), in each case
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of 30-day months) at the Adjusted Treasury Rate (as defined
below).
"Adjusted Treasury Rate" means, with respect to any Redemption Date, the
Treasury Rate (as defined below) plus (i) 1.50% if such Redemption Date occurs
on or before _________, 1988 or (ii) 0.50% if such Redemption Date occurs after
________, 1998.
"Treasury Rate" means (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which is
published weekly by the Federal Reserve and which establishes yields on actively
traded United States Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity corresponding to the
Remaining Life (if no maturity is within three months before or after the
Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be determined and the Treasury Rate
shall be interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does
not contain such yields, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue (as defined below),
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means, with respect to any Redemption Date, the
United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after January ___, 2007, the two
most closely corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
"Quotation Agent" means Merrill Lynch Government Securities, Inc. and its
successors; provided, however, that if the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Trustee after consultation
with the Company.
"Comparable Treasury Price" means, with respect to any Redemption Date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such Redemption Date, as set forth in the most recent
weekly statistical release (or any successor release) published by the Federal
Reserve and designated "H.15(519)" or (ii) if such release (or any successor
release) is not published or does not contain such prices during the week
preceding such Business Day, (A) the average of five Reference Treasury Dealer
Quotations for such Redemption Date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than
three such Reference Treasury Dealer Quotations, the average of all such
Reference Treasury Dealer Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New
York City time, on the third Business Day preceding such Redemption Date.
(c) For so long as the Trust is the Holder of all Outstanding
Debentures, the proceeds of any redemption provided for in this Section 3.1
shall be used by the Trust to redeem Capital Securities in accordance with
their terms.
SECTION 3.2 No Sinking Fund.
The Subordinated Debentures are not entitled to the benefit of any
sinking fund.
5
<PAGE>
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period.
------------------------------------
The Company shall have the right, at any time and from time to time
during the term of the Debentures, to defer payments of interest by extending
the interest payment period of such Debentures for a period not exceeding 10
consecutive semi-annual interest payment periods (the "Extended Interest Payment
Period"), during which Extended Interest Payment Period no interest shall be due
and payable; provided that no Extended Interest Payment Period may extend beyond
the Maturity Date. To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 4.1, will bear interest thereon at the
Coupon Rate compounded quarterly for each semi-annual interest payment period of
the Extended Interest Payment Period ("Compounded Interest"). At the end of the
Extended Interest Payment Period, the Company shall pay all interest accrued and
unpaid on the Debentures, including any Additional Interest and Compounded
Interest (together, "Deferred Interest") that shall be payable to the holders of
the Debentures in whose names the Debentures are registered in the Security
Register on the first record date after the end of the Extended Interest Payment
Period. Before the termination of any Extended Interest Payment Period, the
Company may further extend such period, provided that such period together with
all such further extensions thereof shall not exceed 10 consecutive semi-annual
interest payment periods or extend beyond the maturity date of the Debentures.
Upon the termination of any Extended Interest Payment Period and upon the
payment of all Deferred Interest then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment Period,
except at the end thereof, but the Company may prepay at any time all or any
portion of the interest accrued during an Extended Interest Payment Period.
SECTION 4.2 Notice of Extension.
-------------------
(a) If the Institutional Trustee is the only registered holder of
the Debentures at the time the Company elects an Extended Interest Payment
Period, the Company shall give written notice to the Trustee, the Administrative
Trustees, and the Institutional Trustee of its election of such Extended
Interest Payment Period at least one Business Day before the earlier of (i) the
next succeeding date on which Distributions on the Trust Securities issued by
the Trust are payable, or (ii) the date the Trust is required to give notice of
the record date, or the date such Distributions are payable, to any applicable
self-regulatory organization or to holders of the Capital Securities, but in any
event at least one Business Day before such record date.
(b) If the Institutional Trustee is not the only holder of the
Debentures at the time the Company elects an Extended Interest Payment Period,
the Company shall give the holders of the Debentures and the Trustee written
notice of its election of such Extended Interest Payment Period at least 10
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to any applicable self-regulatory
organization or to holders of the Debentures.
(c) The semi-annual interest payment period in which any notice is
given pursuant to paragraphs (a) or (b) of this Section 4.2 shall be counted as
one of the 10 semi-annual interest payment periods permitted in the maximum
Extended Interest Payment Period permitted under Section 4.1.
6
<PAGE>
ARTICLE V
EXPENSES
SECTION 5.1 Payment of Expenses.
-------------------
(a) In connection with the offering, sale and issuance of the
Debentures to the Institutional Trustee and in connection with the sale of the
Trust Securities by the Trust, the Company, in its capacity as borrower with
respect to the Debentures, shall:
(1) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters
payable pursuant to the Underwriting Agreement and compensation of the
Trustee under the Indenture in accordance with the provisions of Section
7.6 of the Indenture;
(2) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust,
the offering, sale and issuance of the Trust Securities (including
commissions to the underwriters in connection therewith), the fees and
expenses of the Institutional Trustee and the Delaware Trustee, the costs
and expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing,
and disposition of Trust assets); and
(3) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs
and expenses with respect to such taxes of the Trust.
(b) The obligations of the Company under paragraphs (a)(2) and
(a)(3) of this Section 5.1 are for the benefit of, and shall be enforceable by,
any person to whom any such liabilities, costs, expenses, and taxes are owed (a
"Creditor"), whether or not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations of the Company directly against the
Company, and the Company irrevocably waives any right or remedy to require that
any such Creditor take any action against the Trust or any other person before
proceeding against the Company. The Company shall execute such additional
agreements as may be necessary or desirable to give full effect to the
provisions of this Section 5.1(b).
SECTION 5.2 Payment Upon Resignation or Removal.
-----------------------------------
Upon termination of this First Supplemental Indenture or the
Indenture or the removal or resignation of the Trustee pursuant to Section 7.10
of the Indenture, the Company shall pay to the Trustee all amounts accrued and
owing to the Trustee to the date of such termination, removal or resignation.
Upon termination of the Declaration or the removal or resignation of the
Delaware Trustee or the Institutional Trustee, as the case may be, pursuant to
Section 5.7 of the Declaration, the Company shall pay to the Delaware Trustee or
Institutional Trustee, as applicable, all amounts accrued and owing to such
Trustee to the date of such termination, removal or resignation.
7
<PAGE>
ARTICLE VI
FORM OF DEBENTURE
SECTION 6.1 Form of Debenture.
-----------------
The Debentures and the Trustee's Certificate of Authentication to
be endorsed thereon are to be substantially in the following forms:
(FORM OF FACE OF DEBENTURE)
[IF THE Debenture IS TO BE A GLOBAL Debenture, INSERT - This
Debenture is a Global Debenture 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 Debenture is exchangeable for Debentures registered in the name
of a person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Debenture
(other than a transfer of this Debenture as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary) may be registered except in limited
circumstances.
Unless this Debenture is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & CO., has an interest herein.]
8
<PAGE>
No.
----------------------
ARVIN INDUSTRIES, INC.
___% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE 2027
Arvin Industries, Inc., an Indiana corporation (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 $103,100,000 on __________, and to pay
interest on said principal sum from _________, 1997, or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, semi-annually (subject to deferral
as set forth herein) in arrears on ________________ 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, and
on any overdue principal and premium, if any, 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 same rate per annum compounded semi-
annually. The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year of twelve 30-day months. The amount of
interest payable for any period shorter than a full semi-annual interest payment
period for which interest is computed will be computed on the basis of actual
number of days elapsed in a 360-day year of twelve 30-day months. In the event
that any date on which interest is payable on this Debenture is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the person in whose name this Debenture (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of business
on the regular record date for such interest installment, which shall be the
close of business on the business day next preceding such Interest Payment Date.
[IF PURSUANT TO THE PROVISIONS OF THE INDENTURE THE DEBENTURES ARE NO LONGER
REPRESENTED BY A GLOBAL DEBENTURE --which shall be the close of business on the
15th day of the month in which such Interest Payment Date shall occur.] Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the registered holders on such regular record date and
may be paid to the Person in whose name this Debenture (or one or more
Predecessor Securities) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such defaulted
interest, notice of which shall be given to the registered holders of this
series of Debentures not less than 10 days prior to such special record date, or
may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. The principal of (and premium, if any) and the
interest on this Debenture shall be payable at the office or agency of the
Trustee maintained for that purpose in any coin or currency of the United States
of America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made
9
<PAGE>
at the option of the Company by check mailed to the registered holder at such
address as shall appear in the Security Register. Notwithstanding the foregoing,
so long as the holder of this Debenture is the Institutional Trustee, the
payment of the principal of (and premium, if any) and interest on this Debenture
will be made at such place and to such account as may be designated by the
Institutional Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness of the Company, and this
Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each holder of this Debenture, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided, and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes. Each holder
hereof, by his or her acceptance hereof, hereby waives all notice of the
acceptance of the subordination provisions contained herein and in the Indenture
by each holder of Senior Indebtedness of the Company, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated
-------------------
ARVIN INDUSTRIES, INC.
By:
-----------------------
Name:
Title:
Attest:
By:
----------------------
Name:
Title:
10
<PAGE>
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described
in the within-mentioned Indenture.
WILMINGTON TRUST COMPANY or
--------------------------------------
as Trustee as Authenticating Agent
By By
--------------------------- --------------------------------------
Authorized Signatory Authorized Signatory
11
<PAGE>
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of ______________, 199__, duly executed and delivered
between the Company and Wilmington Trust Company, as Trustee (the "Trustee"), as
supplemented by the First Supplemented Indenture dated as of __________, 199__,
between the Company and the Trustee (the Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Debentures. By the terms of the Indenture, the Debentures are
issuable in series that may vary as to amount, date of maturity, rate of
interest and in other respects as provided in the Indenture. This series of
Debentures is limited in aggregate principal amount as specified in said First
Supplemental Indenture.
Subject to the provisions of Article III of the Indenture, the Company has
the right to redeem this Debenture (i) on or after January __, 2007, in whole at
any time or in part from time to time, or (ii) in the event that a Tax Event (as
defined in the First Supplemental Indenture) shall occur and be continuing, then
prior to January __, 2007, in whole (but not in part) within 90 days following
the occurrence of such Tax Event upon not less than 30 nor more than 60 days'
prior written notice, at the redemption price specified below (the "Redemption
Price"), plus any accrued and unpaid interest, including Additional Interest, if
any, thereon to the date of such redemption (the "Redemption Date"); provided,
however, that the Company shall not redeem the Debentures in part unless all
accrued but unpaid interest has been paid in full on all of the Debentures for
all semi-annual interest payment periods terminating on or prior to the
Redemption Date.
The Redemption Price, in the case of a redemption under (i) above, shall
equal the following prices, expressed in percentages of the principal amount of
the Debentures, if the Debentures are redeemed during the 12-month period
beginning January __ of the years indicated below:
REDEMPTION
YEAR PRICE
---- -----
2007.................................................. %
2008.................................................. %
2009.................................................. %
2010.................................................. %
2011.................................................. %
2012.................................................. %
2013.................................................. %
2014.................................................. %
2115.................................................. %
2116.................................................. %
and at 100% on or after January ___, 2017.
The Redemption Price, in the case of a redemption prior to January __, 2007
following a Tax Event, as described under (ii) above, shall equal a Make-Whole
Amount, equal to the greater of (i) 100% of the principal amount of the
Debentures or (ii) as determined by a Quotation Agent (as defined below), the
sum of the present values of (A) the principal amount and premium payable as
part of the Redemption Price with respect to an optional redemption of such
Debentures on January ___, 2007, and (B) the scheduled payments of interest from
the Redemption Date to January ___, 2007 (the "Remaining Life"), in each case
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of 30-day months) at the Adjusted Treasury Rate (as defined
below).
"Adjusted Treasury Rate" means, with respect to any Redemption Date, the
Treasury Rate (as defined below) plus (i) 1.50% if such Redemption Date occurs
on or before __________, 1998 or (ii) 0.50% if such Redemption Date occurs after
___________, 1998.
"Treasury Rate" mean (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which is
published weekly by the Federal Reserve and which establishes yields on actively
traded United States Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity corresponding to the
Remaining Life (if no maturity is within three months before or after the
Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be determined and the Treasury Rate
shall be interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does
not contain such yields, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue (as defined below),
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means, with respect to any Redemption Date, the
United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after January ___, 2007, the two
most closely corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
"Quotation Agent" means Merrill Lynch Government Securities, Inc. and its
successors; provided, however, that if the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Trustee after consultation
with the Company.
"Comparable Treasury Price" means, with respect to any Redemption Date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such Redemption Date, as set forth in the most recent
weekly statistical release (or any successor release) published by the Federal
Reserve and designated "H.15(519)" or (ii) if such release (or any successor
release) is not published or does not contain such prices during the week
preceding such Business Day, (A) the average of five Reference Treasury Dealer
Quotations for such Redemption Date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than
three such Reference Treasury Dealer Quotations, the average of all such
Reference Treasury Dealer Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
If the Debentures are only partially redeemed by the Company, the
Debentures will be redeemed pro rata or by lot or by any other method utilized
by the Trustee; provided that if, at the time of redemption, the Debentures are
registered as a Global Debenture, the Depositary shall determine the principal
amount of such Debentures held by each holder to be redeemed in accordance with
its procedures.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures of this series for the unredeemed portion hereof will be issued in
the name of the holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become immediately due and payable, in
the manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Debentures of each series affected at the time
Outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Debentures of any series, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
premium payable upon the redemption thereof, without the consent of the holder
of each Debenture so affected, or (ii) reduce the aforesaid percentage of
Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the
12
<PAGE>
holders of each Debenture then Outstanding and affected thereby. The Indenture
also contains provisions permitting the holders of a majority in aggregate
principal amount of the Debentures of any series at the time outstanding
affected thereby, on behalf of all of the holders of the Debentures of such
series, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture with
respect to such series, and its consequences, except a default in the payment of
the principal of or premium, if any, or interest on any of the Debentures of
such series. Any such consent or waiver by the registered holder of this
Debenture (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future holders and owners of this
Debenture and of any Debenture issued in exchange herefor or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at the
rate and in the money herein prescribed.
The Company shall have the right at any time during the term of the
Debentures and from time to time to extend the interest payment period of such
Debentures for up to 10 consecutive semi-annual interest payment periods (an
"Extended Interest Payment Period"), at the end of which period the Company
shall pay all interest then accrued and unpaid (together with interest thereon
at the rate specified for the Debentures to the extent that payment of such
interest is enforceable under applicable law); provided that no Extended
Interest Payment Date may extend beyond the maturity date of the Debentures.
Before the termination of any such Extended Interest Payment Period, the Company
may further extend such Extended Interest Payment Period, provided that such
Extended Interest Payment Period together with all such further extensions
thereof shall not exceed 10 consecutive semi-annual interest payment periods. At
the termination of any such Extended Interest Payment Period and upon the
payment of all accrued and unpaid interest and any additional amounts then due,
the Company may commence a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Security Register of the Company, upon surrender of this Debenture
for registration of transfer at the Corporate Trust Office of the Trustee or
such other location designated by the Company pursuant to the Indenture
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Trustee duly executed by the registered
holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and the Security Registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Security Registrar)
for the purpose of receiving payment of or on account of the principal hereof
and premium, if any, and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any Security
Registrar shall be affected by any notice to the contrary.
13
<PAGE>
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
[The Debentures of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.]
[This Global Debenture is exchangeable for Debentures in definitive form only
under certain limited circumstances set forth in the Indenture. Debentures of
this series so issued are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.] As provided in the
Indenture and subject to certain limitations herein and therein set forth,
Debentures of this series so issued are exchangeable for a like aggregate
principal amount of Debentures of this series of a different authorized
denomination, as requested by the holder surrendering the same.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
ARTICLE VII
ORIGINAL ISSUE OF DEBENTURES
SECTION 7.1 Original Issue of Debentures.
----------------------------
Debentures in the aggregate principal amount of $103,100,000 may,
upon execution of this First Supplemental Indenture, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the written order of the
Company, signed by its President, or any Vice President and its Treasurer or an
Assistant Treasurer, without any further action by the Company.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Ratification of Indenture.
-------------------------
The Indenture, as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed, and this First
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.
SECTION 8.2 Trustee Not Responsible for Recitals.
------------------------------------
The recitals herein contained are made by the Company and not by
the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or sufficiency
of this First Supplemental Indenture.
14
<PAGE>
SECTION 8.3 Governing Law.
-------------
This First Supplemental Indenture and each Debenture shall be
deemed to be a contract made under the internal laws of the State of New York,
and for all purposes shall be construed in accordance with the laws of said
State.
SECTION 8.4 Separability.
------------
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Debentures shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this First
Supplemental Indenture or of the Debentures, but this First Supplemental
Indenture and the Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
SECTION 8.5 Counterparts.
------------
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
ARVIN INDUSTRIES, INC.
By:
-----------------------------------
Name:
Title:
Attest:
By:
-------------------------
Name:
Title:
[Seal]
WILMINGTON TRUST COMPANY
not in its individual capacity
but solely as Trustee
By:
------------------------------------
Name:
Title:
Attest:
By:
-------------------------
Name:
Title:
[Seal]
<PAGE>
STATE OF INDIANA )
) SS
COUNTY OF _______ )
On the _____ day of __________, 199___, before me personally came _________
and _________ to me known, who, being by me duly sworn, did depose and say that
they are the __________ and _________, respectively, of ARVIN INDUSTRIES, INC.,
one of the corporations described in and which executed the above instrument;
that they know the corporate seal of said corporation; that the seal affixed to
the said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that they signed their
respective names thereto by like authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal of
office this _____ day of _________, 199___.
--------------------------------------
Notary Public
STATE OF DELAWARE )
) SS
COUNTY OF _______ )
On the _____ day of__________, 199___, before me personally came __________
and __________ to me known, who, being by me duly sworn, did depose and say that
they are __________ and __________, respectively, of WILMINGTON TRUST COMPANY,
one of the corporations described in and which executed the above instrument;
that they know the corporate seal of said corporation; that the seal affixed to
the said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that they signed their
respective names thereto by like authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal of
office this _____ day of __________, 199___.
--------------------------------------
Notary Public
<PAGE>
EXHIBIT 4.7
=========================
CAPITAL SECURITIES GUARANTEE AGREEMENT
ARVIN INDUSTRIES, INC.
DATED AS OF _______________, 199__
=========================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation............................. 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application........................... 4
SECTION 2.2 Lists of Holders of Securities............................. 4
SECTION 2.3 Reports by the Capital Guarantee Trustee................... 5
SECTION 2.4 Periodic Reports to Capital Guarantee Trustee.............. 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent........... 5
SECTION 2.6 Events of Default; Waiver.................................. 5
SECTION 2.7 Event of Default; Notice................................... 5
SECTION 2.8 Conflicting Interests...................................... 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Guarantee Trustee......... 6
SECTION 3.2 Certain Rights of Capital Guarantee Trustee................ 7
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee...... 9
ARTICLE IV
CAPITAL GUARANTEE TRUSTEE
SECTION 4.1 Capital Guarantee Trustee; Eligibility..................... 9
SECTION 4.2 Appointment, Removal and Resignation of Capital Guarantee
Trustees................................................... 10
SECTION 4.3 Compensation and Reimbursement of Expenses of Capital
Guarantee Trustee.......................................... 10
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.................................................. 10
SECTION 5.2 Waiver of Notice and Demand................................ 11
SECTION 5.3 Obligations Not Affected................................... 11
SECTION 5.4 Rights of Holders.......................................... 12
SECTION 5.5 Guarantee of Payment....................................... 12
SECTION 5.6 Subrogation................................................ 12
SECTION 5.7 Independent Obligations.................................... 12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions................................ 13
SECTION 6.2 Ranking................................................... 13
ARTICLE VII
TERMINATION
SECTION 7.1 Termination............................................... 13
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation............................................... 14
SECTION 8.2 Indemnification........................................... 14
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.................................... 14
SECTION 9.2 Amendments................................................ 14
SECTION 9.3 Notices................................................... 15
SECTION 9.4 Benefit................................................... 15
SECTION 9.5 Governing Law............................................. 15
</TABLE>
ii
<PAGE>
Page
----
CROSS-REFERENCE TABLE
FOR THE CAPITAL SECURITIES GUARANTEE AGREEMENT
<TABLE>
<CAPTION>
SECTION OF SECTION OF
TRUST INDENTURE GUARANTEE
OF 1939, AS AMENDED AGREEMENT
- --------------------- -----------------
<S> <C>
310(a)...................................4.1(a)
310(b)................................1(c), 2.8
310(c)...........................Not Applicable
311(a)...................................2.2(a)
311(b)...................................2.2(b)
311(c)...........................Not Applicable
312(a)...................................2.2(a)
312(b)...................................2.2(b)
313.........................................2.3
314(a)......................................2.4
314(b)...........................Not Applicable
314(c)......................................2.5
314(d)...........................Not Applicable
314(e).................................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)..............................5.4(a), 2.6
316(b)......................................5.3
316(c)......................................2.2
317(a)...........................Not Applicable
317(b)...........................Not Applicable
318(a)...................................2.1(b)
318(b)......................................2.1
319(c)...................................2.1(a)
</TABLE>
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Guarantee Agreement and shall not have any bearing on the
interpretation of its terms or provisions.
iii
<PAGE>
CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Capital Securities Guarantee"), dated
as of ____________, 199__, is executed and delivered by Arvin Industries, Inc.,
an Indiana corporation (the "Guarantor"), and Wilmington Trust Company, not in
its individual capacity but solely as trustee (the "Capital Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Capital Securities (as defined herein) of Arvin Capital I, a Delaware
statutory business trust (the "Issuer").
W I T N E S S E T H:
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of _____________, 199__, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof 100,000 capital securities, having an
aggregate liquidation amount of $100,000,000, designated the ___% Capital
Securities (the "Capital Securities");
WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Capital Securities Guarantee, to pay to the
Holders of the Capital Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Capital Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Capital
Securities to receive Guarantee Payments under this Capital Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Capital Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Capital Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Capital Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Capital Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Capital Securities Guarantee has
the same meaning throughout;
<PAGE>
(c) all references to "the Capital Securities Guarantee" or "this
Capital Securities Guarantee" are to this Capital Securities
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Capital Securities Guarantee to Articles
and Sections are to Articles and Sections of this Capital
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Capital Securities Guarantee, unless otherwise
defined in this Capital Securities Guarantee or unless the
context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Business Day" means any day other than a day on which state or
federal banking institutions in New York, New York or Wilmington, Delaware are
authorized or required by law to close.
"Capital Guarantee Trustee" means Wilmington Trust Company, until a
Successor Capital Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Capital Securities Guarantee and
thereafter means each such Successor Capital Guarantee Trustee.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Capital Guarantee
Trustee at which the corporate trust business of the Capital Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-0001.
"Covered Person" means any Holder or beneficial owner of Capital
Securities.
"Debentures" means the series of junior subordinated debt securities
of the Guarantor designated the ___% Junior Subordinated Deferrable Interest
Debentures due 2037 held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.
"Direction" by a Person means a written direction signed: (a) if the
Person is a natural person, by that Person; or (b) in any other case, in the
name of such person by one or more Authorized Officers of that Person.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Capital Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Capital
Securities, to the extent the Issuer shall have funds available therefor, (ii)
the redemption price, including all accrued and unpaid Distributions to the date
of redemption (the "Redemption Price") to the extent the Issuer has funds
available therefor, with respect to any Capital Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary dissolution,
liquidation, winding-up or termination of the
2
<PAGE>
Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Capital Securities as provided in the Declaration), the
lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Capital Securities to the date of payment, to the extent
the Issuer shall have funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an event of default
under the Indenture has occurred and is continuing, the rights of holders of the
Common Securities to receive payments under the Common Securities Guarantee
Agreement are subordinated to the rights of Holders of Capital Securities to
receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer of any Capital Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor; and provided further, that in
determining whether the Holders of the requisite liquidation amount of Capital
Securities have voted on any matter provided for in this Capital Securities
Guarantee, then for the purpose of such determination only (and not for any
other purpose hereunder) if the Capital Securities remain in the form of one or
more Global Certificates (as defined in the Declaration), the term "Holders"
shall mean the holder of the Global Certificate acting at the direction of the
Capital Security Beneficial Owners (as defined in the Declaration).
"Indemnified Person" means the Capital Guarantee Trustee, any
Affiliate of the Capital Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Capital Guarantee Trustee.
"Indenture" means the Indenture dated as of ______________, 199__
between the Guarantor (the "Debenture Issuer") and Wilmington Trust Company, as
trustee, and any indenture supplemental thereto pursuant to which certain
subordinated debt securities of the Debenture Issuer are to be issued to the
Institutional Trustee of the Issuer.
"Majority in liquidation amount of the Capital Securities" means,
except as provided in the terms of the Capital Securities or by the Trust
Indenture Act, a vote by Holder(s) of Capital Securities, voting separately as a
class, of more than 50% of the liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all Capital Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Capital Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
3
<PAGE>
"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 Capital Guarantee
Trustee, the chairman of the board of directors, president, any vice-president,
any assistant vice-president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer or other officer of the
Capital Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers 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.
"Successor Capital Guarantee Trustee" means a successor Capital
Guarantee Trustee possessing the qualifications to act as Capital 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 Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Capital Securities Guarantee and shall, to the extent applicable, be governed
by such provisions; and
(b) if and to the extent that any provision of this Capital
Securities Guarantee 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 Lists of Holders of Securities
(a) The Guarantor shall provide the Capital Guarantee Trustee
with a list, in such form as the Capital Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the Capital Securities
("List of Holders") as of such date, (i) within fourteen (14) days after January
1 and June 30 of each year, and (ii) at any other time within 30 days of receipt
by the Guarantor of a written request for a List of Holders as of a date no more
than fourteen (14) days before such List of Holders is given to the Capital
Guarantee Trustee; provided, that the Guarantor shall not be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Capital Guarantee Trustee by
the Guarantor. The Capital Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
4
<PAGE>
(b) The Capital Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Capital Guarantee Trustee
On or before July 15 of each year (commencing with the first year
of the anniversary of the issuance of the Capital Securities), the Capital
Guarantee Trustee shall provide to the Holders of the Capital Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Capital Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Capital Guarantee Trustee
The Guarantor shall provide to the Capital Guarantee Trustee
such documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by Section 314
of the Trust Indenture Act in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act. Delivery of such reports, information
and documents to the Capital Guarantee Trustee is for informational purposes
only and the Capital Guarantee Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Capital Guarantee Trustee is entitled
to rely exclusively on officers' certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Capital Guarantee Trustee
such evidence of compliance with such conditions precedent, if any, provided for
in this Capital Securities Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) of the Trust
Indenture Act 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 Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, 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
Capital Securities Guarantee, but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Capital Guarantee Trustee shall, within 90 days after a
Responsible Officer has knowledge of the occurrence of an Event of Default,
transmit by mail, first class postage prepaid, to the Holders of the Capital
Securities, notices of all Events of Default actually known to a Responsible
Officer of the Capital Guarantee Trustee, unless such defaults have been cured
before the giving of such notice, provided, that, the Capital Guarantee
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Capital Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Capital Securities.
(b) The Capital Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Capital Guarantee Trustee shall
have received written notice, or a
5
<PAGE>
Responsible Officer of the Capital Guarantee Trustee charged with the
administration of the Declaration shall have obtained actual knowledge, of such
Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in
this Capital Securities Guarantee 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
CAPITAL GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Guarantee Trustee
(a) This Capital Securities Guarantee shall be held by the
Capital Guarantee Trustee for the benefit of the Holders of the Capital
Securities, and the Capital Guarantee Trustee shall not transfer this
Capital Securities Guarantee to any Person except a Holder of Capital
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Capital Guarantee Trustee on acceptance by such Successor Capital
Guarantee Trustee of its appointment to act as Successor Capital Guarantee
Trustee. The right, title and interest of the Capital Guarantee Trustee shall
automatically vest in any Successor Capital Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Capital Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Capital Guarantee Trustee has occurred and is continuing, the
Capital Guarantee Trustee shall enforce this Capital Securities Guarantee
for the benefit of the Holders of the Capital Securities.
(c) The Capital 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 Capital Securities Guarantee, and no implied covenants shall be
read into this Capital Securities Guarantee against the Capital Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Capital Guarantee Trustee, the Capital Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Capital Securities
Guarantee 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 Capital Securities Guarantee shall be
construed to relieve the Capital 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 Capital Guarantee
Trustee shall be determined solely by the express provisions of
this Capital Securities Guarantee, and the
6
<PAGE>
Capital Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Capital Securities Guarantee, and no implied covenants
or obligations shall be read into this Capital Securities Guarantee
against the Capital Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Capital
Guarantee Trustee, the Capital 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 Capital Guarantee Trustee and conforming to the
requirements of this Capital Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Capital Guarantee
Trustee, the Capital Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Capital Securities Guarantee;
(ii) the Capital Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Capital Guarantee Trustee, unless it shall be proved that the Capital
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Capital Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Capital Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Capital Guarantee Trustee, or exercising any trust or power conferred
upon the Capital Guarantee Trustee under this Capital Securities
Guarantee; and
(iv) no provision of this Capital Securities Guarantee shall
require the Capital 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
Capital 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 Capital Securities Guarantee or indemnity,
reasonably satisfactory to the Capital Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Capital Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document 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
Capital Securities Guarantee shall be sufficiently evidenced by a
Direction or an Officers' Certificate.
7
<PAGE>
(iii) Whenever, in the administration of this Capital Securities
Guarantee, the Capital Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Capital Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Capital Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Capital Guarantee Trustee may consult with counsel, and
the written advice or opinion of such counsel with respect to legal matters
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
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees.
The Capital Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Capital Securities
Guarantee from any court of competent jurisdiction.
(vi) The Capital Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Capital
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Capital Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Capital Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Capital Guarantee Trustee's agents, nominees or
custodians) 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 Capital Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Capital Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Capital Securities Guarantee.
(vii) The Capital 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 Capital Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Capital Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Capital
Guarantee 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.
(ix) Any action taken by the Capital Guarantee Trustee or its
agents hereunder shall bind the Holders of the Capital Securities, and
the signature of the Capital Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Capital Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Capital Securities Guarantee, both of
8
<PAGE>
which shall be conclusively evidenced by the Capital Guarantee Trustee's
or its agent's taking such action.
(x) Whenever in the administration of this Capital Securities
Guarantee the Capital Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Capital Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of the
Capital Securities, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii)
shall be protected in conclusively relying on or acting in accordance with
such instructions.
(b) No provision of this Capital Securities Guarantee shall be
deemed to impose any duty or obligation on the Capital 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 Capital 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 Capital Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Capital Securities Guarantee shall be
taken as the statements of the Guarantor, and the Capital Guarantee Trustee does
not assume any responsibility for their correctness. The Capital Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Capital Securities Guarantee.
ARTICLE IV
CAPITAL GUARANTEE TRUSTEE
SECTION 4.1 Capital Guarantee Trustee; Eligibility
(a) There shall at all times be a Capital Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), 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.
9
<PAGE>
(b) If at any time the Capital Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Capital Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Capital Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital 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 Capital Guarantee
Trustees
(a) Subject to Section 4.2(b), the Capital Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Capital Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Capital Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Capital Guarantee Trustee and delivered to the Guarantor.
(c) The Capital Guarantee Trustee appointed to office shall hold
office until a Successor Capital Guarantee Trustee shall have been appointed or
until its removal or resignation. The Capital Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Capital Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Capital
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Capital Guarantee Trustee and
delivered to the Guarantor and the resigning Capital Guarantee Trustee.
(d) If no Successor Capital 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 Capital Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Capital Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Capital Guarantee Trustee.
(e) No Capital Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Capital Guarantee Trustee.
(f) Upon termination of this Capital Securities Guarantee or removal
or resignation of the Capital Guarantee Trustee pursuant to this Section 4.2,
the Guarantor shall pay to the Capital Guarantee Trustee all amounts accrued to
the date of such termination, removal or resignation.
SECTION 4.3 Compensation and Reimbursement of Expenses of Capital Guarantee
Trustee
The Guarantor covenants and agrees to pay to the Capital Guarantee
Trustee from time to time, and the Capital Guarantee Trustee shall be entitled
to, such compensation as shall be agreed to in writing between the Guarantor
and the Capital Guarantee Trustee (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust), and the
Guarantor will pay or reimburse the Capital Guarantee Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Capital Guarantee Trustee in accordance with any of the provisions of this
Capital Securities Guarantee (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly
in its employ) except any such expense, disbursement or advance as may arise
from its negligence or bad faith.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of set-
off or counterclaim that the Issuer may have or assert. The
10
<PAGE>
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Capital
Securities 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 Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Capital Securities Guarantee shall be absolute and unconditional and
shall remain in full force and effect until the entire liquidation amount of all
outstanding Capital Securities shall have been paid and shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Capital Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Capital Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Capital Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debentures or any extension of the maturity date of the Debentures permitted
by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Capital Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, 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.
11
<PAGE>
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing. No setoff, counterclaim, reduction, or diminution of any obligation
or any defense of any kind or nature that the Guarantor has or may have against
any Holder shall be available hereunder to the Guarantor against such Holder to
reduce the payments to it under the Capital Securities Guarantee.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Capital
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Capital Guarantee Trustee in
respect of this Capital Securities Guarantee or exercising any trust or power
conferred upon the Capital Guarantee Trustee under this Capital Securities
Guarantee.
(b) If the Capital Guarantee Trustee fails to enforce this Capital
Securities Guarantee, then any Holder of Capital Securities may institute a
legal proceeding directly against the Guarantor to enforce the Capital Guarantee
Trustee's rights under this Capital Securities Guarantee without first
instituting a legal proceeding against the Issuer, the Capital Guarantee Trustee
or any other person or entity. In addition, if the Guarantor has failed to make
a Guarantee Payment, a Holder of Capital Securities may directly institute a
proceeding against the Guarantor for enforcement of the Capital Securities
Guarantee for such payment to the Holder of the Capital Securities of the
principal of, or interest on, the Debentures on or after the respective due
dates specified in the Debentures, and the amount of the payment will be based
on the Holder's pro rata share of the amount due and owing on all of the Capital
Securities. The Guarantor hereby waives any right or remedy to require that any
action on this Capital Securities Guarantee be brought first against the Issuer
or any other person or entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Capital Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Capital Securities against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Capital Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Capital
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Capital Securities 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 Issuer with respect to the Capital
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Capital
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
12
<PAGE>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Capital Securities remain outstanding, if there shall
have occurred an Event of Default or an event of default under the Declaration,
then (a) the Guarantor shall not declare or pay any dividend on, make any
distribution with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (i)
repurchases or acquisitions of the Guarantor's common shares as contemplated by
any employment arrangement, benefit plan or other similar contract with or for
the benefit of employees, officers or directors entered into in the ordinary
course of business, (ii) as a result of an exchange or conversion of any class
or series of the Guarantor's capital stock for the Guarantor's common shares,
provided that such class or series of the Guarantor's capital stock was
outstanding prior to the occurrence of such Event of Default, (iii) the purchase
of fractional interests in shares of the Guarantor's capital stock pursuant to
the conversion or exchange provisions of such Guarantor capital stock or the
security being converted or exchanged, provided that such Guarantor capital
stock or security was outstanding prior to the occurrence of such Event of
Default, or (iv) the payment of any stock dividend where the dividend is paid in
the form of the same stock as that on which the dividend is paid), (b) the
Guarantor shall not directly or indirectly, and shall not allow any of its
Subsidiaries to, make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities issued by the Guarantor that
rank pari passu with or junior to the Debentures, and (c) the Guarantor shall
not make guarantee payments with respect to the foregoing (other than pursuant
to this Capital Securities Guarantee Agreement).
SECTION 6.2 Ranking
This Capital Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, including the Debentures,
except those liabilities of the Guarantor made pari passu or subordinate by
their terms, (ii) pari passu with the most senior preferred or preference stock
now or hereafter issued by the Guarantor and with any guarantee now or
hereafter entered into by the Guarantor in respect of any preferred or
preference stock of any Affiliate of the Guarantor, and (iii) senior to the
Guarantor's common stock. If an Event of Default has occurred and is continuing
under the Declaration, the rights of the holders of the Common Securities to
receive any payments under the Common Securities Guarantee shall be subordinate
to the rights of the Holders of Capital Securities to receive Guarantee
Payments hereunder.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Capital Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Capital Securities, (ii) the distribution
of the Debentures to the Holders of all of the Capital Securities or (iii) full
payment of the amounts payable in accordance with the Declaration upon
dissolution of the Issuer. Notwithstanding the foregoing, this Capital
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Capital Securities must restore
payment of any sums paid under the Capital Securities or under this Capital
Securities Guarantee.
13
<PAGE>
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Capital Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Capital Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Capital Securities
might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Capital Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Capital Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Capital Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Capital Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount (including the
14
<PAGE>
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all the outstanding Capital Securities. The provisions of
Section 12.2 of the Declaration with respect to meetings of Holders of the
Securities apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Capital Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Capital Guarantee Trustee, at the Capital
Guarantee Trustee's mailing address set forth below (or such other address as
the Capital Guarantee Trustee may give notice of to the Holders of the Capital
Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Department
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders of the Capital Securities):
Arvin Industries, Inc.
One Noblitt Plaza, Box 3000
Columbus, Indiana 47202
Attention: Treasurer
(c) If given to any Holder of Capital Securities, at the address
set forth on the books and records of the Issuer.
All such notices 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 Capital Securities Guarantee is solely for the benefit of the
Holders of the Capital Securities and, subject to Section 3.1(a), is not
separately transferable from the Capital Securities.
SECTION 9.5 Governing Law
THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
15
<PAGE>
THIS CAPITAL SECURITIES GUARANTEE is executed as of the day and year
first above written.
ARVIN INDUSTRIES, INC.,
as Guarantor
By:__________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Capital Guarantee Trustee
By:__________________________
Name:
Title:
<PAGE>
Frederick L. Hartmann
(312) 258-5656
EXHIBIT 5.1
January 15, 1997
Arvin Industries, Inc.
One Noblitt Plaza, Box 3000
Columbus, Indiana 47202-3000
RE: ARVIN INDUSTRIES, INC. AND ARVIN CAPITAL I
REGISTRATION STATEMENT ON FORM S-3,
NOS. 333-18521 AND 333-18521-01
-------------------------------
Gentlemen:
We are acting as counsel to Arvin Industries, Inc., an Indiana corporation
(the "Company"), and Arvin Capital I, a Delaware business trust (the "Trust"),
in connection with the proposed (i) issuance and sale by the Trust of up to
$100,000,000 of ___% Capital Securities of the Trust representing preferred
undivided beneficial interests in the assets of the Trust (the "Capital
Securities"), (ii) issuance by the Company of a guarantee (the "Guarantee") for
the benefit of the holders from time to time of the Capital Securities pursuant
to a Capital Securities Guarantee Agreement (the "Guarantee Agreement") to be
entered into between the Company and Wilmington Trust Company, as trustee (the
"Guarantee Trustee") and (iii) issuance and sale by the Company to the Trust of
Junior Subordinated Deferrable Interest Debentures (the "Subordinated
Debentures") under an Indenture to be entered into between the Company and
Wilmington Trust Company, as trustee (the "Debt Trustee"), all as contemplated
by the Registration Statement on Form S-3 filed by the Company and the Trust
with the Securities and Exchange Commission (the "Commission") on December 23,
1996, as amended by Amendment No. 1 thereto as filed with the Commission
(the "Registration Statement"), for the registration of the Capital
Securities, the Guarantee and the Subordinated Debentures under the Securities
Act of 1933, as amended (the "Act").
As counsel to the Company and the Trust, we have examined (i) the
Registration Statement and exhibits thereto, including the preliminary
prospectus in the Registration Statement, (ii) the Company's Amended and
Restated Articles of Incorporation and By-Laws, as amended, (iii) documents
issued by public officials as to the existence of the Company and the Trust
under the laws of the States of Indiana and Delaware, respectively, and (iv)
such other documents and records of the Company and the Trust and such matters
of law as we deemed necessary to enable us to render this opinion.
<PAGE>
Arvin Industries, Inc.
January 15, 1997
Page 2
Based on the foregoing, we are of the opinion that:
1. The Company is a corporation validly organized and existing under and
by virtue of the laws of the State of Indiana.
2. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
3. The Company has corporate power and authority to execute and deliver
the Guarantee Agreement and the Indenture, to authorize and issue the Guarantee
and to authorize and sell the Subordinated Debentures.
4. The Subordinated Debentures and the Guarantee will be valid and
legally binding obligations of the Company, enforceable in accordance with their
terms against the Company, except to the extent enforceability thereof may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting generally the enforcement of creditors' rights and by
the application of general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or at
law), when:
(a) the Registration Statement, as it may be amended, shall have
become effective under the Act, no stop order shall have been issued by the
Commission relating thereto, and any applicable state securities or Blue Sky
laws shall have been complied with;
(b) the Company's Board of Directors, or a duly authorized committee
thereof, shall have taken such action as may be necessary to authorize the
issuance by the Company of the Subordinated Debentures and the Guarantee on the
terms set forth in or contemplated by the Registration Statement, as it may be
amended, and the exhibits thereto;
(c) the Indenture shall have been qualified under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), the Indenture and any
supplemental indentures thereto shall have been appropriately executed and
delivered by the Company and the Debt Trustee, the terms of the Subordinated
Debentures shall have been duly established, and the Subordinated Debentures
shall have been issued and authenticated in accordance with the applicable
provisions of the Indenture and any supplemental indentures thereto and all
necessary corporate authorizations;
(d) the terms of the Guarantee shall have been duly established in
accordance with applicable law, the Guarantee Agreement shall have been duly
executed and delivered by the Company and the Guarantee Trustee, and the
Guarantee Agreement shall have been qualified under the Trust Indenture Act;
(e) the Amended and Restated Declaration of Trust shall have been duly
executed and delivered and qualified under the Trust Indenture Act;
<PAGE>
Arvin Industries, Inc.
January 15, 1997
Page 3
(f) the Capital Securities to which the Guarantee and the Subordinated
Debentures relate shall have been duly issued and sold and the purchase price
therefor shall have been received by the Trust as contemplated in the
Registration Statement; and
(g) the Company shall have received the consideration payable for the
Subordinated Debentures.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the prospectus included therein.
In rendering this opinion, we have relied, as to matters governed by the
laws of the State of Delaware, on the opinion of even date herewith of Richards,
Layton & Finger, P.A., special Delaware counsel for the Company and the Trust,
which is being filed as an exhibit to the Registration Statement.
Very truly yours,
SCHIFF HARDIN & WAITE
By: /s/ Frederick L. Hartmann
-------------------------
Frederick L. Hartmann
<PAGE>
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger]
January 15, 1997
Arvin Capital I
Arvin Industries, Inc.
One Noblit Plaza
Box 3000
Columbus, Indiana 47202-3000
Re: Arvin Capital I
---------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Arvin Industries, Inc., an
Indiana corporation (the "Company"), and Arvin Capital I, a Delaware business
trust (the "Trust"), in connection with the matters set forth herein. At your
request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our examination
of documents has been limited to the examination of originals or copies of the
following:
(a) The Certificate of Trust of the Trust, dated as of December 18, 1996
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on December 18, 1996;
(b) The Declaration of the Trust, dated as of December 18, 1996, among the
Company, as Sponsor, and the trustees of the Trust named therein;
<PAGE>
Arvin Capital I
Arvin Industries, Inc.
January 15, 1997
Page 2
(c) The Registration Statement on Form S-3, including a preliminary
prospectus, relating to the __% Capital Securities of the Trust representing
preferred undivided beneficial interests in the assets of the Trust (each, a
"Capital Security" and collectively, the "Capital Securities"), as filed by the
Company and the Trust with the Securities and Exchange Commission on December
23, 1996, as amended by Pre-Effective Amendment No. 1 thereto, as proposed to be
filed by the Company and the Trust with the Securities and Exchange Commission
on or about January 15, 1997 (as amended, the "Registration Statement");
(d) A form of Amended and Restated Declaration of the Trust, to be entered
into among the Company, as Sponsor, the trustees of the Trust named therein, and
the holders, from time to time, of undivided beneficial interests in the assets
of the Trust (including Annex I and Exhibits A-1 and A-2 thereto)(the
"Declaration"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated January 15, 1997,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are used
as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other than
the documents listed in paragraphs (a) through (e) above. In particular, we have
not reviewed any document (other than the documents listed in paragraphs (a)
through (e) above) that is referred to in or incorporated by reference into the
documents reviewed by us. We have assumed that there exists no provision in any
document that we have not reviewed that is inconsistent with the opinions stated
herein. We have conducted no independent factual investigation of our own but
rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
constitutes the entire agreement among the parties thereto with respect to the
subject matter thereof, including with respect to the creation, operation and
termination of the Trust, and that
<PAGE>
Arvin Capital I
Arvin Industries, Inc.
January 15, 1997
Page 3
the Declaration and the Certificate are in full force and effect and have not
been amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us under
the laws of the jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are signatories to the documents
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to execute and deliver, and to perform its
obligations under, such documents, (v) the due authorization, execution and
delivery by all parties thereto of all documents examined by us, (vi) the
receipt by each Person to whom a Capital Security is to be issued by the Trust
(collectively, the "Capital Security Holders") of a Capital Security Certificate
for such Capital Security and the payment for the Capital Security acquired by
it, in accordance with the Declaration and the Registration Statement, and (vii)
that the Capital Securities are issued and sold to the Capital Security Holders
in accordance with the Declaration and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding the
securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder that are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumption, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Business Trust Act.
2. The Capital Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Capital Security Holders, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Capital Security
Holders may be obligated to make payments as set forth in the Declaration.
<PAGE>
Arvin Capital I
Arvin Industries, Inc.
January 15, 1997
Page 4
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. We also consent to
Schiff Hardin & Waite's relying as to matters of Delaware law upon this opinion
in rendering its opinion filed as Exhibit 5.1 to the Registration Statement. In
addition, we hereby consent to the use of our name under the heading "Legal
Matters" in the prospectus included in the Registration Statement. In giving the
foregoing consents, we do not thereby admit that we come within the category of
Persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder. Except as stated above, without our prior written
consent, this opinion may not be furnished or quoted to, or relied upon by, any
other Person for any purpose.
Very truly yours,
RICHARDS, LAYTON & FINGER
BJK/dgw
<PAGE>
Lawrence H. Jacobson
(312) 258-5580
Exhibit 8.1
January 15, 1997
Arvin Industries, Inc.
One Noblitt Plaza, Box 3000
Columbus, Indiana 47202-3000
RE: ARVIN INDUSTRIES, INC. AND ARVIN CAPITAL I
REGISTRATION STATEMENT ON FORM S-3,
NOS. 333-18521 AND 333-18521-01
-------------------------------
Gentlemen:
As special tax counsel to Arvin Capital I (the "Trust") and Arvin
Industries, Inc. in connection with the issuance of up to $100,000,000 of
Capital Securities of the Trust (the "Securities"), and assuming (i) the holder
of the Common Securities of the Trust will have "substantial assets" (other than
the Common Securities) within the meaning of Treasury Regulations Section
301.7701-2(d)(2) and (ii) the operative documents for the Securities described
in the Prospectus included in the Registration Statement to which this opinion
is filed as an exhibit (the "Registration Statement") will be performed in
accordance with the terms described therein, we hereby confirm to you our
opinion as set forth under the heading "United States Federal Income Taxation"
in the Prospectus, subject to the limitations set forth therein.
Our opinion is based on current provisions of the Internal Revenue Code of
1986, the Treasury Regulations promulgated thereunder, published pronouncements
of the Internal Revenue Service and case law, any of which may be changed at any
time with retroactive effect. Any change in applicable laws or facts and
circumstances surrounding the offering of the Securities, or any inaccuracy in
the statements, facts, assumptions and representations on which we have relied,
may affect the continuing validity of the opinions set forth herein. We assume
no responsibility to inform you of any such change or inaccuracy that may occur
or come to our attention.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to us under the heading "United States
Federal Income Taxation" in the Registration Statement.
Very truly yours,
SCHIFF HARDIN & WAITE
By: /s/ Lawrence H. Jacobson
------------------------
Lawrence H. Jacobson
<PAGE>
EXHIBIT 23.1
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 30, 1996 appearing on page 41 of Arvin Industries, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 1995. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
Price Waterhouse LLP
Indianapolis, Indiana
January 10, 1997
<PAGE>
EXHIBIT 23.2
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Calspan SRL Corporation
We consent to the use of our report dated January 25, 1995 with respect to the
consolidated balance sheet of Space Industries International, Inc. and
subsidiaries (formerly Calspan Holding Corporation and predecessor to Calspan
SRL Corporation) as of January 1, 1995, and the related consolidated statements
of operations, shareholders' equity, and cash flows for the years ended January
1, 1995 and January 2, 1994, which report is incorporated herein by reference to
the December 31, 1995 annual report on Form 10-K of Arvin Industries, Inc. and
to the reference to our Firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
Buffalo, New York
January 13, 1997
<PAGE>
EXHIBIT 25.1
Registration No.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) ___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
ARVIN INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Indiana 35-0550190
(State of incorporation) (I.R.S. employer identification no.)
One Noblitt Plaza
Box 3000
Columbus, Indiana 47202-3000
(Address of principal executive offices) (Zip Code)
Junior Subordinated Deferrable Interest Debentures
of Arvin Industries, Inc.
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee and
upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes
the certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b)
of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 7th day
of January, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Donald G. MacKelcan By: /s/ Norma P. Closs
----------------------- ------------------------
Assistant Secretary Name: Norma P. Closs
Title: Vice President
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EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE>
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is WILMINGTON TRUST COMPANY whose address
is Rodney Square North, in said City. In addition to such principal
office, the said corporation maintains and operates branch offices in the
City of Newark, New Castle County, Delaware, the Town of Newport, New
Castle County, Delaware, at Claymont, New Castle County, Delaware, at
Greenville, New Castle County Delaware, and at Milford Cross Roads, New
Castle County, Delaware, and shall be empowered to open, maintain and
operate branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of Wilmington,
New Castle County, Delaware, and such other branch offices or places of
business as may be authorized from time to time by the agency or agencies
of the government of the State of Delaware empowered to confer such
authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the
<PAGE>
Corporation shall require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally to
use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or necessary
for the transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort
and kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation,
association, state or municipality, and may receive and manage any
sinking fund therefor on such terms as may be agreed upon between the
two parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
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(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit,
order, or decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or hereafter be
required by any law, judge, officer or court in the State of Delaware
or elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity in the receiving, holding, managing, and disposing of any
and all estates and property, real, personal or mixed, and to be
appointed as such trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority, in the
State of Delaware or elsewhere; and whenever this Corporation is so
appointed by any person, corporation, court, officer or authority
such trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian, bailee, or in any
other trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as security for
the performance of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for
the assumption of any responsibility the said Corporation may be
entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any private,
public or municipal corporation within and without the State of
Delaware, or of the Government of the United States, or of any state,
territory, colony, or possession thereof, or of any foreign
government or country; to receive, collect, receipt for, and dispose
of interest, dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other property
held and owned by it, and to exercise in respect of all such bonds,
mortgages, debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other property,
any and all the rights, powers and privileges of individual
3
<PAGE>
owners thereof, including the right to vote thereon; to invest and
deal in and with any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and proper, and
from time to time to vary or realize such investments; to issue bonds
and secure the same by pledges or deeds of trust or mortgages of or
upon the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when the Board
of Directors shall determine, and in the promotion of its said
corporate business of investment and to the extent authorized by law,
to lease, purchase, hold, sell, assign, transfer, pledge, mortgage
and convey real and personal property of any name and nature and any
estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that
the said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in
any manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount,
execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any
foreign country or place.
4
<PAGE>
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or
restricted by reference to or inference from the terms of any other
clause of this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes and
powers.
FOURTH: - (a) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is forty-one million
(41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and
the preferences and relative, participating, optional and other special
rights of each such series, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other
series at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of
Directors of the Corporation is hereby expressly granted authority to fix
by resolution or resolutions adopted prior to the issuance of any shares
of a particular series of Preferred Stock, the voting powers and the
designations, preferences and relative, optional and other special rights,
and the qualifications, limitations and restrictions of such series,
including, but without limiting the generality of the foregoing, the
following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of
5
<PAGE>
stock and whether such dividends shall be cumulative or non-
cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject
to redemption, and the redemption price or prices and the time or
times at which, and the terms and conditions on which, Preferred
Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section
(b) of this Article FOURTH), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article FOURTH), and subject further to any conditions which may
be fixed in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article FOURTH), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to
6
<PAGE>
receive all of the remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of Common
Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article FOURTH, each holder
of Common Stock shall have one vote in respect of each share of
Common Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or
series of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of
indebtedness, debentures or other securities convertible into or
exchangeable for stock of the Corporation of any class or series, or
carrying any right to purchase stock of any class or series, but any such
unissued stock, additional authorized issue of shares of any class or
series of stock or securities convertible into or exchangeable for stock,
or carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons, firms,
corporations or associations, whether such holders or others, and upon
such terms as may be deemed advisable by the Board of Directors in the
exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article FOURTH and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the
powers, preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred Stock adopted
pursuant to section (b) of this Article FOURTH that the consent of the
holders of a majority (or such greater proportion as shall be therein
fixed) of the outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of Preferred Stock.
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(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board
of Directors of the Corporation shall determine and on such terms and for
such consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased from
time to time by the affirmative vote of the holders of a majority of the
stock of the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the whole
Board, provided, however, that the number of directors shall not be
reduced so as to shorten the term of any director at the time in office,
and provided further, that the number of directors constituting the whole
Board shall be twenty-four until otherwise fixed by a majority of the
whole Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the
next succeeding annual meeting, directors of the second class shall be
elected to hold office for a term expiring at the second succeeding annual
meeting and directors of the third class shall be elected to hold office
for a term expiring at the third succeeding annual meeting. Any vacancies
in the Board of Directors for any reason, and any newly created
directorships resulting from any increase in the directors, may be filled
by the Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen shall
hold office until the next annual election of directors. At such
election, the stockholders shall elect a successor to such director to
hold office until the next election of the class for which such director
shall have been chosen and until his successor shall be elected and
qualified. No decrease in the number of directors shall shorten the term
of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the
8
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Corporation may be removed at any time without cause, but only by the
affirmative vote of the holders of two-thirds or more of the outstanding
shares of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class) cast
at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to stockholders, such written notice shall be delivered
or mailed, as prescribed, to the Secretary of the Corporation not later
than the close of the seventh day following the day on which notice of the
meeting was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the Chairman on
behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such
nominee and (iii) the number of shares of stock of the Corporation which
are beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so
declare to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find
necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized
under the Act entitled "An Act Providing a General Corporation Law",
approved March 10, 1899, as from time to time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
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NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make,
alter or repeal any By-Law whether or not adopted by them, provided
however, that any such additional By-Laws, alterations or repeal may be
adopted only by the affirmative vote of the holders of two-thirds or more
of the outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this purpose
as one class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from
time to time designated by them.
FIFTEENTH: - (a) In addition to any affirmative vote required by law, and
except as otherwise expressly provided in sections (b) and (c) of this
Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or
not itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
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(C) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of related transactions) of any
securities of the Corporation or any Subsidiary to any Interested
Stockholder or any Affiliate of any Interested Stockholder in
exchange for cash, securities or other property (or a combination
thereof) having an aggregate fair market value of $1,000,000 or more,
or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly
or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities
of the Corporation or any Subsidiary which is directly or indirectly
owned by any Interested Stockholder, or any Affiliate of any
Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any one or
more of clauses (A) through (E) of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article FIFTEENTH shall
not be applicable to any particular business combination and such
business combination shall require only such affirmative vote as is
required by law and any other provisions of the Charter or Act of
Incorporation of By-Laws if such business combination has been
approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on
11
<PAGE>
such business combination, or immediately prior to the consummation of any
such transaction:
(A) is the beneficial owner, directly or indirectly, of more than
10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course
of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately
or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
12
<PAGE>
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect in
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,00,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed
to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware
General Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
13
<PAGE>
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON DECEMBER 21, 1995
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10 days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall be held on
the third Thursday of each month at the principal office of the Company, or at
such other place and
<PAGE>
time as may be designated by the Board of Directors, the Chairman of the Board,
or the President.
Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
ARTICLE III
COMMITTEES
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
2
<PAGE>
members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of
Directors when it is not in session to transact all business for and in behalf
of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolutions shall be suspended during such a disaster period until it shall be
determined by any interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct and management of
its affairs and business under all of the other provisions of these By-Laws.
3
<PAGE>
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than
thirteen members who shall be selected by the Board of Directors, a majority of
whom shall be members of the Board of Directors and who shall hold office during
the pleasure of the Board.
(B) The Trust Committee shall have general supervision over the
Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at least once a month. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Trust Committee may be held at any time when
a quorum is present.
(D) Minutes of each meeting of the Trust Committee shall be kept
and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the
Audit Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
4
<PAGE>
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any
time by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absence or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board of Directors shall preside at
all
5
<PAGE>
meetings of the Board of Directors at which the Chairman of the Board shall not
be present and shall have such further authority and powers and shall perform
such duties as the Board of Directors or the Chairman of the Board may from time
to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
6
<PAGE>
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of
stock shall be issued only upon giving such security as may be satisfactory to
the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of
7
<PAGE>
any dividend, or to any allotment or rights, or to exercise any rights in
respect of any change, conversion or exchange of capital stock, or in connection
with obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the date
for the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection with
obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
8
<PAGE>
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending
any proceeding in advance of its final disposition, provided, however, that the
-------- -------
payment of expenses incurred by a Director officer in his capacity as a Director
or officer in advance of the final disposition of the proceeding shall be made
only upon receipt of an undertaking by the Director or officer to repay all
amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses, under
this Article X is not paid in full within ninety days after a written claim
therefor has been received by the Corporation the claimant may file suit to
recover the unpaid amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such claim. In any such
action the Corporation shall have the burden of proving that the claimant was
not entitled to the requested indemnification of payment of expenses
9
<PAGE>
under applicable law.
(D) The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Charter or Act of Incorporation,
these By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or protection hereunder of
any person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
10
<PAGE>
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: January 7, 1997 By: /s/ Norma P. Closs
------------------------
Name: Norma P. Closs
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- --------------------------------------------- -------------------
Name of Bank City
in the State of DELAWARE, at the close of business on September 30, 1996.
--------
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
<S> <C>
Noninterest-bearing balances and currency and coins................ 198,288
Interest-bearing balances.......................................... 0
Held-to-maturity securities.............................................. 489,428
Available-for-sale securities............................................ 783,718
Federal funds sold....................................................... 19,000
Securities purchased under agreements to resell.......................... 48,500
Loans and lease financing receivables:
Loans and leases, net of unearned income.............. 3,620,289
LESS: Allowance for loan and lease losses............ 49,721
LESS: Allocated transfer risk reserve................ 0
Loans and leases, net of unearned income, allowance, and reserve... 3,570,568
Assets held in trading accounts.......................................... 0
Premises and fixed assets (including capitalized leases)................. 83,675
Other real estate owned.................................................. 4,607
Investments in unconsolidated subsidiaries and associated companies...... 85
Customers' liability to this bank on acceptances outstanding............. 0
Intangible assets........................................................ 4,131
Other assets............................................................. 101,592
Total assets............................................................. 5,303,592
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices...................................................... 3,457,641
Noninterest-bearing........ 740,731
Interest-bearing........... 2,716,910
Federal funds purchased.................................................. 135,889
Securities sold under agreements to repurchase........................... 213,617
Demand notes issued to the U.S. Treasury................................. 94,999
Trading liabilities...................................................... 0
Other borrowed money:.................................................... ///////
With original maturity of one year or less......................... 844,000
With original maturity of more than one year....................... 28,000
Mortgage indebtedness and obligations under capitalized leases........... 0
Bank's liability on acceptances executed and outstanding................. 0
Subordinated notes and debentures........................................ 0
Other liabilities........................................................ 103,818
Total liabilities........................................................ 4,877,964
Limited-life preferred stock and related surplus......................... 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus............................ 0
Common Stock............................................................. 500
Surplus.................................................................. 62,119
Undivided profits and capital reserves................................... 363,705
Net unrealized holding gains (losses) on available-for-sale securities... (696)
Total equity capital..................................................... 425,628
Total liabilities, limited-life preferred stock, and equity capital...... 5,303,592
</TABLE>
2
<PAGE>
EXHIBIT 25.2
Registration No.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) ___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
ARVIN INDUSTRIES, INC.
ARVIN CAPITAL I
(Exact name of obligor as specified in its charter)
Indiana 35-0550190
Delaware To be Applied for
(State of incorporation) (I.R.S. employer identification no.)
One Noblitt Plaza
Box 3000
Columbus, Indiana 47202-3000
(Address of principal executive offices) (Zip Code)
Capital Securities of Arvin Capital I
(Title of the indenture securities)
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ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee and
upon information furnished by the obligor, the obligor is not an affiliate
of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 7th day
of Janaury, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Donald G. MacKelcan By: /s/ Norma P. Closs
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Assistant Secretary Name: Norma P. Closs
Title: Vice President
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EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
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AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is WILMINGTON TRUST COMPANY whose address
is Rodney Square North, in said City. In addition to such principal
office, the said corporation maintains and operates branch offices in the
City of Newark, New Castle County, Delaware, the Town of Newport, New
Castle County, Delaware, at Claymont, New Castle County, Delaware, at
Greenville, New Castle County Delaware, and at Milford Cross Roads, New
Castle County, Delaware, and shall be empowered to open, maintain and
operate branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of Wilmington,
New Castle County, Delaware, and such other branch offices or places of
business as may be authorized from time to time by the agency or agencies
of the government of the State of Delaware empowered to confer such
authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the
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Corporation shall require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally to
use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or necessary
for the transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort
and kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation,
association, state or municipality, and may receive and manage any
sinking fund therefor on such terms as may be agreed upon between the
two parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
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(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit,
order, or decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or hereafter be
required by any law, judge, officer or court in the State of Delaware
or elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity in the receiving, holding, managing, and disposing of any
and all estates and property, real, personal or mixed, and to be
appointed as such trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority, in the
State of Delaware or elsewhere; and whenever this Corporation is so
appointed by any person, corporation, court, officer or authority
such trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian, bailee, or in any
other trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as security for
the performance of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for
the assumption of any responsibility the said Corporation may be
entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any private,
public or municipal corporation within and without the State of
Delaware, or of the Government of the United States, or of any state,
territory, colony, or possession thereof, or of any foreign
government or country; to receive, collect, receipt for, and dispose
of interest, dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other property
held and owned by it, and to exercise in respect of all such bonds,
mortgages, debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other property,
any and all the rights, powers and privileges of individual
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owners thereof, including the right to vote thereon; to invest and
deal in and with any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and proper, and
from time to time to vary or realize such investments; to issue bonds
and secure the same by pledges or deeds of trust or mortgages of or
upon the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when the Board
of Directors shall determine, and in the promotion of its said
corporate business of investment and to the extent authorized by law,
to lease, purchase, hold, sell, assign, transfer, pledge, mortgage
and convey real and personal property of any name and nature and any
estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that
the said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in
any manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount,
execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any
foreign country or place.
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(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or
restricted by reference to or inference from the terms of any other
clause of this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes and
powers.
FOURTH: - (a) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is forty-one million
(41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and
the preferences and relative, participating, optional and other special
rights of each such series, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other
series at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of
Directors of the Corporation is hereby expressly granted authority to fix
by resolution or resolutions adopted prior to the issuance of any shares
of a particular series of Preferred Stock, the voting powers and the
designations, preferences and relative, optional and other special rights,
and the qualifications, limitations and restrictions of such series,
including, but without limiting the generality of the foregoing, the
following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of
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stock and whether such dividends shall be cumulative or non-
cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject
to redemption, and the redemption price or prices and the time or
times at which, and the terms and conditions on which, Preferred
Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section
(b) of this Article FOURTH), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article FOURTH), and subject further to any conditions which may
be fixed in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article FOURTH), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to
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receive all of the remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of Common
Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article FOURTH, each holder
of Common Stock shall have one vote in respect of each share of
Common Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or
series of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of
indebtedness, debentures or other securities convertible into or
exchangeable for stock of the Corporation of any class or series, or
carrying any right to purchase stock of any class or series, but any such
unissued stock, additional authorized issue of shares of any class or
series of stock or securities convertible into or exchangeable for stock,
or carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons, firms,
corporations or associations, whether such holders or others, and upon
such terms as may be deemed advisable by the Board of Directors in the
exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article FOURTH and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the
powers, preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred Stock adopted
pursuant to section (b) of this Article FOURTH that the consent of the
holders of a majority (or such greater proportion as shall be therein
fixed) of the outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of Preferred Stock.
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(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board
of Directors of the Corporation shall determine and on such terms and for
such consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased from
time to time by the affirmative vote of the holders of a majority of the
stock of the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the whole
Board, provided, however, that the number of directors shall not be
reduced so as to shorten the term of any director at the time in office,
and provided further, that the number of directors constituting the whole
Board shall be twenty-four until otherwise fixed by a majority of the
whole Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the
next succeeding annual meeting, directors of the second class shall be
elected to hold office for a term expiring at the second succeeding annual
meeting and directors of the third class shall be elected to hold office
for a term expiring at the third succeeding annual meeting. Any vacancies
in the Board of Directors for any reason, and any newly created
directorships resulting from any increase in the directors, may be filled
by the Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen shall
hold office until the next annual election of directors. At such
election, the stockholders shall elect a successor to such director to
hold office until the next election of the class for which such director
shall have been chosen and until his successor shall be elected and
qualified. No decrease in the number of directors shall shorten the term
of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the
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Corporation may be removed at any time without cause, but only by the
affirmative vote of the holders of two-thirds or more of the outstanding
shares of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class) cast
at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to stockholders, such written notice shall be delivered
or mailed, as prescribed, to the Secretary of the Corporation not later
than the close of the seventh day following the day on which notice of the
meeting was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the Chairman on
behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such
nominee and (iii) the number of shares of stock of the Corporation which
are beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so
declare to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find
necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized
under the Act entitled "An Act Providing a General Corporation Law",
approved March 10, 1899, as from time to time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
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NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make,
alter or repeal any By-Law whether or not adopted by them, provided
however, that any such additional By-Laws, alterations or repeal may be
adopted only by the affirmative vote of the holders of two-thirds or more
of the outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this purpose
as one class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from
time to time designated by them.
FIFTEENTH: - (a) In addition to any affirmative vote required by law, and
except as otherwise expressly provided in sections (b) and (c) of this
Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or
not itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
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(C) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of related transactions) of any
securities of the Corporation or any Subsidiary to any Interested
Stockholder or any Affiliate of any Interested Stockholder in
exchange for cash, securities or other property (or a combination
thereof) having an aggregate fair market value of $1,000,000 or more,
or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly
or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities
of the Corporation or any Subsidiary which is directly or indirectly
owned by any Interested Stockholder, or any Affiliate of any
Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any one or
more of clauses (A) through (E) of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article FIFTEENTH shall
not be applicable to any particular business combination and such
business combination shall require only such affirmative vote as is
required by law and any other provisions of the Charter or Act of
Incorporation of By-Laws if such business combination has been
approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on
11
<PAGE>
such business combination, or immediately prior to the consummation of any
such transaction:
(A) is the beneficial owner, directly or indirectly, of more than
10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course
of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately
or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
12
<PAGE>
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect in
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed
to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware
General Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification.
13
<PAGE>
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON DECEMBER 21, 1995
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10 days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall be held on
the third Thursday of each month at the principal office of the Company, or at
such other place and
<PAGE>
time as may be designated by the Board of Directors, the Chairman of the Board,
or the President.
Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
ARTICLE III
COMMITTEES
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
2
<PAGE>
members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of
Directors when it is not in session to transact all business for and in behalf
of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolutions shall be suspended during such a disaster period until it shall be
determined by any interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct and management of
its affairs and business under all of the other provisions of these By-Laws.
3
<PAGE>
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than thirteen
members who shall be selected by the Board of Directors, a majority of whom
shall be members of the Board of Directors and who shall hold office during the
pleasure of the Board.
(B) The Trust Committee shall have general supervision over the Trust
Department and the investment of trust funds, in all matters, however, being
subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at least once a month. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Trust Committee may be held at any time when
a quorum is present.
(D) Minutes of each meeting of the Trust Committee shall be kept and
promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees
and/or designate officers or employees of the Company to whom supervision over
the investment of trust funds may be delegated when the Trust Committee is not
in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the Audit
Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the majority
of its members shall deem it to be proper for the transaction of its business,
and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
4
<PAGE>
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any Committee
created under Article III of the By-Laws of this Company, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absence or
disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board of Directors shall preside at
all
5
<PAGE>
meetings of the Board of Directors at which the Chairman of the Board shall not
be present and shall have such further authority and powers and shall perform
such duties as the Board of Directors or the Chairman of the Board may from time
to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
6
<PAGE>
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of
stock shall be issued only upon giving such security as may be satisfactory to
the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of
7
<PAGE>
any dividend, or to any allotment or rights, or to exercise any rights in
respect of any change, conversion or exchange of capital stock, or in connection
with obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the date
for the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection with
obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
8
<PAGE>
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending any
proceeding in advance of its final disposition, provided, however, that the
-------- -------
payment of expenses incurred by a Director officer in his capacity as a Director
or officer in advance of the final disposition of the proceeding shall be made
only upon receipt of an undertaking by the Director or officer to repay all
amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses, under this
Article X is not paid in full within ninety days after a written claim therefor
has been received by the Corporation the claimant may file suit to recover the
unpaid amount of such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In any such action
the Corporation shall have the burden of proving that the claimant was not
entitled to the requested indemnification of payment of expenses
9
<PAGE>
under applicable law.
(D) The rights conferred on any person by this Article X shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these By-
Laws, agreement, vote of stockholders or disinterested Directors or otherwise.
(E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
10
<PAGE>
EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: January 7, 1997 By: /s/ Norma P. Closs
------------------------
Name: Norma P. Closs
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ---------------------------- ------------------
Name of Bank City
in the State of DELAWARE, at the close of business on September 30, 1996.
--------
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
<S> <C>
Noninterest-bearing balances and currency and coins................ 198,288
Interest-bearing balances.......................................... 0
Held-to-maturity securities.............................................. 489,428
Available-for-sale securities............................................ 783,718
Federal funds sold....................................................... 19,000
Securities purchased under agreements to resell.......................... 48,500
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 3,620,289
LESS: Allowance for loan and lease losses........... 49,721
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and reserve... 3,570,568
Assets held in trading accounts.......................................... 0
Premises and fixed assets (including capitalized leases)................. 83,675
Other real estate owned.................................................. 4,607
Investments in unconsolidated subsidiaries and associated companies...... 85
Customers' liability to this bank on acceptances outstanding............. 0
Intangible assets........................................................ 4,131
Other assets............................................................. 101,592
Total assets............................................................. 5,303,592
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices...................................................... 3,457,641
Noninterest-bearing............. 740,731
Interest-bearing................ 2,716,910
Federal funds purchased.................................................. 135,889
Securities sold under agreements to repurchase........................... 213,617
Demand notes issued to the U.S. Treasury................................. 94,999
Trading liabilities...................................................... 0
Other borrowed money:.................................................... ///////
With original maturity of one year or less......................... 844,000
With original maturity of more than one year....................... 28,000
Mortgage indebtedness and obligations under capitalized leases........... 0
Bank's liability on acceptances executed and outstanding................. 0
Subordinated notes and debentures........................................ 0
Other liabilities........................................................ 103,818
Total liabilities........................................................ 4,877,964
Limited-life preferred stock and related surplus......................... 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus............................ 0
Common Stock............................................................. 500
Surplus.................................................................. 62,119
Undivided profits and capital reserves................................... 363,705
Net unrealized holding gains (losses) on available-for-sale securities... (696)
Total equity capital..................................................... 425,628
Total liabilities, limited-life preferred stock, and equity capital...... 5,303,592
</TABLE>
2
<PAGE>
EXHIBIT 25.3
Registration No.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) ___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
ARVIN INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Indiana 35-0550190
(State of incorporation) (I.R.S. employer identification no.)
One Noblitt Plaza
Box 3000
Columbus, Indiana 47202-3000
(Address of principal executive offices) (Zip Code)
Guarantee of Capital Securities of Arvin Capital I
by Arvin Industries, Inc.
(Title of the indenture securities)
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ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee and
upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes
the certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 7th day
of January, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Donald G. MacKelcan By: /s/ Norma P. Closs
----------------------------- ------------------------
Assistant Secretary Name: Norma P. Closs
Title: Vice President
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EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
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AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is WILMINGTON TRUST COMPANY whose address
is Rodney Square North, in said City. In addition to such principal
office, the said corporation maintains and operates branch offices in the
City of Newark, New Castle County, Delaware, the Town of Newport, New
Castle County, Delaware, at Claymont, New Castle County, Delaware, at
Greenville, New Castle County Delaware, and at Milford Cross Roads, New
Castle County, Delaware, and shall be empowered to open, maintain and
operate branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of Wilmington,
New Castle County, Delaware, and such other branch offices or places of
business as may be authorized from time to time by the agency or agencies
of the government of the State of Delaware empowered to confer such
authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the
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Corporation shall require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally to
use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or necessary
for the transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort
and kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation,
association, state or municipality, and may receive and manage any
sinking fund therefor on such terms as may be agreed upon between the
two parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
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(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit,
order, or decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or hereafter be
required by any law, judge, officer or court in the State of Delaware
or elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity in the receiving, holding, managing, and disposing of any
and all estates and property, real, personal or mixed, and to be
appointed as such trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority, in the
State of Delaware or elsewhere; and whenever this Corporation is so
appointed by any person, corporation, court, officer or authority
such trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian, bailee, or in any
other trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as security for
the performance of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for
the assumption of any responsibility the said Corporation may be
entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any private,
public or municipal corporation within and without the State of
Delaware, or of the Government of the United States, or of any state,
territory, colony, or possession thereof, or of any foreign
government or country; to receive, collect, receipt for, and dispose
of interest, dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other property
held and owned by it, and to exercise in respect of all such bonds,
mortgages, debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other property,
any and all the rights, powers and privileges of individual
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owners thereof, including the right to vote thereon; to invest and
deal in and with any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and proper, and
from time to time to vary or realize such investments; to issue bonds
and secure the same by pledges or deeds of trust or mortgages of or
upon the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when the Board
of Directors shall determine, and in the promotion of its said
corporate business of investment and to the extent authorized by law,
to lease, purchase, hold, sell, assign, transfer, pledge, mortgage
and convey real and personal property of any name and nature and any
estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that
the said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in
any manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount,
execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any
foreign country or place.
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(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or
restricted by reference to or inference from the terms of any other
clause of this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes and
powers.
FOURTH: - (a) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is forty-one million
(41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and
the preferences and relative, participating, optional and other special
rights of each such series, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other
series at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of
Directors of the Corporation is hereby expressly granted authority to fix
by resolution or resolutions adopted prior to the issuance of any shares
of a particular series of Preferred Stock, the voting powers and the
designations, preferences and relative, optional and other special rights,
and the qualifications, limitations and restrictions of such series,
including, but without limiting the generality of the foregoing, the
following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of
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stock and whether such dividends shall be cumulative or non-
cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject
to redemption, and the redemption price or prices and the time or
times at which, and the terms and conditions on which, Preferred
Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section
(b) of this Article FOURTH), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article FOURTH), and subject further to any conditions which may
be fixed in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article FOURTH), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to
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receive all of the remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of Common
Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article FOURTH, each holder
of Common Stock shall have one vote in respect of each share of
Common Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or
series of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of
indebtedness, debentures or other securities convertible into or
exchangeable for stock of the Corporation of any class or series, or
carrying any right to purchase stock of any class or series, but any such
unissued stock, additional authorized issue of shares of any class or
series of stock or securities convertible into or exchangeable for stock,
or carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons, firms,
corporations or associations, whether such holders or others, and upon
such terms as may be deemed advisable by the Board of Directors in the
exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article FOURTH and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the
powers, preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred Stock adopted
pursuant to section (b) of this Article FOURTH that the consent of the
holders of a majority (or such greater proportion as shall be therein
fixed) of the outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of Preferred Stock.
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(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board
of Directors of the Corporation shall determine and on such terms and for
such consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased from
time to time by the affirmative vote of the holders of a majority of the
stock of the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the whole
Board, provided, however, that the number of directors shall not be
reduced so as to shorten the term of any director at the time in office,
and provided further, that the number of directors constituting the whole
Board shall be twenty-four until otherwise fixed by a majority of the
whole Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the
next succeeding annual meeting, directors of the second class shall be
elected to hold office for a term expiring at the second succeeding annual
meeting and directors of the third class shall be elected to hold office
for a term expiring at the third succeeding annual meeting. Any vacancies
in the Board of Directors for any reason, and any newly created
directorships resulting from any increase in the directors, may be filled
by the Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen shall
hold office until the next annual election of directors. At such
election, the stockholders shall elect a successor to such director to
hold office until the next election of the class for which such director
shall have been chosen and until his successor shall be elected and
qualified. No decrease in the number of directors shall shorten the term
of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the
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Corporation may be removed at any time without cause, but only by the
affirmative vote of the holders of two-thirds or more of the outstanding
shares of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class) cast
at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to stockholders, such written notice shall be delivered
or mailed, as prescribed, to the Secretary of the Corporation not later
than the close of the seventh day following the day on which notice of the
meeting was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the Chairman on
behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such
nominee and (iii) the number of shares of stock of the Corporation which
are beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so
declare to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find
necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized
under the Act entitled "An Act Providing a General Corporation Law",
approved March 10, 1899, as from time to time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
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NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make,
alter or repeal any By-Law whether or not adopted by them, provided
however, that any such additional By-Laws, alterations or repeal may be
adopted only by the affirmative vote of the holders of two-thirds or more
of the outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this purpose
as one class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from
time to time designated by them.
FIFTEENTH: - (a) In addition to any affirmative vote required by law, and
except as otherwise expressly provided in sections (b) and (c) of this
Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or
not itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
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(C) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of related transactions) of any
securities of the Corporation or any Subsidiary to any Interested
Stockholder or any Affiliate of any Interested Stockholder in
exchange for cash, securities or other property (or a combination
thereof) having an aggregate fair market value of $1,000,000 or more,
or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly
or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities
of the Corporation or any Subsidiary which is directly or indirectly
owned by any Interested Stockholder, or any Affiliate of any
Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any one or
more of clauses (A) through (E) of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article FIFTEENTH shall
not be applicable to any particular business combination and such
business combination shall require only such affirmative vote as is
required by law and any other provisions of the Charter or Act of
Incorporation of By-Laws if such business combination has been
approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on
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such business combination, or immediately prior to the consummation of any
such transaction:
(A) is the beneficial owner, directly or indirectly, of more than
10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course
of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately
or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
12
<PAGE>
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect in
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,00,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed
to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware
General Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
13
<PAGE>
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON DECEMBER 21, 1995
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10 days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall be held on
the third Thursday of each month at the principal office of the Company, or at
such other place and
<PAGE>
time as may be designated by the Board of Directors, the Chairman of the Board,
or the President.
Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
ARTICLE III
COMMITTEES
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
2
<PAGE>
members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of
Directors when it is not in session to transact all business for and in behalf
of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolutions shall be suspended during such a disaster period until it shall be
determined by any interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct and management of
its affairs and business under all of the other provisions of these By-Laws.
3
<PAGE>
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than thirteen
members who shall be selected by the Board of Directors, a majority of whom
shall be members of the Board of Directors and who shall hold office during the
pleasure of the Board.
(B) The Trust Committee shall have general supervision over the Trust
Department and the investment of trust funds, in all matters, however, being
subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at least once a month. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Trust Committee may be held at any time when
a quorum is present.
(D) Minutes of each meeting of the Trust Committee shall be kept and
promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees
and/or designate officers or employees of the Company to whom supervision over
the investment of trust funds may be delegated when the Trust Committee is not
in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the Audit
Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the majority
of its members shall deem it to be proper for the transaction of its business,
and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
4
<PAGE>
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any Committee
created under Article III of the By-Laws of this Company, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absence or
disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board of Directors shall preside at
all
5
<PAGE>
meetings of the Board of Directors at which the Chairman of the Board shall not
be present and shall have such further authority and powers and shall perform
such duties as the Board of Directors or the Chairman of the Board may from time
to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
6
<PAGE>
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of
stock shall be issued only upon giving such security as may be satisfactory to
the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of
7
<PAGE>
any dividend, or to any allotment or rights, or to exercise any rights in
respect of any change, conversion or exchange of capital stock, or in connection
with obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the date
for the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection with
obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
8
<PAGE>
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending any
proceeding in advance of its final disposition, provided, however, that the
-------- -------
payment of expenses incurred by a Director officer in his capacity as a Director
or officer in advance of the final disposition of the proceeding shall be made
only upon receipt of an undertaking by the Director or officer to repay all
amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses, under this
Article X is not paid in full within ninety days after a written claim therefor
has been received by the Corporation the claimant may file suit to recover the
unpaid amount of such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In any such action
the Corporation shall have the burden of proving that the claimant was not
entitled to the requested indemnification of payment of expenses
9
<PAGE>
under applicable law.
(D) The rights conferred on any person by this Article X shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these By-
Laws, agreement, vote of stockholders or disinterested Directors or otherwise.
(E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
10
<PAGE>
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: January 7, 1997 By: /s/ Norma P. Closs
------------------------
Name: Norma P. Closs
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ---------------------------- --------------
Name of Bank City
in the State of DELAWARE, at the close of business on September 30, 1996.
--------
ASSETS
<TABLE>
<CAPTION>
Thousands of dollars
Cash and balances due from depository institutions:
<S> <C>
Noninterest-bearing balances and currency and coins................ 198,288
Interest-bearing balances.......................................... 0
Held-to-maturity securities.............................................. 489,428
Available-for-sale securities............................................ 783,718
Federal funds sold....................................................... 19,000
Securities purchased under agreements to resell.......................... 48,500
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 3,620,289
LESS: Allowance for loan and lease losses........... 49,721
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and reserve... 3,570,568
Assets held in trading accounts.......................................... 0
Premises and fixed assets (including capitalized leases)................. 83,675
Other real estate owned.................................................. 4,607
Investments in unconsolidated subsidiaries and associated companies...... . 85
Customers' liability to this bank on acceptances outstanding............. 0
Intangible assets........................................................ 4,131
Other assets............................................................. 101,592
Total assets............................................................. 5,303,592
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices...................................................... 3,457,641
Noninterest-bearing............... 740,731
Interest-bearing.................. 2,716,910
Federal funds purchased.................................................. 135,889
Securities sold under agreements to repurchase........................... 213,617
Demand notes issued to the U.S. Treasury................................. 94,999
Trading liabilities...................................................... 0
Other borrowed money:.................................................... ///////
With original maturity of one year or less......................... 844,000
With original maturity of more than one year....................... 28,000
Mortgage indebtedness and obligations under capitalized leases........... 0
Bank's liability on acceptances executed and outstanding................. 0
Subordinated notes and debentures........................................ 0
Other liabilities........................................................ 103,818
Total liabilities........................................................ 4,877,964
Limited-life preferred stock and related surplus......................... 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus............................ 0
Common Stock............................................................. 500
Surplus.................................................................. 62,119
Undivided profits and capital reserves................................... 363,705
Net unrealized holding gains (losses) on available-for-sale securities... (696)
Total equity capital..................................................... 425,628
Total liabilities, limited-life preferred stock, and equity capital...... 5,303,592
</TABLE>
