<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 12, 1998
REGISTRATION STATEMENT NOS. 333- AND 333- -01
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
<TABLE>
<S> <C> <C>
INDIANA NATIONAL CITY BANCSHARES, INC. 35-1632155
DELAWARE NCBE CAPITAL TRUST I 35-2039766
(State or other jurisdiction (Exact name of each registrant (IRS Employer
of as specified in its charter) Identification
organization or Number)
incorporation)
</TABLE>
227 MAIN STREET
P.O. BOX 868
EVANSVILLE, INDIANA 47705-0868
(812) 464-9677
(Address, including zip code, and telephone number, including area code, of
Registrants' principal executive offices)
------------------------------
MICHAEL F. ELLIOTT
NATIONAL CITY BANCSHARES, INC.
227 MAIN STREET
P.O. BOX 868
EVANSVILLE, INDIANA 47705-0868
(812) 464-9677
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
DAVID C. WORRELL C. CRAIG BRADLEY, JR.
Baker & Daniels Stites & Harbison
300 North Meridian Street 400 West Market Street
Suite 2700 Suite 1800
Indianapolis, Indiana 46204 Louisville, Kentucky 40202
(317) 237-0300 (502) 587-3400
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
------------------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 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. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
<S> <C> <C> <C> <C>
NCBE Capital Trust I Preferred Securities(1)..... 1,380,000 $25.00 $34,500,000 $10,178
National City Bancshares, Inc. Subordinated
Debentures(2)(3)................................ (2) -- -- --
National City Bancshares, Inc. Guarantee(2)(3)... (2) -- -- --
</TABLE>
(1) Includes 180,000 Preferred Securities which may be issued by NCBE Capital
Trust I to cover underwriters' over-allotments.
(2) The Subordinated Debentures will be purchased by NCBE Capital Trust I with
the proceeds of the sale of the Preferred Securities. No separate
consideration will be received for the issuance of the Subordinated
Debentures or Guarantee. In accordance with Rule 457 no separate fee is
payable for the Subordinated Debentures or the Guarantee.
(3) This Registration Statement is deemed to cover the Subordinated Debentures
and the Guarantee.
------------------------------
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 SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<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.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 12, 1998
[LOGO]
PROSPECTUS
1,200,000 PREFERRED SECURITIES
NCBE CAPITAL TRUST I
% CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
NATIONAL CITY BANCSHARES, INC.
------------------------
The % Cumulative Trust Preferred Securities (the "Preferred Securities")
offered hereby represent preferred undivided beneficial interests in the assets
of NCBE Capital Trust I, a statutory business trust created under the laws of
the State of Delaware ("NCBE Trust"). National City Bancshares, Inc., an Indiana
corporation (the "Company"), will own all of the common securities (the "Common
Securities" and, together with the Preferred Securities, the "Trust Securities")
representing undivided beneficial interests in the assets of NCBE Trust. The
Preferred Securities have been approved for listing on the Nasdaq National
Market, subject to notice of issuance, under the symbol "NCBEP."
(CONTINUED ON NEXT PAGE)
------------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR CERTAIN INFORMATION RELEVANT TO
AN INVESTMENT IN THE PREFERRED SECURITIES.
---------------------
THE 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.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS, ARE NOT
OBLIGATIONS OF OR GUARANTEED BY ANY BANKING OR NON-BANKING AFFILIATE OF THE
COMPANY (EXCEPT TO THE EXTENT THAT THE PREFERRED SECURITIES ARE
GUARANTEED BY THE COMPANY AS DESCRIBED HEREIN), ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY AND INVOLVE INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS PROCEEDS TO
THE PUBLIC AND COMMISSIONS(1)(2) NCBE TRUST(2)(3)
<S> <C> <C> <C>
Per Preferred Security.......................... $25.00 (2) $25.00
Total(4)........................................ $30,000,000 (2) $30,000,000
</TABLE>
(1) The Company and NCBE Trust have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933,
as amended. See "Underwriting."
(2) Because the proceeds of the sale of the Preferred Securities will be
invested in the Subordinated Debentures, the Company has agreed to pay the
Underwriters, as compensation (the "Underwriters' Compensation") for
arranging the investment therein of such proceeds, $ per Preferred
Security (or, in the aggregate, $ ). See "Underwriting."
(3) Expenses of the offering to be paid by the Company are estimated to be
approximately $275,000.
(4) NCBE Trust has granted the Underwriters an option for 30 days to purchase up
to an additional 180,000 Preferred Securities on the same terms set forth
above solely to cover over-allotments, if any. If such option is exercised
in full, the total Price to the Public and Proceeds to NCBE Trust will be
$34,500,000 and the aggregate Underwriters' Compensation will be $ .
See "Underwriting."
------------------------
The Preferred 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 the Preferred Securities will be ready for delivery in book-entry form only
through the facilities of The Depository Trust Company on or about
, 1998, against payment therefor in immediately available funds.
J.J.B. HILLIARD, W.L. LYONS, INC. NATCITY INVESTMENTS, INC.
, 1998
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
Wilmington Trust Company is the Property Trustee (as defined herein) of NCBE
Trust. NCBE Trust exists for the purpose of issuing the Trust Securities and
investing the proceeds thereof in an equivalent amount of % Subordinated
Debentures (the "Subordinated Debentures") of the Company. The Subordinated
Debentures will mature on March 31, 2028 (the "Scheduled Maturity Date"), which
date may be (i) extended at the option of the Company to a date not later than
March 31, 2037, subject to the prior approval of the Board of Governors of the
Federal Reserve System (the "Federal Reserve") if then required under applicable
capital guidelines or policies of the Federal Reserve ("Federal Reserve
Approval"), or (ii) shortened (a) by redemption at the option of the Company on
or after March 31, 2003, subject to Federal Reserve Approval, or (b) by
declaration of acceleration, notice of redemption (including redemption
following a Tax Event, Investment Company Event, or Capital Event, as described
below), or otherwise. The term "Maturity Date" shall mean the date the principal
becomes due and payable pursuant to the prior sentence, and includes the
Redemption Date. The Preferred Securities will have a preference under certain
circumstances with respect to cash distributions and amounts payable on
liquidation, redemption or otherwise over the Common Securities. See
"Description of the Preferred Securities-- Subordination of Common Securities."
Holders of the Preferred Securities will be entitled to receive preferential
cumulative cash distributions ("Distributions") accumulating from
, 1998, the date of original issuance, and payable quarterly in
arrears on the last day of March, June, September and December of each year
(each, a "Distribution Date"), commencing on June 30, 1998, at the annual rate
of % of the liquidation amount of $25 per Preferred Security (the "Liquidation
Amount"). The amount of Distributions payable for any period will include the
amount of additional interest accrued on interest in arrears and paid on a like
amount of Subordinated Debentures. The Company has the right, under certain
circumstances, to defer payment of interest on the Subordinated Debentures at
any time or from time to time for a period not to exceed 20 consecutive calendar
quarters (including the first calendar quarter during the extension period) with
respect to each deferral period (each, an "Extension Period"), provided that no
Extension Period may extend beyond the Maturity Date of the Subordinated
Debentures or end on a date other than an Interest Payment Date (as defined
herein). Upon the termination of any such Extension Period and the payment of
all amounts then due, the Company may elect to begin a new Extension Period
subject to the requirements set forth herein. If interest payments on the
Subordinated Debentures are so deferred, Distributions on the Preferred
Securities will also be deferred, and the Company will not be permitted, subject
to certain exceptions described herein, to declare or pay any cash distributions
with respect to its capital stock or pay interest, principal or premium on or
repay, repurchase or redeem any debt securities that rank PARI PASSU with or
junior to the Subordinated Debentures. WHILE THE COMPANY INTENDS TO TAKE THE
POSITION THAT THE SUBORDINATED DEBENTURES WILL NOT BE DEEMED TO BE ISSUED WITH
ORIGINAL ISSUE DISCOUNT ("OID"), DURING AN EXTENSION PERIOD, INTEREST ON THE
SUBORDINATED DEBENTURES WILL CONTINUE TO ACCRUE (AND THE AMOUNT OF DISTRIBUTIONS
TO WHICH THE HOLDERS OF THE PREFERRED SECURITIES ARE ENTITLED WILL ACCUMULATE)
AT THE RATE OF % PER ANNUM, COMPOUNDED QUARTERLY, AND THE HOLDERS OF THE
PREFERRED SECURITIES WILL BE REQUIRED TO INCLUDE INTEREST INCOME AS OID 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. A
HOLDER OF PREFERRED SECURITIES THAT DISPOSES OF ITS PREFERRED SECURITIES BETWEEN
RECORD DATES FOR PAYMENTS OF DISTRIBUTIONS (AND CONSEQUENTLY DOES NOT RECEIVE A
DISTRIBUTION FROM NCBE TRUST FOR THE PERIOD PRIOR TO SUCH DISPOSITION) WILL
NEVERTHELESS BE REQUIRED TO INCLUDE ACCRUED BUT UNPAID INTEREST OR OID, IF ANY,
ON THE SUBORDINATED DEBENTURES THROUGH THE DATE OF DISPOSITION IN INCOME AS
ORDINARY INCOME AND TO ADD THE AMOUNT OF ANY ACCRUED OID TO ITS ADJUSTED TAX
BASIS IN ITS PRO RATA SHARE OF THE UNDERLYING SUBORDINATED DEBENTURES DEEMED
DISPOSED OF. See "Description of the Subordinated Debentures--Option to Extend
Interest Payment Period," "Certain Federal Income Tax Consequences--Potential
Extension of Interest Payment Period and Original Issue Discount" and
"--Disposition of the Preferred Securities."
(CONTINUED ON NEXT PAGE)
2
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
The Company and NCBE Trust believe that, taken together, the obligations of
the Company under the Guarantee, the Trust Agreement, the Subordinated
Debentures, the Indenture and the Expense Agreement (each as defined herein)
provide, in the aggregate, a full, irrevocable and unconditional guarantee, on a
subordinated basis, of all of NCBE Trust's obligations under the Preferred
Securities. See "Relationship Among the Preferred Securities, the Subordinated
Debentures and the Guarantee--Full and Unconditional Guarantee." The Guarantee
of the Company guarantees the payments of Distributions and payments on
liquidation or redemption of the Preferred Securities, but only in each case to
the extent of funds held by NCBE Trust, as described herein. See "Description of
the Guarantee." If the Company does not make interest payments on the
Subordinated Debentures held by NCBE Trust, NCBE Trust will have insufficient
funds to pay Distributions on the Preferred Securities. The Guarantee does not
cover payments of Distributions when NCBE Trust does not have sufficient funds
to pay such Distributions. The obligations of the Company under the Guarantee
and the Preferred Securities are subordinate and junior in right of payment to
all Senior Debt and Additional Senior Obligations (each as defined herein). See
"Description of the Subordinated Debentures--Subordination." As of December 31,
1997, the Company had total Senior Debt and Additional Senior Obligations of
$25.9 million, all of which will rank senior to the Guarantee.
The Preferred Securities are subject to mandatory redemption, in whole or in
part, upon repayment of the Subordinated Debentures at their Maturity Date.
Subject to Federal Reserve Approval, the Subordinated Debentures are redeemable
at the option of the Company (i) on or after March 31, 2003, in whole at any
time or in part from time to time, or (ii) at any time, in whole (but not in
part), upon the occurrence and during the continuance of a Tax Event, an
Investment Company Event or a Capital Event (each as defined herein), in each
case at a redemption price equal to the accrued and unpaid interest on the
Subordinated Debentures so redeemed to the date fixed for redemption, plus 100%
of the principal amount thereof. See "Description of the Preferred
Securities--Redemption."
The Company will have the right at any time to dissolve NCBE Trust and,
after satisfying all liabilities to creditors of NCBE Trust as required by
applicable law, cause the Subordinated Debentures to be distributed to holders
of Preferred Securities in liquidation of NCBE Trust, subject to Federal Reserve
Approval. See "Description of the Preferred Securities--Redemption."
In the event of the dissolution of NCBE Trust, after satisfaction of
liabilities to creditors of NCBE Trust as required by applicable law, the
holders of Preferred Securities will be entitled to receive a Liquidation Amount
of $25 per Preferred Security, plus accumulated and unpaid Distributions thereon
to the date of payment, which may be in the form of a distribution of a like
amount of Subordinated Debentures, subject to certain exceptions. See
"Description of the Preferred Securities--Liquidation Distribution Upon
Dissolution."
------------------------
NATIONAL CITY BANCSHARES, INC. AND NCBE CAPITAL TRUST I ARE NOT AFFILIATES
OF NATIONAL CITY CORPORATION AND ITS SUBSIDIARIES, INCLUDING NATCITY
INVESTMENTS, INC., ONE OF THE UNDERWRITERS IN THIS OFFERING.
------------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE PREFERRED
SECURITIES. SUCH TRANSACTIONS MAY INCLUDE OVER-ALLOTMENT, STABILIZING
TRANSACTIONS, THE PURCHASE OF PREFERRED SECURITIES TO COVER SHORT POSITIONS AND
THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF SUCH ACTIVITIES, SEE
"UNDERWRITING." SUCH STABILIZING TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
3
<PAGE>
[MAP]
The Company will provide quarterly reports containing unaudited financial
statements to the holders of Preferred Securities if such reports are furnished
to the holders of the Company's common stock, and annual reports containing
financial statements audited by the Company's independent auditors. The Company
will also furnish annual reports on Form 10-K and quarterly reports on Form 10-Q
free of charge to holders of Preferred Securities who so request in writing
addressed to National City Bancshares, Inc., 227 Main Street, P.O. Box 868,
Evansville, Indiana 47705-0868; Attention: Secretary.
4
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION INCLUDED ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED,
THE INFORMATION CONTAINED IN THIS PROSPECTUS ASSUMES THAT THE UNDERWRITERS'
OVER-ALLOTMENT OPTION WILL NOT BE EXERCISED. PROSPECTIVE INVESTORS SHOULD
CAREFULLY CONSIDER THE INFORMATION SET FORTH UNDER THE HEADING "RISK FACTORS."
THE COMPANY
GENERAL
National City Bancshares, Inc. is a multi-bank and thrift holding company
headquartered in Evansville, Indiana. As of March 6, 1998, the Company owned 13
financial institutions which conduct their business from a total of 44 banking
offices, serving 33 communities in Indiana, Kentucky and Illinois. The Company
also has wholly-owned subsidiaries which conduct leasing and financial services
businesses. As of December 31, 1997, the Company had total consolidated assets
of $1.3 billion and total consolidated deposits of $964.0 million, making it the
sixth largest independent bank holding company headquartered in the State of
Indiana (ranked by asset size) as of such date.
Through its subsidiaries, the Company provides a comprehensive range of
consumer and commercial banking services to individuals and businesses located
throughout the tri-state area of Indiana, Kentucky and Illinois surrounding
Evansville, Indiana. Services offered include taking demand and time deposits,
lending on a secured and unsecured basis, providing cash management services,
issuing letters of credit, providing personal and corporate trust services and
originating leases to businesses.
The principal executive office of the Company is 227 Main Street, P.O. Box
868, Evansville, Indiana 47705-0868, and its telephone number is (812) 464-9677.
OPERATING PHILOSOPHY
Other than its banking operations within the Evansville metropolitan area,
the Company operates in predominately rural and suburban markets and embraces a
community banking philosophy that emphasizes personal service and convenience,
community involvement, local decision-making, quick responses to loan requests
and customized services. The Company's subsidiaries endeavor to provide their
branch managers, lending officers, tellers and deposit service personnel with
the authority to act promptly in service of its customers within the scope of
Company policies. This highly responsive attitude is enhanced by an efficient
corporate support staff and an investment in technology. Management believes the
benefits of this operating philosophy contribute to the Company's success while
providing improved operating efficiencies, effective internal controls and sound
credit underwriting standards.
Management believes that commercial customers of the Company's subsidiaries
generally prefer to bank with locally managed institutions which can provide a
full-service banking relationship meeting the customer's commercial banking
needs as well as the personal needs of its management and employees. The Company
provides its subsidiaries with the advantages of affiliation with a multi-bank
holding company, including services such as data processing services, credit
policy formulation, accounting services, investment portfolio management and
specialized staff support while generally granting substantial autonomy to
management of the subsidiaries. Management believes this autonomy allows the
Company's subsidiaries to better serve customers in their respective
communities, thereby enhancing business opportunities and operations. The
Company also maintains local bank charters and boards of directors.
5
<PAGE>
LONG-TERM GOALS AND BUSINESS STRATEGIES
The Company's long-term goals are to grow its banking activities through
acquisitions of financial institutions and branches of financial institutions to
enhance its market positions within its primary market area by employing the
following business strategies:
- PURSUE EXPANSION OPPORTUNITIES. The Company is actively engaged in
seeking acquisitions of financial institutions whose management can continue to
operate autonomously, yet benefit from the expertise and resources of the
Company in such areas as audit, loan review, compliance, personnel, asset/
liability modeling, investment management and data processing. The Company
believes that its record of allowing its subsidiaries to operate autonomously is
a significant competitive advantage in successfully completing acquisitions. The
Company generally seeks acquisitions within or near its primary market area,
which it considers to be the portions of Indiana, Kentucky and Illinois that are
within 250 miles of Evansville, Indiana. Since January 1, 1995, the Company has
acquired ten financial institutions or branches of financial institutions.
- INTERNAL GROWTH. Management believes vigorous internal growth is a key
component of corporate earnings performance. Management's focus is to remain
loan-driven to increase leverage, although other opportunities will be
considered. Affiliates in place for more than two years and operating at
acceptable levels are expected to report annual internal earnings growth of at
least 4%.
- CONTROL COSTS. The Company seeks to control costs of its subsidiaries
while expanding the range of services offered to customers. Management plans to
continue to consolidate back-office operations of its subsidiaries, which are
transparent to the customer, to control costs through economies of scale, to
outsource functions to improve efficiency, and to move toward more
incentive-based compensation. Products that have already been developed by the
Company for its subsidiaries will be available to all new acquisitions,
including MasterCard, PhoneBank, Express Bill Payer, ATM/Check Card, Paycheck
Express Employee Benefits Program and Direct Access Cash Management business
software.
- MANAGE CREDIT QUALITY. The Company and its subsidiaries have adopted
credit management policies under which loan officers maintain responsibility for
the quality of the credits they originate and manage. The credit management
process is supported by a collective and collaborative review and approval
process and is balanced by a review, evaluation and grading process undertaken
by the Company's loan review function. Senior management is actively involved in
monitoring the credit quality of the loan portfolio. In addition, management's
incentive compensation is affected by the Company's overall credit experience.
RECENT DEVELOPMENTS
Since December 31, 1997, the Company has completed two acquisitions (the
"Recent Acquisitions") and has agreed to make three additional acquisitions (the
"Pending Acquisitions"). The following table sets forth certain information
concerning these transactions:
<TABLE>
<CAPTION>
AS OF
DECEMBER 31, 1997
------------------------ NET INCOME
ASSETS DEPOSITS TO AVERAGE
NAME (MILLIONS) (MILLIONS) ASSETS (1997) STATUS (DATE CLOSED)
- ------------------------------------------ ----------- ----------- --------------- ----------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Mayfield Branch........................... N/A $ 65.7 N/A Closed (January 8, 1998)
Bank of Illinois in Mt. Vernon............ $ 163.5 127.7 1.20% Closed (March 6, 1998)
Illinois One Bank, N.A.................... 88.1 76.4 1.35 Pending
Trigg County Farmers Bank................. 96.4 72.3 1.47 Pending
Community First Bank of Kentucky.......... 55.4 48.6 2.69 Pending
Community First Bank, N.A................. 74.3 65.4 2.34 Pending
</TABLE>
6
<PAGE>
The Pending Acquisitions are subject to various conditions, including
shareholder and regulatory approval. No assurance can be given that the Pending
Acquisitions will be consummated. See "The Company--Recent Acquisitions" and
"--Pending Acquisitions."
STOCK OWNERSHIP OF MANAGEMENT
As of February 28, 1998, the directors and officers of the Company and its
subsidiaries owned approximately 20% of the Company's common stock. If all of
the Pending Acquisitions are completed, the directors and officers of the
Company and its subsidiaries are expected to own approximately 30% of the
Company's common stock then outstanding.
NCBE TRUST
NCBE Capital Trust I is a statutory business trust created under Delaware
law pursuant to (i) a trust agreement dated as of February 12, 1998, executed by
the Company, as depositor, and the trustees of NCBE Trust (together with the
Property Trustee, the "Trustees"), and (ii) a certificate of trust filed with
the Secretary of State of the State of Delaware on February 12, 1998. The
initial trust agreement will be amended and restated in its entirety (as so
amended and restated, the "Trust Agreement") substantially in the form filed as
an exhibit to the Registration Statement of which this Prospectus forms a part.
The Trust Agreement will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Upon issuance of the
Preferred Securities, the purchasers thereof will own all of the Preferred
Securities. The Company will acquire all of the Common Securities which will
represent an aggregate liquidation amount equal to at least 3% of the total
capital of NCBE Trust. The Common Securities will rank PARI PASSU, and payments
will be made thereon pro rata, with the Preferred Securities, except that upon
the occurrence and during the continuance of an Event of Default (as defined
herein) under the Trust Agreement resulting from a Debenture Event of Default,
the rights of the Company as a holder of the Common Securities to payment in
respect of Distributions and payments upon liquidation, redemption or otherwise
will be subordinated to the rights of the holders of the Preferred Securities.
See "Description of the Preferred Securities--Subordination of the Common
Securities." NCBE Trust exists for the exclusive purposes of (i) issuing the
Trust Securities representing undivided beneficial interests in the assets of
NCBE Trust, (ii) investing the gross proceeds of the Trust Securities in the
Subordinated Debentures issued by the Company, and (iii) engaging in only those
other activities necessary, advisable, or incidental thereto. Payments under the
Subordinated Debentures are expected to be the only revenue of NCBE Trust. NCBE
Trust has a term which expires March 31, 2037, but may dissolve earlier as
provided in the Trust Agreement. The principal executive office of NCBE Trust is
227 Main Street, P.O. Box 868, Evansville, Indiana 47705-0868, and its telephone
number is (812) 464-9677.
The number of Trustees will, pursuant to the Trust Agreement, initially be
four. Three of the Trustees (the "Administrative Trustees") will be persons who
are employees or officers of, or who are affiliated with, the Company. The
fourth trustee will be a financial institution that is unaffiliated with the
Company, which trustee will serve as institutional trustee under the Trust
Agreement and as indenture trustee for the purposes of compliance with the
provisions of the Trust Indenture Act (the "Property Trustee"). Wilmington Trust
Company, a Delaware banking corporation, will be the Property Trustee until
removed or replaced by the holder of the Common Securities and the Delaware
Trustee. 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 Debenture Trustee (as defined herein) under the
Indenture.
Initially, the Property Trustee will hold title to the Subordinated
Debentures for the benefit of the holders of the Trust Securities and in such
capacity will have the power to exercise all rights, powers and privileges of
such a holder under the Indenture. The Property Trustee and its agents and any
Paying Agent will also maintain exclusive control of a segregated
non-interest-bearing bank account (the "Payment Account") to hold all payments
made in respect of the Subordinated Debentures for the benefit of the
7
<PAGE>
holders of the Trust Securities. The Property Trustee or Paying Agent will make
payments of Distributions and payments on liquidation, redemption and otherwise
to the holders of the Trust Securities out of funds from the Payment Account.
The Guarantee Trustee will hold the Guarantee for the benefit of the holders of
the Preferred Securities. The Company, as the holder of all the Common
Securities, will have the right to appoint, remove or replace any Trustee and to
increase or decrease the number of Trustees. The Company will pay all fees and
expenses related to NCBE Trust and the offering of the Trust Securities.
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the Trust
Agreement, the Delaware Business Trust Act (the "Trust Act") and the Trust
Indenture Act. See "Description of the Preferred Securities."
THE OFFERING
<TABLE>
<S> <C>
Securities Offered................ 1,200,000 Preferred Securities having a Liquidation
Amount of $25 per Preferred Security. The Preferred
Securities represent preferred undivided beneficial
interests in the assets of NCBE Trust. NCBE Trust has
granted the Underwriters an option, exercisable within
30 days after the date of this Prospectus, to purchase
up to an additional 180,000 Preferred Securities at the
initial offering price, solely to cover over-allotments,
if any.
Distributions..................... The Distributions payable on each Preferred Security
will be fixed at a rate per annum of % of the
Liquidation Amount of $25 per Preferred Security, will
be cumulative, will accumulate from , 1998, the date
of original issuance of the Preferred Securities, and
will be payable quarterly in arrears, on March 31, June
30, September 30 and December 31 of each year,
commencing June 30, 1998. The amount of Distributions
payable for any period will include the amount of
additional interest accrued on interest in arrears and
paid on a like amount of Subordinated Debentures. See
"Description of the Preferred
Securities--Distributions--Payment of Distributions."
Option to Extend Interest
Payment Period.................. The Company has the right, at any time, so long as no
Debenture Event of Default has occurred and is
continuing, to defer payments of interest on the
Subordinated Debentures for a period not exceeding 20
consecutive quarters (including the first calendar
quarter during the Extension Period); provided, that no
Extension Period may extend beyond the Maturity Date of
the Subordinated Debentures or end on a date other than
an Interest Payment Date. As a consequence of the
extension by the Company of the interest payment period,
quarterly Distributions on the Preferred Securities will
be deferred (though such Distributions would continue to
accumulate with interest thereon compounded quarterly,
since interest will continue to accrue and compound on
the Subordinated Debentures) during any such Extension
Period. During an Extension Period, the Company will be
prohibited, subject to certain exceptions described
herein, from declaring or paying any cash distributions
with respect to its capital stock or debt securities
that rank PARI PASSU with or junior to the Subordinated
Debentures. Upon the termination of any Extension Period
and
</TABLE>
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<TABLE>
<S> <C>
the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the
foregoing requirements. See "Description of the
Preferred Securities-- Distributions--Extension Period"
and "Description of the Subordinated Debentures--Option
to Extend Interest Payment Period." SHOULD AN EXTENSION
PERIOD OCCUR, THE HOLDERS OF PREFERRED SECURITIES WILL
BE REQUIRED TO ACCRUE 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. See "Certain
Federal Income Tax Consequences--Potential Extension of
Interest Payment Period and Original Issue Discount."
Redemption........................ The Preferred Securities are subject to mandatory
redemption, in whole or in part, upon repayment or
redemption of the Subordinated Debentures at the
Maturity Date. Subject to Federal Reserve Approval, the
Subordinated Debentures are redeemable prior to the
Scheduled Maturity Date at the option of the Company (i)
on or after March 31, 2003, in whole at any time or in
part from time to time, or (ii) at any time, in whole
(but not in part), within 180 days following the
occurrence of a Tax Event, an Investment Company Event
or a Capital Event (such 180 days being subject to
extension following a Tax Event) in each case at the
redemption price equal to 100% of the principal amount
of the Subordinated Debentures, together with any
accrued but unpaid interest to the date fixed for
redemption. Any partial redemption of the Subordinated
Debentures will be effected by the redemption of an
equivalent amount of Trust Securities, to be allocated
pro rata between the Preferred Securities and the Common
Securities unless, under certain circumstances, an Event
of Default resulting from a Debenture Event of Default
shall have occurred and be continuing as of the
applicable Redemption Date or Distribution Date. See
"Description of the Preferred Securities--Redemption."
If a partial redemption of the Subordinated Debentures
would result in the de-listing of the Preferred
Securities, the Company may only redeem the Subordinated
Debentures in whole. See "Description of the
Subordinated Debentures--Redemption."
Guarantee......................... The Company has guaranteed the payment of Distributions
and payments on liquidation or redemption of the
Preferred Securities, but only in each case to the
extent that NCBE Trust has funds legally and immediately
available to pay such Distributions. If the Company does
not make principal or interest payments on the
Subordinated Debentures, NCBE Trust will not have
sufficient funds to make Distributions on the Preferred
Securities; in which event, the Guarantee will not apply
to such Distributions until NCBE Trust has sufficient
funds available therefor. The Company and NCBE Trust
believe that, taken together, the obligations of the
Company under the Guarantee, the Trust Agreement, the
Subordinated Debentures, the Indenture and the Expense
Agreement provide, in the
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9
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<S> <C>
aggregate, a full, irrevocable and unconditional
guarantee, on a subordinated basis, of all of the
obligations of NCBE Trust under the Preferred
Securities. The obligations of the Company under the
Guarantee and the Preferred Securities are subordinate
and junior in right of payment to all Senior Debt and
Additional Senior Obligations of the Company. See
"Description of the Guarantee."
Voting Rights..................... The holders of the Preferred Securities will have no
voting rights except in limited circumstances. See
"Description of the Preferred Securities--Voting Rights;
Amendment of Trust Agreement."
Subordinated Debentures........... NCBE Trust will invest the proceeds from the issuance of
the Trust Securities in an equivalent principal amount
of Subordinated Debentures. The Subordinated Debentures
will be subordinate and junior in right of payment to
all indebtedness for borrowed money and other
obligations of the Company included in the definitions
of Senior Debt and Additional Senior Obligations. See
"Description of the Subordinated
Debentures--Subordination."
Distribution of Subordinated
Debentures...................... The Company has the right at any time to dissolve NCBE
Trust and, after satisfaction of NCBE Trust's
liabilities, cause the Subordinated Debentures to be
distributed to the holders of the Preferred Securities
in liquidation of NCBE Trust, subject to Federal Reserve
Approval. See "Description of the Preferred
Securities--Redemption" and "--Liquidation Distribution
upon Dissolution."
Use of Proceeds................... The net proceeds to be received by the Company from the
sale of the Subordinated Debentures to NCBE Trust will
be used to repay indebtedness incurred in recent
acquisitions and for general corporate purposes. Pending
any such use, the net proceeds will be invested in
short- to medium-term investment grade financial
instruments. See "Use of Proceeds."
Nasdaq National Market
Symbol.......................... The Preferred Securities have been approved for listing
on the Nasdaq National Market, subject to notice of
issuance, under the symbol "NCBEP."
</TABLE>
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SUMMARY CONSOLIDATED FINANCIAL DATA
The consolidated financial data below summarizes historical consolidated
financial information of the Company for the periods indicated and should be
read in conjunction with the other information included elsewhere in this
Prospectus and the consolidated financial statements of the Company and the
notes thereto which are incorporated by reference in this Prospectus. See
"Selected Consolidated Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Incorporation of Certain
Documents by Reference."
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
SUMMARY RESULTS OF OPERATIONS:
Net interest income.............................. $ 51,995 $ 48,606 $ 44,433 $ 39,933 $ 38,010
Provision for loan losses........................ 1,891 2,704 399 78 736
Noninterest income............................... 10,088 8,606 7,117 5,209 6,707
Noninterest expense.............................. 34,390 29,966 28,968 28,644 28,343
---------- ---------- ---------- ---------- ----------
Income before income taxes....................... 25,802 24,542 22,183 16,420 15,638
Income taxes..................................... 7,451 8,046 7,784 5,668 4,861
---------- ---------- ---------- ---------- ----------
Net income................................... $ 18,351 $ 16,496 $ 14,399 $ 10,752 $ 10,777
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
PER COMMON SHARE:(1)
Net income per share:
Basic.......................................... $ 1.72 $ 1.52 $ 1.30 $ 0.97 $ 0.97
Diluted........................................ 1.69 1.52 1.30 0.97 0.97
Cash dividends declared.......................... 0.64 0.55 0.40 0.40 0.38
Book value, end of year.......................... 13.69 12.12 11.71 10.47 10.23
Weighted average common shares outstanding:
Basic.......................................... 10,679,448 10,843,295 11,095,116 11,040,906 11,146,280
Diluted........................................ 10,832,943 10,843,295 11,095,116 11,040,906 11,146,280
AT YEAR END:
Loans............................................ $ 916,356 $ 800,622 $ 736,997 $ 645,235 $ 579,556
Total assets..................................... 1,298,260 1,172,057 1,081,921 1,004,160 993,468
Deposits......................................... 964,046 913,350 864,136 849,306 848,808
Shareholders' equity............................. 146,803 129,694 130,606 114,750 113,975
PROFITABILITY RATIOS:
Net income to average assets..................... 1.47% 1.48% 1.40% 1.09% 1.09%
Net income to average equity..................... 13.42 12.89 11.74 9.39 9.76
Net interest margin.............................. 4.87 4.90 4.77 4.49 4.29
CAPITAL RATIOS:
Average equity to average assets................. 10.98% 11.48% 11.93% 11.59% 11.17%
Leverage ratio(2)................................ 9.74 10.52 12.41 11.77 11.34
Risk-based capital ratios:
Tier 1 capital................................. 13.39 14.96 17.16 17.07 18.19
Total capital.................................. 14.25 15.84 17.99 17.92 19.09
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS:(3)
Excluding deposit interest..................... 9.24x 12.75x 26.70x 36.58x 46.76x
Including deposit interest..................... 1.59 1.65 1.64 1.60 1.54
</TABLE>
- ------------------------------
(1) The data have been adjusted for all stock dividends and stock splits.
(2) The leverage ratio is Tier 1 capital divided by adjusted total assets after
deducting intangible assets.
(3) Earnings consist of income before income tax plus interest expense. Fixed
charges consist of interest expense. The Company does not currently have any
preferred stock outstanding.
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RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER, TOGETHER WITH THE OTHER
INFORMATION CONTAINED AND INCORPORATED BY REFERENCE IN THIS PROSPECTUS, THE
FOLLOWING RISK FACTORS IN EVALUATING THE COMPANY AND ITS BUSINESS AND NCBE TRUST
BEFORE PURCHASING THE PREFERRED SECURITIES OFFERED HEREBY. CERTAIN STATEMENTS IN
THIS PROSPECTUS OR IN CERTAIN DOCUMENTS INCORPORATED BY REFERENCE HEREIN,
INCLUDING WITHOUT LIMITATION STATEMENTS UNDER THIS SECTION AND UNDER THE
HEADINGS "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS," AND "THE COMPANY," CONSTITUTE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND SECTION 21E OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED (THE "EXCHANGE ACT"). SUCH FORWARD-LOOKING STATEMENTS
INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE
ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO DIFFER MATERIALLY
FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY
SUCH FORWARD-LOOKING STATEMENTS.
SUCH FACTORS INCLUDE, AMONG OTHER THINGS, THE FOLLOWING: THE FACTORS SET
FORTH IN THIS SECTION; GENERAL AND LOCAL ECONOMIC CONDITIONS; RISKS ASSOCIATED
WITH ACQUISITIONS; LEGISLATIVE AND REGULATORY INITIATIVES; MONETARY AND FISCAL
POLICIES OF THE FEDERAL GOVERNMENT; DEPOSIT FLOWS; THE COST OF FUNDS; GENERAL
MARKET RATES OF INTEREST; INTEREST RATES ON COMPETING INVESTMENTS; DEMAND FOR
LOAN PRODUCTS; DEMAND FOR FINANCIAL SERVICES; CHANGES IN ACCOUNTING POLICIES OR
GUIDELINES; AND CHANGES IN THE QUALITY OR COMPOSITION OF THE COMPANY'S LOAN AND
INVESTMENT PORTFOLIOS. THE COMPANY DOES NOT UNDERTAKE AND SPECIFICALLY DISCLAIMS
ANY OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS TO REFLECT THE
OCCURRENCE OF ANTICIPATED OR UNANTICIPATED EVENTS OR CIRCUMSTANCES AFTER THE
DATE OF SUCH STATEMENTS.
RISK FACTORS RELATING TO THE PREFERRED SECURITIES
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE SUBORDINATED
DEBENTURES
The obligations of the Company under the Guarantee issued by the Company for
the benefit of the holders of the Preferred Securities and under the
Subordinated Debentures are unsecured and rank subordinate and junior in right
of payment to the prior payment in full of all Senior Debt and Additional Senior
Obligations of the Company. As of December 31, 1997, the aggregate outstanding
Senior Debt and Additional Senior Obligations of the Company were approximately
$25.9 million. Because the Company is a holding company, the right of the
Company to participate in any distribution of assets of any of its subsidiaries
upon any such subsidiary's liquidation or reorganization or otherwise (and thus
the ability of holders of the Preferred Securities to benefit indirectly from
such distribution) is subject to the prior claims of creditors of that
subsidiary, except to the extent that the Company may itself be recognized as a
creditor of that subsidiary. Accordingly, the Subordinated Debentures will be
effectively subordinated to all existing and future liabilities of the
subsidiaries, and holders of Subordinated Debentures and Preferred Securities
should look only to the assets of the Company for payments on the Subordinated
Debentures. None of the Indenture, the Guarantee or the Trust Agreement places
any limitation on the amount of secured or unsecured debt, including Senior Debt
and Additional Senior Obligations, that may be incurred by the Company. See
"Description of the Guarantee--Status of the Guarantee" and "Description of the
Subordinated Debentures--Subordination."
The ability of NCBE Trust to pay amounts due on the Preferred Securities is
solely dependent upon the Company's making payments on the Subordinated
Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; MARKET PRICE
CONSEQUENCES
So long as no Debenture Event of Default (as defined below) has occurred and
is continuing, the Company has the right under the Indenture at any time during
the term of the Subordinated Debentures to defer the payment of interest on the
Subordinated Debentures at any time or from time to time for a period not
exceeding 20 consecutive calendar quarters (including the first calendar quarter
during the Extension Period) with respect to each such period, provided that no
Extension Period may extend beyond
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the Maturity Date (including any extension thereof) of the Subordinated
Debentures or end on a date other than an Interest Payment Date. As a
consequence of any such deferral, quarterly Distributions on the Preferred
Securities by NCBE Trust will be deferred (and the amount of Distributions to
which holders of the Preferred Securities are entitled will accumulate
additional interest thereon, including Additional Sums, at the Coupon Rate,
compounded quarterly from the relevant payment date for such Distributions to
the date of payment) during any such Extension Period. During any such Extension
Period, the Company may not (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's capital stock, or (ii) make any payment of principal,
interest or premium, if any, on, or repay, repurchase or redeem any debt
securities of the Company, that rank PARI PASSU with, or are junior in interest
to, the Subordinated Debentures or make any guarantee payments with respect to
any guarantee by the Company of the debt securities of any subsidiary of the
Company, if such guarantee ranks PARI PASSU with, or is junior in interest to,
the Subordinated Debentures (other than (a) dividends or distributions in
Company common stock, (b) any declaration of a dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee and (d) purchases of common
stock related to the rights under any of the Company's benefit plans for its
directors, officers or employees). Prior to the termination of any such
Extension Period, the Company may further defer the payment of interest,
provided that no Extension Period (with all previous and further extensions) may
exceed 20 consecutive quarters (including the first calendar quarter during the
Extension Period) or extend beyond the Maturity Date or end on a date other than
an Interest Payment Date. Upon the termination of any Extension Period and the
payment of all interest then due, the Company may elect to begin a new Extension
Period, subject to the above requirements. Subject to the foregoing, there is no
limitation on the number of times that the Company may elect to begin an
Extension Period. See "Description of the Preferred Securities--Distributions"
and "Description of the Subordinated Debentures--Option to Extend Interest
Payment Period."
Should an Extension Period occur, a holder of Preferred Securities will be
required to accrue and recognize income (in the form of original issue discount)
in respect of its pro rata share of the interest accruing on the Subordinated
Debentures held by NCBE Trust for United States federal income tax purposes. As
a result, a holder of Preferred Securities will include such income in gross
income for United States federal income tax purposes in advance of the receipt
of cash, and will not receive the cash related to such income from NCBE Trust if
the holder disposes of the Preferred Securities prior to the record date for the
payment of the related Distributions. See "Certain Federal Income Tax
Consequences--Potential Extension of Interest Payment Period and Original Issue
Discount."
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures. However, should the Company elect to exercise such
right in the future, the market price of the Preferred Securities is likely to
be adversely affected. A holder that disposes of its Preferred Securities during
an Extension Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Preferred Securities. In
addition, as a result of the existence of the Company's right to defer interest
payments, the market price of the Preferred Securities may be more volatile than
the market prices of other securities on which original issue discount accrues
that are not subject to such optional deferrals.
REDEMPTION UPON TAX EVENT, INVESTMENT COMPANY EVENT OR CAPITAL EVENT
Upon the occurrence and during the continuance of a Tax Event, Investment
Company Event or Capital Event (whether occurring before or after March 31,
2003), the Company has the right to redeem the Subordinated Debentures in whole
(but not in part) within 180 days following the occurrence of such Tax Event,
Investment Company Event or Capital Event (such 180 days being subject to
extension following a Tax Event) and, therefore, cause a mandatory redemption of
the Preferred Securities. The exercise of such right is subject to Federal
Reserve Approval. See "Description of the Subordinated Debentures--Redemption."
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EXCHANGE OF PREFERRED SECURITIES FOR SUBORDINATED DEBENTURES
The Company will have the right at any time to dissolve NCBE Trust and,
after satisfying all liabilities to creditors of NCBE Trust as required by
applicable law, cause the Subordinated Debentures to be distributed to the
holders of the Trust Securities in liquidation of NCBE Trust. The exercise of
such right is subject to Federal Reserve Approval. See "Description of the
Preferred Securities--Redemption."
REDEMPTION OF SUBORDINATED DEBENTURES
The Company will have the right at any time to redeem, in whole or in part,
the Subordinated Debentures on or after March 31, 2003, subject to Federal
Reserve Approval.
EXTENSION OF MATURITY DATE OF SUBORDINATED DEBENTURES
The Company will also have the right, at any time before the day which is 90
days before the Scheduled Maturity Date, to extend the maturity of the
Subordinated Debentures (whether or not NCBE Trust is dissolved and the
Subordinated Debentures are distributed to holders of the Preferred Securities)
to a date no later than March 31, 2037, provided that the Company can extend the
maturity, only if at the time notice of such election is provided and as of the
Scheduled Maturity Date, (i) the Company is not in bankruptcy, otherwise
insolvent or in liquidation, (ii) the Company is not in default in the payment
of any interest or principal on the Subordinated Debentures, and (iii) NCBE
Trust is not in arrears on payments of Distributions on the Preferred Securities
and no deferred Distributions are accumulated.
RIGHTS UNDER THE GUARANTEE
The Guarantee guarantees, on a subordinated basis, to the holders of the
Preferred Securities the following payments, to the extent not paid by or on
behalf of NCBE Trust: (i) any accumulated and unpaid Distributions required to
be paid on the Preferred Securities, to the extent that NCBE Trust has funds
legally and immediately available therefor, (ii) the redemption price with
respect to any Preferred Securities called for redemption, to the extent that
NCBE Trust has funds legally and immediately available therefor at such time,
and (iii) upon a voluntary or involuntary dissolution, winding-up or liquidation
of NCBE Trust (unless the Subordinated Debentures are distributed to holders of
the Preferred Securities), the lesser of (a) the aggregate of the Liquidation
Amount and all accumulated and unpaid Distributions to the date of payment to
the extent that NCBE Trust has funds legally and immediately available therefor
at such time and (b) the amount of assets of NCBE Trust remaining available for
distribution to holders of the Preferred Securities. An event of default under
the Guarantee will occur upon the failure of the Company to perform any of its
payment or other obligations thereunder. The holders of not less than a majority
in aggregate Liquidation Amount of the Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of the Guarantee or to direct the
exercise of any trust power conferred upon the Guarantee Trustee under the
Guarantee. Any holder of the Preferred Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against NCBE Trust, the
Guarantee Trustee or any other person. If the Company were to default on its
obligation to pay amounts payable under the Subordinated Debentures, NCBE Trust
would lack funds for the payment of Distributions or amounts payable on
redemption of the Preferred Securities or otherwise, and, in such event, holders
of Preferred Securities would not be able to rely upon the Guarantee for such
amounts. Instead, in the event a Debenture Event of Default (as hereafter
defined) shall have occurred and be continuing and such event is attributable to
the failure of the Company to pay interest on or principal of the Subordinated
Debentures on the payment date on which such payment is due and payable, then a
holder of Preferred Securities may institute a legal proceeding directly against
the Company for enforcement of payment to such holder of the principal of or
interest on such Subordinated Debentures having a principal amount equal to the
aggregate Liquidation Amount of the Preferred Securities of such holder (a
"Direct Action"). In connection with such Direct Action, the Company will
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have a right of set-off under the Indenture to the extent of any payment made by
the Company to such holder of Preferred Securities in the Direct Action. Except
as described herein, holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Subordinated
Debentures or assert directly any other rights in respect of the Subordinated
Debentures unless there shall have been an Event of Default under the Trust
Agreement. See "Description of the Subordinated Debentures--Debenture Events of
Default," "--Enforcement of Certain Rights by Holders of Preferred Securities"
and "Description of the Guarantee." The Trust Agreement provides that each
holder of Preferred Securities by acceptance thereof agrees to the provisions of
the Guarantee and the Indenture.
LIMITED VOTING RIGHTS
Holders of Preferred Securities will generally have limited voting rights
relating only to the modification of the Preferred Securities and the exercise
of NCBE Trust's rights as holder of Subordinated Debentures and the Guarantee.
Holders of Preferred Securities will not be entitled to vote to appoint, remove
or replace the Property Trustee or the Delaware Trustee, and such voting rights
are vested exclusively in the holder of the Common Securities except upon the
occurrence of certain events described herein. The Trust Agreement may be
amended without the consent of holders of Preferred Securities to ensure that
NCBE Trust will be classified for United States federal income tax purposes as a
grantor trust and not be treated as an "investment company" under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), even if such
action adversely affects the interests of such holders. See "Description of the
Preferred Securities--Removal of Trustees" and "--Voting Rights; Amendment of
Trust Agreement."
POSSIBLE TAX LAW CHANGES
Certain legislative proposals were made in 1996 and 1997 which were designed
to eliminate the ability of issuers of certain instruments to deduct interest
paid on those instruments. These proposals were not, however, incorporated into
the legislation recently enacted as the Taxpayer Relief Act of 1997.
Nevertheless, there can be no assurance that other legislation enacted after the
date hereof will not otherwise adversely affect the ability of the Company to
deduct interest payable on the Subordinated Debentures, and such legislation
could be retroactive in effect. Consequently, there can be no assurance that a
Tax Event will not occur. A Tax Event would permit the Company, upon Federal
Reserve Approval, to cause a redemption of the Preferred Securities before, as
well as after, March 31, 2003. See "Description of the Subordinated
Debentures--Redemption" and "Description of the Preferred
Securities--Redemption-- Tax Event Redemption, Investment Company Event
Redemption or Capital Event Redemption." See also "Certain Federal Income Tax
Consequences--Possible Changes in Tax Laws."
MARKET PRICES
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for Preferred Securities if a liquidation of NCBE Trust occurs. Accordingly, the
Preferred Securities, or the Subordinated Debentures that a holder of Preferred
Securities may receive on liquidation of NCBE Trust, may trade at a discount to
the price that the investor paid to purchase the Preferred Securities offered
hereby. In addition, there can be no assurance that the Company will not
exercise its option to extend the Maturity Date of the Subordinated Debentures
as permitted by the terms thereof and of the Indenture. Because holders of
Preferred Securities may receive Subordinated Debentures on liquidation of NCBE
Trust, prospective purchasers of Preferred Securities are also making an
investment decision with regard to the Subordinated Debentures and should
carefully review all the information regarding the Subordinated Debentures
contained herein. See "Description of the Subordinated Debentures."
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TRADING CHARACTERISTICS OF THE PREFERRED SECURITIES
The Preferred Securities have been approved for listing on the Nasdaq
National Market, subject to notice of issuance, under the symbol "NCBEP." The
Preferred 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 that disposes of its Preferred Securities prior to the
record date for payment of a Distribution (and consequently does not receive the
Distribution from NCBE Trust for the period prior to such disposition) will be
required to include as ordinary income either original issue discount ("OID"),
if applicable, or accrued but unpaid interest on the Subordinated Debentures
through the date of disposition. To the extent the amount realized is less than
the holder's adjusted tax basis, a holder will generally 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
"Certain Federal Income Tax Consequences--Disposition of the Preferred
Securities."
PREFERRED SECURITIES ARE NOT INSURED
The Preferred Securities are not insured by the Bank Insurance Fund or the
Savings Association Insurance Fund of the Federal Deposit Insurance Corporation
("FDIC") or by any other governmental agency.
RISK FACTORS RELATING TO THE COMPANY
STATUS OF THE COMPANY AS A BANK HOLDING COMPANY
The Company is a legal entity separate and distinct from its subsidiaries,
although the principal source of the Company's cash revenues is dividends from
its subsidiaries. The right of the Company to participate in the assets of any
subsidiary upon the latter's liquidation, reorganization or otherwise (and thus
the ability of the holders of Preferred Securities to benefit indirectly from
any such distribution) will be subject to the claims of the subsidiaries'
creditors, which will take priority except to the extent that the Company may
itself be a creditor with a recognized claim.
The Company's principal source of funds is dividends received from its
banking subsidiaries. Regulations limit the amount of dividends that may be paid
by such subsidiaries without prior approval. During 1998, approximately $3.3
million in the aggregate plus a portion of 1998 net profits can be paid by the
banking subsidiaries to the Company without prior regulatory approval.
The banking subsidiaries are also subject to legal restrictions which limit
the transfer of funds by any of the banking subsidiaries to the Company and its
nonbanking subsidiaries, whether in the form of loans, extensions of credit,
investments, asset purchases or otherwise. Such transfers by any banking
subsidiary to the Company or any of the Company's nonbanking subsidiaries are
limited in amount to 10% of such Bank's capital and surplus and, with respect to
the Company and all such nonbanking subsidiaries, to an aggregate of 20% of such
banking subsidiary capital and surplus. Furthermore, such loans and extensions
of credit are required to be secured in specified amounts.
RISKS ASSOCIATED WITH ACQUISITIONS
The Company has experienced significant growth as a result of acquisitions.
Since January 1, 1995, the Company has acquired ten financial institutions or
branches of financial institutions. As the banking industry continues to
consolidate, the Company expects to pursue other acquisitions in the future. The
Company's Pending Acquisitions are subject to various conditions, including
shareholder and regulatory approval. No assurance can be given that the Pending
Acquisitions will be consummated. The future profitability of the Company will
depend, in part, upon management's ability to improve the profitability of
acquired institutions and to realize expected operational synergies.
Acquisitions involve numerous risks, including difficulties in the assimilation
of the operations of the acquired company, a diversion of
16
<PAGE>
management's attention from other business concerns, risks of entering new
geographic markets, the potential loss of key employees of the acquired company
and the assumption of undisclosed liabilities. Future acquisitions may result in
dilutive issuances of equity securities, the incurrence of additional debt and
the amortization of expenses related to goodwill and intangible assets, any of
which could have a material adverse effect on the Company. In addition, as
consolidation of the banking industry continues, the competition for suitable
acquisition candidates can be expected to increase. The Company competes with
other banking companies for acquisition opportunities and many of these
competitors have greater financial resources and acquisition experience than the
Company. See "The Company--Recent Developments."
IMPACT OF INTEREST RATE CHANGES
The Company's results of operations are derived from the operations of its
subsidiaries and are principally dependent on net interest income, calculated as
the difference between interest earned on loans and investments and the interest
expense paid on deposits and other borrowings. Like other banks and financial
institutions, the Company's interest income and interest expense are affected by
general economic conditions and by the policies of regulatory authorities,
including the monetary policies of the Federal Reserve. While management has
taken measures intended to manage the risks of operating in a changing interest
rate environment, there can be no assurance that such measures will be effective
in avoiding undue interest rate risk. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
CREDIT RISK AND LOAN CONCENTRATION
The Company is exposed to the risk that customers to whom its subsidiaries
have made loans will be unable to repay those loans according to their terms and
that collateral securing such loans (if any) may not be sufficient in value to
assure repayment. Credit losses could have a material adverse effect on the
Company's operating results.
A primary risk facing the Company, and financial institutions in general, is
credit risk, that is, the risk of losing principal and interest due to a
borrower's failure to perform according to the terms of such borrower's loan
agreement. As of December 31, 1997, the Company's total loan portfolio was
approximately $916.4 million or 70.6% of its total assets. The three largest
components of the loan portfolio are real estate loans, $501.9 million or 54.7%
of total loans, commercial and industrial loans, $201.4 million or 30.0% of
total loans, and consumer loans, $149.5 million or 16.3% of total loans. The
Company's credit risk with respect to its consumer installment loan portfolio
and commercial loan portfolio relates principally to the general
creditworthiness of individuals and businesses within its market area. The
Company's credit risk with respect to its real estate mortgage and construction
loan portfolio relates principally to the general creditworthiness of
individuals and the value of real estate serving as security for the repayment
of the loans.
REGULATORY RISKS
The banking industry is heavily regulated. These regulations are primarily
intended to protect depositors and the FDIC, not shareholders or other
creditors. Regulations affecting the financial institutions industry are
undergoing continuous change, and the ultimate effect of such changes cannot be
predicted. Regulations and laws affecting the Company and its subsidiaries may
be modified at any time, and new legislation affecting financial institutions
may be proposed and enacted. There is no assurance that such modifications or
new laws will not materially and adversely affect the business, condition or
operations of the Company and its subsidiaries.
17
<PAGE>
EXPOSURE TO LOCAL ECONOMIC CONDITIONS
The success of the Company and its subsidiaries is dependent to a certain
extent upon the general economic conditions of the geographic markets they
serve. Unlike larger banks which are more geographically diversified, the
Company's subsidiaries provide financial and banking services to customers in
the tri-state area of Indiana, Kentucky and Illinois surrounding Evansville,
Indiana. No assurance can be given concerning the economic conditions which will
exist in such markets.
COMPETITION
The Company's subsidiaries face substantial competition for deposit, credit
and trust relationships, as well as other sources of funding in the communities
they serve. Competing providers include other national and state banks, thrifts
and trust companies, insurance companies, mortgage banking operations, credit
unions, finance companies, money market funds and other financial and
nonfinancial companies which may offer products functionally equivalent to those
offered by the Company's subsidiaries. Competing providers may have greater
financial resources than the Company and offer services within and outside the
market areas served by the Company's subsidiaries.
USE OF PROCEEDS
NCBE Trust will use the proceeds of the sale of the Preferred Securities to
acquire the Subordinated Debentures from the Company. The Company will receive
approximately $28.7 million ($33.0 million if the Underwriters' over-allotment
option is exercised in full) as the net proceeds from the sale of the
Subordinated Debentures to NCBE Trust. The Company intends to use substantially
all of the net proceeds to repay loans incurred to finance recent acquisitions
(the "Acquisition Loans") and the remaining portion, if any, for general
corporate purposes. The Acquisition Loans currently have outstanding principal
balances of $19.0 million and $10.0 million and mature in June 1998 and October
1998, respectively. The Acquisition Loans bear interest at a variable rate equal
to 75 basis points over the lender's cost of funds. Pending any such use, the
net proceeds may be invested in short- to medium-term investment grade financial
instruments.
Substantially all of the aggregate Liquidation Amount of the Preferred
Securities offered hereby are expected to qualify as Tier 1 capital or core
capital with respect to the Company under the risk-based capital guidelines
established by the Federal Reserve. Under such guidelines, capital received from
the proceeds of the sale of the Preferred Securities cannot constitute more than
25% of the total Tier 1 capital of the Company (the "25% Capital Limitation").
Consequently, any amount of Preferred Securities in excess of the 25% Capital
Limitation will constitute Tier 2 capital, or supplementary capital, of the
Company. If the Company consummates any of the Pending Acquisitions, all of the
aggregate amount of the Preferred Securities is expected to qualify as Tier 1
capital.
18
<PAGE>
MARKET FOR THE PREFERRED SECURITIES
The Preferred Securities have been approved for listing on the Nasdaq
National Market, subject to notice of issuance, under the symbol "NCBEP."
Although the Underwriters have informed the Company that they presently intend
to make a market in the Preferred Securities, there can be no assurance that an
active and liquid trading market will develop or, if developed, that such a
market will continue. The offering price and percentage rate for Distributions
have been determined by negotiations among representatives of the Company and
the Underwriters, and the offering price of the Preferred Securities may not be
indicative of the market price following this offering. See "Underwriting."
ACCOUNTING TREATMENT
For financial reporting purposes, NCBE Trust will be treated as a subsidiary
of the Company and, accordingly, the accounts of NCBE Trust will be included in
the consolidated financial statements of the Company. The Preferred Securities
will be presented as long-term debt in the consolidated balance sheet of the
Company under the caption "Guaranteed preferred beneficial interests in the
Company's Subordinated Debentures," and appropriate disclosures about the
Preferred Securities, the Guarantee and the Subordinated Debentures will be
included in the notes to the consolidated financial statements. The Company will
record Distributions payable on the Preferred Securities as interest expense in
its consolidated statements of income for financial reporting purposes.
All future reports of the Company filed under the Exchange Act while the
Preferred Securities are outstanding will (a) present the Trust Securities
issued by NCBE Trust on the balance sheet as a long-term debt item entitled
"Guaranteed preferred beneficial interests in the Company's Subordinated
Debentures," and (b) include in a footnote to the financial statements
disclosure that the Company owns all of the Common Securities of NCBE Trust, the
sole assets of NCBE Trust are the Subordinated Debentures (including the
outstanding principal amount, interest rate and Maturity Date of such
Subordinated Debentures), and the back-up obligations, in the aggregate,
constitute a full and unconditional guarantee by the Company of the obligations
of NCBE Trust under the Preferred Securities.
19
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company, (i) as reported at December 31, 1997 and (ii) as adjusted, to give
effect to the issuance of the Preferred Securities hereby offered by NCBE Trust,
as if such sale had been consummated on December 31, 1997.
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-----------------------
ACTUAL AS ADJUSTED
---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
LONG-TERM DEBT:
Guaranteed preferred beneficial interests in the Company's Subordinated
Debentures(1)........................................................................ $ 0 $ 30,000
---------- -----------
Total long-term debt................................................................. $ 0 $ 30,000
---------- -----------
SHAREHOLDERS' EQUITY:
Common Stock, $1.00 stated value; 20,000,000 shares authorized; 10,727,247 shares
issued and outstanding............................................................... $ 10,727 $ 10,727
Capital surplus........................................................................ 79,725 79,725
Retained earnings...................................................................... 52,858 52,858
Unrealized gain on securities available for sale....................................... 3,493 3,493
---------- -----------
Total shareholders' equity........................................................... 146,803 146,803
---------- -----------
Total capitalization............................................................... $ 146,803 $ 176,803
---------- -----------
---------- -----------
CAPITAL RATIOS:
Shareholders' equity to total assets................................................... 11.31% 13.62%
Leverage ratio(2)(3)................................................................... 9.74 11.82
Risk-based capital ratios(3)(4):
Tier 1 capital to risk-weighted assets............................................... 13.39 16.53
Total risk-based capital to risk-weighted assets..................................... 14.25 17.39
</TABLE>
- ------------------------
(1) In connection with the issuance of the preferred beneficial interests in the
Company's Subordinated Debentures, the Company estimates it will pay
Underwriters' Compensation of $1.1 million ($1.2 million if the
over-allotment option is exercised in full) and incur additional expenses of
$275,000. The Subordinated Debentures will mature on March 31, 2028, which
date may be, if certain conditions are met, (a) shortened to a date not
earlier than March 31, 2003 (or earlier following a Tax Event, Investment
Company Event or Capital Event), or (b) extended to a date not later than
March 31, 2037.
(2) The leverage ratio is Tier 1 capital divided by adjusted total assets after
deducting intangible assets.
(3) The capital ratios, as adjusted, are computed including the total estimated
proceeds from the sale of the Preferred Securities, in a manner consistent
with Federal Reserve guidelines.
(4) Federal Reserve guidelines for calculation of Tier 1 capital to
risk-weighted assets limit the amount of cumulative preferred stock which
can be included in Tier 1 capital to 25% of total Tier 1 capital.
Notwithstanding such limitation, substantially all of the Preferred
Securities offered hereby will be included as Tier 1 capital for the
Company.
20
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth on a consolidated basis certain selected
financial data of the Company and is based on the consolidated financial
statements of the Company, including the notes thereto, incorporated by
reference in this Prospectus. See "Incorporation of Certain Documents by
Reference."
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
SUMMARY RESULTS OF OPERATIONS:
Net interest income.............................. $ 51,995 $ 48,606 $ 44,433 $ 39,933 $ 38,010
Provision for loan losses........................ 1,891 2,704 399 78 736
Noninterest income............................... 10,088 8,606 7,117 5,209 6,707
Noninterest expense.............................. 34,390 29,966 28,968 28,644 28,343
---------- ---------- ---------- ---------- ----------
Income before income taxes....................... 25,802 24,542 22,183 16,420 15,638
Income taxes..................................... 7,451 8,046 7,784 5,668 4,861
---------- ---------- ---------- ---------- ----------
Net income..................................... $ 18,351 $ 16,496 $ 14,399 $ 10,752 $ 10,777
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
PER COMMON SHARE:(1)
Net income per share:
Basic.......................................... $ 1.72 $ 1.52 $ 1.30 $ 0.97 $ 0.97
Diluted........................................ 1.69 1.52 1.30 0.97 0.97
Cash dividends declared.......................... 0.64 0.55 0.40 0.40 0.38
As a percentage of basic earnings per share.... 37.78% 36.15% 30.82% 41.07% 39.30%
Book value, end of year.......................... $ 13.69 $ 12.12 $ 11.71 $ 10.47 $ 10.23
Weighted average common shares outstanding:
Basic.......................................... 10,679,448 10,843,295 11,095,116 11,040,906 11,146,280
Diluted........................................ 10,832,943 10,843,295 11,095,116 11,040,906 11,146,280
AT YEAR END:
Loans............................................ $ 916,356 $ 800,622 $ 736,997 $ 645,235 $ 579,556
Securities....................................... 279,328 282,894 258,895 268,103 269,098
Total assets..................................... 1,298,260 1,172,057 1,081,921 1,004,160 993,468
Deposits......................................... 964,046 913,350 864,136 849,306 848,808
Shareholders' equity............................. 146,803 129,694 130,606 114,750 113,975
PROFITABILITY RATIOS:
Net income to average assets..................... 1.47% 1.48% 1.40% 1.09% 1.09%
Net income to average equity..................... 13.42 12.89 11.74 9.39 9.76
Net interest margin.............................. 4.87 4.90 4.77 4.49 4.29
CAPITAL RATIOS:
Average equity to average assets................. 10.98% 11.48% 11.93% 11.59% 11.17%
Leverage ratio(2)................................ 9.74 10.52 12.41 11.77 11.34
Risk-based capital ratios:
Tier 1 capital................................. 13.39 14.96 17.16 17.07 18.19
Total capital.................................. 14.25 15.84 17.99 17.92 19.09
OTHER RATIOS:
Allowance to net loans, end of year.............. 0.87% 0.90% 0.84% 0.89% 0.95%
Allowance to underperforming assets, end of
year........................................... 175.49 193.93 281.62 252.19 184.08
Net charge-offs to average loans................. 0.19 0.27 0.02 0.02 0.21
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS:(3)
Excluding deposit interest..................... 9.24x 12.75x 26.70x 36.58x 46.76x
Including deposit interest..................... 1.59 1.65 1.64 1.60 1.54
</TABLE>
- ------------------------------
(1) The data have been adjusted to reflect all stock dividends and stock splits.
(2) The leverage ratio is Tier 1 capital divided by adjusted total assets after
deducting intangible assets.
(3) Earnings consist of income before income tax plus interest expense. Fixed
charges consist of interest expense. The Company does not currently have any
preferred stock outstanding.
21
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(DOLLAR AMOUNTS OTHER THAN SHARE DATA IN THOUSANDS)
INTRODUCTION
The discussion and analysis which follows is presented to assist in the
understanding and evaluation of the financial condition and results of
operations of National City Bancshares, Inc. and its subsidiaries as presented
in the consolidated financial statements and related notes. The text of this
review is supplemented with various financial data and statistics. All
information has been restated to include bank acquisitions accounted for using
the pooling of interests method and to give effect to all stock dividends and
the two-for-one stock split issued in 1996.
The Company continues to grow rapidly by acquiring community banks. The
financial results of the acquisitions can best be assessed from the Company's
financial statements on a quarterly, as-reported basis. After each acquisition
accounted for as a pooling of interests, the Company's financial statements are
restated to include the results of the acquiree. From the beginning of 1995 to
the end of 1997, the Company acquired assets of $278,209 (measured at the time
of each acquisition) in 3 transactions accounted for as poolings of interests.
Since the beginning of 1995, the Company has also acquired $172,581
(measured at the time of each acquisition) in assets through transactions
accounted for as purchases. Financial statements are not restated following a
transaction accounted for as a purchase; instead, the Company's financial
statements include the results of each acquiree following acquisition.
Transactions accounted for as purchases typically result in the Company's
recording intangible assets, including goodwill, which the Company amortizes on
a straight-line basis. The Company has recorded $19,716 (measured at the time of
each acquisition) in intangible assets as the direct result of purchases
consummated between the beginning of 1995 and the end of 1997.
In 1997, First Federal Savings Bank of Leitchfield and First National Bank
of Bridgeport became subsidiaries of the Company in transactions accounted for
as purchases. As a result of the purchases, the Company's assets increased
$97,335 and it recorded intangible assets of $12,142. First Bank of Huntingburg
also became a subsidiary of the Company in 1997. This acquisition was accounted
for as a pooling of interests; accordingly, financial results for periods prior
to the acquisition reported in the following sections and in the financial
statements have been restated to include the results of First Bank of
Huntingburg, including $108,109 in assets.
Since the end of 1997, the Company has acquired Bank of Illinois in Mt.
Vernon and a subsidiary of the Company has acquired a branch office in Mayfield,
Kentucky. Both transactions were accounted for as purchases. Bank of Illinois in
Mt. Vernon had assets at December 31, 1997 of $163,450. The branch purchase
increased the Company's deposits by $65,639. The Company will record
approximately $19,601 in intangible assets as a result of both transactions.
As of March 9, 1998, the Company had entered into definitive merger
agreements with Illinois One Bancorp, Inc., Trigg Bancorp, Inc., and Community
First Financial, Inc. Together, the potential acquirees have assets of
approximately $315,000. The acquisitions remain subject, among other things, to
regulatory approval, shareholder approval of the acquirees, and other customary
conditions. The Company intends to account for these transactions as poolings of
interests; however, any or all may be accounted for as purchases if they fail to
qualify for pooling treatment.
Management expects to continue to pursue acquisition opportunities as they
arise. Management believes other community banks located in the Company's
general geographic area (which may extend beyond the tri-state region currently
served) will find the Company an attractive partner because the Company shares a
commitment to local communities and provides the opportunity to retain much of
the
22
<PAGE>
operational decision making in those communities while recognizing the
efficiencies of affiliation with a larger organization.
FINANCIAL CONDITION
Basic earnings per share for 1997 were $1.72, representing a 13% increase
over the 1996 results. The increase in earnings per share was the result of a
combination of increased net interest income, improved non-interest income, and
continued cost control. During 1997, book value per share increased by $1.57 to
$13.69 and resulted in a ratio of average equity capital to average assets of
10.98%.
Average earning assets increased $112,207, or 10.7%, and $78,141, or 8.1%,
in l997 and 1996, respectively. Growth in average assets in 1997 was $130,254,
or 11.7%, compared to $87,238, or 8.5%, in 1996. During 1997, average interest
bearing deposits in banks decreased $925, or 19.7%, and average federal funds
sold decreased $1,401, or 26.0%. Average securities increased $24,124, or 9.1%,
with the largest increase being in tax-exempt municipals which increased by
$63,042, or 71.4%. Taxable municipals increased $355, or 11.8%. U.S. Government
and agencies decreased $33,674, or 22.8%, and all other types of securities
decreased $7,249, or 28.3%. The average market value adjustment on securities
available for sale increased to an unrealized gain of $1,227 from an unrealized
loss of $423 in 1996. Average loans increased $90,409, or 11.7%. All types of
loans increased during the year. Average commercial loans increased $36,820, or
13.5%; average consumer loans increased $4,879, or 3.2%; and average mortgage
loans increased $45,253, or 13.5%. All other types of loans increased $3,457, or
31.2%. The growth in the loan portfolio was due mainly to purchase acquisitions
in which average loans increased by $41,784. The remaining growth in the loan
portfolio was attributable to a strong loan demand. The change in the earning
asset mix was intended to and did result in improved earnings in 1995, 1996, and
1997.
Average certificate of deposit and other time deposit balances increased by
$62,192, or 12.9%, in 1997. Average balances of money market accounts decreased
$361, or 0.5%. Savings and interest bearing checking accounts increased $3,540,
or 1.6%. Average federal funds purchased and securities sold under agreements to
repurchase increased $14,735, or 33.7%. Average other borrowings increased
$32,510, or 76.9%. Average noninterest-bearing deposits increased $7,548, or
7.1%.
SECURITIES PORTFOLIO
Securities comprised 24.9% of the 1997 average earning assets compared to
25.2% and 26.1% in 1996 and 1995, respectively. They represent the second
largest earning asset component after loans. The Company holds various types of
securities, including mortgage-backed securities. Inherent in mortgage-backed
securities is prepayment risk, which occurs when borrowers prepay their
obligations due to market fluctuations and rates. In an effort to reduce this
risk, management monitors the amount of mortgage-backed securities contained in
the portfolio. The Company has no securities of any single issuer, with the
exception of the U. S. Government, exceeding 10% of shareholders' equity. The
Company manages the quality and risk of securities through its Asset/Liability
Committee, which recommends and monitors the composition of the overall security
portfolio as approved by the Company's Board of Directors. Among other things,
the investment policy establishes guidelines for the level, type, quality, and
mix of securities appropriate for the portfolio. The securities portfolio at
December 31, 1997, included $1,748 in structured notes, which were comprised of
$1,000 in an indexed amortizing note, $500 in a delevered floating note,
23
<PAGE>
and $248 in a capped floating rate note. These securities have risk
characteristics which are well within the constraints of the non-structured
securities held in the securities portfolio.
<TABLE>
<CAPTION>
CARRYING VALUE AT DECEMBER 31
---------------------------------------------------------------
1997 1996 1995
----------- ------------------------ ------------------------
AVAILABLE HELD TO AVAILABLE HELD TO AVAILABLE
SECURITIES PORTFOLIO FOR SALE MATURITY FOR SALE MATURITY FOR SALE
- -------------------------------------------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Debt Securities:
U.S. Treasury securities........................ $ 9,915 $ -- $ 13,598 $ 500 $ 33,880
U.S. Government agencies........................ 29,067 21,877 38,662 5,448 61,568
Taxable municipals.............................. 3,473 2,775 -- 3,120 --
Tax-exempt municipals........................... 170,301 120,805 -- 64,250 --
Corporate securities............................ 5,986 11,161 3,056 17,165 4,638
Mortgage-backed securities...................... 47,860 7,985 56,082 6,459 56,096
----------- ----------- ----------- ----------- -----------
Total debt securities......................... 266,602 164,603 111,398 96,942 156,182
Equity securities................................. 1,355 -- 1,402 -- 1,500
----------- ----------- ----------- ----------- -----------
Total securities.............................. $ 267,957 $ 164,603 $ 112,800 $ 96,942 $ 157,682
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
AFTER 1 YEAR AFTER 5 YEARS
BUT WITHIN 5 BUT WITHIN 10
WITHIN 1 YEAR YEARS YEARS AFTER 10 YEARS TOTAL
MATURITY ANALYSIS -------------- -------------- -------------- -------------- --------
DECEMBER 31, 1997 AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT
- ------------------------------------------------ ------- ----- ------- ----- ------- ----- ------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SECURITIES CLASSIFIED AS AVAILABLE FOR SALE:
U.S. Treasury securities........................ $5,314 6.60% $4,601 6.84% $ -- -- $ -- -- $ 9,915
U.S. Government agencies........................ 14,078 5.88% 11,272 6.32% 3,455 8.09% 262 9.38% 29,067
Taxable municipals.............................. 970 5.60% 2,098 6.93% 405 7.80% -- -- 3,473
Tax-exempt municipals........................... 9,725 7.43% 28,406 8.17% 45,075 8.30% 87,095 8.62% 170,301
Corporate securities............................ 5,687 7.42% 299 5.76% -- -- -- -- 5,986
------- ----- ------- ----- ------- ----- ------- ----- --------
Total maturing securities................... $35,774 6.64% $46,676 7.52% $48,935 8.28% $87,357 8.62% 218,742
------- ----- ------- ----- ------- ----- ------- -----
------- ----- ------- ----- ------- ----- ------- -----
Mortgage-backed securities...................... 47,860
Equity securities............................... 1,355
--------
Total securities............................ $267,957
--------
--------
<CAPTION>
MATURITY ANALYSIS
DECEMBER 31, 1997 YIELD
- ------------------------------------------------ -----
<S> <C>
SECURITIES CLASSIFIED AS AVAILABLE FOR SALE:
U.S. Treasury securities........................ 6.71%
U.S. Government agencies........................ 6.34%
Taxable municipals.............................. 6.66%
Tax-exempt municipals........................... 8.39%
Corporate securities............................ 7.34%
-----
Total maturing securities................... 7.99%
Mortgage-backed securities...................... 6.32%
Equity securities............................... 6.69%
-----
Total securities............................ 7.69%
-----
-----
</TABLE>
Securities classified as held to maturity are carried at amortized cost, and
those classified as available for sale are carried at fair value. The
available-for-sale securities included unrealized gains of approximately $6,283
and unrealized losses of $540 at December 31, 1997. At December 31, 1997,
available-for-sale securities included $47,860 in mortgage-backed securities, or
17.9% of the available-for-sale portfolio. The weighted average maturity of the
available-for-sale portfolio at December 31, 1997, was 9.3 years. The weighted
average maturity of the available-for-sale and the held-to-maturity portfolios
at December 31, 1996 was 7.3 years and 7.9 years, respectively. The weighted
average yields on municipal securities that are tax-exempt have been computed on
a federal-tax-equivalent basis using a 35.0% tax rate.
LOANS
Each subsidiary bank follows loan policies approved by its board of
directors. These policies are compatible with the Company's loan policy approved
by its Board of Directors. The lending policies address risks associated with
each type of lending, collateralization, loan-to-value ratios, loan
concentrations, insider lending, and other pertinent matters. These functions
are monitored by subsidiary and corporate loan review personnel and by the loan
committees of the subsidiaries' boards of directors for compliance and loan
quality. Management believes that careful loan administration and high credit
24
<PAGE>
standards minimize credit risk, as evidenced by the ratio of underperforming
loans to total loans. Speculative loans are prohibited and the loan portfolio
contains no foreign loans.
The Company's loan portfolio is diversified by type of loan and industry,
and, within its market area, by geographic location, which minimizes economic
risk. The loan portfolio contained 29% commercial loans, 55% real estate loans
(primarily residential), and 16% consumer loans at December 31, 1997. The
Company's subsidiary banks lend to customers in various industries including
manufacturing, agricultural, health and other services, transportation, mining,
wholesale, and retail.
Commercial and industrial loans increased $24,830, of which approximately
30% was due to acquisitions accounted for under the purchase method. The
remaining increase was due to a general increase in business among the
communities the Company's banks serve. Growth in consumer lending was primarily
due to acquisitions accounted for under the purchase method.
<TABLE>
<CAPTION>
LOAN PORTFOLIO AT YEAR END, FIVE-YEAR SUMMARY 1997 1996 1995 1994 1993
- ----------------------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Real estate loans.................................... $ 501,882 $ 425,507 $ 393,082 $ 368,989 $ 342,616
Agricultural loans................................... 31,788 31,154 30,345 29,297 28,112
Commercial and industrial loans...................... 201,402 176,572 165,217 127,389 109,880
Economic development loans and other obligations of
state and political subdivisions................... 13,997 11,214 9,887 13,138 10,011
Consumer loans....................................... 149,505 143,485 131,477 105,812 89,387
Direct lease financing............................... 13,146 12,331 6,960 518 503
Leveraged leases..................................... 4,661 -- -- -- --
All other loans...................................... 415 582 344 396 1,398
---------- ---------- ---------- ---------- ----------
Total loans--gross............................... 916,796 800,845 737,312 645,539 581,907
Unearned income on loans............................. 440 223 315 304 2,351
---------- ---------- ---------- ---------- ----------
Total loans--net of unearned income.............. 916,356 800,622 736,997 645,235 579,556
Less: allowance for loan losses...................... 7,969 7,189 6,176 5,750 5,528
---------- ---------- ---------- ---------- ----------
Total loans--net................................. $ 908,387 $ 793,433 $ 730,821 $ 639,485 $ 574,028
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
AFTER 1
YEAR BUT
LOAN MATURITIES AND RATE SENSITIVITIES AT DECEMBER 31, 1997 WITHIN 1 WITHIN 5 OVER 5
ON AGRICULTURAL, COMMERCIAL, AND TAX-EXEMPT LOANS YEAR YEARS YEARS TOTAL
- ------------------------------------------------------------------ ---------- ----------- --------- ----------
<S> <C> <C> <C> <C>
Rate sensitivities:
Fixed rate loans................................................ $ 38,128 $ 41,572 $ 20,596 $ 100,296
Variable rate loans............................................. 141,161 4,090 770 146,021
---------- ----------- --------- ----------
Subtotal...................................................... $ 179,289 $ 45,662 $ 21,366 246,317
---------- ----------- ---------
---------- ----------- ---------
Percent of subtotal........................................... 72.79% 18.54% 8.67%
Nonaccrual loans.................................................. 870
----------
Total loans net of unearned income............................ $ 247,187
----------
----------
</TABLE>
Real estate loans increased $76,375, of which approximately 40% was due to
purchase acquisitions. The remaining increase was a direct result of strong loan
demand in the markets served by the Company's banks supported by a favorable
interest rate environment. This portfolio primarily consists of single-family,
owner-occupied housing. The Company's guidelines for residential mortgage
lending were followed and advances normally did not exceed 80% of appraised
value.
25
<PAGE>
At December 31, 1997, there was no concentration of credit risk from
borrowers engaged in the same or similar industries exceeding 10% of total
loans. Geographic diversification is provided by the Company's policy to extend
credit to customers in its geographic market areas in and around the subsidiary
banks' banking offices in Southwestern Indiana, Southeastern Illinois, and
Western Kentucky.
UNDERPERFORMING ASSETS
Underperforming assets consist of nonaccrual securities and loans,
restructured loans, loans past due 90 days or more, and other real estate held.
Nonaccrual securities are those which have defaulted on interest payments.
Nonaccrual loans are loans on which interest recognition has been suspended
because of doubts as to the borrower's ability to repay principal or interest.
Loans are generally place on nonaccrual status after becoming 90 days past due
if the ultimate collectibility of the loan is in question. Loans which are
current, but as to which serious doubt exists about repayment ability, may also
be placed on nonaccrual status. Restructured loans are loans where the terms
have been changed to provide a reduction or deferral of principal or interest
because of the borrower's financial position. Past-due loans are loans that are
continuing to accrue interest but are contractually past due ninety days or more
as to interest or principal payments. Other real estate owned represents
properties obtained for debts previously contracted. Management is not aware of
any loans which have not been disclosed as underperforming assets that represent
or result from unfavorable trends or uncertainties which management reasonably
believes will materially adversely affect future operating results, liquidity,
or capital resources, or represent material credits as to which management has
serious doubt as to the ability of such borrower to comply with loan repayment
terms.
Past due 90 days or more, nonaccrual, and restructured loans were 0.5% of
total loans at the end of 1997 and 1996. Of the loans in these categories,
$2,102, or 46.3%, were secured by real estate at the end of 1997, compared to
$1,977, or 53.3%, at the end of 1996. Additional interest income that would have
been recorded, if nonaccrual and restructured loans had been current in
accordance with their original terms, was $324, $218, and $134 in 1997, 1996,
and 1995, respectively. The interest recognized on nonaccrual loans was
approximately $56, $23, and $58 in 1997, 1996, and 1995, respectively.
<TABLE>
<CAPTION>
UNDERPERFORMING ASSETS AT YEAR END, FIVE-YEAR SUMMARY 1997 1996 1995 1994 1993
- ----------------------------------------------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Underperforming loans:
Nonaccrual..................................................... $ 3,672 $ 2,438 $ 1,049 $ 1,274 $ 2,441
Restructured................................................... 75 114 143 223 222
90 days past due............................................... 794 1,155 1,001 783 340
--------- --------- --------- --------- ---------
Total underperforming loans.................................. 4,541 3,707 2,193 2,280 3,003
Nonaccrual municipal securities.................................. 61 31 -- -- 81
Other real estate owned.......................................... 79 66 383 671 1,148
--------- --------- --------- --------- ---------
Total........................................................ $ 4,681 $ 3,804 $ 2,576 $ 2,951 $ 4,232
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>
In addition to those loans classified as underperforming, management was
monitoring loans of approximately $38,460 and $46,386 as of the end of 1997 and
1996, respectively, for the borrowers' abilities to comply with present loan
repayment terms.
The Company monitors credit quality through a periodic review and analysis
of each subsidiary bank's loan portfolio. On a quarterly basis, each subsidiary
bank performs an evaluation of the adequacy of its allowance for loan losses.
The evaluation includes an analysis of past due loans, loans criticized during
regulatory examinations, internally classified loans, delinquency trends, and
other relevant factors. The results of these evaluations are used by the Company
to determine the adequacy of the consolidated allowance for loan losses.
26
<PAGE>
RISK MANAGEMENT
As of December 31, 1997, management considered the allowance for loan losses
adequate to provide for potential losses in the loan portfolio. Management
reviews delinquent and problem loans weekly. Loans which are judged
uncollectible are charged off on a timely basis. The allowance for loan losses
is reviewed quarterly in order to evaluate and maintain its adequacy based on an
analysis of the entire loan portfolio. Some of the factors used in this review
include current economic conditions and forecasts, risk by type of loan,
previous loan loss experience, and evaluation of specific borrowers and
collateral. The Company and its banks monitor loan portfolios using models
designed in part by regulatory agencies.
<TABLE>
<CAPTION>
SUMMARY OF LOAN LOSS EXPERIENCE
(ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES) 1997 1996 1995 1994 1993
- ----------------------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Allowance for loan losses, January 1................. $ 7,189 $ 6,176 $ 5,750 $ 5,528 $ 5,986
Allowance associated with purchase acquisitions...... 516 379 140 -- --
Loans charged off:
Commercial......................................... 624 879 263 239 1,345
Real estate mortgage............................... 355 483 88 267 248
Consumer........................................... 1,486 1,155 393 222 308
Direct lease financing............................. -- 67 -- -- --
---------- ---------- ---------- ---------- ----------
Total............................................ 2,465 2,584 744 728 1,901
---------- ---------- ---------- ---------- ----------
Recoveries on charged-off loans:
Commercial......................................... 255 115 320 215 393
Real estate mortgage............................... 327 229 197 227 188
Consumer........................................... 256 165 114 430 126
Direct lease financing............................. -- 5 -- -- --
---------- ---------- ---------- ---------- ----------
Total............................................ 838 514 631 872 707
---------- ---------- ---------- ---------- ----------
Net charge-offs................................ 1,627 2,070 113 (144) 1,194
Provision for loan losses............................ 1,891 2,704 399 78 736
---------- ---------- ---------- ---------- ----------
Allowance for loan losses, December 31............... $ 7,969 $ 7,189 $ 6,176 $ 5,750 $ 5,528
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total loans at year end.............................. $ 916,356 $ 800,622 $ 736,997 $ 645,235 $ 579,556
Average loans........................................ 861,778 771,369 689,514 606,206 569,313
As a percent of year-end loans:
Net charge-offs.................................... 0.18% 0.26% 0.02% (0.02)% 0.21%
Provision for loan losses.......................... 0.21 0.34 0.05 0.01 0.13
Year-end allowance balance......................... 0.87 0.90 0.84 0.89 0.95
As a percent of average loans:
Net charge-offs.................................... 0.19% 0.27% 0.02% (0.02)% 0.21%
Provision for loan losses.......................... 0.22 0.35 0.06 0.01 0.13
Year-end allowance balance......................... 0.92 0.93 0.90 0.95 0.97
Allowance for loan losses as a percent of
underperforming loans.............................. 175.49% 193.93% 281.62% 252.19% 184.08%
</TABLE>
Total loans charged off during 1997 decreased $119, or 4.6%, and recoveries
were $324, or 63.0%, higher than in 1996. The provision for loan losses for 1997
was decreased based on the Company's periodic analysis of the subsidiary banks'
loan portfolios. The provision for loan losses for 1996 was increased as a
result of the increase in net charge-offs and growth of the loan portfolio. In
1995, the provision for loan
27
<PAGE>
losses was increased due to increased loan volume. In 1994, the provision for
loan losses was decreased as a result of significant reductions in
underperforming loans and net charge-offs.
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES AT DECEMBER 31
<TABLE>
<CAPTION>
PERCENT OF LOANS TO
ALLOWANCE APPLICABLE TO TOTAL GROSS LOANS
----------------------------------------------------- -------------------------------------
LOAN TYPE 1997 1996 1995 1994 1993 1997 1996 1995
- ---------------------------------- --------- --------- --------- --------- --------- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial........................ $ 2,599 $ 2,189 $ 2,395 $ 2,006 $ 1,670 29% 29% 29%
Real estate mortgage.............. 1,576 1,622 1,571 1,579 1,511 55% 53% 53%
Consumer.......................... 1,887 1,444 986 635 668 16% 18% 18%
--------- --------- --------- --------- --------- --- --- ---
Allocated..................... 6,062 5,255 4,952 4,220 3,849 100% 100% 100%
--- --- ---
--- --- ---
Unallocated....................... 1,907 1,934 1,224 1,530 1,679
--------- --------- --------- --------- ---------
TOTAL......................... $ 7,969 $ 7,189 $ 6,176 $ 5,750 $ 5,528
--------- --------- --------- --------- ---------
<CAPTION>
LOAN TYPE 1994 1993
- ---------------------------------- ----- -----
<S> <C> <C>
Commercial........................ 27% 26%
Real estate mortgage.............. 57% 59%
Consumer.......................... 16% 15%
--- ---
Allocated..................... 100% 100%
--- ---
--- ---
Unallocated.......................
TOTAL.........................
</TABLE>
DEPOSITS
The Company's Asset/Liability Committee manages the deposits of its banks to
achieve short-term and long-term benefits of deposit growth. Average deposits
increased $72,919, or 8.2%, during 1997, compared to $31,129, or 3.6%, in 1996.
Of the increase in 1997, $43,549 was due to purchase acquisitions. Average time
deposits of $100,000 or more increased $20,683, or 16.3%, compared to $24,653,
or 24.2%, in 1996. The increase in time deposits of $100,000 or more in 1996
included $13,000 in brokered deposits. As of December 31, 1997, the Company had
no brokered deposits. Management uses brokered deposits to supplement local
deposits under guidelines and limits established by the Company's
Asset/Liability Committee. Time deposits of $100,000 or more are not considered
to present an undue risk.
<TABLE>
<CAPTION>
1997 1996 1995
--------------------- --------------------- ---------------------
AVERAGE DEPOSITS AMOUNT RATE AMOUNT RATE AMOUNT RATE
- ------------------------------------------------------- ---------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Noninterest-bearing demand............................. $ 113,616 -- $ 106,068 -- $ 98,109 --
Money market accounts.................................. 79,397 3.62% 79,758 3.55% 74,079 3.79%
Interest-bearing demand................................ 142,063 1.65% 140,183 1.86% 145,107 2.30%
Savings................................................ 80,119 2.29% 78,459 2.45% 83,525 2.61%
Time deposits of $100,000 or more...................... 147,339 5.14% 126,656 5.38% 102,003 5.71%
Other time deposits.................................... 397,827 5.40% 356,318 5.30% 353,490 5.13%
---------- ---------- ----------
Total.............................................. $ 960,361 $ 887,442 $ 856,313
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
TIME DEPOSITS OF $100,000 OR MORE AT DECEMBER 31 1997 1996 1995
- ----------------------------------------------------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
Maturing:
3 months or less........................................................... $ 60,652 $ 60,705 $ 34,892
Over 3 to 6 months......................................................... 29,239 29,358 45,968
Over 6 to 12 months........................................................ 20,029 20,599 15,210
Over 12 months............................................................. 19,469 18,872 5,057
---------- ---------- ----------
Total.................................................................... $ 129,389 $ 129,534 $ 101,127
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
28
<PAGE>
CAPITAL RESOURCES
At the end of 1997, shareholders' equity totaled $146,803, an increase of
$17,109, or 13.2%, from 1996. The average equity to average asset ratio was
10.98% and 11.48% for 1997 and 1996, respectively. The decrease is attributable
to the Company's repurchase of 426,508 shares of its common stock for
approximately $16,200, during 1997. The dividend payout ratio for 1997 was
36.74%, compared to 37.05% in 1996.
In 1995, The National City Bank of Evansville committed to build an addition
to its main office to be completed in the second quarter of 1998. The
approximate cost of the addition and renovation of the main office of The
National City Bank of Evansville is $18,000. The National City Bank of
Evansville and the Company will occupy three floors of the facility, at a cost
of approximately $10,000, with the other six floors being sold as condominiums.
Four of these six floors have been sold to non-affiliated entities. The Company,
through its subsidiary Twenty-One Southeast Third Corporation, funded the
project, including financing for the purchasers of the condominiums, through the
proceeds of a $15,000 term loan. Payments from the purchasers will be used to
repay the term loan. As of December 31, 1997, there were no other material
commitments for capital expenditures.
Guidelines for minimum capital levels have been established for the Company
by the Federal Reserve Board. Tier 1 (core) capital consists of shareholders'
equity less goodwill, other identifiable intangible assets, and unrealized
losses on marketable equity securities. Total capital consists of Tier 1 capital
plus allowance for loan losses. Minimum capital levels are 4% for the leverage
ratio which is defined as Tier 1 capital as a percentage of total assets less
goodwill and other identifiable intangible assets; 4% for Tier 1 capital to
risk-weighted assets; and 8% for total capital to risk-weighted assets. The
Company has exceeded each of these levels. Its leverage ratio was 9.74% and
10.52%; Tier 1 capital to risk-weighted assets was 13.39% and 14.96%; and total
capital to risk-weighted assets was 14.25% and 15.84% at the end of 1997 and
1996, respectively. In addition, each subsidiary bank has exceeded minimum
regulatory capital guidelines.
SHORT-TERM BORROWINGS
Federal funds purchased are borrowings from other financial institutions
maturing daily. Securities sold under agreements to repurchase are secured
transactions with customers. Securities sold under agreements to repurchase
generally mature within six months. Notes payable U.S. Treasury are demand notes
created by treasury tax and loan account funds transfers. Short-term borrowings
increased $9,552, or 14.2%, during 1997. At December 31, 1997, federal funds
purchased were $55,000, reflecting an $825, or 1.5%, increase over 1996.
Securities sold under agreements to repurchase and notes payable U.S. Treasury
increased during 1997 by $4,532, or 39.5%, and $4,195, or 243.8%, respectively.
<TABLE>
<CAPTION>
SHORT-TERM BORROWINGS AT DECEMBER 31 1997 1996 1995
- --------------------------------------------------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Federal funds purchased.......................................................... $ 55,000 $ 54,175 $ 34,500
Securities sold under agreements to repurchase................................... 16,001 11,469 18,329
Notes payable U.S. Treasury...................................................... 5,916 1,721 2,769
--------- --------- ---------
Total........................................................................ $ 76,917 $ 67,365 $ 55,598
--------- --------- ---------
--------- --------- ---------
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
SECURITIES
SOLD UNDER NOTES
FEDERAL AGREEMENTS PAYABLE
FUNDS TO U.S.
PURCHASED REPURCHASE TREASURY
----------- ----------- -----------
<S> <C> <C> <C>
1997
AVERAGE AMOUNT OUTSTANDING..................................................... $ 42,588 $ 15,924 $ 2,064
MAXIMUM AMOUNT AT ANY MONTH END................................................ 69,400 26,146 5,916
WEIGHTED AVERAGE INTEREST RATE:
DURING YEAR.................................................................. 5.67% 4.00% 5.36%
END OF YEAR.................................................................. 6.74% 3.48% 5.25%
1996
Average amount outstanding..................................................... $ 26,329 $ 17,448 $ 1,378
Maximum amount at any month end................................................ 54,175 28,153 3,270
Weighted average interest rate:
During year.................................................................. 5.50% 4.35% 5.17%
End of year.................................................................. 6.65% 3.66% 5.15%
1995
Average amount outstanding..................................................... $ 4,665 $ 17,064 $ 2,655
Maximum amount at any month end................................................ 34,500 20,649 6,647
Weighted average interest rate:
During year.................................................................. 5.90% 4.64% 5.67%
End of year.................................................................. 5.90% 4.10% 5.15%
</TABLE>
LIQUIDITY
Liquidity of a banking institution reflects the ability to provide funds to
meet loan requests, to accommodate possible outflows in deposits, and to take
advantage of interest rate market opportunities. Funding loan requests,
providing for liability outflows, and managing interest rate fluctuations
require continuous analysis in order to match maturities of specific categories
of short-term and long-term loans and investments with specific types of
deposits and borrowings. Bank liquidity is thus normally considered in terms of
the nature of mix of the banking institution's sources and uses of funds.
For the Company, the primary sources of short-term liquidity have been
federal funds sold, interest-bearing deposits in banks, and U.S. Government and
agency securities available for sale.
In addition to these sources, short-term liquidity is provided by maturing
loans and securities. The balance between these sources and needs to fund loan
demand and deposit withdrawals is monitored by the Company's asset/liability
management program and by each subsidiary bank to provide liquidity without
penalizing earnings. When these sources are not adequate, the Company utilizes
federal funds purchased, brokered deposits, and its lines with Federal Home Loan
Banks as alternative sources of liquidity. The increased loan demand throughout
the year was funded by an increase in deposits and other borrowings.
Additionally, the Company's underwriting standards for its mortgage loan
portfolio comply with standards established by government housing agencies; as a
result, a portion of the mortgage loan portfolio could be sold to provide
additional liquidity. At December 31, 1997 and 1996, respectively, federal funds
sold were $1,500 and $600, interest-bearing deposits in banks were $2,485 and
$2,983, and U.S. Government and agency securities available for sale were
$38,982 and $52,260.
These sources and other liquid assets also satisfy long-term liquidity
needs. Long-term liquidity is managed in the same way, only with longer
maturities, to provide for future needs while maintaining interest margins.
The Company (parent company) maintains credit lines to provide an
alternative source of liquidity. At December 31, 1997, the Company had a
$10,000, unsecured, revolving credit agreement with a bank. On
30
<PAGE>
January 22, 1998, the line was increased to $45,000. The Company intends to use
the line to provide short-term funding for acquisitions and other corporate
purposes.
The ability of the Company to pay cash dividends to its shareholders is
dependent on the receipt of cash from its subsidiary banks. Banking regulations
impose restrictions on the ability of subsidiaries to pay dividends to the
Company. The amount of dividends that could be paid is further restricted by
management to maintain prudent capital levels.
INTEREST RATE SENSITIVITY
The Company's exposure to market risk is reviewed on a regular basis by the
Asset/Liability Committee. Interest rate risk is the most significant market
risk affecting the Company. Other types of market risk do not arise in the
normal course of the Company's business activities. Interest rate risk is the
potential economic loss due to future interest rate changes. This economic loss
can be reflected as a loss of future net interest income and/or a loss of
current fair market values.
The Company's net income is dependent, to a significant degree, on its net
interest income. Net interest income is susceptible to interest rate risk to the
degree that interest-bearing liabilities reprice or mature on a different basis
than interest-earning assets. When interest-bearing liabilities reprice or
mature more quickly than interest-earning assets, an increase in market rates
could adversely affect net interest income. Similarly, if interest-earning
assets reprice or mature more quickly than interest-bearing liabilities, a
decrease in market rates could adversely affect net interest income. Changes in
market rates can also cause losses in the current fair values of financial
instruments.
In order to manage its exposure to changes in interest rates, the Company
monitors interest rate risk through analysis of standard gap reports and
interest rate shock simulation reports on the effect of changes in interest
rates on net interest income and on the economic value of equity (the present
value of expected cash flows from existing assets minus the present value of
expected cash flows from existing liabilities). The following table sets forth,
at December 31, 1997, an analysis of the Company's interest rate risk as
measured by the estimated change in economic value of equity (EVE) following
parallel shifts in the yield curve.
<TABLE>
<CAPTION>
ESTIMATED INCREASE
(DECREASE) IN EVE
ESTIMATED ----------------------
CHANGE IN INTEREST RATES EVE AMOUNT AMOUNT PERCENT
- ------------------------------------------------------------ ------------ --------- -----------
<S> <C> <C> <C>
(Basis Points)
+200...................................................... $ 176,695 $ (6,479) (3.54)%
183,174 -- --
(200).................................................... 186,814 3,640 1.99
</TABLE>
Certain assumptions were employed in preparing data in the preceding table.
These assumptions relate to interest rates, loan prepayment rates, deposit decay
rates, and the market values of certain assets under the various interest rate
scenarios. Even if interest rates change in the designated amounts, there can be
no assurance that the Company's assets and liabilities would perform as set
forth. In addition, a change in U.S. Treasury rates in the designated amounts
accompanied by a change in the shape of the Treasury yield curve would cause
significantly different changes to the EVE than indicated above.
Derivative financial instruments include futures, forwards, interest rate
swaps, option contracts, and other financial instruments with similar
characteristics. The Company does not enter into futures, forwards, swaps, or
options. In the normal course of business, however, the Company is a party to
financial instruments with off-balance-sheet risk to meet the financing needs of
its customers. These instruments involve, to varying degrees, elements of credit
and interest rate risk in excess of the amount recognized in the balance sheet.
The contractual or notional amounts of those instruments reflect the extent of
involvement the Company has in particular classes of financial instruments.
31
<PAGE>
Corporate asset liability gap positions are targeted at plus or minus 15% at
the six-month and one-year horizons. At December 31, 1997, all subsidiary banks
were within, or close to, their targeted spreads. The cumulative gap position
through one year of negative $133,852 at the end of 1997 was 10.3% of total
assets, which management believes is a relatively balanced position.
RESULTS OF OPERATIONS
Net income for 1997 was $18,351, reflecting a $1,855, or 11.2%, increase
over 1996. Net income for 1996 increased $2,097, or 14.6%, over 1995. Basic
earnings per share in 1997 were $1.72, compared to $1.52 in 1996 and $1.30 in
1995. Increases in both rates and volumes of earning assets resulted in growth
in net interest income of $3,389, or 7.0%, in 1997 and $4,173, or 9.4%, in 1996.
Noninterest income increased $1,482, or 17.2%, in 1997 and $1,489, or 20.9%, in
1996. Noninterest expense increased $4,424, or 14.8%, in 1997 and $998, or 3.4%,
in 1996. The provision for loan losses decreased $813 in 1997 due to lower net
charge-offs, and increased $2,305 in 1996 due to higher net charge-offs and loan
growth.
Changes in net interest income for the last two years are presented in the
following schedule with dollar changes allocated to rate and volume variances.
The combined rate-volume variances are included in the total volume variances.
In addition to this schedule, at the end of Management's Discussion is a
three-year balance sheet analysis on an average basis and an analysis of net
interest income.
The following discussion of results of operations is on a
federal-tax-equivalent basis. Average loans increased 11.7% during 1997 compared
to an increase of 11.9% during 1996. Approximately 46% of the growth in average
loan balances was attributable to acquisitions accounted for as purchases. Loan
income increased 11.6% in 1997 and 12.4% in 1996, principally due to increased
loan volumes. The average yield on loans decreased slightly from 9.13% in 1996
to 9.12% in 1997.
Average securities before market value adjustments increased 8.5% in 1997
and 4.1% in 1996. Approximately 33% of the increase in average securities
balances in 1997 was due to two purchase acquisitions. Securities income
increased 14.7% and 11.0% in 1997 and 1996, respectively. The yield on
securities increased from 6.91% in 1996 to 7.30% in 1997. During 1997, 61.2% of
the increase in interest income on securities was due to volume increases and
38.8% was attributable to rate increases, while in 1996, 60.1% of the increase
was due to rate and 39.9% was due to volume. Average earning assets increased
$112,207, or 10.7%, in 1997 and $78,141, or 8.1%, in 1996. Purchase acquisitions
accounted for 44.4% of the increase in 1997 and 20.9% in 1996. The average yield
on total earning assets increased from 8.53% in 1996 to 8.63% in 1997, due
principally to increased in yields on securities in 1997. Increase in volumes of
earning assets accounted for 90.6% and 85.4% of the growth in interest income in
1997 and 1996, respectively.
Average total interest-bearing deposits increased 8.4% during 1997 and 3.1%
during 1996. Internal growth of average deposits accounted for 35.9% of the
increase, while 64.1% was due to purchase acquisitions. The average cost of
interest bearing deposits decreased from 4.26% to 4.23% in 1996 and increased
from 4.23% to 4.27% in 1997. Interest expense on deposits increased $3,077, or
9.3%, in 1997 and $750, or 2.3%, in 1996. In 1997, 90.6% of the increase in
interest expense on deposits was due to volume increases. In 1996, interest
expense on deposits increased due to volume increases which were partially
offset by rate decreases. Interest expense on federal funds purchased and other
borrowings increased $2,613 in 1997 and $2,782 in 1996. The increases were
principally due to increases in volumes.
32
<PAGE>
The Company uses federal funds purchased and Federal Home Loan Bank advances,
selectively, as alternative funding sources to meet short and intermediate-term
funding needs.
<TABLE>
<CAPTION>
1997 COMPARED TO 1996 1996 COMPARED TO 1995
------------------------------------- -------------------------------------
CHANGE DUE TO A CHANGE CHANGE DUE TO A CHANGE
IN IN
CHANGES IN NET INTEREST INCOME ---------------------- ----------------------
(INTEREST ON A FEDERAL-TAX-EQUIVALENT BASIS) VOLUME RATE TOTAL CHANGE VOLUME RATE TOTAL CHANGE
- ------------------------------------------------ ----------- --------- ------------- ----------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Interest income increase (decrease)
Loans......................................... $ 8,243 $ (66) $ 8,177 $ 7,470 $ 285 $ 7,755
Securities.................................... 1,641 1,040 2,681 721 1,086 1,807
Other short-term investments.................. (129) 35 (94) (811) (114) (925)
----------- --------- ------------- ----------- --------- -------------
Total interest income....................... 9,755 1,009 10,764 7,380 1,257 8,637
----------- --------- ------------- ----------- --------- -------------
Interest expense increase (decrease)
Deposits...................................... 2,788 289 3,077 980 (230) 750
Borrowings.................................... 2,663 (50) 2,613 2,744 38 2,782
----------- --------- ------------- ----------- --------- -------------
Total interest expense...................... 5,451 239 5,690 3,724 (192) 3,532
----------- --------- ------------- ----------- --------- -------------
Net interest income increase (decrease)......... $ 4,304 $ 770 $ 5,074 $ 3,656 $ 1,449 $ 5,105
----------- --------- ------------- ----------- --------- -------------
----------- --------- ------------- ----------- --------- -------------
</TABLE>
In 1997 and 1996, net interest income increased $5,074 and $5,105,
respectively. Increases in volumes accounted for 84.8% of the increase in 1997
and 71.6% in 1996. The net interest income of purchase acquisitions accounted
for $2,137, or 42.5%, of the increase in net interest income in 1997 and $693,
or 13.6%, in 1996.
NONINTEREST INCOME
Noninterest income increased $1,482, or 17.2%, during 1997 and $1,489, or
20.9%, during 1996. Service charges on deposit accounts, the largest item in
this category, increased $331, or 9.1%, during 1997 and $691, or 23.4%, during
1996. Other service charges and fees increased $273, or 11.6%, in 1997 and $544,
or 30.0%, in 1996. Trust fees increased $179, or 10.2%, during 1997 and $245, or
16.3%, during 1996. Trust fees fluctuate with changes in the number of estates
managed each year and with changes in the market value of assets under
management. Security gains increased from $42 in 1996 to $794 in 1997. Other
types of noninterest income decreased $53, or 6.6%, during 1997 and $7, or 0.9%,
during 1996.
NONINTEREST EXPENSE
Noninterest expense increased $4,424, or 14.8%, during 1997 and $998, or
3.4%, in 1996. Salaries and other employee benefits increased $2,785, or 16.7%,
during 1997 and $117, or 0.7%, in 1996. Occupancy expense of bank premises
increased $121, or 6.1%, during 1997 and $13, or 0.7%, during 1996. Furniture
and equipment expense increased $152, or 6.5%, during 1997 and $263, or 12.6%,
in 1996. The FDIC assessment decreased $623, or 78.1%, during 1997 and $284, or
26.2%, during 1996 due to lower premium requirements. The 1996 FDIC expense
included $595 representing the cost of a special assessment on Savings
Association Insurance Fund (SAIF) insured deposits to recapitalize the SAIF.
Other types of noninterest expense increased $1,989, or 24.4%, during 1997 and
$889, or 12.3%, during 1996.
YEAR 2000 COMPLIANCE
The year 2000 has posed a unique set of challenges to those industries
reliant on information technology. As a result of methods employed by early
programmers, many software applications and operational programs may be unable
to distinguish the year 2000 from the year 1900. If not effectively addressed,
this problem could result in the production of inaccurate data, or, in the worst
cases, the inability of the systems to continue to function altogether.
Financial institutions are particularly vulnerable due to the industry's
dependence on electronic data processing systems.
33
<PAGE>
In 1996, the Company started the process of identifying the hardware and
software issues required to be addressed to assure year 2000 compliance. The
Company began by assessing the issues related to the year 2000 and the potential
for those issues to adversely affect the Company's own operations and those of
its subsidiaries.
Since that time, the Company has established a Year 2000 Compliance Team
(the Team) composed of representatives from key areas throughout the
organization. It is the mission of this Team to identify areas subject to
complications related to the year 2000 and to initiate remedial measures
designed to eliminate any adverse effects on the Company's operations.
The Team has identified all mission-critical software and hardware that may
be adversely affected by the year 2000 and has required vendors to represent
that the systems and products provided are or will be year 2000 compliant. The
Company expects that all mission critical software will be upgraded to achieve
year 2000 compliance and tested by December 31, 1998. In addition, the Team is
developing contingency plans to address systems which do not become year 2000
compliant by December 31, 1998.
The Company is committed to a plan for achieving compliance, focusing not
only on its own data processing systems, but also on its customers. The Team has
taken steps to educate and assist its customers with identifying their year 2000
compliance problems. In addition, the Team has proposed policy and procedure
changes to help identify potential risks to the Company and to gain an
understanding of how customers are managing the risks associated with the year
2000.
Management believes that the expenditures required to bring systems into
compliance will not have a materially adverse effect on the Company's
performance. However, the year 2000 problem is pervasive and complex and can
potentially affect any computer process. Accordingly, no assurance can be given
that year 2000 compliance can be achieved without additional unanticipated
expenditures and uncertainties that might affect future financial results.
34
<PAGE>
AVERAGE BALANCE SHEET AND ANALYSIS OF NET INTEREST INCOME
<TABLE>
<CAPTION>
1997 1996 1995
----------------------------- ----------------------------- -----------------------------
AVERAGE INTEREST YIELD/ AVERAGE INTEREST YIELD/ AVERAGE INTEREST YIELD/
BALANCES & FEES COST BALANCES & FEES COST BALANCES & FEES COST
---------- -------- ------ ---------- -------- ------ ---------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EARNING ASSETS:
Interest-bearing deposits in
banks....................... $ 3,780 $ 214 5.66% $ 4,705 $ 273 5.80% $ 9,533 $ 509 5.34%
Short-term money market
investments................. -- -- -- -- -- -- 1,317 87 6.61%
Federal funds sold............ 3,985 218 5.47% 5,386 253 4.70% 14,807 855 5.77%
Securities:
U.S. Government and
agency.................... 113,748 7,267 6.39% 147,422 9,276 6.29% 173,960 10,312 5.93%
Taxable municipals.......... 3,359 222 6.61% 3,004 203 6.76% 2,806 182 6.49%
Tax-exempt municipals....... 151,316 12,174 8.05% 88,274 7,199 8.16% 48,018 4,235 8.82%
Other....................... 18,393 1,286 6.99% 25,642 1,590 6.20% 29,127 1,732 5.95%
---------- -------- ------ ---------- -------- ------ ---------- -------- ------
Securities before market
value adjustment........ 286,816 20,949 7.30% 264,342 18,268 6.91% 253,911 16,461 6.48%
Market value adjustment on
securities available for
sale...................... 1,227 (423) (1,844)
---------- ---------- ----------
Total securities.......... 288,043 263,919 252,067
Loans:
Commercial.................. 308,803 28,341 9.18% 271,983 25,378 9.33% 234,167 21,864 9.34%
Consumer.................... 157,924 16,251 10.29% 153,045 15,147 9.90% 124,877 12,392 9.92%
Real estate mortgage........ 380,512 32,623 8.57% 335,259 28,847 8.60% 320,315 27,359 8.54%
Economic development and
other municipal loans..... 14,539 1,358 9.34% 11,082 1,024 9.24% 10,155 1,026 10.10%
---------- -------- ------ ---------- -------- ------ ---------- -------- ------
Total loans............... 861,778 78,573 9.12% 771,369 70,396 9.13% 689,514 62,641 9.08%
---------- -------- ------ ---------- -------- ------ ---------- -------- ------
Total earning assets...... 1,157,586 $99,954 8.63% 1,045,379 $89,190 8.53% 967,238 $80,553 8.33%
-------- -------- --------
-------- -------- --------
NON-EARNING ASSETS:
Allowance for loan losses..... (7,621) (6,516) (5,939)
Cash and due from banks....... 32,423 32,822 31,089
Premises and equipment........ 28,420 19,178 15,550
Other assets.................. 34,469 24,160 19,847
---------- ---------- ----------
TOTAL ASSETS.................. $1,245,277 $1,115,023 $1,027,785
---------- ---------- ----------
---------- ---------- ----------
INTEREST-BEARING LIABILITIES:
Savings and interest-bearing
demand...................... $ 222,182 $ 4,182 1.88% $ 218,642 $ 4,533 2.07% $ 228,632 $ 5,517 2.41%
Money market accounts......... 79,397 2,875 3.62% 79,758 2,831 3.55% 74,079 2,809 3.79%
Certificates of deposit and
other time.................. 545,166 29,061 5.33% 482,974 25,677 5.32% 455,493 23,965 5.26%
---------- -------- ------ ---------- -------- ------ ---------- -------- ------
Total interest-bearing
deposits................ 846,745 36,118 4.27% 781,374 33,041 4.23% 758,204 32,291 4.26%
Federal funds purchased and
securities sold under
agreements to repurchase.... 58,512 3,054 5.22% 43,777 2,206 5.04% 21,729 1,067 4.91%
Other borrowings.............. 74,790 4,461 5.96% 42,280 2,696 6.38% 16,155 1,053 6.52%
---------- -------- ------ ---------- -------- ------ ---------- -------- ------
Total interest-bearing
liabilities............. 980,047 $43,633 4.45% 867,431 $37,943 4.37% 796,088 $34,411 4.32%
-------- -------- --------
-------- -------- --------
NONINTEREST-BEARING
LIABILITIES AND
SHAREHOLDERS' EQUITY:
Noninterest-bearing demand
deposits.................... $ 113,616 $ 106,068 $ 98,109
Other liabilities............. 14,866 13,508 10,971
Shareholders' equity.......... 136,748 128,016 122,617
---------- ---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY........ $1,245,277 $1,115,023 $1,027,785
---------- ---------- ----------
---------- ---------- ----------
Interest income/earning
assets...................... $99,954 8.63% $89,190 8.53% $80,553 8.33%
Interest expense/earning
assets...................... 43,633 3.77% 37,943 3.63% 34,411 3.56%
-------- ------ -------- ------ -------- ------
Net interest income/earning
assets...................... $56,321 4.87% $51,247 4.90% $46,142 4.77%
-------- ------ -------- ------ -------- ------
-------- ------ -------- ------ -------- ------
</TABLE>
- ------------------------------
Note: Income is on a federal-tax-equivalent basis using a 35% tax rate.
Average volume includes nonaccrual loans.
Loans are classified by department.
35
<PAGE>
THE COMPANY
GENERAL
The Company is registered with the Federal Reserve as a bank holding
company. The Company was incorporated on October 18, 1984, under the laws of the
State of Indiana. As of December 31, 1997, the Company had total consolidated
assets of $1.3 billion and total consolidated deposits of $964.0 million, making
it the sixth largest independent bank holding company headquartered in the State
of Indiana (ranked by asset size) as of such date.
As of March 6, 1998, the Company owned 13 financial institution
subsidiaries, consisting of 12 commercial banks and one savings bank. The
following is a list of the Company's banking subsidiaries, type of charter,
location of main banking office, total number of banking offices and date of
affiliation with the Company:
<TABLE>
<CAPTION>
DATE OF
LOCATION OF NUMBER OF BANKING AFFILIATION WITH
NAME TYPE OF CHARTER MAIN OFFICE OFFICES THE COMPANY
- --------------------------- ------------------------- -------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
The National City
Bank of Evansville....... National Commercial Bank Evansville, Indiana 11 May 6, 1985
The Peoples National
Bank of Grayville........ National Commercial Bank Grayville, Illinois 1 May 16, 1988
First Kentucky Bank........ Kentucky Commercial Bank Sturgis, Kentucky 6 November 30, 1990
Lincolnland Bank........... Indiana Commercial Bank Dale, Indiana 5 December 17, 1993
The Bank of Mitchell....... Indiana Commercial Bank Mitchell, Indiana 4 December 17, 1993
Pike County Bank........... Indiana Commercial Bank Petersburg, Indiana 3 December 17, 1993
Alliance Bank (1).......... Indiana Commercial Bank Vincennes, Indiana 3 December 17, 1993
White County Bank.......... Illinois Commercial Bank Carmi, Illinois 1 June 30, 1995
The First National
Bank of Wayne City....... National Commercial Bank Wayne City, Illinois 1 August 31, 1996
First Federal Savings
Bank of Leitchfield...... Federal Savings Bank Leitchfield, 2 March 1, 1997
Kentucky
First National Bank of
Bridgeport............... National Commercial Bank Bridgeport, Illinois 1 August 1, 1997
First Bank of
Huntingburg.............. Indiana Commercial Bank Huntingburg, Indiana 3 December 31, 1997
Bank of Illinois in Mt.
Vernon................... Illinois Commercial Bank Mount Vernon, 3 March 6, 1998
Illinois
</TABLE>
- ------------------------------
(1) Alliance Bank was formed on June 30, 1997 as the result of the merger of The
State Bank of Washington and United Federal Savings Bank, which were
acquired by the Company on December 17, 1993 and August 31, 1995,
respectively.
The Company also has direct and indirect subsidiaries which offer leasing
and other financial services to the public.
Through its subsidiaries, the Company provides a comprehensive range of
consumer and commercial banking services to individuals and businesses located
throughout the tri-state area of Indiana, Kentucky and Illinois surrounding
Evansville, Indiana, including taking demand and time deposits, lending on a
secured and unsecured basis, providing cash management services, issuing letters
of credit, providing personal and corporate trust services and originating
leases to businesses.
OPERATING PHILOSOPHY
Other than its banking operations within the Evansville metropolitan area,
the Company operates in predominately rural and suburban markets and embraces a
community banking philosophy that emphasizes personal service and convenience,
community involvement, local decision-making, quick responses to
36
<PAGE>
loan requests and customized services. The Company's subsidiaries endeavor to
provide their branch managers, lending officers, tellers and deposit service
personnel with the authority to act promptly in service of its customers within
the scope of Company policies. This highly responsive attitude is enhanced by an
efficient corporate support staff and an investment in technology. Management
believes the benefits of this operating philosophy contribute to the Company's
success while providing improved operating efficiencies, effective internal
controls and sound credit underwriting standards.
Management believes that commercial customers of the Company's subsidiaries
generally prefer to bank with locally managed institutions which can provide a
full-service banking relationship meeting the customer's commercial banking
needs as well as the personal needs of its management and employees. The Company
provides its subsidiaries with the advantages of affiliation with a multi-bank
holding company, including services such as data processing services, credit
policy formulation, accounting services, investment portfolio management and
specialized staff support while generally granting substantial autonomy to
management of the subsidiaries. Management believes this autonomy allows the
Company's subsidiaries to better serve customers in their respective
communities, thereby enhancing business opportunities and operations. The
Company also maintains local bank charters and boards of directors.
LONG-TERM GOALS AND BUSINESS STRATEGIES
The Company's long-term goals are to grow its banking activities through
acquisitions of financial institutions and branches of financial institutions to
enhance its market positions within its primary market area by employing the
following business strategies:
- PURSUE EXPANSION OPPORTUNITIES. The Company is actively engaged in
seeking acquisitions of financial institutions whose management can continue to
operate autonomously, yet benefit from the expertise and resources of the
Company in such areas as audit, loan review, compliance, personnel, asset/
liability modeling, investment management and data processing. The Company
believes that its record of allowing its subsidiaries to operate autonomously is
a significant competitive advantage in successfully completing acquisitions. The
Company generally seeks acquisitions within or near its primary market area,
which it considers to be the portions of Indiana, Kentucky and Illinois that are
within 250 miles of Evansville, Indiana. Since January 1, 1995, the Company has
acquired ten financial institutions or branches of financial institutions.
- INTERNAL GROWTH. Management believes that vigorous internal growth is an
important component of corporate earnings performance. Management's focus is to
remain loan-driven to increase leverage, although other opportunities will be
considered. Affiliates in place for more than two years and operating at
acceptable levels are expected to report annual internal earnings growth of at
least 4%.
- CONTROL COSTS. The Company seeks to control costs of its subsidiaries
while expanding the range of services offered to customers. Management plans to
continue to consolidate back-office operations of its subsidiaries, which are
transparent to the customer, to control costs through economies of scale, to
outsource functions to improve efficiency, and to move toward more
incentive-based compensation. Products that have already been developed by the
Company for its subsidiaries will be available to all new acquisitions,
including MasterCard, PhoneBank, Express Bill Payer, ATM/Check Card, Paycheck
Express Employee Benefits Program and Direct Access Cash Management business
software.
- MANAGE CREDIT QUALITY. The Company and its subsidiaries have adopted
credit management policies under which loan officers maintain responsibility for
the quality of the credits they originate and manage. The credit management
process is supported by a collective and collaborative review and approval
process and is balanced by a review, evaluation and grading process undertaken
by the Company's loan review function. Senior management is actively involved in
monitoring the credit quality of the loan portfolio. In addition, management's
incentive compensation is affected by the Company's overall credit experience.
37
<PAGE>
RECENT ACQUISITIONS
The following is a brief description of the two acquisitions that the
Company has completed since December 31, 1997:
MAYFIELD BRANCH. On January 8, 1998, the Company's subsidiary, First
Kentucky Bank, through an affiliate acquired the Mayfield, Kentucky branch of
Republic Bank & Trust Company. First Kentucky Bank assumed deposit liabilities
of $65.7 million in consideration of a deposit premium of $4.6 million. First
Kentucky Bank also purchased the office facility and certain loans of the
branch.
BANK OF ILLINOIS IN MT. VERNON. On March 6, 1998, the Company acquired
Vernois Bancshares, Inc., the holding company for Bank of Illinois in Mt. Vernon
("BOI"), an Illinois banking corporation with three offices in Mount Vernon,
Illinois. The Company paid $27.5 million in cash for all of the outstanding
stock. As of December 31, 1997, BOI had total assets of $163.5 million, net
loans of $109.3 million and total deposits of $127.7 million. The acquisition
was accounted for using the purchase method of accounting and the results of
operations of BOI will be included in the Company's consolidated results of
operations from the date of acquisition.
PENDING ACQUISITIONS
The following is a brief description of the terms of the Pending
Acquisitions:
ILLINOIS ONE BANK, NATIONAL ASSOCIATION. The Company is a party to an
Agreement and Plan of Merger dated December 15, 1997 with Illinois One Bancorp,
Inc. ("IOBI"), the holding company for Illinois One Bank, National Association
("IOB"), a national banking association with offices in Shawneetown,
Elizabethtown and Golconda, Illinois. The agreement relates to the acquisition
of IOB in a merger transaction in which up to 577,417 shares of Company common
stock would be issued. As of December 31, 1997, IOB had total assets of $88.1
million, net loans of $48.4 million, total deposits of $76.4 million and total
shareholders' equity of $10.9 million. The acquisition is subject to the
approval of the shareholders of IOBI and the Federal Reserve. The acquisition is
expected to qualify for the pooling of interests method of accounting. The
parties expect to close the merger in the second quarter of 1998.
TRIGG COUNTY FARMERS BANK. The Company is a party to an Agreement and Plan
of Merger dated February 11, 1998, with Trigg Bancorp, Inc. ("TBI"), the holding
company for Trigg County Farmers Bank ("TCFB"), a Kentucky banking corporation,
which has three offices in Cadiz, Kentucky. The agreement relates to the
acquisition of TBI in a merger transaction in which up to 736,278 shares of the
Company's common stock would be issued. As of December 31, 1997, TCFB had total
assets of $96.4 million, net loans of $52.1 million, total deposits of $72.3
million and total shareholders equity of $8.5 million. The acquisition is
subject to the approval of the shareholders of TBI, the Federal Reserve and the
Kentucky Department of Financial Institutions. The acquisition is expected to
qualify for the pooling of interests method of accounting. The parties expect to
close the merger in the second or third quarter of 1998.
COMMUNITY FIRST BANK OF KENTUCKY AND COMMUNITY FIRST BANK, N.A. The Company
is a party to an Agreement and Plan of Merger dated March 9, 1998, with
Community First Financial, Inc. ("CFF"), the holding company for Community First
Bank of Kentucky, a Kentucky banking corporation, which has two offices in
Warsaw and Dry Ridge, Kentucky, and Community First Bank, National Association,
a national banking association, which has six offices in Maysville, May's Lick
and Mount Olivet, Kentucky and Aberdeen and Ripley, Ohio. The agreement relates
to the acquisition of CFF in a merger transaction in which up to 1,441,862
shares of the Company's common stock would be issued to shareholders of CFF. As
of December 31, 1997, CFF's subsidiary banks had total assets of $129.7 million,
net loans of $101.9 million, total deposits of $114.0 million and total
shareholders equity of $12.6 million. The acquisition of CFF is subject to the
approval of the shareholders of CFF, the Federal Reserve and the Kentucky
Department of Financial Institutions. The acquisition is expected to qualify for
the pooling of interests method of accounting. The parties expect to close the
merger in the second or third quarter of 1998.
38
<PAGE>
MANAGEMENT
MICHAEL F. ELLIOTT is the Chairman of the Board and Chief Executive Officer
of the Company, positions he has held since January 1998. Mr. Elliott was the
Executive Vice President of the Company from December 1993 to December 1997 and
Vice Chairman of the Board from January 1996 to December 1997. Previously, he
was the Chairman of the Board, President and Chief Executive Officer of Sure
Financial Corporation which the Company acquired in December 1993.
ROBERT A. KEIL is the President of the Company, a position he has held since
June 1993. From January 1991 to June 1993, he was an Executive Vice President of
the Company. Mr. Keil first became an officer of the Company in 1985.
CURTIS D. RITTERLING, age 41, is the Company's Executive Vice President, a
position he has held since November 1997. From May 1995 to June 1997, he was
Chairman of the Board, President and Chief Executive Officer of Boatman's Bank
of South Central Illinois. From December 1990 to May 1995, he was Chairman of
the Board, President and Chief Executive Officer of Boatman's Bank of Marshall,
Missouri.
Executive officers of the Company serve at the discretion of the Board of
Directors.
The Company's Board of Directors is divided into three classes of three or
four directors each, with each class serving a staggered term of three years.
The following table sets forth certain information respecting directors of the
Company as of February 28, 1998:
<TABLE>
<CAPTION>
DIRECTOR YEAR TERM
NAME AGE SINCE EXPIRES PRESENT PRINCIPAL OCCUPATION
- -------------------------------------- --- ----------- ----------- ----------------------------------------------
<S> <C> <C> <C> <C>
Janice L. Beesley..................... 44 1995 1999 Chairman of the Board and Chief
Executive Officer, Alliance Bank
Michael F. Elliott.................... 46 1994 1999 Chairman of the Board of Directors and
Chief Executive Officer of the Company
Susanne R. Emge....................... 56 1985 2000 Executive Director, St. Mary's Medical
Center Foundation
Donald G. Harris...................... 65 1986 1999 Retired (1)
Dr. H. Ray Hoops...................... 58 1996 1998 President, University of Southern Indiana
Robert A. Keil........................ 54 1993 2000 President of the Company
John D. Lippert....................... 64 1985 1998 Retired (2)
Ronald G. Reherman.................... 61 1985 1998 Chairman of the Board, President and
CEO, SIGCORP, Inc.; Chairman of
the Board, Southern Indiana Gas and
Electric Company
Laurence R. Steenberg................. 59 1985 2000 President, BST Corporation and Lot
Resources
Richard F. Welp....................... 56 1998 1999 South Region Manager, Countrymark
Cooperative, Inc.
</TABLE>
- ------------------------
(1) Mr. Harris was the President of Mead John Nutritional Group from 1989
through 1993.
(2) Mr. Lippert was the Chairman of the Board and Chief Executive Officer of the
Company from 1993 through 1997.
39
<PAGE>
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the Trust
Agreement. The Trust Agreement is qualified as an indenture under the Trust
Indenture Act. Initially, Wilmington Trust Company will be the Property Trustee
and will act as trustee for the purpose of complying with the Trust Indenture
Act. The terms of the Preferred Securities will include those stated in the
Trust Agreement and those made part of the Trust Agreement by the Trust
Indenture Act. This summary of the material terms and provisions of the
Preferred Securities and the Trust Agreement does not purport to be complete and
is subject to, and is qualified in its entirety by reference to, all the
provisions of the Trust Agreement, including the definitions therein of certain
terms, and the Trust Indenture Act. Wherever particular defined terms of the
Trust Agreement (as amended or supplemented from time to time) are referred to
herein, such defined terms are incorporated by reference herein. The form of the
Trust Agreement has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part.
GENERAL
Pursuant to the terms of the Trust Agreement, the Administrative Trustees,
on behalf of NCBE Trust, will issue the Trust Securities. The Trust Agreement
does not permit NCBE Trust to issue any securities other than the Trust
Securities. All of the Common Securities, which will represent an aggregate
liquidation amount equal to at least 3% of the total capital of NCBE Trust, will
be owned by the Company.
The Preferred Securities will represent undivided preferred beneficial
interests in the assets of NCBE Trust and the holders thereof will be entitled
to a preference in certain circumstances with respect to Distributions and
amounts payable on redemption or liquidation over the holders of the Common
Securities of NCBE Trust, as well as other benefits as described in the Trust
Agreement. The Preferred Securities will rank PARI PASSU, and payments will be
made thereon pro rata, with the Common Securities of NCBE Trust based on
Liquidation Amounts, except as described under "--Subordination of Common
Securities."
Legal title to the Subordinated Debentures will be held by the Property
Trustee in trust for the benefit of the holders of the Preferred Securities and
Common Securities. The Guarantee executed by the Company for the benefit of the
holders of the Preferred Securities will be a guarantee on a subordinated basis
with respect to the Preferred Securities, but will not guarantee payment of
Distributions or amounts payable on redemption or liquidation of such Preferred
Securities when NCBE Trust does not have funds legally and immediately available
to make such payments. See "Description of the Guarantee."
DISTRIBUTIONS
PAYMENT OF DISTRIBUTIONS. Distributions on each Preferred Security will be
payable at the annual rate of % of the stated Liquidation Amount of $25,
accruing from the date of original issuance and payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year, to the holders of
the Preferred Securities on the relevant record dates (each date on which
Distributions are payable in accordance with the foregoing, a "Distribution
Date"). The amount of Distributions payable for any period will include the
amount of additional interest accrued on interest in arrears and paid on a like
amount of Subordinated Debentures. The record date will be, for so long as the
Preferred Securities remain in book-entry form, one Business Day prior to the
relevant Distribution Date and, in the event the Preferred Securities are not in
book-entry form, the 15th day of the month in which the relevant Distribution
Date occurs. Distributions will accumulate from the date of original issuance.
The first Distribution Date for the Preferred Securities will be June 30, 1998.
The amount of Distributions payable for any full period will be computed on the
basis of a 360-day year of twelve 30-day months and for any period of less than
a full month will be computed on the number of days elapsed in such month. In
the event that any date on which Distributions are payable on the Preferred
Securities is not a Business Day, then payment of the Distributions payable on
such date will be made on the next succeeding day that is a Business Day (and
40
<PAGE>
without any additional Distributions, interest or other payment in respect of
any such delay), in each case with the same force and effect as if made on the
date such payment was originally payable. As used in this Prospectus, a
"Business Day" shall mean any day other than a Saturday or a Sunday, or a day on
which banking institutions in The City of New York are authorized or required by
law or executive order to remain closed or a day on which the corporate trust
office of the Property Trustee or the Debenture Trustee is closed for business.
EXTENSION PERIOD. So long as no Debenture Event of Default has occurred and
is continuing, the Company has the right under the Indenture to defer the
payment of interest on the Subordinated Debentures at any time and from time to
time for a period not exceeding 20 consecutive calendar quarters, including the
first calendar quarter of such Extension Period (each, an "Extension Period"),
provided that no Extension Period may extend beyond the Maturity Date or end on
a date other than an Interest Payment Date. As a consequence of any such
election, quarterly Distributions on the Preferred Securities will be deferred
by NCBE Trust during any such Extension Period. At the end of an Extension
Period, the Company will pay on the Subordinated Debentures all interest then
accrued and unpaid (together with interest thereon at the Coupon Rate,
compounded quarterly, to the extent permitted by applicable law), which amounts
will then be included in "Distributions." During any such Extension Period, the
Company may not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank PARI PASSU with or junior in interest to the Subordinated
Debentures or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company if such
guarantee ranks PARI PASSU with or junior in interest to the Subordinated
Debentures (other than (a) dividends or distributions in Company common stock,
(b) any declaration of a dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee and (d) purchases of common stock under any of the
Company's benefit plans for its directors, officers or employees). Prior to the
termination of any such Extension Period, the Company may defer the payment of
interest, provided that no Extension Period may exceed 20 consecutive calendar
quarters (including the first calendar quarter of the extension period), or
extend beyond the Maturity Date of the Subordinated Debentures or end on a date
other than an Interest Payment Date. Upon the termination of any such Extension
Period and the payment of all amounts then due, the Company may elect to begin a
new Extension Period. Subject to the foregoing, there is no limitation on the
number of times that the Company may elect to begin an 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.
CUMULATIVE DISTRIBUTIONS. The funds of NCBE Trust available for
distribution to holders of its Preferred Securities will be limited to payments
under the Subordinated Debentures. See "Description of the Subordinated
Debentures." If the Company does not make interest payments on the Subordinated
Debentures, the Property Trustee will not have funds available to pay
Distributions on the Preferred Securities. The payment of Distributions (if and
to the extent NCBE Trust has funds legally and immediately available for the
payment of such Distributions) is guaranteed by the Company. See "Description of
the Guarantee."
REDEMPTION
The Company will have the right to redeem the Subordinated Debentures (i) on
or after March 31, 2003, in whole at any time or in part from time to time, or
(ii) at any time, in whole (but not in part), within 180 days following the
occurrence of a Tax Event, an Investment Company Event or a Capital Event (such
180 days being subject to extension following a Tax Event), in each case subject
to Federal Reserve Approval.
41
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MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in
part, of any Subordinated Debentures, the proceeds from such repayment or
redemption shall be applied by the Property Trustee to redeem a Like Amount (as
defined below) of the Trust Securities, upon not less than 30 nor more than 60
days notice, at a redemption price (the "Redemption Price") equal to the
aggregate Liquidation Amount of such Trust Securities plus accumulated but
unpaid Distributions thereon to the date of redemption (the "Redemption Date")
plus the related amount of the premium, if any, paid upon the concurrent
redemption of a Like Amount of the Subordinated Debentures. See "Description of
the Subordinated Debentures--Redemption." If less than all of the Subordinated
Debentures are to be repaid or redeemed on a Redemption Date, then the proceeds
from such repayment or redemption shall be allocated to the redemption of the
Preferred Securities and the Common Securities pro rata based on Liquidation
Amounts.
DISTRIBUTION OF SUBORDINATED DEBENTURES. Subject to Federal Reserve
Approval, the Company will have the right at any time to dissolve NCBE Trust
and, after satisfaction of the liabilities to creditors of NCBE Trust as
provided by applicable law, cause the Subordinated Debentures to be distributed
to the holders of Trust Securities in the liquidation of NCBE Trust.
TAX EVENT REDEMPTION, INVESTMENT COMPANY EVENT REDEMPTION OR CAPITAL EVENT
REDEMPTION. If a Tax Event, an Investment Company Event or a Capital Event in
respect of the Trust Securities shall occur and be continuing, the Company has
the right to redeem the Subordinated Debentures in whole (but not in part) and
thereby cause a mandatory redemption of the Trust Securities in whole (but not
in part) at the Redemption Price within 180 days following the occurrence of
such Tax Event, Investment Company Event or Capital Event. In the event a Tax
Event, Investment Company Event or Capital Event in respect of the Trust
Securities has occurred and is continuing and the Company does not elect to
redeem the Subordinated Debentures and thereby cause a mandatory redemption of
such Trust Securities or to dissolve NCBE Trust and cause the Subordinated
Debentures to be distributed to holders of such Trust Securities in liquidation
of NCBE Trust as described below, such Trust Securities will remain outstanding
and, in the event of a Tax Event (or otherwise), Additional Sums (as defined
below) may be payable on the Subordinated Debentures. With respect to a Tax
Event, if the Company can eliminate within the 180-day period the Tax Event by
taking some ministerial action that has no adverse effect on the Company, the
holders of Subordinated Debentures or Trust Securities, or NCBE Trust, the
Company will take such action and may not cause a redemption during that period.
If the Company pursues such ministerial action, the time for redemption shall be
extended an additional 180 days.
"Additional Sums" includes additional amounts as may be necessary in order
that the amount of Distributions then due and payable by NCBE Trust on the
outstanding Trust Securities shall not be reduced as a result of any additional
taxes, duties, assessments and other governmental charges of whatever nature to
which NCBE Trust has become subject.
"Like Amount" means (i) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount (as defined below) equal to that
portion of the principal amount of Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Preferred Securities based upon the relative
aggregate Liquidation Amounts of such classes and the proceeds of which will be
used to pay the Redemption Price of such Trust Securities, and (ii) with respect
to a distribution of Subordinated Debentures to holders of Trust Securities in
connection with a termination or liquidation of NCBE Trust, Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the holder to whom such Subordinated Debentures are
distributed which Subordinated Debentures will carry accumulated interest in an
amount equal to the accumulated and unpaid interest then due.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
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REDEMPTION PROCEDURES. Preferred Securities redeemed on each Redemption
Date shall be redeemed at the Redemption Price with the applicable proceeds from
the contemporaneous redemption of the Subordinated Debentures. Redemptions of
the Preferred Securities shall be made and the Redemption Price shall be payable
on each Redemption Date only to the extent that NCBE Trust has funds on hand
available for the payment of such Redemption Price. See "--Subordination of
Common Securities."
If the Property Trustee gives a notice of redemption in respect of its
Preferred Securities, then, by 12:00 noon, New York City Time, on the Redemption
Date, to the extent funds are legally and immediately available, and as long as
the Preferred Securities are in book-entry form, the Property Trustee will
deposit with the Depositary funds sufficient to pay the Redemption Price and
will give the Depositary irrevocable instructions and authority to pay the
Redemption Price. See "Book-Entry Issuance." If such Preferred Securities are no
longer in book-entry form, the Property Trustee, to the extent funds are legally
and immediately available, will deposit with the Paying Agent for such Preferred
Securities funds sufficient to pay the aggregate Redemption Price and will give
such Paying Agent irrevocable instructions and authority to pay the Redemption
Price to the holders thereof upon surrender of the certificates evidencing such
Preferred Securities. Notwithstanding the foregoing, Distributions payable on or
prior to the Redemption Date for any Preferred Securities called for redemption
shall be payable to the holders of such Preferred Securities on the relevant
record dates for the related Distribution Dates. If notice of redemption shall
have been given and funds deposited as required, then upon the date of such
deposit, all rights of the holders of such Preferred Securities so called for
redemption will cease, except the right of the holders of such Preferred
Securities to receive the Redemption Price and any Distributions payable on or
prior to the Redemption Date, but without interest and such Preferred Securities
will cease to be outstanding. In the event that any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a Business
Day (and without any additional Distribution, interest or other payment in
respect of any such delay). In the event that payment of the Redemption Price in
respect of Preferred Securities called for redemption is improperly withheld or
refused and not paid either by NCBE Trust or by the Company pursuant to the
Guarantee, Distributions on such Preferred Securities will continue to accrue at
the then applicable rate, from the Redemption Date originally established by
NCBE Trust for such Preferred Securities to the date such Redemption Price is
actually paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the Redemption Price. See "Description of
the Guarantee."
Subject to applicable law (including, without limitation, United States
federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Subordinated Debentures to holders of Preferred Securities shall
be made to the applicable record holders thereof as they appear on the register
for such Preferred Securities on the relevant record date, which date shall be
one Business Day prior to the relevant Redemption Date; provided, however, that
in the event that any Preferred Securities are not in book-entry-only form, the
relevant record date for such Preferred Securities shall be a date at least 15
days prior to the Redemption Date.
If less than all of the Trust Securities issued by NCBE Trust are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of such
Trust Securities to be redeemed shall be allocated pro rata to the Trust
Securities based upon the relative aggregate Liquidation Amounts of each class.
The particular Preferred Securities to be redeemed shall be selected by the
Property Trustee from the outstanding Preferred Securities not previously called
for redemption, by such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $25 or an integral multiple of $25 in excess thereof) of the
Liquidation Amount of the Preferred Securities of a denomination larger than
$25. The Property Trustee shall promptly notify the trust registrar in writing
of the Preferred Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For
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all purposes of the Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of the Preferred Securities shall relate
to the portion of the aggregate Liquidation Amount of Preferred Securities which
has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Trust Securities to be
redeemed at its registered address. Unless the Company defaults in payment of
the Redemption Price on the Subordinated Debentures, on and after the Redemption
Date interest will cease to accrue on such Subordinated Debentures or portions
thereof (and Distributions will cease to accrue on the related Preferred
Securities or portions thereof) called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Preferred
Securities and Common Securities, as applicable, shall be made pro rata based on
the relative aggregate Liquidation Amounts of the Preferred Securities and
Common Securities; provided, however, that if on any Distribution Date or
Redemption Date an Event of Default resulting from a Debenture Event of Default
shall have occurred and be continuing, no payment of any Distribution on, or
Redemption Price of, any of the Common Securities, and no other payment on
account of the redemption, liquidation or other acquisition of such Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all of the outstanding Preferred Securities for all
Distribution periods terminating on or prior thereto, or in the case of payment
of the Redemption Price, the full amount of such Redemption Price on all of the
outstanding Preferred Securities then called for redemption, shall have been
made or provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions on, or
Redemption Price of, the Preferred Securities then due and payable.
In the case of any Event of Default resulting from a Debenture Event of
Default, the Company, as holder of the Common Securities, will be deemed to have
waived any right to act with respect to any such Event of Default under the
Trust Agreement until the effect of all such Events of Default with respect to
such Preferred Securities have been cured, waived or otherwise eliminated. Until
any such Events of Default under the Trust Agreement with respect to the
Preferred Securities have been so cured, waived or otherwise eliminated, the
Property Trustee shall act solely on behalf of the holders of the Preferred
Securities and not on behalf of the Company as holder of the Common Securities,
and only the holders of the Preferred Securities will have the right to direct
the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
The amount payable on the Preferred Securities in the event of any
liquidation of NCBE Trust, after satisfaction of liabilities to creditors, is
$25 per Preferred Security plus accrued and unpaid Distributions thereon to the
date of payment, which may be in the form of a distribution of such amount in
Subordinated Debentures, subject to certain exceptions.
The Company, as the holder of the Common Securities, will have the right at
any time to dissolve NCBE Trust and, after satisfying all liabilities to
creditors of NCBE Trust as required by applicable law, cause the Subordinated
Debentures to be distributed to the holders of the Preferred Securities. Such
right is subject to Federal Reserve Approval.
In addition, pursuant to the Trust Agreement, NCBE Trust shall automatically
dissolve upon expiration of its term and shall earlier dissolve on the first to
occur of: (i) certain events of bankruptcy, dissolution or liquidation of the
Company; (ii) the distribution of a Like Amount of the Subordinated Debentures
to the holders of its Trust Securities, if the Company, as Depositor, has given
written direction to the Property Trustee to dissolve NCBE Trust at any time
(which direction is optional and wholly within the discretion of the Company, as
Depositor), subject to Federal Reserve Approval; (iii) redemption of all
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of the Preferred Securities as described under "--Redemption;" and (iv) the
entry of an order for the dissolution of NCBE Trust by a court of competent
jurisdiction.
If an early dissolution occurs as described in clause (i), (ii) or (iv)
above, NCBE Trust shall be liquidated by the Trustees as expeditiously as the
Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of NCBE Trust as provided by applicable law, to the
holders of such Trust Securities a Like Amount of the Subordinated Debentures,
unless such distribution is determined by the Property Trustee not to be
practical, in which event such holders will be entitled to receive out of the
assets of NCBE Trust available for distribution to holders, after satisfaction
of liabilities to creditors of NCBE Trust as provided by applicable law, an
amount equal to, in the case of holders of Preferred Securities, the aggregate
of the Liquidation Amount plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution"). If such
Liquidation Distribution can be paid only in part because NCBE Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by NCBE Trust on the Preferred
Securities shall be paid on a pro rata basis. The holder(s) of the Common
Securities will be entitled to receive distributions upon any such liquidation
pro rata with the holders of the Preferred Securities, except that if a
Debenture Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities.
After the liquidation date fixed for any distribution of Subordinated
Debentures for Trust Securities (i) such Preferred Securities will no longer be
deemed to be outstanding, (ii) The Depository Trust Company, its nominee or
successor (the "Depositary"), as the record holder of the Trust Securities, will
receive a registered global certificate or certificates representing a Like
Amount of Subordinated Debentures to be delivered upon such distribution, (iii)
the Company will use reasonable effort to cause the Subordinated Debentures to
be approved for listing on the Nasdaq National Market (or other exchange on
which the Preferred Securities are then listed or approved for quotation), (iv)
any certificates representing Trust Securities not held by the Depositary or its
nominee will be deemed to represent the Subordinated Debentures having a
principal amount equal to the Liquidation Amount of such Trust Securities, and
bearing accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on the Trust Securities until such certificates are presented to
the Securities Registrar or their agent for transfer or reissuance and (v) all
rights of the holders of Trust Securities will cease except the right to receive
Subordinated Debentures upon surrender of the certificates evidencing the Trust
Securities.
Under current United States federal income tax law and interpretations and
assuming, as expected, NCBE Trust is treated as a grantor trust, a distribution
of the Subordinated Debentures should not be a taxable event to holders of the
Preferred 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 holders of the Preferred Securities. See "Certain
Federal Income Tax Consequences." If the Company elects neither to redeem the
Subordinated Debentures, nor to liquidate NCBE Trust and distribute the
Subordinated Debentures to holders of the Preferred Securities, the Preferred
Securities will remain outstanding until the repayment of the Subordinated
Debentures.
If the Company elects to dissolve NCBE Trust and thereby causes the
Subordinated Debentures to be distributed to holders of the Preferred Securities
in liquidation of NCBE Trust, the Company shall continue to have the right to
shorten or extend the maturity of such Subordinated Debentures, subject to
certain conditions. See "Description of the Subordinated Debentures--General."
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for Preferred Securities if a dissolution and liquidation of NCBE Trust were to
occur. Accordingly, the Preferred Securities that an investor may purchase, or
the Subordinated Debentures that the investor may receive on dissolution and
liquidation of NCBE Trust, may trade at a discount to the price that the
investor paid to purchase the Preferred Securities offered hereby.
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EVENTS OF DEFAULT AND NOTICE
Any one of the following events constitutes an Event of Default under the
Trust Agreement (an "Event of Default") with respect to the Preferred Securities
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the Indenture
(see "Description of the Subordinated Debentures--Debenture Events of
Default"); or
(ii) default by NCBE Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of 30
days; or
(iii) default by the NCBE Trust in the payment of any Redemption Price of
any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in the Trust Agreement (other than
a covenant or warranty a default in the performance of which or the breach
of which is dealt with in clauses (ii) or (iii) above), and continuation of
such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the defaulting Trustee or Trustees by
the holders of at least 25% in aggregate Liquidation Amount of the
outstanding Preferred Securities, a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" under the Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Company to appoint a
successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Preferred Securities, the
Administrative Trustees and the Company, as Depositor, unless such Event of
Default shall have been cured or waived. The Company, as Depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities upon
dissolution of NCBE Trust as described above. See "--Liquidation Distribution
Upon Dissolution." The existence of an Event of Default does not entitle the
holders of Preferred Securities to accelerate the maturity thereof.
REMOVAL OF TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by the holders of the Common Securities.
If a Debenture Event of Default has occurred and is continuing, the Property
Trustee and the Delaware Trustee may be removed at such time by the holders of
at least a majority of in Liquidation Amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of a Trustee and no appointment of a
successor trustee shall be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Trust Agreement.
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CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property, as
defined in the Indenture, may at the time be located, the Company, as the holder
of the Common Securities, shall have power (and at the request of the Property
Trustee will execute documents necessary) to appoint one or more persons either
to act as a co-trustee, jointly with the Property Trustee, of all or any part of
such Trust Property, or to act as separate trustee of any such property, in
either case with such powers as may be provided in the instrument of
appointment, and to vest in such person or persons in such capacity any
property, title, right or power deemed necessary or desirable, subject to the
provisions of the Trust Agreement. In case a Debenture Event of Default has
occurred and is continuing, or the Company does not join in such appointment
within 15 days after receipt of request, the Property Trustee alone shall have
power to make such appointment.
MERGER OR CONSOLIDATION OF TRUSTEES
Any person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any person resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
person succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee under the Trust Agreement,
provided such person shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF NCBE TRUST
NCBE Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other person, except as
described below or above under "--Liquidation Distribution Upon Dissolution."
NCBE Trust may, at the request of the Company, with the consent of the
Administrative Trustees and without the consent of the holders of the Preferred
Securities, merge with or into, consolidate, amalgamate, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to a trust organized as such under the laws of any State; provided, that (i)
such successor entity either (a) expressly assumes all of the obligations of
NCBE Trust with respect to the Preferred Securities or (b) substitutes for the
Preferred Securities other securities having substantially the same terms as the
Preferred Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Preferred Securities rank in priority with
respect to distributions and payments upon liquidation, redemption and
otherwise, (ii) the Company expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee in its
capacity as the holder of the Subordinated Debentures, (iii) the Successor
Securities are quoted, or any Successor Securities will be approved for
quotation upon notification of issuance, on the Nasdaq National Market or any
national securities exchange or other organization on which the Preferred
Securities are then approved for quotation or listed, if any, (iv) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Preferred Securities (including any Successor Securities) in any material
respect, (v) such successor entity has a purpose substantially identical to that
of NCBE Trust, (vi) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Company has received an opinion
from independent counsel to NCBE Trust experienced in such matters to the effect
that (a) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the Preferred Securities (including any Successor
Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
NCBE Trust nor such successor entity will be required to register as an
investment company under the Investment Company Act and (vii) the Company or any
permitted successor or assignee owns all of the common securities of such
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successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, NCBE Trust shall not, except with the consent of
holders of 100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to any other entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease would cause NCBE Trust or the successor entity to be
classified as other than a grantor trust for United States federal income tax
purposes.
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under "Description of the Guarantee--Amendments
and Assignment" and as otherwise required by law and the Trust Agreement, the
holders of the Preferred Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Preferred Securities (i) in connection with the appointment of a
successor Trustee, (ii) to cure any ambiguity, correct or supplement any
provisions in the Trust Agreement that may be inconsistent with any other
provision, or to make any other provisions with respect to matters or questions
arising under the Trust Agreement, which shall not be inconsistent with the
other provisions of the Trust Agreement, or (iii) to modify, eliminate or add to
any provisions of the Trust Agreement to such extent as shall be necessary to
ensure that NCBE Trust will be classified for United States federal income tax
purposes as a grantor trust at all times that any Trust Securities are
outstanding or to ensure that NCBE Trust will not be treated as an "investment
company" under the Investment Company Act; provided, however, that in the case
of clause (ii), such action shall not adversely affect in any material respect
the interests of any holder of Trust Securities, and any such amendments of such
Trust Agreement shall become effective when notice thereof is given to the
holders of Trust Securities. The Trust Agreement may be amended by the Trustees
and the Company with (i) the consent of holders representing not less than a
majority in the aggregate Liquidation Amount of the outstanding Trust
Securities, and (ii) receipt by the Trustees of an opinion of counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect NCBE Trust's status as a
grantor trust for United States federal income tax purposes or NCBE Trust's
exemption from status as an "investment company" under the Investment Company
Act. Notwithstanding anything in this paragraph to the contrary, without the
consent of each holder of Trust Securities, the Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the Trust Securities as of a specified date or (ii)
restrict the right of a holder of Trust Securities to institute suit for the
enforcement of any such payment on or after such date.
So long as any Subordinated Debentures are held by the Property Trustee, the
Property Trustee shall not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee, or executing
any trust or power conferred on the Property Trustee with respect to the
Subordinated Debentures, (ii) waive any past default that is waivable under the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Subordinated Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Subordinated Debentures, where such consent shall be required, without, in each
case, obtaining the prior approval of the holders of at least a majority in
aggregate Liquidation Amount of all outstanding Preferred Securities; provided,
however, that where a consent under the Indenture would require the consent of
each holder of Subordinated Debentures affected thereby, no such consent shall
be given by the Property Trustee without the prior consent of each holder of the
Preferred Securities. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the holders of the Preferred
Securities except by subsequent vote of the holders of the Preferred Securities.
The Property Trustee shall notify each
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holder of Preferred Securities of any notice of default with respect to the
Subordinated Debentures. In addition to obtaining the foregoing approvals of the
holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Property Trustee shall obtain an opinion of counsel experienced in
such matters to the effect that NCBE Trust will not be classified as an
association taxable as a corporation for United States federal income tax
purposes on account of such action.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be given
to each holder of record of Preferred Securities in the manner set forth in the
Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for NCBE Trust to redeem and cancel its Preferred Securities in accordance with
the Trust Agreement.
Notwithstanding the fact that holders of Preferred Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Company, the Trustees or any
affiliate of the Company or any Trustee, shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
GLOBAL PREFERRED SECURITIES
The Preferred Securities will be represented by one or more global
certificates registered in the name of the Depositary or its nominee ("Global
Preferred Security"). Beneficial interests in the Preferred Securities will be
shown on, and transfers thereof will be effected only through, records
maintained by participants in the Depositary. Except as described below,
Preferred Securities in certificated form will not be issued in exchange for the
global certificates. See "Book-Entry Issuance."
A global security shall be exchangeable for Preferred Securities registered
in the names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
depositary for such global security and is unable to appoint a qualified
successor depositary or if at any time the Depositary ceases to be a clearing
agency registered under the Exchange Act, at a time when the Depositary is
required to be so registered to act as such Depositary, (ii) the Company in its
sole discretion determines that such global security shall be so exchangeable,
or (iii) there shall have occurred and be continuing a Debenture Event of
Default and owners of Preferred Securities aggregating at least a majority of
the aggregate Liquidation Amount, request, in writing, a change in the
Depositary. Any global security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for definitive certificates registered in such
names as the Depositary shall direct. It is expected that such instructions will
be based upon directions received by the Depositary with respect to ownership of
beneficial interests in such global security. In the event that Preferred
Securities are issued in definitive form, such Preferred Securities will be in
denominations of $25 and integral multiples thereof and may be transferred or
exchanged at the offices described below.
Payments on Preferred Securities represented by a global security will be
made to the Depositary, as the depositary for the Preferred Securities. In the
event the Preferred Securities are issued in definitive form, Distributions will
be payable, at the corporate office of the Property Trustee in Wilmington,
Delaware, or at the offices of any Paying Agent appointed by the Administrative
Trustees, provided that payment of any Distribution may be made at the option of
the Administrative Trustees by check mailed to the address of the persons
entitled thereto or by wire transfer. In addition, if the Preferred Securities
are issued in certificated form, the record dates for payment of Distributions
will be the 15th day of the month in which the relevant Distribution Date
occurs. The transfer of Preferred Securities will be registrable at the
corporate offices of the registrar of Trust Securities which shall initially be
the Property Trustee. For a description of the terms of the depositary
arrangements relating to payments, transfers, voting rights, redemptions and
other notices and other matters, see "Book-Entry Issuance."
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Upon the issuance of a Global Preferred Security, and the deposit of such
Global Preferred Security with or on behalf of the Depositary, the Depositary
for such Global Preferred Security or its nominee will credit, on its book-entry
registration and transfer system, the respective aggregate Liquidation Amounts
of the individual Preferred Securities represented by such Global Preferred
Securities to the accounts of persons having accounts with the Depositary
("Participants"). Such accounts shall be designated by the dealers, underwriters
or agents with respect to such Preferred Securities. Ownership of beneficial
interests in a Global Preferred Security will be limited to Participants or
persons that may hold interests through Participants. Ownership of beneficial
interests in such Global Preferred Security will be shown on, and the transfer
of that ownership will be effected only through, records maintained by the
applicable Depositary or its nominee (with respect to interests of Participants)
and the records of Participants (with respect to interests of persons who hold
through Participants). The laws of some states require that certain purchasers
of securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Preferred Security.
So long as the Depositary for a Global Preferred Security, or its nominee,
is the registered owner of such Global Preferred Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Preferred Securities represented by such Global Preferred Security for all
purposes under the Trust Agreement governing such Preferred Securities. Except
as provided below, owners of beneficial interests in a Global Preferred Security
will not be entitled to have any of the individual Preferred Securities
represented by such Global Preferred Security registered in their names, will
not receive or be entitled to receive physical delivery of any such Preferred
Securities in definitive form and will not be considered the owners or holders
thereof under the Trust Agreement.
None of the Company, NCBE Trust, the Property Trustee, any Paying Agent, or
the Securities Registrar for such Preferred Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global
Preferred Security representing such Preferred Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for Preferred Securities or its
nominee, upon receipt of any payment of the Liquidation Amount, Redemption Price
or Distributions in respect of the Global Preferred Security immediately will
credit Participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the aggregate Liquidation Amount of such
Global Preferred Security as shown on the records of such Depositary or its
nominee. The Company also expects that payments by Participants to owners of
beneficial interests in such Global Preferred Security held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." Such payments will be the responsibility of
such Participants.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to the Paying
Agent, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any Preferred Securities are not held by
the Depositary, such payments shall be made by check mailed to the address of
the holder entitled thereto as such address shall appear on the register of
holders of Preferred Securities. The Paying Agent shall initially be the
Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees. The Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Property Trustee,
the Administrative Trustees and the Company. In the event that the Property
Trustee shall no longer be the Paying Agent, the Administrative Trustees shall
appoint a successor (which shall be a bank or trust company acceptable to the
Administrative Trustees) to act as Paying Agent.
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REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Preferred Securities. Registration of transfers of Preferred Securities will be
effected without charge by or on behalf of NCBE Trust, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. NCBE Trust will not be required to register or cause to be
registered the transfer of Preferred Securities after such Preferred Securities
have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than upon the occurrence and during the
continuance of an Event of Default, undertakes to perform only such duties as
are specifically set forth in the Trust Agreement and, after such Event of
Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Trust Agreement at the request of any holder of
Preferred Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the Trust Agreement or is unsure of the application of any provision of the
Trust Agreement, and the matter is not one on which holders of Preferred
Securities are entitled under the Trust Agreement to vote, then the Property
Trustee shall take such action as is directed by the Company and if not so
directed, shall take such action as it deems advisable and in the best interests
of the holders of the Trust Securities and will have no liability except for its
own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate NCBE Trust in such a way that NCBE Trust will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a corporation
for United States federal income tax purposes and so that the Subordinated
Debentures will be treated as indebtedness of the Company for United Stated
federal income tax purposes. In this connection, the Company and the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the certificate of trust of NCBE Trust or the Trust Agreement,
that the Company and the Administrative Trustees determine in their discretion
to be necessary or desirable for such purposes, as long as such action does not
materially adversely affect the interests of the holders of the related
Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
The Trust Agreement and the Preferred Securities will be governed by, and
construed in accordance with, the laws of the State of Delaware.
DESCRIPTION OF THE SUBORDINATED DEBENTURES
Concurrently with the issuance of the Preferred Securities, NCBE Trust will
invest the proceeds thereof, together with the consideration paid by the Company
for the Common Securities, in the Subordinated Debentures to be issued by the
Company. The Subordinated Debentures will be issued as unsecured debt under the
Indenture, dated as of March , 1998 ("Indenture"), between the Company and
Wilmington Trust Company, as trustee (the "Debenture Trustee"). The following
summary of the material terms and provisions of the Subordinated Debentures and
the Indenture does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, the Indenture, which has been filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part, and to the Trust Indenture Act. The Indenture will be qualified under the
Trust Indenture Act. Whenever particular defined terms of the Indenture are
referred to herein, such defined terms are incorporated herein by reference.
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GENERAL
The Subordinated Debentures will bear interest at the annual rate of %
(the "Coupon Rate") of the principal amount thereof, on any overdue principal
and (to the extent enforceable under applicable law) on any overdue installment
of interest, payable quarterly in arrears on March 31, June 30, September 30,
and December 31 of each year (each, an "Interest Payment Date") beginning June
30, 1998, to the person in whose name each Subordinated Debenture is registered,
subject to certain exceptions, at the close of business on the fifteenth day of
the last month of the calendar quarter. The term "interest" as used herein shall
also include Additional Sums (as defined below), as applicable. Interest will
begin to accrue from the date of original issuance of the Subordinated
Debentures. It is anticipated that, until the liquidation, if any, of NCBE
Trust, the Subordinated Debentures will be held in the name of the Property
Trustee in trust for the benefit of the holders of the Preferred Securities. The
amount of interest payable for any period will be computed on the basis of a
360-day year of twelve 30-day months and, for any period of less than a full
calendar month, the number of days elapsed in such month. 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) with the same force and effect as if
made on the date such payment was originally payable.
The Subordinated Debentures will mature and the unpaid principal thereon
will be payable on the Scheduled Maturity Date, March 31, 2028, which date may
be (i) extended at the option of the Company to a date not later than March 31,
2037, subject to Federal Reserve Approval, or (ii) shortened (a) by redemption
at the option of the Company on or after March 31, 2003, subject to Federal
Reserve Approval, or (b) by declaration of acceleration, notice of redemption
(including redemption following a Tax Event, Investment Company Event, or
Capital Event, as described below), or otherwise.
The Subordinated Debentures will be unsecured and will rank junior and be
subordinate in right of payment to all Senior Debt and Additional Senior
Obligations (each as defined herein) of the Company. See "--Subordination."
Because the Company is a holding company, the right of the Company to
participate in any distribution of assets of any of its subsidiaries, upon any
such subsidiary's liquidation or reorganization or otherwise (and thus the
ability of holders of the Preferred Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of that subsidiary,
except to the extent that the Company may itself be recognized as a creditor of
such subsidiary. Accordingly, the Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Company's
subsidiaries, and holders of Subordinated Debentures should look only to the
assets of the Company for payments on the Subordinated Debentures. The Indenture
does not limit the incurrence or issuance of other secured or unsecured debt of
the Company, including Senior Debt or Additional Senior Obligations, whether
under the Indenture or any existing indenture or other indenture that the
Company may enter into in the future or otherwise. See "--Subordination."
The Indenture does not contain provisions that afford holders of the
Subordinated Debentures protection in the event of a highly leveraged
transaction or other similar transaction involving the Company that may
adversely affect such holders.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Debenture Event of Default has occurred and is continuing, the
Company has the right under the Indenture at any time during the term of the
Subordinated Debentures to defer the payment of interest for a period not
exceeding 20 consecutive calendar quarters, including the first calendar quarter
of such period (each such period an "Extension Period"), provided that no
Extension Period may extend beyond the Maturity Date of the Subordinated
Debentures or end on a date other than an Interest Payment Date. At the end of
such Extension Period, the Company must pay all interest then accrued and
unpaid, including Additional Sums (together with interest thereon at the Coupon
Rate, compounded
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quarterly, to the extent permitted by applicable law). During an Extension
Period, interest will continue to accrue and holders of Subordinated Debentures
(or holders of Preferred Securities while such securities are outstanding) will
be required to accrue interest income for United States federal income tax
purposes. See "Certain Federal Income Tax Consequences--Potential Extension of
Interest Payment Period and Original Issue Discount."
During any such Extension Period, the Company may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company (including other
Subordinated Debentures) that rank PARI PASSU with or junior in interest to the
Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks PARI PASSU or junior in interest to the Subordinated
Debentures (other than (a) dividends or distributions in Company common stock,
(b) any declaration of a dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such plan in the
future or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, and (d) purchases of common stock related to
rights under any of the Company's benefit plans for its directors, officers or
employees).
Prior to the termination of any Extension Period, the Company may further
extend the interest payment period, provided that no Extension Period (with all
previous and further extensions thereof) may exceed 20 consecutive calendar
quarters (including the first calendar quarter of the extension period), extend
beyond the Maturity Date of the Subordinated Debentures or end on a date other
than an Interest Payment Date. Upon the termination of any such Extension Period
and the payment of all amounts then due on any Interest Payment Date, the
Company may elect to begin a new Extension Period subject to the above
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof, but the Company may prepay at any time, without
premium or penalty, all or any portion of any amounts accrued during the
Extension Period. The Company must provide notice of its election pursuant to
the Indenture and the Administrative Trustees shall give notice of the Company's
election to begin a new Extension Period to the holders of the Preferred
Securities. Subject to the foregoing, there is no limitation on the number of
times that the Company may elect to begin an Extension Period.
SHORTENING OR EXTENDING MATURITY DATE
The Subordinated Debentures will mature on the Scheduled Maturity Date,
March 31, 2028, which date may be shortened (a) by redemption at the option of
the Company on or after March 31, 2003, subject to Federal Reserve Approval, or
(b) by declaration of acceleration, notice of redemption (including redemption
following a Tax Event, Investment Company Event, or Capital Event, as described
below), or otherwise. Such date may also be extended at any time before the day
which is 90 days before the Scheduled Maturity Date at the election of the
Company, but in no event to a date later than March 31, 2037, provided that at
the time such notice of such election is provided and as of the Scheduled
Maturity Date, (i) the Company is not in bankruptcy, otherwise insolvent or in
liquidation, (ii) the Company is not in default in the payment of any interest
or principal on the Subordinated Debentures, and (iii) NCBE Trust is not in
arrears on payments of Distributions on the Preferred Securities and no deferred
Distributions are accumulated. In the event that the Company elects to extend
the Maturity Date of the Subordinated Debentures, it shall give notice to the
Debenture Trustee, to NCBE Trust and to the holders of the Subordinated
Debentures no more than 180 days and no less than 90 days prior to the Scheduled
Maturity Date. Such extension is also subject to Federal Reserve Approval.
ADDITIONAL SUMS
If the Property Trustee or NCBE Trust is required to pay any additional
taxes, duties, assessments or other governmental charges of whatever nature
(other than withholding taxes), the Company will pay as
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additional amounts on the Subordinated Debentures such additional amounts
("Additional Sums") as shall be required so that the Distributions payable by
NCBE Trust shall not be reduced as a result of any such additional taxes, duties
or other governmental charges.
REDEMPTION
Subject to Federal Reserve Approval, the Subordinated Debentures are
redeemable prior to maturity at the option of the Company (i) on or after March
31, 2003, in whole at any time or in part from time to time or (ii) at any time
in whole (but not in part) upon the occurrence and during the continuance of a
Tax Event, an Investment Company Event or a Capital Event, in each case at a
redemption price equal to the accrued and unpaid interest on the Subordinated
Debentures so redeemed to the date fixed for redemption, plus 100% of the
principal amount thereof.
With respect to a Tax Event, if the Company can eliminate within the 180-day
period, the Tax Event by taking some ministerial action that has no adverse
effect on the Company, the holders of Subordinated Debentures or Trust
Securities, or NCBE Trust, the Company will take such action and may not cause a
redemption during that period. If the Company pursues such ministerial action,
the time for redemption shall be extended an additional 180 days.
"Tax Event" means the receipt by NCBE Trust of an opinion of counsel (which
may be counsel to the Company) experienced in such matters to the effect that,
as a result of any amendment to, or change in (including any announced
prospective change), the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of issuance of the Subordinated Debentures, there is more than an insubstantial
risk that (i) interest payable by the Company on the Subordinated Debentures is
not, or within 90 days after the date of such opinion will not be, deductible by
the Company, in whole or in part, for United States federal income tax purposes,
(ii) NCBE Trust is, or will be within 90 days after the date of such opinion,
subject to United States federal income tax with respect to interest received or
accrued on the Subordinated Debentures, or (iii) NCBE Trust is, or will be
within 90 days after the date of such opinion, subject to more than a de minimis
amount of other taxes, duties, assessments or other governmental charges.
An "Investment Company Event" means the receipt by NCBE Trust of an opinion
of counsel (which may be counsel to the Company) experienced in such matters to
the effect that, as a result of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that NCBE Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act,
which change becomes effective on or after the date of original issuance of the
Preferred Securities.
A "Capital Event" means that NCBE Trust has received an opinion of counsel
(which may be counsel to the Company) experienced in such matters that the
Company cannot, or within 90 days after the date of such opinion, will not be
permitted by the applicable regulatory authorities, due to a change in law,
regulation, policy or guideline or change in interpretation or application of
law or regulation, policy or guideline, to account for the Preferred Securities
as Tier 1 Capital under the capital guidelines or policies of the Federal
Reserve.
Any partial redemption of the Subordinated Debentures will be effected by
the redemption of an equivalent amount, based on Liquidation Amounts, of Trust
Securities, to be allocated pro rata between the Preferred Securities and the
Common Securities unless an Event of Default resulting from a Debenture Event of
Default shall have occurred and be continuing as of the applicable Redemption
Date or Distribution Date. See "Description of the Preferred
Securities--Redemption." If a partial redemption of the Subordinated Debentures
would result in de-listing the Preferred Securities from the Nasdaq
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National Market (or any other organization or national securities exchange on
which the Preferred Securities are then listed or approved for quotation), the
Company may only redeem the Subordinated Debentures in whole.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Subordinated Debentures to
be redeemed at its registered address. Unless the Company defaults in payment of
the redemption price, on and after the redemption date interest ceases to accrue
on such Subordinated Debentures or portions thereof called for redemption.
The Subordinated Debentures will not be subject to any sinking fund.
DISTRIBUTION UPON LIQUIDATION
As described under "Description of the Preferred Securities--Liquidation
Distribution Upon Dissolution," under certain circumstances involving the
termination of NCBE Trust, the Subordinated Debentures may be distributed to the
holders of the Preferred Securities in liquidation of NCBE Trust after
satisfaction of liabilities to creditors of NCBE Trust as provided by applicable
law. If distributed to holders of Preferred Securities in liquidation, it is
anticipated that the Subordinated Debentures will initially be issued in the
form of one or more global securities and the Depositary, or any successor
depositary for the Preferred Securities, will act as depositary for the
Subordinated Debentures. It is anticipated that the depositary arrangements for
the Subordinated Debentures would be substantially identical to those in effect
for the Preferred Securities. If the Subordinated Debentures are issued as
global securities in connection with the distribution to the holders of
Preferred Securities upon the liquidation of NCBE Trust, the Company will use
its best efforts to have the Subordinated Debentures approved for listing on the
Nasdaq National Market or such stock exchange, if any, on which the Preferred
Securities are then listed or approved for quotation. There can be no assurance
as to the market price of any Subordinated Debentures that may be distributed to
the holders of Preferred Securities.
RESTRICTIONS ON CERTAIN PAYMENTS
If at any time (i) there shall have occurred any event that would constitute
a Debenture Event of Default, (ii) the Company shall be in default with respect
to its payment of any obligations under the Guarantee, or (iii) the Company
shall have given notice of its election of an Extension Period as provided in
the Indenture with respect to the Subordinated Debentures or such Extension
Period, or any extension thereof, shall be continuing, the Company will not (a)
declare or pay any dividends on or make any distributions with respect to, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock or (b) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities of the
Company that rank PARI PASSU with or junior in interest to the Subordinated
Debentures or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company if such
guarantee ranks PARI PASSU or junior in interest to the Subordinated Debentures
(other than (1) dividends or distributions in Company common stock, (2) any
declaration of a dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (3)
payments under the Guarantee and (4) purchases of common stock related to rights
under any of the Company's benefit plans for its directors, officers or
employees).
SUBORDINATION
The Indenture provides that any Subordinated Debentures issued thereunder
will be subordinate and junior in right of payment to the prior payment in full
of all Senior Debt and Additional Senior Obligations. Upon any payment or
distribution of assets to creditors upon any liquidation, dissolution,
winding-up, reorganization, or any bankruptcy, insolvency, or other proceedings
in connection with any insolvency or bankruptcy proceeding of the Company, the
holders of Senior Debt and Additional Senior Obligations will first be entitled
to receive payment in full of principal of (and premium, if any) and interest,
if any, on such Senior Debt and Additional Senior Obligations before the holders
of Subordinated
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Debentures will be entitled to receive any payment in respect of the principal
of or interest, if any, on the Subordinated Debentures.
No payments on account of principal or interest (including redemption and
sinking finance payments), if any, in respect of the Subordinated Debentures may
be made if there shall have occurred and be continuing a default in any payment
with respect to Senior Debt or Additional Senior Obligations or an event of
default with respect to any Senior Debt or Additional Senior Obligations
resulting in the acceleration of the maturity thereof.
"Debt" means with respect to any person, whether recourse is to all or a
portion of the assets of such person and whether or not contingent, (i) every
obligation of such person for money borrowed; (ii) every obligation of such
person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such person; (iv) every obligation of such person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another person
and all dividends of another person the payment of which, in either case, such
person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Subordinated Debentures or to other Debt
which is PARI PASSU with, or subordinated to, the Subordinated Debentures;
provided, however, that Senior Debt shall not be deemed to include (i) any Debt
of the Company which when incurred and without respect to any election under
section 1111(b) of the United States Bankruptcy Code of 1978, as amended, was
without recourse to the Company, (ii) any Debt of the Company to any of its
subsidiaries, (iii) Debt to any employee of the Company, (iv) Debt which by its
terms is subordinated to trade accounts payable or accrued liabilities arising
in the ordinary course of business to the extent that payments made to the
holders of such Debt by the holders of the Subordinated Debentures as a result
of the subordination provisions of the Indenture would be greater than they
otherwise would have been as a result of any obligation of such holders to pay
amounts over to the obligees on such trade accounts payable or accrued
liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject.
"Additional Senior Obligations" means all indebtedness of the Company
whether incurred on or prior to the date of the Indenture or thereafter
incurred, for claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar arrangements;
provided, however, that Additional Senior Obligations do not include claims in
respect of Senior Debt or obligations which, by their terms, are expressly
stated to be not superior in right of payment to the Subordinated Debentures or
to rank PARI PASSU in right of payment with the Subordinated Debentures. For
purposes of this definition, "claim" shall have the meaning assigned thereto in
Section 101(4) of the United States Bankruptcy Code of 1978, as amended.
The Indenture places no limitation on the amount of additional Senior Debt
that may be incurred by the Company. The Company expects from time to time to
incur additional indebtedness constituting Senior Debt and Additional Senior
Obligations.
DENOMINATIONS, REGISTRATION AND TRANSFER
Initially, the Subordinated Debentures will be registered in the name of the
Property Trustee. If the Subordinated Debentures are distributed to the holders
of the Preferred Securities upon the liquidation of
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NCBE Trust, it is anticipated that the Subordinated Debentures will then be
represented by global certificates registered in the name of the Depositary or
its nominee. Beneficial interests in the Subordinated Debentures will be shown
on, and transfers thereof will be effected only through, records maintained by
the Depositary. If the Subordinated Debentures are maintained by the Depositary,
it is anticipated that substantially the same procedures will be applicable to
the Subordinated Debentures as are described under "Description of the Preferred
Securities--Global Preferred Securities." See also "Book-Entry Issuance."
The Company will appoint the Debenture Trustee as securities registrar under
the Indenture (the "Securities Registrar"). Subordinated Debentures may be
presented for exchange as provided above, and may be presented for registration
of transfer (with the form of transfer endorsed thereon, or a satisfactory
written instrument of transfer, duly executed), at the office of the Securities
Registrar. The Company may at any time rescind the designation of any such
registrar or approve a change in the location through which any such registrar
acts. The Company may at any time designate additional transfer agents with
respect to the Subordinated Debentures. In the event of any redemption, neither
the Company nor the Securities Registrar shall be required to (i) issue,
register the transfer of or exchange Subordinated Debentures during a period
beginning at the opening of business 15 days before the day of selection for
redemption of Subordinated Debentures and ending at the close of business on the
day of mailing of the relevant notice of redemption or (ii) transfer or exchange
any Subordinated Debentures so selected for redemption, except, in the case of
any Subordinated Debentures being redeemed in part, any portion thereof not to
be redeemed.
PAYMENT AND PAYING AGENTS
Payment of principal of and any interest on the Subordinated Debentures
initially will be made at the office of the Debenture Trustee in the City of
Wilmington, Delaware, except that at the option of the Company payment of any
interest may be made (i) by check mailed to the address of the person entitled
thereto as such address shall appear in the securities register or (ii) by wire
transfer to an account maintained by the person entitled thereto as specified in
the securities register, provided that proper transfer instructions have been
received by the record date. Notwithstanding the foregoing, so long as the
Property Trustee holds the Subordinated Debentures, payments shall be made at
the time and place designated by the Property Trustee. Payment of any interest
on Subordinated Debentures will be made to the person in whose name such
Subordinated Debentures is registered at the close of business on the record
date for such interest payment, except in the case of Defaulted Interest. So
long as the Subordinated Debentures remain outstanding, the Company will
maintain an office or agency in Evansville, Indiana, or the office of the
Property Trustee, and unless the Property Trustee is the only registered holder
of the Subordinated Debentures, in the Borough of Manhattan, New York City.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or then
held by the Company in trust, for the payment of the principal of or interest on
the Subordinated Debentures and remaining unclaimed for two years after such
principal or interest has become due and payable shall, at the written request
of the Company, be repaid to the Company and the holder of such Subordinated
Debenture shall thereafter look, as a general unsecured creditor, only to the
Company for payment thereof.
MODIFICATION OF INDENTURE
From time to time the Company and the Debenture Trustee may, without the
consent of the holders of the Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies and qualifying, or maintaining
the qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Company and the Debenture Trustee, with the
consent of the holders of not less than a majority in aggregate principal amount
of the outstanding Subordinated Debentures, to modify the Indenture in a manner
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,
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extend the maturity of the Subordinated Debentures beyond the Scheduled Maturity
Date (other than in accordance with the terms of the Indenture governing such
extensions), or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, reduce the percentage of
principal amount of Subordinated Debentures the holders of which are required to
consent to any such modification of the Indenture.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Subordinated Debentures that has occurred and is
continuing constitutes an event of default ("Debenture Event of Default") with
respect to the Subordinated Debentures:
(i) failure for 30 days to pay any interest on the Subordinated
Debentures, when due (subject to the deferral of any due date in the case of
an Extension Period); or
(ii) failure to pay any principal on the Subordinated Debentures when
due and payable whether at the Scheduled Maturity Date, upon redemption, by
declaration of acceleration or otherwise (subject to the deferral of any due
date in the case of an Extension Period); or
(iii) failure to observe or perform in any material respect certain other
covenants contained in the Indenture for 90 days after proper written notice
to the Company from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of the Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Company; or
(v) under certain circumstances, the dissolution, winding up, or
termination of NCBE Trust.
Within the limits of the Indenture, and subject to the Indenture Trustee's
rights to decline to take action exposing it to personal liability, the holders
of a majority in aggregate outstanding 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 Debenture Trustee. The Debenture
Trustee or the holders of not less than 25% in aggregate outstanding principal
amount of the Subordinated Debentures may declare the principal due and payable
immediately upon a Debenture Event of Default. The holders of a majority in
aggregate outstanding principal amount of the Subordinated Debentures may annul
such declaration and waive the default if the default (other than the
non-payment of the principal of the Subordinated Debentures which has become due
solely by such acceleration) has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee, amounts payable to
the Debenture Trustee have been paid, and all Debenture Events of Default (other
than the non-payment of the principal of the Subordinated Debentures which has
become due solely by such acceleration) have been removed or waived. Should the
holders of the Subordinated Debentures fail to annul such declaration and waive
such default, the holders of a majority in aggregate Liquidation Amount of the
Preferred Securities shall have waiver rights.
The Company is required to file annually with the Debenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing, and as
long as the Property Trustee is the holder of the Subordinated Debentures, the
Property Trustee will have the right to declare the principal of and the
interest on such Subordinated Debentures, and any other amounts payable under
the Indenture, to be forthwith due and payable and to enforce its other rights
as a creditor with respect to such Subordinated Debentures.
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ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay 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), a
holder of Preferred Securities may institute a Direct Action. The Company may
not amend the Indenture to remove the foregoing right to bring a Direct Action
without the prior written consent of the holders of all of the Preferred
Securities. If the right to bring a Direct Action is removed, NCBE Trust may
become subject to the periodic reporting obligations of the Exchange Act. The
Company has the right under the Indenture to set-off any payment made to such
holder of Preferred Securities by the Company in connection with a Direct
Action.
The holders of the Preferred Securities would not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the Subordinated Debentures unless there shall have
been an Event of Default under the Trust Agreement. See "Description of the
Preferred Securities--Events of Default and Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Company may consolidate with or merge into any other Person or sell,
convey, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person, subject to the following covenants
and agreements: (i) in case the Company consolidates with or merges into another
Person or conveys or transfers its properties and assets substantially as an
entirety to any Person, the successor Person is organized under the laws of the
United States or any state or the District of Columbia, and such successor
Person expressly assumes the Company's obligations on the Subordinated
Debentures issued under the Indenture; (ii) immediately after giving effect
thereto, no Debenture Event of Default, and no event which, after notice or
lapse of time or both, would become a Debenture Event of Default, shall have
occurred and be continuing; and (iii) certain other conditions as prescribed in
the Indenture are met.
The general provisions of the Indenture do not afford holders of the
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Company that may adversely affect holders of the
Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Subordinated
Debentures not previously delivered to the Debenture Trustee for cancellation
(i) have become due and payable or (ii) will become due and payable at their
Maturity Date within one year or (iii) or are to be called for redemption within
one year under arrangements satisfactory to the Debenture Trustee for the giving
of notice, and the Company deposits or causes to be deposited with the Debenture
Trustee funds, in trust, for the purpose and in an amount in which the
Subordinated Debentures are payable sufficient to pay and discharge the entire
indebtedness on the Subordinated Debentures not previously delivered to the
Debenture Trustee for cancellation, for the principal and interest to the
Maturity Date, and the Company pays all other sums payable under the Indenture,
then the Indenture will cease to be of further effect (except as to certain
administrative and other obligations) and the Company will be deemed to have
satisfied and discharged the Indenture.
GOVERNING LAW
The Indenture and the Subordinated Debentures will be governed by and
construed in accordance with the laws of the State of Indiana.
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INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Subordinated Debentures, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which might
be incurred thereby. The Debenture Trustee is not required to expend or risk its
own funds or otherwise incur personal financial liability in the performance of
its duties if the Debenture Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.
The Company has covenanted, as to the Subordinated Debentures, (i) to
maintain directly or indirectly 100% ownership of the Common Securities,
provided that certain successors which are permitted pursuant to the Indenture
may succeed to the Company's ownership of the Common Securities, (ii) not to
voluntarily dissolve, wind-up or liquidate NCBE Trust, except upon prior
approval of the Federal Reserve if then so required under applicable capital
guidelines or policies of the Federal Reserve, and (iii) to use its reasonable
efforts, consistent with the terms and provisions of the NCBE Trust Agreement,
to cause (a) NCBE Trust to remain classified as a grantor trust and not as an
association taxable as a corporation or partnership for United States federal
income tax purposes and (b) each holder of Trust Securities to be treated as
owning an undivided beneficial interest in the Subordinated Debentures.
BOOK-ENTRY ISSUANCE
The Depositary will act as securities depositary for all of the Preferred
Securities. The Preferred Securities will be issued only as fully-registered
securities registered in the name of Cede & Co. (the Depositary's nominee). One
or more fully-registered global certificates will be issued for the Preferred
Securities and will be deposited with the Depositary.
The Depositary is a limited purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The Depositary holds securities that its Participants deposit with the
Depositary. The Depositary also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
"Direct Participants" include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations and certain other
organizations. The Depositary 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 Depositary
system is also available to others such as securities brokers and dealers, banks
and trust companies that clear through or maintain custodial relationships with
Direct Participants, either directly or indirectly ("Indirect Participants").
The rules applicable to the Depositary and its Participants are on file with the
Commission.
Purchases of Preferred Securities within the Depositary system must be made
by or through Direct Participants, which will receive a credit for the Preferred
Securities on the Depositary's records. The ownership interest of each actual
purchaser of each Preferred Security ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from the Depositary of their purchases,
but Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Direct or Indirect Participants through which the Beneficial Owners
purchased Preferred Securities. Transfers of ownership interests in the
Preferred Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
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receive certificates representing their ownership interests in Preferred
Securities, except in the event that use of the book-entry system for the
Preferred Securities of NCBE Trust is discontinued.
To facilitate subsequent transfer, all Preferred Securities deposited by
Participants with the Depositary are registered in the name of the Depositary's
partnership nominee, Cede & Co. The deposit of Preferred Securities with the
Depositary and their registration in the name of Cede & Co. effect no change in
beneficial ownership. The Depositary has no knowledge of the actual Beneficial
Owners of the Preferred Securities; the Depositary's records reflect only the
identity of the Direct Participants to whose accounts such Preferred Securities
are credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder of
the Preferred Securities. If less than all of the Preferred Securities are being
redeemed, the Depositary will determine by lot the amount of interest of each
Direct Participant in such Preferred Securities to be redeemed. Although voting
with respect to the Preferred Securities is limited to the holders of record of
the Preferred Securities, in those instances in which a vote is required,
neither the Depositary nor Cede & Co. will itself consent or vote with respect
to Preferred Securities. Under its usual procedures, the Depositary would mail
an omnibus proxy (the "Omnibus Proxy") to the relevant Trustee as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts such
Preferred Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Distribution payments on the Preferred Securities will be made by the Paying
Agent to the Depositary. The Depositary's practice is to credit Direct
Participants' accounts on the relevant payment date in accordance with their
respective holdings shown on the Depositary's records unless the Depositary 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
accounts of customers in bearer form or registered in "street name" and will be
the responsibility of such Participant and not of the Depositary, the relevant
Trustee, NCBE Trust or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of Distributions to
the Depositary is the responsibility of the Paying Agent, disbursement of such
payments to Direct Participants is the responsibility of the Depositary, and
disbursements of such payments to the Beneficial Owners is the responsibility of
Direct and Indirect Participants.
The Depositary may discontinue providing its services as securities
depositary with respect to any of the Preferred Securities at any time by giving
reasonable notice to the relevant Trustee and the Company. In the event that a
successor securities depositary is not obtained, definitive Preferred Security
certificates representing such Preferred Securities are required to be printed
and delivered. The Company, at its option, may decide to discontinue use of the
system of book-entry transfers through the Depositary (or a successor
depositary). After a Debenture Event of Default, the holders of a majority in
aggregate Liquidation Amount of Preferred Securities may determine to
discontinue the system of book-entry transfers through the Depositary. In any
such event, definitive certificates for such Preferred Securities will be
printed and delivered.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that NCBE Trust
and the Company believe to be accurate, but NCBE Trust and the Company assume no
responsibility for the accuracy thereof. Neither NCBE Trust nor the Company has
any responsibility for the performance by the Depositary or its Participants of
their
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respective obligations as described herein or under the rules and procedures
governing their respective operation.
In the event that NCBE Trust is dissolved and the Subordinated Debentures
are distributed to the Depositary (as holder of the Preferred Securities), the
depository arrangements and book-entry system applicable thereto will be
substantially similar to those applicable to the Preferred Securities. See
"Description of the Preferred Securities--Global Preferred Securities."
DESCRIPTION OF THE GUARANTEE
The Preferred Securities Guarantee Agreement (the "Guarantee") will be
executed and delivered by the Company concurrently with the issuance of the
Preferred Securities for the benefit of the holders of the Preferred Securities.
Wilmington Trust Company will act as trustee under the Guarantee (the "Guarantee
Trustee") for the purposes of compliance with the Trust Indenture Act, and the
Guarantee will be qualified as an indenture under the Trust Indenture Act. The
following summary of the material terms and provisions of the Guarantee does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of the Guarantee, including the definitions
therein of certain terms, and the Trust Indenture Act. The form of the Guarantee
has been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part. The Guarantee Trustee will hold the Guarantee for the
benefit of the holders of the Preferred Securities.
GENERAL
Pursuant to the Guarantee, the Company will irrevocably agree to pay in full
on a subordinated basis, to the extent set forth therein, the Guarantee Payments
(as defined below) to the holders of the Preferred Securities, as and when due,
regardless of any defense, right of set-off or counterclaim that NCBE Trust may
have or assert other than the defense of payment. The following payments with
respect to the Preferred Securities, to the extent not paid by or on behalf of
NCBE Trust (the "Guarantee Payments"), will be subject to the Guarantee: (i) any
accumulated and unpaid Distributions required to be paid on the Preferred
Securities, to the extent that NCBE Trust has funds legally and immediately
available therefor at such time, (ii) the Redemption Price with respect to any
Preferred Securities called for redemption to the extent that NCBE Trust has
funds legally and immediately available therefor at such time, and (iii) upon a
voluntary or involuntary dissolution, winding-up or liquidation of NCBE Trust
(unless the Subordinated Debentures are distributed to holders of the Preferred
Securities), the lesser of (a) the Liquidation Distribution to the extent NCBE
Trust has funds legally and immediately available therefor at such time and (b)
the amount of assets of NCBE Trust remaining available for distribution to
holders of Preferred Securities. The Company's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Company to the holders of the Preferred Securities or by causing NCBE Trust to
pay such amounts to such holders.
The Guarantee will not apply to any payment of Distributions except to the
extent NCBE Trust has funds legally and immediately available therefor. If the
Company does not make principal or interest payments on the Subordinated
Debentures held by NCBE Trust, NCBE Trust will not pay Distributions on the
Preferred Securities and will not have funds legally available therefor.
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior Debt and
Additional Senior Obligations of the Company in the same manner as the
Subordinated Debentures. The Guarantee does not place a limitation on the amount
of additional Senior Debt or Additional Senior Obligations that may be incurred
by the Company. The Company expects from time to time to incur additional
indebtedness constituting Senior Debt and Additional Senior Obligations.
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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 first instituting
a legal proceeding against any other person or entity). The Guarantee will be
held for the benefit of the holders of the Preferred Securities. The Guarantee
will not be discharged except by payment of the Guarantee Payments in full to
the extent not paid by NCBE Trust or upon distribution of the Subordinated
Debentures to the holders of the Preferred Securities. Because the Company is a
holding company, the right of the Company to participate in any distribution of
assets of its subsidiaries upon liquidation or reorganization or otherwise is
subject to the prior claims of creditors of a subsidiary, except to the extent
the Company may itself be recognized as a creditor of such subsidiary. The
Company's obligations under the Guarantee, therefore, will be effectively
subordinated to all existing and future liabilities of its subsidiaries, and
claimants should look only to the assets of the Company for payments thereunder.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Preferred Securities (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of the
outstanding Preferred Securities. See "Description of the Preferred
Securities--Voting Rights; Amendment of Trust Agreement." All guarantees and
agreements contained in the Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to the
benefit of the holders of the Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of Preferred Securities may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against NCBE Trust, the Guarantee Trustee or any
other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, must exercise the same degree of care and
skill as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by the Guarantee at the request of
any holder of any Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon full
payment of the Redemption Price of the Preferred Securities, upon full payment
of the amounts payable upon liquidation of NCBE Trust or upon distribution of
the Subordinated Debentures to the holders of the Preferred
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Securities. The Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of the Preferred Securities must
restore payment of any sums paid under such Preferred Securities or the
Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of Indiana.
EXPENSE AGREEMENT
Pursuant to the Agreement as to Expenses and Liabilities entered into by the
Company under the Trust Agreement (the "Expense Agreement"), the Company will
irrevocably and unconditionally guarantee to each person or entity to whom NCBE
Trust becomes indebted or liable, the full payment of any costs, expenses or
liabilities of NCBE Trust, other than obligations of NCBE Trust to pay to the
holders of the Preferred Securities or other similar interests in NCBE Trust the
amounts due such holders pursuant to the terms of the Preferred Securities or
such other similar interests, as the case may be. Third party creditors of NCBE
Trust may proceed directly against the Company under the Expense Agreement,
regardless of whether such creditors had notice of the Expense Agreement.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE SUBORDINATED DEBENTURES
AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent NCBE Trust has funds available for the payment of such
Distributions and other amounts) are irrevocably guaranteed by the Company as
and to the extent set forth under "Description of the Guarantee." The Company
and NCBE Trust believe that, taken together, the Company's obligations under the
Subordinated Debentures, the Indenture, the Trust Agreement, the Expense
Agreement, and the Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee, on a subordinated basis, of payment of Distributions
and other amounts due on the Preferred Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of NCBE Trust's obligations under the Preferred Securities. If and to the extent
that the Company does not make payments on the Subordinated Debentures, NCBE
Trust will not pay Distributions or other amounts due on the Preferred
Securities. The Guarantee does not cover payment of Distributions when NCBE
Trust does not have sufficient funds to pay such Distributions. In such event,
the remedy of a holder of Preferred Securities (other than in connection with
the distribution of Subordinated Debentures to the holders of Preferred
Securities or a redemption of all Preferred Securities) is to institute a legal
proceeding directly against the Company for enforcement of payment of such
Distributions to such holder. The obligations of the Company under the Guarantee
are subordinate and junior in right of payment to all Senior Debt and Additional
Senior Obligations.
SUFFICIENCY OF PAYMENTS
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 other payments due on the Preferred Securities, primarily because (i) the
aggregate principal amount of the Subordinated Debentures will be equal to the
sum of the aggregate stated Liquidation Amount of the Preferred Securities and
Common Securities; (ii) the interest rate and interest and other payment dates
on the Subordinated Debentures will match the Distribution rate and Distribution
and other payment dates for the Preferred Securities; (iii) the Company will pay
for any and all costs, expenses and liabilities of NCBE Trust except
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NCBE Trust's obligations to holders of the Preferred Securities; and (iv) the
Trust Agreement further provides that NCBE Trust will not engage in any activity
that is not consistent with the limited purposes of NCBE Trust.
Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set-off any payment it is otherwise required to make thereunder if
and to the extent the Company has theretofore made, or is concurrently on the
date of such payment making, a payment under the Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Preferred Security may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, NCBE Trust or any
other person or entity.
A default or event of default under any Senior Debt or Additional Senior
Obligations of the Company would not constitute a Debenture Event of Default.
However, in the event of payment defaults under, or acceleration of, Senior Debt
or Additional Senior Obligations of the Company, the subordination provisions of
the Indenture provide that no payments may be made in respect of the
Subordinated Debentures until such Senior Debt or Additional Senior Obligations
have been paid in full or any payment default thereunder has been cured or
waived. Failure to make required payments on the Subordinated Debentures would
constitute a Debenture Event of Default and, correspondingly an Event of
Default.
LIMITED PURPOSE OF NCBE TRUST
The Preferred Securities evidence a beneficial interest in the assets of
NCBE Trust, and NCBE Trust exists for the exclusive purposes of (i) issuing the
Preferred Securities and Common Securities, (ii) investing the proceeds thereof
in the Subordinated Debentures, and (iii) engaging in activities necessary,
advisable or incidental thereto. A principal difference between the rights of a
holder of a Preferred Security and a holder of a Subordinated Debenture is that
a holder of a Subordinated Debenture is entitled to receive from the Company the
principal amount of and interest accrued on the Subordinated Debentures held,
while a holder of Preferred Securities is entitled to receive Distributions from
NCBE Trust (or from the Company under the Guarantee) if and to the extent NCBE
Trust has funds available for the payment of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary dissolution, winding-up or liquidation of
NCBE Trust involving the liquidation of the Subordinated Debentures, the holders
of the Preferred Securities will be entitled to receive, out of assets held by
NCBE Trust, the Liquidation Distribution in cash. See "Description of Preferred
Securities--Liquidation Distribution Upon Dissolution." Upon any voluntary or
involuntary liquidation or bankruptcy of the Company, the Property Trustee, as
holder of the Subordinated Debentures, would be a subordinated creditor of the
Company, subordinated in right of payment to all Senior Debt and Additional
Senior Obligations as set forth in the Indenture, but entitled to receive
payment in full of principal and interest before any shareholders of the Company
receive payments or distributions. Since the Company is the guarantor under the
Guarantee and has agreed to pay for all costs, expenses and liabilities of NCBE
Trust (other than NCBE Trust's obligations to the holders of the Preferred
Securities), the positions of a holder of the Preferred Securities and a holder
of the Subordinated Debentures relative to other creditors and to shareholders
of the Company in the event of liquidation or bankruptcy of the Company are
expected to be substantially the same.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
This section is a summary of the material United States federal income tax
considerations that may be relevant to the purchasers of Preferred Securities
and represents the opinion of Baker & Daniels, counsel to the Company, insofar
as it relates to matters of law and legal conclusions. The conclusions expressed
herein are based upon current provisions of the Internal Revenue Code of 1986,
as amended ("Code"), the regulations promulgated thereunder and current
administrative rulings and court decisions, all of which are subject to change
at any time, with possible retroactive effects. Subsequent changes may cause tax
consequences to vary substantially from the consequences described below. See
"--Possible Changes in Tax Laws." Furthermore, the authorities on which this
summary is based are subject to various interpretations, and it is therefore
possible that the federal income tax treatment of the purchase, ownership and
disposition of Preferred Securities may differ from the treatment described
below.
No attempt has been made in the following discussion to comment on all
United States federal income tax matters affecting purchasers of Preferred
Securities. Moreover, the discussion generally focuses on holders of Preferred
Securities who are individual citizens or residents of the United States and who
acquire Preferred Securities on their original issue at their offering price and
hold Preferred Securities as capital assets. The discussion has only limited
application to dealers in securities, corporations, estates, trusts or
nonresident aliens and does not address all the tax consequences that may be
relevant to holders who may be subject to special tax treatment, such as, for
example, 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 Preferred 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 Preferred
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 Preferred Securities.
Each prospective investor should consult, and should rely exclusively on,
the investor's own tax advisors in analyzing the federal, state, local and
foreign tax consequences of the purchase, ownership or disposition of Preferred
Securities.
CLASSIFICATION OF THE SUBORDINATED DEBENTURES
The Company intends to take the position that the Subordinated Debentures
will be classified for United States federal income tax purposes as indebtedness
of the Company under current law and, by acceptance of a Preferred Security,
each holder covenants to treat the Subordinated Debentures as indebtedness and
the Preferred Securities as evidence of an indirect beneficial interest in the
Subordinated Debentures. No assurance can be given, however, that such position
of the Company will not be challenged by the Internal Revenue Service or, if
challenged, that such a challenge will not be successful. The remainder of this
discussion assumes that the Subordinated Debentures will be classified for
United States federal income tax purposes as indebtedness of the Company.
CLASSIFICATION OF NCBE TRUST
Under current law and assuming full compliance with the terms of the Trust
Agreement and Indenture, NCBE 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 Preferred Securities generally will be treated as owning an undivided
beneficial interest in the Subordinated Debentures, and each holder will be
required to include in its return any income, gain, loss or expense with respect
to its allocable share of the Subordinated Debentures.
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<PAGE>
Because income on the Preferred Securities will constitute interest income
for United States Federal income tax purposes, corporate holders of Preferred
Securities will not be entitled to claim a dividends received deduction in
respect of such income.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
The Company's option to extend the interest payment period on the
Subordinated Debentures may cause the indebtedness to be issued with original
issue discount ("OID"). Under current Treasury regulations (the "Regulations"),
a contingency that stated interest will not be timely paid that is "remote" will
be ignored in determining whether such debt instrument is issued with OID.
Because the exercise by the Company of its option to defer the payment of stated
interest on the Subordinated Debentures would prevent the Company from declaring
dividends on any class of equity, the Company believes that the likelihood of
its exercising the option is "remote" within the meaning of the Regulations. As
a result, the Company intends to take the position that the Subordinated
Debentures will not be deemed to be issued with OID at the time of their initial
issuance. If this position is sustained, a holder of the Preferred Securities
should include in gross income such holder's allocable share of interest on the
Subordinated Debentures in accordance with such holder's method of tax
accounting.
There can be no assurance, however, that the Internal Revenue Service will
not successfully contest the Company's position. If the Internal Revenue Service
were successful in such a contention, then all of the stated interest payments
on the Subordinated Debentures would be treated as OID. In such case, the
holders of the Preferred Securities would be required to include OID in income
on an economic accrual basis regardless of whether any interest is actually paid
or their method of tax accounting, but will not be required to report actual
payments of interest as taxable income.
If the Company's position that there is no OID initially is upheld, but the
Company exercises its option to defer any payment of interest, the Subordinated
Debentures would at the time of such exercise be treated as issued with OID, and
all stated interest thereafter payable on the Subordinated Debentures would be
treated as OID. In such event, the holders of the Preferred Securities would be
required to account for the OID as stated in the immediately preceding
paragraph. Consequently, a holder of Preferred Securities would be required to
include in gross income OID even though the Company would not make any actual
interest payments during an Extension Period.
MARKET DISCOUNT AND ACQUISITION PREMIUM
Holders of Preferred Securities other than a holder who purchased the
Preferred Securities upon original issuance 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 Preferred Securities.
RECEIPT OF SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF NCBE TRUST
Under certain circumstances, as described under "Description of the
Preferred Securities--Redemption," the Subordinated Debentures may be
distributed to holders of Preferred Securities upon a liquidation of NCBE Trust.
Under current United States federal income tax law, such a distribution would be
treated as a nontaxable exchange to each such holder and would result in such
holder having an aggregate tax basis in the Subordinated Debentures received in
the liquidation equal to such holder's aggregate tax basis in the Preferred
Securities immediately before the distribution. A holder's holding period in the
Subordinated Debentures so received in liquidation of NCBE Trust would include
the period for which such holder held the Preferred Securities.
If, however, a Tax Event occurs which results in NCBE Trust being treated as
an association taxable as a corporation, the distribution would likely
constitute a taxable event to NCBE Trust and to holders of the
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<PAGE>
Preferred Securities. Each holder of Preferred Securities would recognize gain
or loss as if such holder exchanged the Preferred Securities for the
Subordinated Debentures it received upon liquidation of NCBE Trust. Under
certain circumstances described herein, the Subordinated Debentures may be
redeemed for cash and the proceeds of such redemption distributed to holders in
redemption of their Preferred Securities. Under current law, such a redemption
would, for United States federal income tax purposes, constitute a taxable
disposition, and a holder would recognize gain or loss as if the holder sold
such Preferred Securities for cash. See "Description of the Preferred
Securities--Redemption."
DISPOSITION OF THE PREFERRED SECURITIES
A holder of Preferred Securities that sells Preferred Securities will
recognize gain or loss equal to the difference between its adjusted tax basis
for the Preferred Securities and the amount realized on the sale of such
Preferred Securities. Assuming that the Company's position that there is no OID
initially is upheld, and that the Company does not exercise its option to defer
payment of interest on the Subordinated Debentures, a Preferred Security
holder's adjusted tax basis for the Preferred Securities generally will be its
initial purchase price. If the Subordinated Debentures are deemed to have been
issued initially with OID, or OID results due to the Company's deferral of any
interest payment, a Preferred Security holder's adjusted tax basis for the
Preferred Securities generally will be its initial purchase price, increased by
OID previously included in such holder's gross income to the date of disposition
and decreased by distributions and other payments received on the Preferred
Securities since the date the Subordinated Debentures are deemed to have OID.
Such gain or loss generally will be a capital gain or loss (except to the extent
any amount realized is treated as a payment of accrued interest with respect to
such holder's pro rata share of the Subordinated Debentures) and will be a
long-term capital gain or loss if the Preferred Securities have been held for
more than eighteen months.
The Preferred 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 that disposes of its Preferred Securities
between record dates for payments of distributions thereon will be required to
include as ordinary income either OID (if applicable) or accrued but unpaid
interest on the Subordinated Debentures through the date of disposition. To the
extent the amount realized is less than the holder's adjusted tax basis, a
holder will generally 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.
POSSIBLE CHANGES IN TAX LAWS
Certain legislative proposals were made in 1996 and 1997 which were designed
to eliminate the ability of issuers of certain instruments to deduct interest
paid on those instruments. These proposals were not, however, incorporated into
the legislation recently enacted as the Taxpayer Relief Act of 1997.
Nevertheless, there can be no assurance that other legislation enacted after the
date hereof will not otherwise adversely affect the ability of the Company to
deduct interest payable on the Subordinated Debentures, and such legislation
could be retroactive in effect. Consequently, there can be no assurance that a
Tax Event will not occur. A Tax Event would permit the Company, upon approval of
the Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve, to cause a redemption of the Preferred
Securities before, as well as after, March 31, 2003. See "Description of the
Subordinated Debentures--Redemption" and "Description of the Preferred
Securities--Redemption--Tax Event Redemption, Investment Company Event
Redemption or Capital Event Redemption."
BACKUP WITHHOLDING AND INFORMATION REPORTING
Payments with respect to, and the amount of OID accrued on, the Preferred
Securities held of record by individual citizens or residents of the United
States, or certain trusts, estates, and partnerships, will be reported to the
Internal Revenue Service on Forms 1099, which forms should be mailed to such
holders of Preferred Securities by January 31 following each calendar year.
Payments made on, and proceeds from
68
<PAGE>
the sale of, the Preferred Securities may be subject to a "backup" withholding
tax (currently at 31%) unless the holder complies with certain identification
and other requirements. Any amounts withheld under the backup withholding rules
will be allowed as a credit against the holder's United States federal income
tax liability provided the required information is provided to the Internal
Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON THE
PARTICULAR SITUATION OF A HOLDER OF PREFERRED SECURITIES. HOLDERS OF PREFERRED
SECURITIES 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
Employee benefit plans that are subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code
("Plans"), generally may purchase Preferred Securities, subject to the investing
fiduciary's determination that the investment in Preferred Securities satisfies
ERISA's fiduciary standards and other requirements applicable to investments by
the Plan.
In any case, the Company and/or any of its affiliates may be considered a
"party in interest" (within the meaning of ERISA) or a "disqualified person"
(within the meaning of Section 4975 of the Code) with respect to certain plans
(generally, Plans maintained or sponsored by, or contributed to by, any such
persons with respect to which the Company or an affiliate is a fiduciary or
Plans for which the Company or an affiliate provides services). The acquisition
and ownership of Preferred Securities by a Plan (or by an individual retirement
arrangement or other Plans described in Section 4975(e)(1) of the Code) with
respect to which the Company or any of its affiliates is considered a party in
interest or a disqualified person may constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code, unless such Preferred
Securities are acquired pursuant to and in accordance with an applicable
exemption.
As a result, Plans with respect to which the Company or any of its
affiliates is a party in interest or a disqualified person should not acquire
Preferred Securities unless such Preferred Securities are acquired pursuant to
and in accordance with an applicable exemption. Any other Plans or other
entities whose assets include Plan assets subject to ERISA or Section 4975 of
the Code proposing to acquire Preferred Securities should consult with their own
counsel.
69
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement among
J.J.B. Hilliard, W.L. Lyons, Inc. and NatCity Investments, Inc. (the
"Underwriters") and the Company and NCBE Trust, the Underwriters have, severally
and not jointly, agreed to purchase from NCBE Trust, and NCBE Trust has agreed
to sell to the Underwriters, the respective numbers of the Preferred Securities
set forth opposite their respective names below.
<TABLE>
<CAPTION>
NUMBER OF
PREFERRED
NAME OF UNDERWRITER SECURITIES
- ------------------------------------------------------ ------------------
<S> <C>
J.J.B. Hilliard, W.L. Lyons, Inc......................
NatCity Investments, Inc..............................
----------
Total............................................... 1,200,000
----------
----------
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
thereunder are subject to approval of certain legal matters by counsel and to
various other conditions, including, among other things, the continuing accuracy
of the representations and warranties of the Company and NCBE Trust contained in
the Underwriting Agreement, the performance by the Company and NCBE Trust of
their obligations under the Underwriting Agreement and the receipt of certain
opinions of counsel in form and substance reasonably satisfactory to counsel for
the Underwriters. The nature of the Underwriters' obligations is such that they
are committed to purchase and pay for all of the Preferred Securities, if any
are purchased.
The Underwriters propose to offer the Preferred Securities directly to the
public at the initial public offering price set forth on the cover page of this
Prospectus. The Underwriters have advised the Company and NCBE Trust that sales
of the Preferred Securities to certain dealers may be made at a concession not
in excess of $ per Preferred Security, and that the Underwriters may allow,
and such dealers may reallow, discounts not in excess of $ per Preferred
Security on sales to certain other dealers. After the public offering, the
offering price and other selling terms may be changed by the Underwriters.
Because the National Association of Securities Dealers, Inc. ("NASD") is
expected to view the Preferred Securities as interests in a direct participation
program, the offering of the Preferred Securities is being made in compliance
with the applicable provisions of Rule 2810 of the NASD's Conduct Rules.
In view of the fact that the proceeds from the sale of the Preferred
Securities will be used to purchase the Subordinated Debentures issued by the
Company, the Underwriting Agreement provides that the Company will pay as
Underwriters' Compensation for the Underwriters' arranging the investment
therein of such proceeds an amount equal to $ per Preferred Security for
the accounts of the several Underwriters.
NCBE Trust has granted to the Underwriters an option, exercisable during a
thirty-day period after the date of this Prospectus, to purchase up to 180,000
Preferred Securities at the public offering price, all as described on the cover
page hereof, solely to cover over-allotments, if any. The Company has also
agreed to pay the Underwriters the same commission described in the immediately
preceding paragraph in the event the Underwriters exercise this option.
Prior to this offering, there has been no public market for the Preferred
Securities. The Preferred Securities have been approved for listing on the
Nasdaq National Market, subject to notice of issuance. Trading of the Preferred
Securities on the Nasdaq National Market is expected to commence within 30 days
after the initial delivery of the Preferred Securities. The Underwriters have
advised the Company that they intend to make a market in the Preferred
Securities prior to commencement of trading on the Nasdaq National Market, but
are not obligated to do so and may discontinue market making at any time without
notice. No assurance can be given as to the liquidity of or the existence of the
trading market for the Preferred Securities.
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<PAGE>
The Company and NCBE Trust have agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the Securities Act.
In connection with the offering of the Preferred Securities, the
Underwriters and any selling group members and their respective affiliates may
engage in transactions effected in accordance with Rule 104 of the Commission's
Regulation M promulgated by the Securities and Exchange Commission
("Commission") that are intended to stabilize, maintain or otherwise affect the
market price of the Preferred Securities. Such transactions may include
over-allotment transactions in which the Underwriters create a short position
for their own account by selling more Preferred Securities than they are
committed to purchase from NCBE Trust. In such case, to cover all or part of the
short position, the Underwriters may exercise the over-allotment option
described above or may purchase Preferred Securities in the open market
following completion of the initial offering of the Preferred Securities. The
Underwriters also may engage in stabilizing transactions in which they bid for,
and purchase, Preferred Securities at a level above that which might otherwise
prevail in the open market for the purpose of preventing or retarding a decline
in the market price of the Preferred Securities. The Underwriters also may
reclaim any selling concessions allowed to a dealer if the Underwriters
repurchase Preferred Securities distributed by that dealer. Any of the foregoing
transactions may result in the maintenance of a price for the Preferred
Securities at a level above that which might otherwise prevail in the open
market. Neither the Company nor any Underwriter makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Preferred Securities. The
Underwriters are not required to engage in any of the foregoing transactions
and, if commenced, such transactions may be discontinued at any time without
notice.
The Underwriters or their affiliates may provide in the future investment
banking services to the Company and its affiliates, for which such Underwriters
or their affiliates would expect to receive customary fees and commissions.
National City Bancshares, Inc. and NCBE Capital Trust I are not affiliates
of National City Corporation and its subsidiaries, including NatCity
Investments, Inc., one of the Underwriters.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Preferred
Securities, the enforceability of the Trust Agreement and the formation of NCBE
Trust will be passed upon, upon behalf of NCBE Trust and the Company, by
Richards, Layton & Finger, P.A., special Delaware counsel to NCBE Trust and the
Company. The validity of the Subordinated Debentures and the Guarantee and
certain matters relating thereto, as well as certain matters relating to United
States federal income tax considerations, will be passed upon for the Company by
Baker & Daniels, Indianapolis, Indiana. Counsel for the Underwriters, Stites &
Harbison, Louisville, Kentucky will pass upon certain legal matters for the
Underwriters.
EXPERTS
The consolidated financial statements of National City Bancshares, Inc. and
subsidiaries as of December 31, 1997 and 1996 and each of the three years ended
December 31, 1997, incorporated herein by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1997, have been audited by
McGladrey & Pullen, LLP, independent certified public accountants, as set forth
in their report thereon included therein and incorporated herein by reference.
The consolidated financial statements referenced above are incorporated herein
by reference in reliance upon such reports and upon the authority of such firm
as experts in accounting and auditing.
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<PAGE>
AVAILABLE INFORMATION
This Prospectus constitutes a part of a joint Registration Statement on Form
S-3 (together with all amendments, exhibits and schedules thereto, the
"Registration Statement") filed by the Company and NCBE Trust with the
Commission under the Securities Act and the rules and regulations promulgated
thereunder, with respect to this offering. This Prospectus does not contain all
of the information set forth in such Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission, although it does include a summary of the material terms of the
Indenture, the Subordinated Debentures and the Trust Agreement (each as defined
herein). Reference is made to such Registration Statement and to the exhibits
relating thereto for further information with respect to the Company, NCBE Trust
and the Preferred Securities. Any statements contained herein concerning the
provisions of any document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission 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.
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information filed by the Company with the Commission can be inspected and copied
at the public reference facilities maintained by the Commission at Judiciary
Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at its
regional offices at Citicorp Center, 500 West Madison Street, Chicago, Illinois
60661, and Seven World Trade Center, New York, New York 10048. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company's Common Stock is listed on the Nasdaq Stock Market's National
Market under the symbol "NCBE" and reports, proxy statements and other
information concerning the Company can be inspected at the offices of the NASD
at 1735 K Street, N.W., Washington, D.C. 20006. If available, such reports and
other information may also be accessed through the Commission's electronic data
gathering, analysis and retrieval system ("EDGAR") via electronic means,
including the Commission's web site on the Internet (http://www.sec.gov).
No separate financial statements of NCBE Trust have been included or
incorporated by reference herein. The Company and NCBE Trust do not consider
that such financial statements would be material to holders of the Preferred
Securities because NCBE Trust is a newly formed special purpose entity, has no
operating history or independent operations and is not engaged in and does not
propose to engage in any activity other than holding as trust assets the
Subordinated Debentures and issuing the Trust Securities. See "Description of
the Preferred Securities," "Description of the Subordinated Debentures" and
"Description of the Guarantee." In addition, the Company does not expect that
NCBE Trust will file periodic reports in the future under the Exchange Act with
the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company (File No.
0-13585) pursuant to the Exchange Act are incorporated by reference in this
Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended December 31, 1997;
(b) Current Report on Form 8-K dated March 11, 1998; and
(c) Proxy Statement dated March 17, 1997, relating to the annual meeting of
shareholders held April 15, 1997.
All documents filed by the Company or NCBE Trust pursuant to Section 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date of this Registration
Statement and prior to the filing of a post-effective amendment to this
Registration Statement which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference
72
<PAGE>
in this Prospectus and to be a part hereof from the filing date of such
documents. Any statement contained in this Prospectus or in a document
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 the original Section 10(a) prospectus (as regards any statement in any
previously filed document incorporated by reference herein), or a statement in
any subsequently filed document that is also incorporated by reference herein or
a statement in any subsequent Section 10(a) prospectus, modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, upon 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 by reference herein (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference in
such documents). Requests for such copies should be directed to National City
Bancshares, Inc., 227 Main Street, P.O. Box 868, Evansville, Indiana 47705-0868;
Attention: Secretary.
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<PAGE>
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY NCBE TRUST, THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY ANY OF
THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO
WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH
IN THIS PROSPECTUS OR IN THE AFFAIRS OF NCBE TRUST OR THE COMPANY SINCE THE DATE
HEREOF.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 5
Risk Factors.............................................................. 12
Use of Proceeds........................................................... 18
Market for the Preferred Securities....................................... 19
Accounting Treatment...................................................... 19
Capitalization............................................................ 20
Selected Consolidated Financial Data...................................... 21
Management's Discussion and Analysis of Financial Condition and Results of
Operations.............................................................. 22
The Company............................................................... 36
Management................................................................ 39
Description of the Preferred Securities................................... 40
Description of the Subordinated Debentures................................ 51
Book-Entry Issuance....................................................... 60
Description of the Guarantee.............................................. 62
Expense Agreement......................................................... 64
Relationship Among the Preferred Securities, the Subordinated Debentures
and the Guarantee....................................................... 64
Certain Federal Income Tax Consequences................................... 66
ERISA Considerations...................................................... 69
Underwriting.............................................................. 70
Legal Matters............................................................. 71
Experts................................................................... 71
Available Information..................................................... 72
Incorporation of Certain Documents by Reference........................... 72
</TABLE>
1,200,000 PREFERRED SECURITIES
NCBE CAPITAL TRUST I
% CUMULATIVE TRUST
PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER
PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
NATIONAL CITY BANCSHARES, INC.
[LOGO]
-------------
P R O S P E C T U S
-------------
J.J.B. HILLIARD, W.L. LYONS, INC.
NATCITY INVESTMENTS, INC.
, 1998
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting compensation, are:
<TABLE>
<S> <C>
SEC Registration Fee.............................................. $ 10,178
Legal Fees and Expenses........................................... 100,000*
Accounting Fees and Expenses...................................... 40,000*
Printing Expenses................................................. 85,000*
Trustees' Fees and Expenses....................................... 10,000*
Nasdaq Listing Fees............................................... 11,900
NASD Filing Fee................................................... 3,950
Miscellaneous Expenses............................................ 13,972*
---------
Total......................................................... $ 275,000*
---------
---------
</TABLE>
- ------------------------
* Estimated
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The Indiana Business Corporation Law provides that a corporation, unless
limited by its Articles of Incorporation, is required to indemnify its directors
and officers against reasonable expenses incurred in the successful defense of
any proceeding to which the director or officer was a party because of serving
as a director or officer of the corporation.
As permitted by the Indiana Business Corporation Law, the Company's Articles
of Incorporation provide for indemnification of directors, officers and
employees of the Company against any and all liability and reasonable expense
that may be incurred by them, arising out of any claim or action, civil,
criminal, administrative or investigative, in which they may become involved by
reason of being or having been a director, officer, or employee. To be entitled
to indemnification, those persons must have been wholly successful in the claim
or action or the Board of Directors must have determined that such persons acted
in good faith in what they reasonably believed to be the best interests of the
Company (or at least not opposed to its best interests) and, in addition, in any
criminal action, had reasonable cause to believe their conduct was lawful (or
had no reasonable cause to believe that their conduct was unlawful).
In addition, the Company has a directors' and officers' liability and
company reimbursement policy that insures against certain liabilities, including
liabilities under the Securities Act, subject to applicable retentions.
The form of the Underwriting Agreement filed as an exhibit to this
Registration Statement contains certain provisions relating to the
indemnification of the Company's directors, officers and controlling persons.
ITEM 16. EXHIBITS.
The list of exhibits is incorporated by reference to the Index to Exhibits
on page E-1.
ITEM 17. UNDERTAKINGS.
(a) Filings incorporating subsequent Exchange Act documents by reference.
II-1
<PAGE>
The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) 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) Filing of Registration Statement on Form S-3.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing, the Registrants have been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by Registrants of expenses incurred or paid by a director, officer or
controlling person of Registrants 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 the
Securities Act and will be governed by the final adjudication of such issue.
(c) Rule 430A Undertaking.
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 shall be deemed to be part of this registration
statement as of the time it was declared effective.
For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Evansville, State of Indiana, on March 11, 1998.
<TABLE>
<S> <C> <C>
NATIONAL CITY BANCSHARES, INC.
By: /s/ MICHAEL F. ELLIOTT
-----------------------------------------
Michael F. Elliott, CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
</TABLE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints Michael F. Elliott and Robert A. Keil and each of
them, his or her true and lawful attorneys-in-fact and agents with full power of
substitution, for him or her and in his or her name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and any subsequent registration
statement filed pursuant to Rule 462(b) of the Securities Act of 1933, as
amended, and to file the same, with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
Chairman of the Board,
/s/ MICHAEL F. ELLIOTT Chief Executive Officer
- ------------------------------ and Director (Principal March 11, 1998
Michael F. Elliott Executive Officer)
/s/ ROBERT A. KEIL President and Director
- ------------------------------ (Principal Financial March 11, 1998
Robert A. Keil Officer)
/s/ STEPHEN C. BYELICK, JR. Secretary and Treasurer
- ------------------------------ (Principal Accounting March 11, 1998
Stephen C. Byelick, Jr. Officer)
*
- ------------------------------ Director March , 1998
Janice L. Beesley
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
/s/ SUSAN R. EMGE
- ------------------------------ Director March 11, 1998
Susan R. Emge
*
- ------------------------------ Director March , 1998
Donald G. Harris
/s/ DR. H. RAY HOOPS
- ------------------------------ Director March 11, 1998
Dr. H. Ray Hoops
/s/ JOHN D. LIPPERT
- ------------------------------ Director March 11, 1998
John D. Lippert
/s/ RONALD G. REHERMAN
- ------------------------------ Director March 11, 1998
Ronald G. Reherman
/s/ LAWRENCE R. STEENBERG
- ------------------------------ Director March 11, 1998
Lawrence R. Steenberg
/s/ RICHARD F. WELP
- ------------------------------ Director March 11, 1998
Richard F. Welp
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, NCBE Capital
Trust I certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Evansville, State of Indiana, on March 11, 1998.
<TABLE>
<S> <C> <C>
NCBE Capital Trust I
By: National City Bancshares, Inc., AS
DEPOSITOR
By: /s/ MICHAEL F. ELLIOTT
-----------------------------------------
Michael F. Elliott, CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ----------- --------------------------------------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement.
4.1 Certificate of Trust of NCBE Capital Trust I.
4.2 Trust Agreement of NCBE Capital Trust I.
4.3 Form of Amended and Restated Trust Agreement of NCBE Capital Trust I.
4.4 Form of Indenture between National City Bancshares, Inc. and Wilmington Trust Company, as Trustee.
4.5 Form of Subordinated Debenture of National City Bancshares, Inc. (included in Exhibit 4.4 above).
4.6 Form of Preferred Securities Certificate of NCBE Capital Trust I (included in Exhibit 4.3 above).
4.7 Form of Preferred Securities Guarantee of National City Bancshares, Inc.
5.1 Opinion of Baker & Daniels as to the validity of the issuance of the Subordinated Debentures and the
Guarantee to be issued by the Company
5.2 Opinion of Richards, Layton & Finger, P.A., special Delaware Counsel, as to the validity of the issuance
of the Preferred Securities to be issued by NCBE Capital Trust I.
8.1 Opinion of Baker & Daniels as to certain federal income tax matters.
12.1 Computation of ratio of earnings to fixed charges (included on page 21 of Prospectus).
12.2 Computation of ratio of earnings to fixed charges plus preferred dividend requirements (included on page
21 of Prospectus).
23.1 Consent of McGladrey & Pullen, LLP
23.2 Consent of Baker & Daniels (included in Exhibits 5.1 and 8.1 above).
23.3 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2 above).
24.1 Powers of Attorney (included in signatures page of this Registration Statement and in Exhibit 4.2
above).
25.1 Statement of Eligibility under Trust Indenture Act of 1939, as amended, of Wilmington Trust Company, as
Property Trustee.
25.2 Statement of Eligibility under Trust Indenture Act of 1939, as amended, of Wilmington Trust Company, as
Guarantee Trustee.
25.3 Statement of Eligibility under Trust Indenture Act of 1939, as amended, of Wilmington Trust Company, as
Indenture Trustee.
</TABLE>
E-1
<PAGE>
NCBE CAPITAL TRUST I
(A DELAWARE BUSINESS TRUST)
___% CUMULATIVE TRUST PREFERRED SECURITIES
UNDERWRITING AGREEMENT
DATED: MARCH ___, 1998
<PAGE>
NCBE CAPITAL TRUST I
___% CUMULATIVE TRUST PREFERRED SECURITIES
UNDERWRITING AGREEMENT
March ___, 1998
J.J.B. HILLIARD, W.L. LYONS, INC.
NATCITY INVESTMENTS, INC.
c/o J.J.B. Hilliard, W.L. Lyons, Inc.
501 South Fourth Avenue
Louisville, Kentucky 40202
Dear Sirs:
NCBE Capital Trust I (the "Trust"), a statutory business trust organized
under the Business Trust Act (the "Delaware Act") of the State of Delaware
(Chapter 38, Title 12 of the Delaware Business Code, 12 Del. C. Section 3801 et
seq.), and National City Bancshares, Inc., an Indiana corporation (the
"Company", and together with the Trust, the "Offerors"), as depositor of the
Trust and as guarantor, propose, upon the terms and subject to the conditions
set forth herein, to issue and sell 1,200,000 of the Trust's ___% Cumulative
Trust Preferred Securities (with a liquidation amount equal to $25 per Preferred
Security) to J.J.B. Hilliard, W.L. Lyons, Inc. and NatCity Investments, Inc.
(collectively, the "Underwriters"), severally and not jointly, in the respective
amounts set forth on Schedule A hereto (the "Firm Preferred Securities") and, at
the election of the Underwriters, up to an additional 180,000 shares of such
securities (the "Option Preferred Securities") solely to cover over-allotments,
if any. The Firm Preferred Securities and the Option Preferred Securities are
herein collectively referred to as the "Preferred Securities."
The Preferred Securities and the Common Securities (as defined herein)
are to be issued pursuant to the terms of an Amended and Restated Trust
Agreement, to be dated as of March ___, 1998 (the "Trust Agreement"), among
the Company, as depositor, Michael F. Elliott, Robert A. Keil and Stephen C.
Byelick, Jr., as administrative trustees (the "Administrative Trustees"),
Wilmington Trust Company (the "Trust Company"), as property trustee (the
"Property Trustee"), and Wilmington Trust Company, as Delaware trustee (the
"Delaware Trustee" and, together with the Property Trustee and the
Administrative Trustees, the "Trustees"), and the holders from time to time
of undivided beneficial interests in the assets of the Trust. The Preferred
Securities will be guaranteed by the Company on a subordinated basis and
subject to certain limitations with respect to distributions and payments
upon liquidation, redemption or otherwise (the "Guarantee") pursuant to a
Guarantee Agreement, to be dated as of March ___, 1998 (the
-1-
<PAGE>
"Guarantee Agreement"), between the Company and the Trust Company, as
trustee (the "Guarantee Trustee"). The assets of the Trust will consist of ___%
Subordinated Debentures, due March 31, 2028 (the "Subordinated Debentures"), of
the Company which will be issued under an Indenture, to be dated as of March __,
1998 (the "Indenture"), between the Company and the Trust Company, as indenture
trustee (the "Indenture Trustee"). Under certain circumstances, the
Subordinated Debentures will be distributable to the holders of undivided
beneficial interests in the assets of the Trust.
Section 1. REPRESENTATIONS AND WARRANTIES OF THE OFFERORS. The Offerors
jointly and severally represent and warrant to and agree with each of the
Underwriters that:
(a) The Company and the Trust have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(Nos. 333-_____ and 333-_____-01) and a related preliminary prospectus for
the registration of (i) the Preferred Securities, (ii) the Guarantee, and
(iii) the Subordinated Debentures under the Securities Act of 1933, as
amended (the "1933 Act"), and the applicable rules and regulations
thereunder (the "1933 Act Regulations"). The Company and the Trust have
prepared and filed such amendments thereto, if any, and such amended
preliminary prospectuses, if any, as may have been required to the date
hereof, and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required. The registration statement has
been declared effective under the 1933 Act by the Commission, and no stop
order suspending the effectiveness of the registration statement has been
issued and no proceeding for that purpose has been instituted or, to the
knowledge of the Offerors, threatened by the Commission. The term
"Registration Statement" as used in this Agreement shall mean such
registration statement at the time such registration statement became
effective (the "Effective Time") including any prospectus included with
such Registration Statement, each document incorporated therein by
reference and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Time (as hereinafter defined), shall also
mean such registration statement as so amended; provided, however, that
such term shall also include all Rule 430A Information deemed to be
included in such registration statement at the time such registration
statement becomes effective as provided by Rule 430A of the 1933 Act
Regulations. The term "Preliminary Prospectus" shall mean any preliminary
prospectus included in the Registration Statement at the Effective Time and
each document incorporated therein by reference. The term "Prospectus" as
used in this Agreement shall mean the final prospectus relating to the
Preferred Securities in the form in which it is filed with the Commission
after the date hereof
-2-
<PAGE>
pursuant to Rule 424(b) of the 1933 Act Regulations and each document
incorporated therein by reference. The term "Rule 430A Information"
means information with respect to the Preferred Securities and the
offering thereof permitted pursuant to Rule 430A of the 1933 Act
Regulations to be omitted from the Registration Statement when it became
effective.
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and no proceedings for that
purpose have been instituted or threatened by the Commission or the state
securities or blue sky authority of any jurisdiction, and each Preliminary
Prospectus and any amendment or supplement thereto, at the time of filing
thereof, conformed in all material respects to the requirements of the 1933
Act and the 1933 Act Regulations, and did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Offerors by an Underwriter
expressly for use in the Registration Statement.
(c) When the Prospectus is first filed pursuant to Rule 424(b) of the
1933 Act Regulations, when any amendment to the Registration Statement
becomes effective, when any amendment or supplement to the Prospectus is
filed with the Commission and at the Closing Time and Date of Delivery (as
hereinafter defined), (i) the Registration Statement, the Prospectus and
any amendments thereof and supplements thereto will conform in all material
respects with the applicable requirements of the 1933 Act and the 1933 Act
Regulations, and (ii) neither the Registration Statement, the Prospectus
nor any amendment or supplement thereto will contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to (A) that part of the Registration Statement that constitutes
the Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of 1939, as amended (the "1939 Act") of the Property Trustee,
the Indenture Trustee and the Guarantee Trustee, and (B) any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Offerors by an Underwriter expressly
authorizing its use in the Registration Statement.
(d) Each document incorporated by reference in the Registration
Statement (an "Incorporated Document"), as of the
-3-
<PAGE>
date such Incorporated Document was filed with the Commission, conformed
in all material respects to the requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission thereunder, and when read together with
the other information in the Preliminary Prospectus or Prospectus (as
applicable), as of the date hereof and at the Closing Time, did not and
will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
and any further documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act
and the rules and regulations thereunder and when read together with the
other information in the Prospectus, as of the date hereof and at the
Closing Time, did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(e) The conditions for the use by the Company and the Trust of a
registration statement on Form S-3 set forth in the General Instructions to
Form S-3 have been satisfied and the Company and the Trust are entitled to
use such form for the transactions contemplated herein.
(f) The Company has been duly incorporated and is validly existing as
a corporation under the laws of the state of Indiana with all requisite
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus. The Company is qualified to transact business as a foreign
corporation and is in good standing in each of the jurisdictions in which
the ownership or leasing of its properties or the nature or conduct of its
business requires such qualification, except where the failure to do so
would not have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of the
Company and its subsidiaries taken as a whole. The Company is duly
registered as a bank holding company under the Bank Holding Company Act of
1956, as amended.
(g) The subsidiaries of the Company that are engaged in the banking
business, savings and loan business or trust business are listed on
Schedule B hereto (the "Principal Subsidiaries"). Each of the Principal
Subsidiaries is duly organized and validly existing and, where applicable,
in good standing under the laws of the jurisdiction of its organization
with all requisite power and authority to own,
-4-
<PAGE>
lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus. Each of the
Principal Subsidiaries is authorized to transact business in each of the
jurisdictions in which the ownership or leasing of its properties or the
nature of or conduct of its business requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the condition (financial or other), business, properties, net
worth or results of operations of the Company and its subsidiaries taken
as a whole. All of the issued and outstanding shares of capital stock
of each Principal Subsidiary have been duly authorized and validly
issued, and are fully paid and non-assessable and are owned by the
Company free and clear of any security interest, pledge, lien or other
encumbrance.
(h) The Indenture has been duly qualified under the 1939 Act and has
been duly authorized by the Company and, upon execution and delivery
thereof by the Company, and assuming due authorization, execution and
delivery thereof by the Indenture Trustee, the Indenture will, as of the
Closing Time, be a valid and binding agreement of the Company, enforceable
in accordance with its terms, except to the extent that enforceability may
be limited by bankruptcy, insolvency, moratorium, reorganization or other
laws of general applicability relating to or affecting creditors' rights,
or by general principles of equity whether considered at law or in equity
(the "Permitted Exceptions").
(i) The Trust Agreement has been duly qualified under the 1939 Act
and has been duly authorized by the Company and, upon execution and
delivery thereof by the Company and the Administrative Trustees, and
assuming due authorization, execution and delivery thereof by the Property
Trustee and the Delaware Trustee, the Trust Agreement will, as of the
Closing Time, be a valid and binding agreement of the Company and the
Administrative Trustees, enforceable in accordance with its terms, except
to the extent that enforceability may be limited by the Permitted
Exceptions.
(j) The Guarantee has been duly qualified under the 1939 Act and has
been duly authorized by the Company and, upon execution and delivery
thereof by the Company, the Guarantee will, as of the Closing Time, be a
valid and binding agreement of the Company, enforceable in accordance with
its terms, except to the extent that enforceability may be limited by the
Permitted Exceptions.
(k) The Subordinated Debentures have been duly authorized and, when
executed by the Company, authenticated by the Indenture Trustee, issued in
accordance with the Indenture and delivered to the Trust against payment
therefor as
-5-
<PAGE>
described in the Registration Statement and the Prospectus, will
constitute valid and binding obligations of the Company, enforceable in
accordance with their terms, except to the extent that enforceability
may be limited by the Permitted Exceptions.
(l) The Preferred Securities have been duly authorized by the Trust
Agreement and, when issued and delivered in accordance with the terms of
this Agreement and the Trust Agreement, will be validly issued undivided
beneficial interests in the assets of the Trust, and the issuance of such
Preferred Securities will not be subject to any preemptive or similar
rights. The Common Securities to be issued to the Company have been
authorized by the Trust Agreement and, when executed in accordance with the
terms of the Trust Agreement and delivered to the Company against payment
therefor as described in the Registration Statement and the Prospectus,
will represent validly issued undivided beneficial interests in the assets
of the Trust.
(m) This Agreement has been duly authorized, executed and delivered
by each of the Offerors and constitutes a valid and binding agreement of
each of them, enforceable in accordance with its terms, except to the
extent that enforceability may be limited by the Permitted Exceptions and
except to the extent enforcement of the indemnification or contribution
provisions set forth in Section 6 of this Agreement may be limited by
federal or state securities laws or the public policy underlying such laws.
(n) No authorization, approval, consent or order of, or any filing or
declaration with, any court or governmental authority or agency is
necessary in connection with the issuance and sale of the Common Securities
or the offering of the Preferred Securities, the Subordinated Debentures or
the Guarantee hereunder or the consummation of the transactions
contemplated hereby, except as may have been obtained under the 1933 Act
and the 1933 Act Regulations, the 1939 Act and the rules and regulations
thereunder, such as may be required by the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the purchase and
distribution by the Underwriters of the Preferred Securities, such as may
be required from the Nasdaq National Market relating to the listing of the
Preferred Securities and such as may be required under state securities
laws.
(o) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, there has been no material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the Trust
or the Company
-6-
<PAGE>
and its subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business.
(p) The Company's obligations under the Guarantee Agreement are
subordinate and junior in right of payment to the extent set forth therein.
(q) The Subordinated Debentures are subordinated and junior in right
of payment as and to the extent set forth in the Indenture.
(r) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and compliance by the
Company with its obligations hereunder will not conflict with or constitute
a breach of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any of the Principal Subsidiaries pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company or any of the Principal Subsidiaries 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 or any of the Principal Subsidiaries is subject (except for
conflicts, breaches and defaults which would not, individually or in the
aggregate, be materially adverse to the Company and its subsidiaries taken
as a whole or materially adverse to the transactions contemplated by this
Agreement), nor will such action result in any material violation of the
provisions of the articles of incorporation or by-laws of the Company or
any Principal Subsidiary, or any applicable law, administrative regulation
or administrative or court decree.
(s) Except as disclosed in the Prospectus, there is no action, suit
or proceeding before or by any government, governmental instrumentality or
court, domestic or foreign, now pending or, to the best knowledge of the
Offerors, threatened, against or affecting the Company, any Principal
Subsidiary or the Trust that is required to be disclosed in the Prospectus,
other than actions, suits or proceedings that are not reasonably expected,
individually or in the aggregate, to have a material adverse effect on the
condition, financial or otherwise, or in the earnings or business affairs
of the Trust or the Company and its subsidiaries, taken as a whole, whether
or not arising in the ordinary course of business.
(t) The Trust possesses adequate certificates, authorities or permits
issued by the appropriate state, federal or local regulatory agencies or
bodies to conduct the business now operated by it, and the Trust has not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit
-7-
<PAGE>
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding would materially and adversely affect the
condition, financial or otherwise, or the earnings or business affairs
of the Trust.
(u) The execution, delivery and performance of this Agreement, the
issuance and sale of the Preferred Securities and the Common Securities,
and the consummation of the transactions contemplated herein and compliance
by the Trust with its obligations hereunder have been duly authorized by
all necessary action on the part of the Trust and do not and will not
result in any violation of the Trust Agreement or Certificate of Trust and
do not and will not conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Trust under (A) any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the Trust
is a party or by which it may be bound or to which any of its properties
may be subject or (B) any existing applicable law, rule, regulation,
judgment, order or decree of any government, governmental instrumentality
or court, domestic or foreign, or any regulatory body or administrative
agency or other governmental body having jurisdiction over the Trust, or
any of its properties (except for conflicts, breaches, violations or
defaults which would not, individually or in the aggregate, be materially
adverse to the Trust, or materially adverse to the transactions
contemplated by this Agreement).
(v) The Company's authorized, issued and outstanding capital stock is
as disclosed in the Prospectus. All of the issued shares of capital stock
of the Company have been duly authorized and validly issued, are fully paid
and nonassessable and conform to the description of the Company's capital
stock contained in the Prospectus.
(w) The financial statements of the Company and its consolidated
subsidiaries included or incorporated in the Registration Statement and
Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of
operations and cash flows for the Company and its consolidated subsidiaries
for the periods specified, all in conformity with generally accepted
accounting principles applied on a consistent basis. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, and except as otherwise stated in the Registration
Statement and the Prospectus, there has not been (i) any material change in
the capital stock, long-term debt, obligations under capital lease, or
short-term borrowings of the Company or the Principal Subsidiaries, or (ii)
any
-8-
<PAGE>
material adverse change, or any development which could reasonably be
seen as involving a prospective material adverse change, in or affecting
the business, prospects, properties, assets, results of operations or
condition (financial or other) of the Company and its subsidiaries taken as
a whole, other than developments, if any, generally affecting the banking
business in the United States.
(x) McGladrey & Pullen, LLP, who have examined and are reporting upon
the audited financial statements and schedules incorporated by reference in
the Registration Statement, are, and were during the periods covered by
their reports incorporated by reference in the Registration Statement and
the Prospectus, independent public accountants with respect to the Company
within the meaning of the 1933 Act and the 1933 Act Regulations.
(y) There are no contracts, agreements or other documents required to
be filed as exhibits to the Registration Statement by the 1933 Act, the
1933 Act Regulations or the 1939 Act (or any rules or regulations
thereunder) which have not been filed as exhibits to, or incorporated by
reference in, the Registration Statement as required.
(z) Each of the Company's and the Principal Subsidiaries' respective
systems of internal accounting controls taken as a whole is sufficient to
meet the broad objectives of internal accounting control insofar as those
objectives pertain to the prevention or detection of errors or
irregularities in amounts that would be material in relation to the
Company's or the Principal Subsidiaries' financial statements; and none of
the Company, the Principal Subsidiaries, or any employee or agent thereof,
has made any payment of funds of the Company or the Principal Subsidiaries,
or received or retained any funds and no funds of the Company or the
Principal Subsidiaries have been set aside to be used for any payment, in
each case in violation of any law, rule or regulation.
(aa) Neither of the Offerors is, and upon the issuance and sale of the
Preferred Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus neither will be, an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"1940 Act").
Section 2. SALE AND DELIVERY OF THE PREFERRED SECURITIES TO THE
UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions
-9-
<PAGE>
herein set forth, the Trust agrees to issue and sell to each of the
Underwriters the Firm Preferred Securities, and each Underwriter agrees,
severally and not jointly, to purchase from the Trust the number of Firm
Preferred Securities set forth opposite the name of such Underwriter in
Schedule A, at a price per Preferred Security of $25. In the event and
to the extent that the Underwriters shall exercise the election to
purchase Option Preferred Securities as provided below, the Trust agrees
to issue and sell to the Underwriters, and the Underwriters agree to
purchase from the Trust, at the same purchase price per Preferred
Security set forth in the first sentence of this Section 2, the number
of Option Preferred Securities as to which such election shall have been
exercised. If the option is exercised as to all or any portion of the
Option Preferred Securities, the Option Preferred Securities as to which
the option is exercised shall be purchased by the Underwriters,
severally and not jointly, in proportion to their purchases of the Firm
Preferred Securities.
As compensation to the Underwriters for their commitments hereunder,
and in view of the fact that the proceeds of the sale of the Preferred
Securities will be used by the Trust to purchase the Subordinated
Debentures of the Company, the Company hereby agrees to pay at the Closing
Time and the Date of Delivery, if applicable, to J.J.B. Hilliard, W.L.
Lyons, Inc., for the accounts of the several Underwriters, an amount equal
to $0.875 per Preferred Security for the Preferred Securities to be
delivered at the Closing Time and on the Date of Delivery, respectively.
(b) In addition, on the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein set forth,
the Trust hereby grants an option to the Underwriters, severally and not
jointly, to purchase up to an additional 180,000 Option Preferred
Securities at the same purchase price as shall be applicable to the Firm
Preferred Securities. The option hereby granted will expire if not
exercised within the thirty (30) day period after the date of the
Prospectus by giving written notice to the Trust. The option granted
hereby may be exercised in whole or in part (but not more than once), only
for the purpose of covering over-allotments that may be made in connection
with the offering and distribution of the Firm Preferred Securities. The
notice of exercise shall set forth the number of Option Preferred
Securities as to which the several Underwriters are exercising the option,
and the time and date of payment and delivery thereof. Such time and date
of delivery (the "Date of Delivery") shall be determined by you but shall
not be later than three full business days after the exercise of such
option, nor in any event prior to the Closing Time. If the option is
exercised as to all or any portion of the Option
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Preferred Securities, the Option Preferred Securities as to which the
option is exercised shall be purchased by the Underwriters, severally
and not jointly, in proportion to their purchases of the Firm Preferred
Securities.
(c) Payment of the purchase price for and delivery of certificates in
definitive form representing the Firm Preferred Securities shall be made at
the offices of J.J.B. Hilliard, W.L. Lyons, Inc., 501 South Fourth Avenue,
Louisville, Kentucky 40202, or at such other place as shall be agreed upon
by the Company, the Trust and you, at 10:00 a.m., either (i) on the third
full business day after the execution of this Agreement, or (ii) at such
other time not more than ten full business days thereafter as you, the
Company and the Trust shall determine (unless, in either case, postponed
pursuant to the terms hereof) (such date and time of payment and delivery
being herein called the "Closing Time"). In addition, in the event that
any or all of the Option Preferred Securities are purchased by the
Underwriters, payment of the purchase price for and delivery of
certificates in definitive form representing the Option Preferred
Securities shall be made at the offices of J.J.B. Hilliard, W.L. Lyons,
Inc. in the manner set forth above, or at such other place as the Company,
the Trust and you shall determine, on the Date of Delivery as specified in
the notice from you to the Trust. Payment for the Firm Preferred
Securities and the Option Preferred Securities shall be made to the Trust
by wire transfer in same-day funds to the accounts designated to the
Underwriters in writing by the Trust against delivery to you for the
respective accounts of the Underwriters of the Preferred Securities to be
purchased by them.
At the Closing Time and the Date of Delivery, if applicable, the
Company will pay, or cause to be paid, the commission payable at such
time to the Underwriters under this Section 2 hereof by wire transfer in
same-day funds to the account or accounts designated to the Company in
writing by J.J.B. Hilliard, W.L. Lyons, Inc., on behalf of the several
Underwriters.
(d) The Preferred Securities to be purchased by each Underwriter
hereunder will be represented by one or more definitive global Preferred
Securities in book entry form which will be deposited by or on behalf of
the Trust with The Depository Trust Company ("DTC") or its designated
custodian. The Trust will deliver the Preferred Securities to J.J.B.
Hilliard, W.L. Lyons, Inc. for the account of each Underwriter, against
payment to the Trust as provided in paragraph (c) of this Section 2.
(e) You intend to offer the Preferred Securities to the public as set
forth in the Prospectus, but after the initial
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public offering of such Preferred Securities you may in your discretion
vary the public offering price.
Section 3. CERTAIN COVENANTS OF THE COMPANY AND THE TRUST. The Company
and the Trust covenant and agree with each Underwriter as follows:
(a) The Trust and the Company will prepare the Prospectus in a form
approved by the Underwriters, will comply with the requirements of Rule
430A and will file such Prospectus with the Commission pursuant to Rule
424(b) not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement. The
Trust and the Company will notify the Underwriters immediately, and confirm
the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall have become effective and of the filing of the
Prospectus pursuant to Rule 424(b), (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 the Prospectus, of the suspension of the
qualification of the Preferred Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for
such purpose. The Trust and the Company will make every reasonable effort
to prevent the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification and, if any such order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) The Trust and the Company will deliver to the Underwriters one
manually executed copy of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated by reference
into the Prospectus), such number of conformed copies of the Registration
Statement as originally filed and of each amendment thereto (including
documents incorporated by reference into the Prospectus but without
exhibits) as such Underwriters may reasonably request and copies of each
Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus.
(c) The Trust and the Company will furnish to the Underwriters, from
time to time during the period when the Prospectus is required to be
delivered under the 1933 Act, such additional number of copies of the
Prospectus (as amended
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or supplemented, if applicable) as they may reasonably request for the
purposes contemplated by the 1933 Act or the 1933 Act Regulations.
(d) The Trust and the Company will deliver to the Underwriters notice
of their intention to prepare or file any amendment to the Registration
Statement (including any Post-effective amendment) or any amendment or
supplement to the Prospectus which the Trust and the Company propose for
use by the Underwriters in connection with the offering of the Preferred
Securities and which differs from the prospectus on file at the Commission
at the time the Registration Statement became effective, whether or not
such revised prospectus is required to be filed pursuant to Rule 424(b) of
the 1933 Act Regulations, will furnish the Underwriters and counsel for the
Underwriters with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be,
and will not file any such amendment or supplement or use any such
prospectus to which the Underwriters or counsel for the Underwriters shall
reasonably object.
(e) If any event shall occur as a result of which it is necessary to
amend or supplement the Prospectus (as then amended or supplemented) in
order to ensure that the Prospectus does not contain an untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or it is necessary to amend or supplement the
Prospectus to comply with the 1933 Act or any other law, the Company and
the Trust will forthwith prepare and furnish, at the Company's expense, to
the Underwriters, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented will
not, in the light of the circumstances under which they were made, be
misleading or so that the Prospectus will comply with the 1933 Act or such
other law, as the case may be.
(f) The Trust and the Company, during the period when the Prospectus
is required to be delivered under the 1933 Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13,
14, or 15 of the Exchange Act.
(g) The Company and the Trust will use their respective best efforts
to qualify the Preferred Securities for offer and sale under the securities
or blue sky laws of such jurisdictions as any Underwriter shall reasonably
request and to pay all reasonable expenses (including reasonable fees and
disbursements of counsel) in connection with such qualification and the
printing of any memoranda concerning the
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aforesaid qualification; provided however, that neither Offeror shall
be required to qualify to do business in any jurisdiction where it is
not now qualified or to take any action which would subject it to
general or unlimited service of process in any jurisdiction where they
are not now subject.
(h) During the period beginning on the date hereof and continuing to
and including the Date of Delivery, the Company and the Trust will not
offer, sell, contract to sell or otherwise dispose of (other than in an
offering made exclusively outside the United States) any securities of the
Company or the Trust substantially similar to the Preferred Securities or
any securities convertible into or exchangeable for the Preferred
Securities without the prior written consent of the Underwriters.
(i) During the period when the Preferred Securities are outstanding,
the Company will not be or become an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the 1940 Act.
(j) Neither the Company nor the Trust shall enter into any
contractual agreement with respect to the distribution of the Preferred
Securities except for the arrangements with the Underwriters.
(k) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later
than 90 days after the close of the period covered thereby, an "earnings
statement" (which need not be audited) complying with the provisions of
Rule 158 of the 1933 Act Regulations and covering a period of at least 12
consecutive months beginning on the first day of the Company's first full
fiscal quarter after the effective date (as defined in Rule 158) of the
Registration Statement.
(l) The Company and the Trust will use proceeds received from the
sale of the Preferred Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(m) For a period of five years after the Closing Time the Company
will furnish to the Underwriters copies of all reports and communications
delivered to the Company's shareholders or to holders of the Preferred
Securities and will also furnish copies of all reports (excluding exhibits)
filed with the Commission on Forms 8-K, 10-Q and 10-K and all other reports
and information furnished to its shareholders generally, not later than the
time such reports are first furnished to its shareholders generally.
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Section 4. PAYMENT OF EXPENSES. The Company will pay and bear all costs,
fees and expenses incident to the performance of the Offerors obligations under
this Agreement (excluding fees and expenses of counsel for the Underwriters,
except as specifically set forth below), including (a) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, the Preliminary Prospectuses, the
Prospectus and any amendments or supplements thereto, and the cost of furnishing
copies thereof to the Underwriters, (b) the preparation, printing and
distribution of this Agreement, the Indenture, the Guarantee Agreement, the
Trust Agreement, the certificates representing the Preferred Securities, the
Blue Sky Memoranda and any instruments or documents relating to any of the
foregoing, (c) the issuance and delivery of the Preferred Securities to the
Underwriters, including any transfer taxes payable upon the sale of the
Preferred Securities to the Underwriters (other than transfer taxes on resales
by the Underwriters), (d) the fees and disbursements of the Company's and the
Trust's counsel and accountants, (e) the qualification of the Preferred
Securities, the Subordinated Debentures and the Guarantee under the applicable
securities laws in accordance with the terms of this Agreement, including filing
fees and fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the Blue Sky Memoranda, (f) all costs, fees and
expenses in connection with the listing of the Preferred Securities on the
Nasdaq Stock Market, (g) filing fees relating to review of the offering by the
NASD, (h) the transfer agent's and registrar's fees and all miscellaneous
expenses referred to in Part II of the Registration Statement, (i) costs related
to travel and lodging incurred by the Company and its representatives relating
to meetings with and presentations to prospective purchasers of the Preferred
Securities reasonably determined by the Underwriters to be necessary or
desirable to effect the sale of the Preferred Securities to the public, (j) the
fees and expenses of the Indenture Trustee, the Guarantee Trustee and the
Trustees, including the fees and disbursements of counsel for any such Trustees,
(k) any fees payable in connection with the ratings, if any, of the Preferred
Securities and Subordinated Debentures, and (1) all other costs and expenses
incident to the performance of the Company's or the Trust's obligations
hereunder (including costs incurred in closing the purchase of the Option
Preferred Securities, if any) that are not otherwise specifically provided for
in this section. The Company, upon your request, will provide funds in advance
for filing fees in connection with "blue sky" qualifications.
If the sale of the Preferred Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 5 hereof is not satisfied, because of any termination pursuant
to Section 8 hereof or because of any refusal, inability or failure on the part
of the Company or the Trust to perform any agreement herein or comply with any
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provision hereof other than by reason of default by any of the Underwriters, the
Company will reimburse the Underwriters severally on demand for all reasonable
out-of-pocket expenses, including fees and disbursements of Underwriters'
counsel, reasonably incurred by the Underwriters in reviewing the Registration
Statement and the Prospectus, and in investigating and making preparations for
the marketing of the Preferred Securities, in each case following presentation
of reasonably detailed invoices therefor.
Section 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters to purchase and pay for (i) the Firm Preferred Securities that
they have respectively agreed to purchase pursuant to this Agreement (and any
Option Preferred Securities as to which the option granted in Section 2 has been
exercised and the Date of Delivery determined by you is the same as the Closing
Time) at the Closing Time and (ii) the Option Preferred Securities at the Date
of Delivery, are subject to the accuracy of the representations and warranties
of the Offerors contained herein as of the Closing Time or the Date of Delivery,
as the case may be, and to the accuracy of the representations and warranties of
the Offerors contained in certificates of any officer of the Company or trustees
of the Trust delivered pursuant to the provisions hereof, to the performance by
the Offerors of their obligations hereunder, and to the following further
conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act and no proceedings
for that purpose shall have been instituted or shall be pending or, to
your knowledge or the knowledge of the Offerors, shall be contemplated
by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the satisfaction
of counsel for the Underwriters. If the Company and the Trust have
elected to rely upon Rule 430A, a Prospectus containing the Rule 430A
Information have been filed with the Commission in accordance with Rule
424(b) (or it post-effective amendment providing such information shall
have been filed and declared effective in accordance with the
requirements of Rule 430A).
(b) At the Closing Time, you shall have received an opinion of Baker
& Daniels, counsel for the Company and the Trust, dated as of the Closing
Time, in form and substance satisfactory to counsel for the Underwriters,
to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation under the laws of the state of Indiana with the
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus, and is
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duly registered as a banking holding company under the Bank
Holding Company Act of 1956, as amended. The Company is
qualified to transact business as a foreign corporation and is
in good standing in each of the jurisdictions in which the
ownership or leasing of the Company's properties or the nature
or conduct of its business requires such qualification, except
where the failure to do so would not have a material adverse
effect on the condition (financial or other), business.
properties, net worth or results of operations of the Company
and its subsidiaries taken as a whole.
(ii) Each of the Principal Subsidiaries is organized and validly
existing and, where applicable, in good standing under the laws
of the jurisdiction of its organization. Each such entity has
all requisite power and authority to own, lease and operate its
properties and conduct its business as described in the
Registration Statement and the Prospectus. Each such entity is
duly qualified to do business and is in good standing in each
other jurisdiction in which the ownership or leasing of its
properties or the nature or conduct of its business requires such
qualification, except where the failure to do so would not have a
material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the
Company and its consolidated subsidiaries taken as a whole.
(iii) The authorized capitalization of the Company is as set forth
in the Prospectus under the caption "Capitalization."
(iv) All of the issued and outstanding shares of capital stock of each
Principal Subsidiary has been duly authorized and validly issued,
and is fully paid and non-assessable, except to the extent that
the shares of The National City Bank of Evansville, The Peoples
National Bank of Grayville, The First National Bank of Wayne City
and First National Bank of Bridgeport are assessable to the
extent of impairment of capital pursuant to the National Bank
Act, 12 U.S.C. Section 55, and the Company, or a wholly-owned
subsidiary of the Company, is the sole record owner of the
outstanding capital stock of each of the Principal Subsidiaries.
(v) This Agreement has been duly authorized, executed and delivered
by the Company.
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(vi) No authorization, approval, consent or order of, or filing or
declaration with, any court or governmental agency or body is
necessary for the valid authorization, issuance, sale and
delivery of the Preferred Securities, the execution, delivery and
performance of this Agreement and the consummation by the Company
of the transactions contemplated hereby, except such as have been
obtained under the 1933 Act and the 1933 Act Regulations, the
1939 Act and the rules and regulations thereunder, such as may be
required by the Nasdaq Stock Market in connection with the
listing of the Preferred Securities thereon, and such as may be
necessary under state securities laws or required by the NASD in
connection with the purchase and distribution of the Preferred
Securities by the Underwriters, as to which such counsel need
express no opinion.
(vii) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of
the terms and provisions of, or (with or without the giving
notice or the passage of time or both) constitute a default
under, the articles of incorporation or by-laws of the
Company, or under any indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument to
which the Company is a party or to which the Company or any of
its properties or other assets is subject; or, to such
counsel's knowledge, any applicable statute, judgment, decree,
order, rule or regulation of any court or governmental agency
or body; or to such counsel's knowledge, result in the
creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company.
(viii) The statements set forth in the Registration Statement and the
Prospectus under the captions "Description of the Preferred
Securities," "Description of the Subordinated Debentures,"
"Description of the Guarantee" and "Relationship among the
Preferred Securities, the Subordinated Debentures and the
Guarantee," insofar as they purport to describe the provisions
of the laws and documents referred to therein, fairly
summarize the matters described therein in all material
respects.
(ix) The Indenture has been duly qualified under the 1939 Act and has
been duly authorized, executed and
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delivered by the Company and, assuming the due authorization,
execution and delivery thereof by the Indenture Trustee, is a
valid and binding agreement of the Company, enforceable in
accordance with its terms, except to the extent that
enforceability may be limited by the Permitted Exceptions.
(x) The Trust Agreement has been duly qualified under the 1939 Act
and has been duly authorized, executed and delivered by the
Company and the Administrative Trustees, and assuming due
authorization, execution and delivery thereof by the Property
Trustee and the Delaware Trustee, the Trust Agreement is a valid
and binding agreement of the Company and the Administrative
Trustees enforceable in accordance with its terms, except to the
extent that enforceability may be limited by the Permitted
Exceptions.
(xi) The Guarantee has been duly qualified under the 1939 Act and has
been duly authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company, enforceable in
accordance with its terms, except to the extent that
enforceability may be limited by the Permitted Exceptions.
(xii) The Subordinated Debentures have been duly authorized and
executed by the Company and, when authenticated by the
Indenture Trustee, in accordance with the Indenture and
delivered to the Trust against payment therefor as described
in the Registration Statement and the Prospectus, will
constitute valid and binding obligations of the Company,
enforceable in accordance with their terms, except to the
extent that enforceability may be limited by the Permitted
Exceptions.
(xiii) To such counsel's knowledge, there is no pending or
threatened action, suit, proceeding, inquiry or investigation
against the Company, the Principal Subsidiaries or any of
their respective officers and directors or to which the
properties, assets or rights of any such entity are subject,
before or brought by any court or governmental agency or body
or board of arbitrators, that is required to be described in
the Registration Statement or the Prospectus but is not
described as required.
(xiv) The Registration Statement has become effective under the
1933 Act and, to the knowledge of such
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counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for
that purpose has been instituted or is pending or contemplated
under the 1933 Act. Other than financial statements and other
financial and operating data and schedules contained therein,
as to which counsel need express no opinion, the Registration
Statement, all Preliminary Prospectuses, the Prospectus and
any amendment or supplement thereto, if any, comply as to form
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 thereunder.
(xv) The statements of law or legal conclusions and opinions set forth
in the Registration Statement under the caption "Certain United
States Federal Income Tax Consequences," subject to the
assumptions and conditions described therein, constitute such
counsel's opinion.
(xvi) The Trust is not an "investment company," or a company
"controlled" by an "investment company," within the meaning of
the 1940 Act.
(xvii) The descriptions in the Prospectus of statutes, regulations,
legal or governmental proceedings, insofar as such
descriptions constitute a summary of legal or regulatory
matters or proceedings, are accurate descriptions of the
matters in all material respects and present fairly a summary
of the information required to be shown under the 1933 Act and
the 1933 Act Regulations.
Such counsel shall also confirm that, in connection with the preparation of
the Registration Statement and the Prospectus, such counsel has participated in
conferences with officers and representatives of the Offerors and with their
independent public accountants and with the Underwriters and their counsel, at
which conferences such counsel made inquiries of such officers, representatives
and accountants and discussed the contents of the Registration Statement and the
Prospectus and the documents incorporated therein by reference (without taking
further action to verify independently the statements made in the Registration
Statement and the Prospectus, and without assuming responsibility for the
accuracy or completeness of such statements, except to the extent expressly
provided above) and that they have no reason to believe that the Registration
Statement, or any further amendment thereto made prior to the Closing Time or
the Date of Delivery, as the case may be, on its effective date and as of the
Closing Time or the Date of Delivery, as the case may be, contained or
contains any untrue statement of a material fact or omitted or omits to
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state any 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 made prior to the Closing Time or the Date of
Delivery, as the case may be, as of its issue date and as of the Closing Time
or the Date of Delivery, as the case may be, contained or contains any 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 (provided that such
counsel need express no belief regarding the financial statements and related
schedules and other financial data contained in the Registration Statement,
any amendment thereto, or the Prospectus, or any amendment or supplement
thereto).
In rendering the opinions set forth in Section 5(b), such counsel may rely
on the following:
(A) as to matters involving the application of laws other than the
laws of the United States and jurisdictions in which they are
admitted, to the extent such counsel deems proper and to the
extent specified in such opinion, upon an opinion or opinions (in
form and substance reasonably satisfactory to Underwriters'
counsel) of other counsel familiar with the applicable laws, and
(B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and
certificates or other written statements of officers or
departments of various jurisdictions, having custody of documents
respecting the existence or good standing of the Company provided
that copies of all such opinions, statements or certificates
shall be delivered to Underwriters' counsel. The opinion of
counsel for the Company shall state that the opinion of any other
counsel, or certificate or written statement, on which such
counsel is relying is in form satisfactory to such counsel and
that you and they are justified in relying thereon.
(c) At the Closing Time, you shall have received an opinion from
Stites & Harbison, counsel for the Underwriters, dated as of the Closing
Time, with respect to the issuance and sale of the Preferred Securities,
the Registration Statement, the Prospectus and other related matters as the
Underwriters may reasonably require, and the Company shall have furnished
to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass on such matters.
(d) At the Closing Time, you shall have received an opinion of
Richards, Layton & Finger, P.A., special Delaware
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counsel to the Offerors, dated as of the Closing Time, in form and
substance satisfactory to counsel for the Underwriters, to the effect that:
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act; all filings
required under the laws of the State of Delaware with respect to
the formation and valid existence of the Trust as a business
trust have been made.
(ii) Under the Delaware Act and the Trust Agreement, the Trust has all
the trust power and authority to own property and to conduct its
business, all as described in the Registration Statement and the
Prospectus, and to enter into and perform its obligations under
this Agreement, the Preferred Securities and the Common
Securities.
(iii) Assuming due authorization, execution and delivery by the
Company and the Trustees, the Trust Agreement constitutes a
valid and binding obligation of the Company, and is
enforceable against the Company in accordance with its
terms, except as enforceability thereof may be limited by
(A) bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance or
transfer and other similar laws relating to or affecting the
rights and remedies of creditors generally, (B) 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 (C) the effect of
applicable public policy on the enforceability of provisions
relating to indemnification or contribution.
(iv) The Common Securities have been duly authorized by the Trust
Agreement and are validly issued and represent undivided
beneficial interests in the assets of the Trust.
(v) The Preferred Securities have been duly authorized by the Trust
Agreement and are validly issued and, subject to the terms of the
Trust Agreement, when delivered to and paid for by the
Underwriters pursuant to this Agreement, will be validly issued,
fully paid and non-assessable undivided beneficial interests in
the assets of the Trust; the holders of the Preferred Securities
will be entitled to the same limitation of personal liability
under Delaware law as is extended to stockholders of
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private corporations for profit; such counsel may note that the
holders of the Preferred Securities may be obligated, pursuant to
the Trust Agreement, (A) to provide indemnity and/or security in
connection with and pay taxes or governmental charges arising
from transfers or exchanges of Preferred Securities certificates
and the issuance of replacement Preferred Securities
certificates, and (B) to provide security or indemnity in
connection with requests of or directions to the Property Trustee
to exercise its rights and powers under the Trust Agreement and
under the Delaware Act and the Trust Agreement the issuance of
the Preferred Securities is not subject to preemptive or other
similar rights.
(vi) Under the Delaware Act and the Trust Agreement, this Agreement
has been duly authorized by the Trust.
(vii) The issuance and sale by the Trust of the Preferred
Securities and the Common Securities, the execution,
delivery and performance by the Trust of this Agreement, the
consummation by the Trust of the transactions contemplated
hereby and the compliance by the Trust with its obligations
hereunder will not violate (A) any of the provisions of the
Certificate of Trust or the Trust Agreement or (B) any
applicable Delaware law or administrative regulation.
(e) At the Closing Time, you shall have received an opinion, dated as
of the Closing Time, of Richards, Layton & Finger, P.A., counsel for the
Trust Company, as Indenture Trustee under the Indenture, as Guarantee
Trustee under the Guarantee, as Property Trustee under the Trust Agreement,
and as Delaware Trustee under the Trust Agreement, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Trust Company is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the
laws of the state of Delaware with all necessary corporate power
and authority to execute and deliver, and to carry out and
perform its obligations under the terms of the Trust Agreement,
the Indenture and the Guarantee.
(ii) The execution, delivery and performance by the Trust Company of
the Indenture, the Trust Agreement, and the Guarantee have been
duly authorized by all necessary corporate action on the
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part of the Trust Company. The Indenture, the Trust Agreement
and the Guarantee have been duly executed and delivered by the
Trust Company, and constitute the legal, valid and binding
obligations of the Trust Company, enforceable against the Trust
Company in accordance with their respective terms, except as
enforceability thereof may be limited by the Permitted
Exceptions.
(iii) The execution, delivery and performance of the Indenture,
the Trust Agreement and the Guarantee by the Trust Company
does not conflict with or constitute a breach of the
Certificate of Incorporation or bylaws of the Trust Company.
(iv) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required
for the execution, delivery or performance by the Trust Company
of the Indenture, the Trust Agreement or the Guarantee.
(f) At the Closing Time, (i) the Registration Statement, and the
Prospectus, as they may then be amended or supplemented, shall contain all
statements that are required to be stated therein under the 1933 Act and
the 1933 Act Regulations and in all material respects shall conform to the
requirements of the 1933 Act and the 1933 Act Regulations; the Company
shall have complied in all material respects with Rule 430A (if it shall
have elected to rely thereon) and neither the Registration Statement nor
the Prospectus, as they may then be amended or supplemented, shall 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, (ii) there shall not have been, since the respective dates
as of which information is given in the Registration Statement, any
material adverse change in the business, prospects, properties, assets,
results of operations or condition (financial or otherwise) of the Trust or
the Company and its subsidiaries, taken as a whole, whether or not arising
in the ordinary course of business, (iii) no action, suit or proceeding at
law or in equity shall be pending or, to the best of Offerors' knowledge,
threatened against the Company or the Trust that would be required to be
set forth in the Prospectus other than as set forth therein and no
proceedings shall be pending or, to the best knowledge of the Offerors,
threatened against the Company or the Trust before or by any federal, state
or other commission, board or administrative agency wherein an unfavorable
decision, ruling or finding could materially adversely affect the business,
prospects, assets, results of operations or condition (financial or
otherwise) of the Trust or the Company and its
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subsidiaries, taken as a whole, other than as set forth in the
Prospectus, (iv) the Company and the Trust shall have complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Time, and (v) the representations
and warranties of the Offerors set forth in Section I shall be accurate
as though expressly made at and as of the Closing Time. At the Closing
Time, you shall have received a certificate executed by the President
and Chief Financial Officer of the Company dated as of the Closing Time,
to such effect and with respect to the following additional matters: (A)
the Registration Statement has become effective under the 1933 Act and
no stop order suspending the effectiveness of the Registration Statement
or preventing or suspending the use of the Prospectus has been issued,
and no proceedings for that purpose have been instituted or are pending
or, to the best of their knowledge, threatened under the 1933 Act; and
(B) they have reviewed the Registration Statement and the Prospectus,
when the Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate, the
Registration Statement, and the Prospectus and any amendments or
supplements thereto contained all statements and information required to
be included therein or necessary to make the statements therein not
misleading and neither the Registration Statement, nor the Prospectus
nor any amendment or supplement thereto included any untrue statement of
a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and, since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an amended or
supplemented Prospectus that has not been so set forth.
(g) You shall have received from McGladrey & Pullen, LLP letters
dated, respectively, the date hereof (but delivered prior to the execution
of this Agreement) and the Closing Time and the Date of Delivery, in form
heretofore agreed, with such variations as may be reasonably acceptable to
you.
(h) At the Closing Time, counsel for the Underwriters shall have been
furnished with all such documents, certificates and opinions as they may
request for the purpose of enabling them to pass upon the issuance and sale
of the Preferred Securities as contemplated in this Agreement and the
matters referred to in Section 5(c) and in order to evidence the accuracy
and completeness of any of the representations, warranties or statements of
the Company and the Trust, the performance of any of the covenants of the
Company and the Trust, or the fulfillment of any of the conditions herein
contained; and all proceedings taken by the Company and the Trust at or
prior to the Closing Time in connection with the authorization, issuance
and sale of the Preferred Securities as contemplated in this Agreement
shall be reasonably
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satisfactory in form and substance to you and to counsel for the
Underwriters. The Company and the Trust will furnish you with such
number of conformed copies of such opinions, certificates, letters and
documents as you shall reasonably request.
(i) The NASD, upon review of the terms of the public offering of the
Preferred Securities, shall not have objected to such offering, such terms
or the Underwriters' participation in the same.
(j) Subsequent to the date hereof, there shall not have occurred any
of the following: (i) if there has occurred or accelerated any outbreak of
hostilities or other national or international calamity or crisis or change
in economic or political conditions the effect of which on the financial
markets of the United States is such as to make it, in your judgment,
impracticable to market the Preferred Securities or enforce contracts for
the sale of the Preferred Securities, or (ii) if trading in any securities
of the Company has been suspended by the Commission or by the Nasdaq Stock
Market, or if trading generally on the New York Stock Exchange or in the
over-the-counter market has been suspended, or limitations on prices for
trading (other than limitations on hours or numbers of days of trading)
have been fixed, or maximum ranges for prices for securities have been
required, by the NASD or by order of the Commission or any other
governmental authority, or (iii) if a banking moratorium has been declared
by federal or New York, Kentucky or Indiana authorities, or (iv) any
federal or state statute, regulation, rule or order of any court or other
governmental authority has been enacted, published, decreed or otherwise
promulgated which in your reasonable opinion materially adversely affects
or will materially adversely affect the business or operations of the
Company or the Trust, or (v) any action has been taken by any federal,
state or local government or agency in response of its monetary or fiscal
affairs which in your reasonable opinion has a material adverse effect on
the securities markets in the United States.
If any of the conditions specified in this Section 5 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, this Agreement
may be terminated by you on notice to the Company and the Trust at any time at
or prior to the Closing Time, and such termination shall be without liability of
any party to any other party, except as provided in Section 4. Notwithstanding
any such termination, the provisions of Section 6 shall remain in effect.
The several obligations of the Underwriters to purchase Option Preferred
Securities hereunder are subject to the satisfaction on and as of any Date of
Delivery for Option Preferred Securities of
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the conditions set forth in this Section 5, except that, if any Date of
Delivery for Option Preferred Securities is other than the Closing Time, the
certificates, opinions and letters referred to in paragraphs (b), (c), (d),
(e) and (f) shall be revised to reflect the sale of Option Preferred
Securities.
Section 6. INDEMNIFICATION AND CONTRIBUTION
(a) Each of the Company and the Trust, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may
become subject under the 1933 Act, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) (i) arise
out of or are based upon any breach of any warranty or covenant of the
Company or the Trust herein contained, (ii) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in (A) any Preliminary Prospectus, the Registration Statement, or
the Prospectus, or any amendment or supplement thereto, or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Company or the Trust or based upon written information
furnished by or on behalf of the Company or the Trust filed in any
jurisdiction in order to qualify the Preferred Securities under the
securities or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application"), or
(iii) arise out of or are based upon the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any Application a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company and the Trust
shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any Preliminary Prospectus, the Registration Statement, or the
Prospectus, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company or the Trust
by any Underwriter expressly for use therein. In addition to its other
obligations under this Section 6(a), the Company and the Trust agrees that
as an interim measure during the pendency of any such claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in
this Section 6(a), it will reimburse the Underwriters on a quarterly basis
for all reasonable legal and other expenses
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<PAGE>
incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and
enforceability of the Company's and the Trust's obligation to reimburse
the Underwriters for such expenses and the possibility that such
payments might later be held to have been improper by a court of
competent jurisdiction. Any such interim reimbursement payments that
are not made to an Underwriter within 30 days of a request for
reimbursement shall bear interest at the prime rate (or reference rate
or other commercial lending rate for borrowers of the highest credit
standing) published from time to time by The Wall Street Journal (the
"Prime Rate") from the date of such request. This indemnity agreement
shall be in addition to any liabilities that the Company and the Trust
may otherwise have. Each of the Company and the Trust will not, without
the prior written consent of each Underwriter, settle or compromise or
consent to the entry of any judgment in any pending or threatened action
or claim or related cause of action or portion of such cause of action
in respect of which indemnification may be sought hereunder (whether or
not such Underwriter is a party to such action or claim), unless such
settlement, compromise or consent includes an unconditional release of
such Underwriter from all liability arising out of such action or claim
(or related cause of action or portion thereof).
The indemnity agreement in this Section 6(a) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Underwriter within the meaning of the 1933
Act to the same extent as such agreement applies to the Underwriters.
(b) Each Underwriter, severally but not jointly, will indemnify and
hold harmless the Company and the Trust against any losses, claims, damages
or liabilities to which the Company and the Trust may become subject, under
the 1933 Act, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any breach of any warranty or covenant by such Underwriter herein contained
or any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, any
462(b) Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement thereto in
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<PAGE>
reliance upon and in conformity with written information furnished to
the Company or the Trust by such Underwriter expressly for use therein;
and will reimburse the Company or the Trust for any legal or other
expenses reasonably incurred by the Company or the Trust in connection
with investigating or defending any such loss, claim damage, liability
or action. In addition to its other obligations under this Section
6(b), the Underwriters agree that, as an interim measure during the
pendency of any such claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or
any alleged statement or omission, described in this Section 6(b), they
will reimburse the Company and the Trust on a monthly basis for all
reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of their obligation
to reimburse the Company and the Trust for such expenses and the
possibility that such payments might later be held to have been improper
by a court of competent jurisdiction. Any such interim reimbursement
payments that are not made to the Company or the Trust, as the case may
be, within 30 days of a request for reimbursement shall bear interest at
the Prime Rate from the date of such request. This indemnity agreement
shall be in addition to any liabilities that the Underwriters may
otherwise have. No Underwriter will, without the prior written consent
of the Company and the Trust, settle or compromise or consent to the
entry of judgment in any pending or threatened action or claim or
related cause of action or portion of such cause of action in respect of
which indemnification may be sought hereunder (whether or not the
Company or the Trust is a party to such action or claim), unless such
settlement, compromise or consent includes an unconditional release of
the Company and the Trust from all liability arising out of such action
or claim (or related cause of action or portion thereof).
The indemnity agreement in this Section 6(b) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each
officer and director of the Company and the Trust and each person, if any,
who controls the Company and the Trust within the meaning of the 1933 Act
to the same extent as such agreement applies to the Company and the Trust.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; no
indemnification provided for in subsection (a) or (b) shall be available to
any party who shall fail to give notice as provided in this
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subsection (c) if the party to whom notice was not given was unaware of
the proceeding to which such notice would have related and was
prejudiced by the failure to give such notice, but the omission so to
notify the indemnifying party will not relieve the indemnifying party
from any liability that it may have to any indemnified party otherwise
than under Section 6. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to
such indemnified of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under
such subsection for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation, except that if the indemnified party
has been advised by counsel in writing that there are one or more
defenses available to the indemnified party which are different from or
additional to those available to the indemnifying party, then the
indemnified party shall have the right to employ separate counsel and in
that event the reasonable fees and expenses of such separate counsel for
the indemnified party shall be paid by the indemnifying party; provided,
however, that if the indemnifying party is the Company or the Trust, the
Company or the Trust shall only be obligated to pay the reasonable fees
and expenses of a single law firm (and any reasonably necessary local
counsel) employed by all of the indemnified parties. The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) In order to provide for just and equitable contribution in
circumstances under which the indemnity provided for in this Section 6 is
for any reason judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the right of appeal) to be unenforceable by the
indemnified parties although applicable in accordance with its terms, the
Company and the Trust, on the one hand and the Underwriters on the other
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity incurred by the
Company and the Trust, and one or
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more of the Underwriters, as incurred, in such proportions that (a) the
Underwriters are responsible pro rata for that portion represented by
the percentage that the underwriting discount appearing on the cover
page of the Prospectus bears to the public offering price (before
deducting expenses) appearing thereon, and (b) the Company and the Trust
are responsible for the balance, provided, however, that no person
guilty of fraudulent misrepresentations (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; provided,
further, that if the allocation provided above is not permitted by
applicable law, the Company and the Trust, on the one hand, and the
Underwriters on the other shall contribute to the aggregate losses in
such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company
and the Trust, on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. Relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the Company or the Trust, on the one
hand or by the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Trust and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) 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 6(d). The amount paid or payable by a party as a result of the
losses, claims, damages or liabilities referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending such action or
claim. Notwithstanding the provisions of this Section 6(d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Preferred Securities
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Underwriters'
obligations in this Section 6(d) to contribute are several in proportion
to their respective underwriting obligations and not joint. For
purposes of this Section 6(d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the, 1933 Act shall have
the same rights to contribution as
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such Underwriter, and each director of the Company, each officer of the
Company or each trustee of the Trust who signed the Registration
Statement, and each person, if any, who controls the Company or the
Trust within the meaning of Section 15 of the 1933 Act shall have the
same rights to contribution as the Company and the Trust.
Section 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
The representations, warranties, indemnities, agreements and other statements of
the Offerors or its officers set forth in or made pursuant to this Agreement
will remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Offerors, or any Underwriter or
controlling person, and with respect to an Underwriter or the Offerors will
survive delivery of and payment for the Preferred Securities or termination of
this Agreement.
Section 8. EFFECTIVE DATE OF AGREEMENT AND TERMINATION
(a) This Agreement shall become effective upon the later of (i) the
execution and delivery hereof by the parties hereto and (ii) release of
notification of effectiveness of the Registration Statement by the
Commission. By giving notice before the time this Agreement becomes
effective, you, or the Company, may prevent this Agreement from becoming
effective, without liability of any party to any other party, except that
the Company shall remain obligated to pay costs and expenses to the extent
provided in Section 4 hereof.
(b) You may terminate this Agreement, by notice to the Company and
the Trust, at any time at or prior to the Closing Time (i) in accordance
with the last paragraph of Section 5 of this Agreement, or (ii) if there
has been since the respective dates as of which information is given in the
Registration Statement, any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
business, prospects, management, properties, assets, results of operations
or condition (financial or otherwise) of the Company, whether or not
arising in the ordinary course of business, or (iii) if there has occurred
or accelerated any outbreak of hostilities or other national or
international calamity or crisis or change in economic or political
conditions the effect of which on the financial markets of the United
States is such as to make it, in your judgment, impracticable to market the
Shares or enforce contracts for the sale of the Preferred Securities, or
(iv) if trading in any securities of the Company has been suspended by the
Commission or by the Nasdaq Stock Market or if trading generally on the New
York Stock Exchange or in the over-the-counter market has been suspended,
or limitations on prices for trading (other than limitations on hours or
numbers of days of trading) have been fixed, or maximum ranges for prices
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for securities have been required, by the NASD or by order of the
Commission or any other governmental authority, or (v) if a banking
moratorium has been declared by federal or New York, Kentucky or Indiana
authorities, or (vi) any federal or state statute, regulation, rule or
order of any court or other governmental authority has been enacted,
published, decreed or otherwise promulgated which in your reasonable
opinion materially adversely affects or will materially adversely affect
the business or operations of the Company, or (vii) any action has been
taken by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a material
adverse effect on the securities markets in the United States.
(c) If this Agreement is terminated pursuant to this Section 8, such
termination shall be without liability of any party to any other party,
except to the extent provided in Section 4. Notwithstanding any such
termination, the provisions of Section 6 shall remain in effect.
Section 9. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of
the Underwriters shall fail at the Closing Time to purchase the Preferred
Securities that it or they are obligated to purchase pursuant to this Agreement
(the "Defaulted Securities"), you shall have the right, within 36 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 set forth in this Agreement; if, however, you have not completed such
arrangements within such 36-hour period, then:
(a) if the aggregate number of Firm Preferred Securities which are
Defaulted Securities does not exceed 10% of the aggregate number of Firm
Preferred Securities to be purchased pursuant to this Agreement, the
non-defaulting Underwriters shall be obligated to purchase the full amount
thereof in the proportions that their respective underwriting obligation
proportions bear to the underwriting obligations of all non-defaulting
Underwriters, and
(b) If the aggregate number of Firm Preferred Securities which are
Defaulted Securities exceeds 10% of the aggregate number of Firm Preferred
Securities to be purchased pursuant to this Agreement, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either you or the Company shall have the right to postpone the
Closing Time for a period not exceeding
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seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements, and the
Company agrees promptly to file any amendments to the Registration Statement
or supplements to the Prospectus that may thereby be made necessary. As used
in this Agreement, the term "Underwriter" includes any person substituted for
an Underwriter under this Section 9.
Section 10. DEFAULT BY THE COMPANY. If the Company or the Trust shall
fail at the Closing Time to sell and deliver the aggregate number of Firm
Preferred Securities that it is obligated to sell, then this Agreement shall
terminate without any liability on the part of any non-defaulting party, except
to the extent provided in Section 4 and except that the provisions of Section 6
shall remain in effect.
No action taken pursuant to this Section shall relieve the Company or the
Trust from liability, if any, in respect to such default.
Section 11. NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed c/o J.J.B. Hilliard, W.L. Lyons,
Inc., 501 South Fourth Avenue, Louisville, Kentucky 40202, Attention: Craig R.
Reinhardt (with a copy sent in the same manner to Stites & Harbison, 400 West
Market Street, Suite 1800, Louisville, Kentucky 40202, Attention: C. Craig
Bradley, Jr.); and notices to the Company shall be directed to it at 227 Main
Street, P.O. Box 868, Evansville, Indiana 47705, Attention: Robert A. Keil,
President (with a copy sent in the same manner to Baker & Daniels, 300 North
Meridian Street, Suite 2700, Indianapolis, Indiana 46204, Attention: David C.
Worrell).
Section 12. PARTIES. This Agreement is made solely for the benefit of and
is binding upon the Underwriters, the Company and the Trust to the extent
provided in Section 6, any person controlling the Company, the Trust or any of
the Underwriters, the officers, directors; and trustees of the Company, and
their respective executors, administrators, successors and assigns and subject
to the provisions of Section 6, no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" shall
not include any purchaser, as such purchaser, from any of the several
Underwriters of the Preferred Securities.
All of the obligations of the Underwriters hereunder are several and not
joint.
Section 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
the laws of the Commonwealth of Kentucky. Specified
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time of the day refers to United States Eastern Time. Time shall be of the
essence of this Agreement.
Section 14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and when a counterpart has been executed by each party, all such
counterparts taken together shall constitute one and the same agreement.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, and upon the acceptance
hereof by the Underwriters, this instrument will become a binding agreement
among the Company and the several Underwriters in accordance with its terms.
Very truly yours,
NATIONAL CITY BANCSHARES, INC.
By: ______________________________
Name: ________________________
Title:________________________
NCBE CAPITAL TRUST I
By: NATIONAL CITY BANCSHARES, INC.,
as Depositor
By: ______________________________
Name: ________________________
Title:________________________
The foregoing Agreement is hereby confirmed and accepted as of the date first
written above:
J.J.B. HILLIARD, W.L. LYONS, INC.
By: ______________________________
Name: ________________________
Title:________________________
NATCITY INVESTMENTS, INC.
By: ______________________________
Name: ________________________
Title:________________________
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SCHEDULE A
<TABLE>
<CAPTION>
NUMBER OF FIRM PREFERRED
UNDERWRITER SECURITIES TO BE PURCHASED
- ----------- --------------------------
<S> <C>
J.J.B. Hilliard, W.L. Lyons, Inc.
NatCity Investments, Inc.
--------------------------
TOTAL 1,200,000
</TABLE>
<PAGE>
SCHEDULE B
The National City Bank of Evansville
The Peoples National Bank of Grayville
First Kentucky Bank
Lincolnland Bank
The Bank of Mitchell
Pike County Bank
Alliance Bank
White County Bank
The First National Bank of Wayne City
First Federal Savings Bank of Leitchfield
First National Bank of Bridgeport
First Bank of Huntingburg
Bank of Illinois in Mt. Vernon
<PAGE>
EXHIBIT 4.1
CERTIFICATE OF TRUST OF
NCBE CAPITAL TRUST I
This Certificate of Trust of the NCBE CAPITAL TRUST I (the "Trust"), dated
February 12, 1998, is being duly executed and filed by WILMINGTON TRUST COMPANY,
a Delaware banking corporation, and MICHAEL F. ELLIOTT, ROBERT A. KEIL and
STEPHEN C. BYELICK, JR., each an individual, as trustees, to form a business
trust under the Delaware Business Trust Act (12 Del. C.(S) 3801 et seq.)
1. NAME. The name of the business trust formed hereby is NCBE Capital
Trust I.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware is Wilmington
Trust Company, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware, 19890-0001, Attn: Corporate Trust Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon
filing of this Certificate of Trust with the Secretary of State of the State of
Delaware.
IN WITNESS WHEREOF, each of the undersigned, being a trustee of the Trust,
has executed this Certificate of Trust as of the date first above written.
WILMINGTON TRUST COMPANY, not in
its individual capacity, but solely as trustee
By: /s/ Patricia A. Evans
-------------------------------------------
Name: Patricia A. Evans
-------------------------------------------
Title: Financial Services Officer
-------------------------------------------
/s/ Michael F. Elliott
---------------------------------------------------
Michael F. Elliott, not in his individual capacity,
but solely as trustee
/s/ Robert A. Keil
---------------------------------------------------
Robert A. Keil, not in his individual capacity,
but solely as trustee
/s/ Stephen C. Byelick, Jr.
---------------------------------------------------
Stephen C. Byelick, Jr., not in his individual capacity,
but solely as trustee
<PAGE>
EXHIBIT 4.2
TRUST AGREEMENT
TRUST AGREEMENT, dated as of February 12, 1998, by and among: (i) National
City Bancshares, Inc., an Indiana corporation (the "Depositor"), (ii)
Wilmington Trust Company, a Delaware banking corporation, as trustee and (iii)
Michael F. Elliott, Robert A. Keil and Stephen C. Byelick, Jr., each an
individual, as trustees (each of such trustees in (ii) and (iii) a "Trustee" and
collectively, the "Trustees"). The Depositor and the Trustees hereby agree as
follows:
Section 1. The Trust. The trust created hereby shall be known as NCBE
Capital Trust I (the "Trust"), in which name the Trustees, or the Depositor to
the extent provided herein, may conduct the business of the Trust, make and
execute contracts, and sue and be sued.
Section 2. The Trust Estate. The Depositor hereby assigns, transfers,
conveys and sets over to the Trust the sum of $10. Such amount shall constitute
the initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Depositor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del C (S) 3801 et seq (the "Business
Trust Act"), and that this document constitute the governing instrument of the
Trust. The Trustees are hereby authorized and directed to execute and file a
certificate of trust with the Delaware Secretary of State in accordance with the
provisions of the Business Trust Act.
Section 3. Amended and Restated Trust Agreement. The Depositor and the
Trustees will enter into an amended and restated Trust Agreement, satisfactory
to each such party and substantially in the form to be included as an exhibit to
the 1933 Act Registration Statement (as defined below), to provide for the
contemplated operation of the Trust created hereby and the issuance of the
Capital Securities (as defined below) and common securities of the Trust to be
referred to therein. Prior to the execution and delivery of such amended and
restated Trust Agreement, the Trustees shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain prior to such execution and
delivery any licenses, consents or approvals required by applicable law or
otherwise.
Section 4. Certain Authorizations. The Depositor, as the sponsor of the
Trust, is hereby authorized (i) to file with the Securities and Exchange
Commission (the "Commission") and execute, in each case on behalf of the Trust
(a) the Registration Statement on Form S-3 (the "1933 Act Registration
Statement"), including any pre-effective or post- effective amendments to such
1933 Act Registration Statement (including the prospectus and the exhibits
contained therein), relating to the registration under the Securities Act of
1933, as amended, of the preferred securities of the Trust (the "Capital
Securities") and certain other securities of the Depositor and (b) a
Registration Statement on Form 8-A (the "1934 Act Registration Statement"),
including any pre-effective and post-effective amendments thereto, relating to
the registration of the Capital Securities of the Trust under Section 12 of the
Securities Exchange Act of 1934, as amended; (ii) to file with the Nasdaq
National Market and execute on behalf of the Trust a listing application or
applications and all other applications, statements, certificates, agreements
and other instruments as shall be necessary or desirable to cause the Capital
Securities to be listed on the Nasdaq National Market; (iii) to file and execute
on behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as the Depositor on behalf of the Trust, may deem necessary or
desirable to register the Capital Securities under state securities or "Blue
Sky" laws; and (iv) to execute on behalf of the Trust that certain Underwriting
Agreement relating to the Capital Securities, among the Trust, the Depositor and
the several Underwriters named therein, substantially in the form filed as an
exhibit to the 1933 Act Registration Statement. In the event that any filing
referred to in clauses (i), (ii) and (iii) above is required by the rules and
regulations of the Commission, the Nasdaq Stock Market or state securities or
"Blue Sky" laws, to be executed on behalf of the Trust by one or more of the
Trustees, each of the Trustees, in its or his capacity as a trustee of the
Trust, is hereby authorized and, to the extent so required, directed to join in
any such filing and to execute on behalf of the Trust any and all of the
foregoing, it being understood that Wilmington Trust Company in its capacity as
a trustee of the Trust shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required by the rules
and regulations of the Commission, the Nasdaq Stock Market or state securities
or "Blue Sky" laws. In connection with
<PAGE>
the filings referred to above, the Depositor and Michael F. Elliott, Robert A.
Keil and Stephen C. Byelick, Jr, each as a Trustee and not in their individual
capacities, hereby constitute and appoint Michael F. Elliott, Robert A. Keil
and Stephen C. Byelick, Jr., and each of them, as its true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for the Depositor or such Trustee or in the Depositor's or such
Trustee's name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to the 1933 Act Registration
Statement and the 1934 Act Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Commission, the Nasdaq National Market and administrators of the state
securities or "Blue Sky" laws, granting unto said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as the Depositor or such Trustee might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their respective substitute or substitutes, shall do
or cause to be done by virtue hereof.
Section 5. Counterparts. This Trust Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 6. Trustees. The number of Trustees initially shall be four (4)
and thereafter the number of Trustees shall be such number as shall be fixed
from time to time by a written instrument signed by the Depositor, which may
increase or decrease the number of Trustees; provided, however, that to the
extent required by the Business Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural person,
an entity which has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee at any time. Any Trustee may resign upon thirty days' prior notice to
the Depositor.
Section 7. Governing Law. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to conflict of laws principles).
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed as of the day and year first above written.
NATIONAL CITY BANCSHARES, INC.,
as Depositor
By: /s/ Robert A. Keil
------------------------------
Name: Robert A. Keil
----------------------------
Title: President
---------------------------
<PAGE>
WILMINGTON TRUST COMPANY, not in
its individual capacity, but solely as trustee
By: /s/ Patricia A. Evans
-----------------------------------------------
Name: Patricia A. Evans
-----------------------------------------------
Title: Financial Services Officer
-----------------------------------------------
/s/ Michael F. Elliott
-----------------------------------------------------
Michael F. Elliott, not in his individual capacity,
but solely as trustee
/s/ Robert A. Keil
-----------------------------------------------------
Robert A. Keil, not in his individual capacity,
but solely as trustee
/s/ Stephen C. Byelick, Jr.
-----------------------------------------------------
Stephen C. Byelick, Jr., not in his individual
capacity, but solely as trustee
<PAGE>
EXHIBIT 4.3
Wilmington Trust Company, not in its
individual capacity, but solely as Trustee
By __________________________________
Name: _______________________________
Title: ________________________________
Michael F. Elliott
not in his individual capacity, but solely as Trustee
Robert A. Keil
not in his individual capacity, but solely as Trustee
Stephen C. Byelick, Jr.
not in his individual capacity, but solely as Trustee
NCBE CAPITAL TRUST I
AMENDED AND RESTATED
TRUST AGREEMENT
among
NATIONAL CITY BANCSHARES, INC., as Depositor
WILMINGTON TRUST COMPANY, as Property Trustee
WILMINGTON TRUST COMPANY, as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of _________ ___, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
1. DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. ESTABLISHMENT OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . . .12
2.1 NAME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
2.2 OFFICE OF THE TRUST; PRINCIPAL EXECUTIVE OFFICE. . . . . . . . . . .12
2.3 INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL EXPENSES. . .12
2.4 ISSUANCE OF THE PREFERRED SECURITIES . . . . . . . . . . . . . . . .12
2.5 ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND
PURCHASE OF DEBENTURES. . . . . . . . . . . . . . . . . . . . . . .13
2.6 DECLARATION OF TRUST . . . . . . . . . . . . . . . . . . . . . . . .14
2.7 AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS . . . . . . . . . .14
2.8 ASSETS OF TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . .18
2.9 TITLE TO TRUST PROPERTY. . . . . . . . . . . . . . . . . . . . . . .18
3. PAYMENT ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
3.1 PAYMENT ACCOUNT. . . . . . . . . . . . . . . . . . . . . . . . . . .19
4. DISTRIBUTIONS, REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . .19
4.1 DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .19
4.2 REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
4.3 SUBORDINATION OF COMMON SECURITIES . . . . . . . . . . . . . . . . .22
4.4 PAYMENT PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . .23
4.5 TAX RETURNS AND REPORTS. . . . . . . . . . . . . . . . . . . . . . .23
4.6 PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST. . . . . . . . . . . . .24
4.7 PAYMENTS UNDER INDENTURE . . . . . . . . . . . . . . . . . . . . . .24
5. TRUST SECURITIES CERTIFICATES . . . . . . . . . . . . . . . . . . . . . .24
5.1 INITIAL OWNERSHIP. . . . . . . . . . . . . . . . . . . . . . . . . .24
5.2 THE TRUST SECURITIES CERTIFICATES. . . . . . . . . . . . . . . . . .24
5.3 EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES. . . . . . .24
5.4 REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED
SECURITIES CERTIFICATES . . . . . . . . . . . . . . . . . . . . . .25
5.5 MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
5.6 PERSONS DEEMED SECURITYHOLDERS . . . . . . . . . . . . . . . . . . .26
5.7 ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES . . . . . . .27
5.8 MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . . . . . . . .27
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
5.9 APPOINTMENT OF PAYING AGENT. . . . . . . . . . . . . . . . . . . . .27
5.10 OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR. . . . . . . . . . . . .28
5.11 BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES;
COMMON SECURITIES CERTIFICATE . . . . . . . . . . . . . . . . . . .28
5.12 NOTICES TO CLEARING AGENCY . . . . . . . . . . . . . . . . . . . . .29
5.13 DEFINITIVE PREFERRED SECURITIES CERTIFICATES . . . . . . . . . . . .29
5.14 RIGHTS OF SECURITYHOLDERS. . . . . . . . . . . . . . . . . . . . . .30
6. ACTS OF SECURITYHOLDERS; MEETINGS; VOTING . . . . . . . . . . . . . . . .31
6.1 LIMITATIONS ON VOTING RIGHTS . . . . . . . . . . . . . . . . . . . .31
6.2 NOTICE OF MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . .32
6.3 MEETINGS OF PREFERRED SECURITYHOLDERS. . . . . . . . . . . . . . . .32
6.4 VOTING RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .33
6.5 PROXIES, ETC . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
6.6 SECURITYHOLDER ACTION BY WRITTEN CONSENT . . . . . . . . . . . . . .33
6.7 RECORD DATE FOR VOTING AND OTHER PURPOSES. . . . . . . . . . . . . .33
6.8 ACTS OF SECURITYHOLDERS. . . . . . . . . . . . . . . . . . . . . . .34
6.9 INSPECTION OF RECORDS. . . . . . . . . . . . . . . . . . . . . . . .35
7. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . .35
7.1 REPRESENTATIONS AND WARRANTIES OF THE BANK . . . . . . . . . . . . .35
7.2 REPRESENTATIONS AND WARRANTIES OF THE DELAWARE BANK. . . . . . . . .36
7.3 REPRESENTATIONS AND WARRANTIES OF DEPOSITOR. . . . . . . . . . . . .37
8. THE TRUSTEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
8.1 CERTAIN DUTIES AND RESPONSIBILITIES. . . . . . . . . . . . . . . . .38
8.2 CERTAIN NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . .40
8.3 CERTAIN RIGHTS OF PROPERTY TRUSTEE . . . . . . . . . . . . . . . . .40
8.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES . . . . . . .43
8.5 MAY HOLD SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . .43
8.6 COMPENSATION; INDEMNITY; FEES. . . . . . . . . . . . . . . . . . . .43
8.7 CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES . . . .44
8.8 CONFLICTING INTERESTS. . . . . . . . . . . . . . . . . . . . . . . .44
8.9 CO-TRUSTEES AND SEPARATE TRUSTEE . . . . . . . . . . . . . . . . . .44
8.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. . . . . . . . . .46
8.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR . . . . . . . . . . . . . . .48
8.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. . . . .48
8.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST . . . .49
8.14 REPORTS BY PROPERTY TRUSTEE. . . . . . . . . . . . . . . . . . . . .49
8.15 REPORTS TO THE PROPERTY TRUSTEE. . . . . . . . . . . . . . . . . . .49
8.16 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT . . . . . . . . . .49
8.17 NUMBER OF TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . .49
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
8.18 DELEGATION OF POWER. . . . . . . . . . . . . . . . . . . . . . . . .50
8.19 VOTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
9. TERMINATION, LIQUIDATION AND MERGER . . . . . . . . . . . . . . . . . . .50
9.1 TERMINATION UPON EXPIRATION DATE . . . . . . . . . . . . . . . . . .50
9.2 EARLY TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . .51
9.3 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
9.4 LIQUIDATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
9.5 MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
10. MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . .54
10.1 LIMITATION OF RIGHTS OF SECURITYHOLDERS. . . . . . . . . . . . . . .54
10.2 AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
10.3 SEPARABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
10.4 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . .56
10.5 PAYMENTS DUE ON NON-BUSINESS DAY . . . . . . . . . . . . . . . . . .56
10.6 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
10.7 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
10.8 REPORTS, NOTICES AND DEMANDS . . . . . . . . . . . . . . . . . . . .56
10.9 AGREEMENT NOT TO PETITION. . . . . . . . . . . . . . . . . . . . . .57
10.10 TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT. . . . . . .58
10.11 ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND
INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
</TABLE>
EXHIBITS
<TABLE>
<CAPTION>
Description Exhibit
<S> <C>
Certificate of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A
Certificate Depository Agreement . . . . . . . . . . . . . . . . . . . . . . . B
Certificate Evidencing Common Securities . . . . . . . . . . . . . . . . . . . C
Form of Agreement as to Expenses and Liabilities . . . . . . . . . . . . . . . D
Certificate Evidencing Preferred Securities. . . . . . . . . . . . . . . . . . E
</TABLE>
TRUST INDENTURE ACT
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
Section of Section of
Trust Indenture Act Trust Agreement
of 1939, As Amended
<S> <C>
310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7
310(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7
310(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
310(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7(a)(1)
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.8
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.13
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.13
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..5.7
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.14(a)
313(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.14(b)
313(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.14(b)
313(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.14(b)
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.14(c)
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.15
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
314(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.16
314(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.16
314(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1, 8.16
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.1(a), 8.3(a)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.1(a)
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.1, 8.3
315(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
316(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
316(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
316(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
317(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
317(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.10
</TABLE>
NOTE: This reconciliation shall not, for any purpose, be deemed to be a part of
the Amended and Restated Trust Agreement.
-iv-
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT is entered into and
effective as of April ____, 1998, by and among (i) NATIONAL CITY BANCSHARES,
INC., an Indiana corporation (including any successors or assigns, the
"Depositor"), (ii) WILMINGTON TRUST COMPANY, a Delaware banking corporation duly
organized and existing under the laws of the State of Delaware, as property
trustee (including its successors, the "Property Trustee" and, in its separate
corporate capacity and not in its capacity as Property Trustee, the "Bank"),
(iii) WILMINGTON TRUST COMPANY, a Delaware banking corporation, duly organized
and existing under the laws of the State of Delaware, as Delaware Trustee
(including its successors, the "Delaware Trustee" and, in its separate corporate
capacity and not in its capacity as Delaware Trustee, the "Delaware Bank"),
(iv) Michael F. Elliott, an individual, Robert A. Keil, an individual, and
Stephen C. Byelick, Jr., an individual, each of whose address is c/o National
City Bancshares, Inc., 227 Main Street, P.O. Box 868, Evansville,
Indiana 47705-0868 (each, including successors, an "Administrative Trustee" and
collectively the "Administrative Trustees") (the Property Trustee, the Delaware
Trustee, the Administrative Trustees referred to collectively as the "Trustees")
and (v) the several Holders, as hereinafter defined.
RECITALS:
A. Whereas, the Depositor, the Delaware Trustee, and the
Administrative Trustees have heretofore duly declared and established a business
trust pursuant to the Delaware Business Trust Act by the entering into of that
certain Trust Agreement, dated as of February 12, 1998 (the "Original Trust
Agreement"), and by the execution and filing by the Delaware Trustee with the
Secretary of State of the State of Delaware of the Certificate of Trust, filed
on February 12, 1998, the form of which is attached as Exhibit A; and
B. Whereas, the Depositor, the Delaware Trustee, the Property
Trustee and the Administrative Trustees desire to amend and restate the Original
Trust Agreement in its entirety as set forth herein to provide for, among other
things, (i) the issuance of the Common Securities by the Trust to the Depositor,
(ii) the issuance and sale of the Preferred Securities by the Trust pursuant to
the Underwriting Agreement, (iii) the acquisition by the Trust from the
Depositor of all of the right, title and interest in the Debentures and (iv) the
appointment of the Property Trustee;
AGREEMENT:
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party, for the benefit of the
Securityholders, hereby amends and restates the Original Trust Agreement in its
entirety and agrees as follows:
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1. DEFINED TERMS.
1.1 DEFINITIONS.
(a) For all purposes of this Trust Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Section have the meanings assigned
to them in this Section and include the plural as well as the
singular;
(2) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the
case may be, of this Trust Agreement; and
(4) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Trust Agreement as a whole and not to
any particular Article, Section or other subdivision.
(b) "Act" has the meaning specified in Section 6.8.
(c) "Additional Amount" means, with respect to Trust Securities
of a given Liquidation Amount and/or a given period, the amount of
additional interest accrued on interest in arrears and paid by the
Depositor on a Like Amount of Debentures for such period.
(d) "Additional Sums" has the meaning specified in
Section 2.5(c) of the Indenture.
(e) "Administrative Trustee" has the meaning set forth in the
Preamble.
(f) "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
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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.
(g) "Authenticating Agent" means any authenticating agent
appointed pursuant to Section 5.3(c).
(h) "Bank" has the meaning specified in the preamble to this
Trust Agreement.
(i) "Bankruptcy Event" means, with respect to any Person:
(1) the entry of a decree or order by a court having
jurisdiction in the premises adjudging such Person as bankrupt or
insolvent, or approving as properly filed a petition seeking
liquidation or reorganization of or in respect of such Person under
the United States Bankruptcy Code of 1978, as amended ("Bankruptcy
Code") or any other similar applicable federal or state law, and the
continuance of any such decree or order unvacated and unstayed for a
period of 90 days; or the commencement of an involuntary case under
the Bankruptcy Code in respect of such Person, which shall continue
undismissed for a period of 90 days or entry of an order for relief in
such case; or the entry of a decree or order of a court having
jurisdiction in the premises for the appointment on the ground of
insolvency or bankruptcy of a receiver, custodian, liquidator, trustee
or assignee in bankruptcy or insolvency of such Person or of its
property, or for the winding up or liquidation of its affairs, and
such decree or order shall have remained in force unvacated and
unstayed for a period of 90 days; or
(2) the institution by such Person of proceedings to be
adjudicated a voluntary bankrupt, or the consent by such Person to the
filing of a bankruptcy proceeding against it, or the filing by such
Person of a petition or answer or consent seeking liquidation or
reorganization under the Bankruptcy Code or other similar applicable
federal or state law, or the consent by such Person to the filing of
any such petition or to the appointment on the ground of insolvency or
bankruptcy of a receiver or custodian or liquidator or trustee or
assignee in bankruptcy or insolvency of such Person or of its
property, or shall make a general assignment for the benefit of
creditors.
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(j) "Bankruptcy Laws" has the meaning specified in Section 10.9.
(k) "Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Depositor to have been
duly adopted by the Depositor's Board of Directors, or such committee
of the Board of Directors or officers of the Depositor to which
authority to act on behalf of the Board of Directors has been
delegated, and to be in full force and effect on the date of such
certification, and delivered to the appropriate Trustee.
(l) "Book-Entry Preferred Securities Certificates" means
certificates representing Preferred Securities issued in global, fully
registered form to the Clearing Agency as described in Section 5.11.
(m) "Business Day" means a day other than (a) a Saturday or
Sunday, (b) a day on which banking institutions in The City of New
York are authorized or required by law or executive order to remain
closed, or (c) a day on which the Corporate Trust Office (as defined
herein or in the Indenture) or the office of the Property Trustee is
closed for business.
(n) "Certificate Depository Agreement" means the agreement among
the Depositor, the Property Trustee, the Securities Registrar, and The
Depository Trust Company, as the initial Clearing Agency, dated as of
the Closing Date, relating to the Trust Securities Certificates,
substantially in the form attached as Exhibit B, as the same may be
amended and supplemented from time to time.
(o) "Certificate of Trust" means the certificate of trust filed
with the Secretary of State of the State of Delaware with respect to
the Trust, as amended or restated from time to time.
(p) "Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. The
Depository Trust Company will be the initial Clearing Agency.
(q) "Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time
a Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.
(r) "Closing Date" means the date of execution and delivery of
this Trust Agreement.
(s) "Code" means the Internal Revenue Code of 1986, as amended.
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(t) "Commission" means the Securities and Exchange Commission,
as from time to time constituted, created under the Exchange Act, or,
if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the
Trust Indenture Act, then the body performing such duties at such
time.
(u) "Common Security" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $25 and having
the rights provided therefor in this Trust Agreement, including the
right to receive Distributions and a Liquidation Distribution as
provided herein.
(v) "Common Securities Certificate" means a certificate
evidencing ownership of Common Securities, substantially in the form
attached as Exhibit C.
(w) "Corporate Trust Office" means the principal corporate trust
office of the Property Trustee, which at the date hereof is located
at Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890, Attn: Corporate Trust Administration.
(x) "Debenture Event of Default" means an "Event of Default" as
defined in the Indenture.
(y) "Debenture Redemption Date" means, with respect to any
Debentures to be redeemed under the Indenture, the date fixed for
redemption under the Indenture.
(z) "Debenture Trustee" means the trustee under the Indenture.
(aa) "Debentures" means the $_____________ aggregate principal
amount (or up to $______________ aggregate principal amount if the
Underwriters exercise their Option and there is an Option Closing
Date) of the Depositor's _______% Subordinated Debentures due 2028,
issued pursuant to the Indenture.
(bb) "Definitive Preferred Securities Certificates" means either
or both (as the context requires) of (a) Preferred Securities
Certificates issued as Book-Entry Preferred Securities Certificates as
provided in Section 5.11(a) and 5.11(b) and (b) Preferred Securities
Certificates issued in certificated, fully registered form as provided
in Section 5.13.
(cc) "Delaware Bank" has the meaning specified in the Preamble.
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(dd) "Delaware Business Trust Act" means Chapter 38 of Title 12
of the Delaware Code, 12 Delaware Code Sections 3801 et seq, as it may
be amended from time to time.
(ee) "Delaware Trustee" has the meaning specified in the
Preamble.
(ff) "Depositor" has the meaning specified in the Preamble.
(gg) "Distribution Date" has the meaning specified in
Section 4.1(a).
(hh) "Distributions" means amounts payable in respect of the
Trust Securities as provided in Section 4.1.
(ii) "Early Termination Event" has the meaning set forth in
Section 9.2.
(jj) "Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(1) the occurrence of a Debenture Event of Default; or
(2) default by the Trust or Property Trustee in the payment of
any Distribution when it becomes due and payable, and continuation of
such default for a period of 30 days; or
(3) default by the Trust in the payment of any Redemption Price
of any Trust Security when it becomes due and payable; or
(4) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this Trust
Agreement (other than a covenant or warranty a default in the
performance of which or the breach of which is dealt with in
clause (2) or (3), above) and continuation of such default or breach
for a period of 60 days after there has been given, by registered or
certified mail, to the defaulting Trustee or Trustees by the Holders
of at least 25% in aggregate Liquidation Amount of the Outstanding
Preferred Securities a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder; or
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(5) the occurrence of a Bankruptcy Event with respect to the
Property Trustee and the failure by the Depositor to appoint a
successor Property Trustee within 60 days thereof.
(kk) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(ll) "Expense Agreement" means the Agreement as to Expenses and
Liabilities between the Depositor and the Trust, substantially in the
form attached as Exhibit D, as amended from time to time.
(mm) "Expiration Date" has the meaning specified in Section 9.1.
(nn) "Extended Interest Payment Period" has the meaning specified
in Section 4.1 of the Indenture.
(oo) "Guarantee" means the Guarantee Agreement executed and
delivered by the Depositor and Wilmington Trust Company as trustee,
contemporaneously with the execution and delivery of this Trust
Agreement, for the benefit of the Holders of the Preferred Securities,
as amended from time to time.
(pp) "Global Debenture" has the meaning specified in the
Indenture.
(qq) "Indenture" means the Indenture, dated as of ___________
____, 1999, between the Depositor and the Debenture Trustee, as
trustee, as amended or supplemented from time to time.
(rr) "Investment Company Act" means the Investment Company Act of
1940, as amended, as in effect as of the date of the execution of this
instrument.
(ss) "Lien" means any lien, pledge, charge, encumbrance,
mortgage, deed of trust, adverse ownership interest, hypothecation,
assignment, security interest or preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever.
(tt) "Like Amount" means (a) with respect to a redemption of
Trust Securities, Trust Securities having a Liquidation Amount equal
to the principal amount of Debentures to be contemporaneously redeemed
in accordance with the Indenture and the proceeds of which will be
used to pay the Redemption Price of such Trust Securities and (b) with
respect to a distribution of Debentures to Holders of Trust Securities
in connection with a termination or liquidation of the Trust,
Debentures having a principal amount equal to the Liquidation Amount
of the Trust
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Securities of the Holder to whom such Debentures are distributed, which
Debentures will carry accumulated interest in an amount equal to the
accumulated and unpaid interest then due.
(uu) "Liquidation Amount" means the stated amount of $25 per
Trust Security.
(vv) "Liquidation Date" means the date on which Debentures are to
be distributed to Holders of Trust Securities in connection with a
termination and liquidation of the Trust pursuant to Section 9.4(a).
(ww) "Liquidation Distribution" has the meaning specified in
Section 9.4(d).
(xx) "Officers' Certificate" means a certificate signed by the
Chairman of the Board, President or a Vice President and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary, of the Depositor, and delivered to the appropriate Trustee.
One of the officers signing an Officers' Certificate given pursuant to
Section 8.16 shall be the principal executive, financial or accounting
officer of the Depositor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided in this
Trust Agreement shall include:
(1) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(2) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(3) 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) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
(yy) "Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Trust, the Property Trustee, the Delaware
Trustee or the Depositor,
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but not an employee of any thereof, and who shall be reasonably
acceptable to the Property Trustee.
(zz) "Option" means the grant by the Trust to the Underwriters of
an option to purchase all or any portion of an additional _______
Preferred Securities pursuant to the terms of the Underwriting
Agreement, solely to cover over-allotments, if any.
(aaa) "Option Closing Date" means the time, date of payment
and delivery of the Preferred Securities purchased by the Underwriters
pursuant to their exercise of the Option and in accordance with the
terms of the Underwriting Agreement.
(bbb) "Original Trust Agreement" has the meaning specified in
the recitals to this Trust Agreement.
(ccc) "Outstanding", when used with respect to Preferred
Securities, means, as of the date of determination, all Preferred
Securities theretofore executed and delivered under this Trust
Agreement, except:
(1) Preferred Securities theretofore canceled by the Property
Trustee or delivered to the Property Trustee for cancellation;
(2) Preferred Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with the
Property Trustee or any Paying Agent for the Holders of such Preferred
Securities; provided that, if such Preferred Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Trust Agreement; and
(3) Preferred Securities which have been paid or in exchange for
or in lieu of which other Preferred Securities have been executed and
delivered pursuant to Sections 5.4, 5.5, 5.11 and 5.13; provided,
however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given
any request, demand, authorization, direction, notice, consent or
waiver hereunder, Preferred Securities owned by the Depositor, any
Trustee or any Affiliate of the Depositor or any Trustee shall be
disregarded and deemed not to be Outstanding, except that (a) in
determining whether any Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or
wavier, only Preferred Securities that such Trustee knows to be so
owned shall be so disregarded and (b) the foregoing
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shall not apply at any time when all of the outstanding Preferred
Securities are owned by the Depositor, one or more of the Trustees
and/or any such Affiliate. Preferred Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Administrative
Trustees the pledgee's right so to the Depositor or any Affiliate
of the Depositor.
(ddd) "Owner" means each Person who is the beneficial owner
of a Book-Entry Preferred Securities Certificate as reflected in the
records of the Clearing Agency or, if a Clearing Agency Participant is
not the Owner, then as reflected in the records of a Person
maintaining an account with such Clearing Agency (directly or
indirectly, in accordance with the rules of such Clearing Agency).
(eee) "Paying Agent" means any paying agent or co-paying
agent appointed pursuant to Section 5.9 and shall initially be the
Bank.
(fff) "Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee with the
Bank in its trust department for the benefit of the Securityholders
in which all amounts paid in respect of the Debentures will be held and
from which the Property Trustee shall make payments to the Securityholders
in accordance with Sections 4.1 and 4.2.
(ggg) "Person" means any individual, corporation,
partnership, joint venture, trust, limited liability company or
corporation, unincorporated organization or government or any agency
or political subdivision thereof.
(hhh) "Preferred Security" means an undivided beneficial
interest in the assets of the Trust, having a Liquidation Amount of
$25 and having the rights provided therefor in this Trust Agreement,
including the right to receive Distributions and a Liquidation
Distribution as provided herein.
(iii) "Preferred Securities Certificate" means a certificate
evidencing ownership of Preferred Securities, substantially in the
form attached as Exhibit E.
(jjj) "Property Trustee" means the commercial bank or trust
company identified as the "Property Trustee", in the Preamble solely
in its capacity as Property Trustee of the Trust and not in its
individual capacity, or its successor in interest in such capacity, or
any successor property trustee appointed as herein provided.
(kkk) "Redemption Date" means, with respect to any Trust
Security to be redeemed, the date fixed for such redemption by or
pursuant to this Trust Agreement;
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provided that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of
Trust Securities.
(lll) "Redemption Price" means with respect to any Trust
Security, the Liquidation Amount of such Trust Security, plus
accumulated and unpaid Distributions to the Redemption Date, plus the
related amount of the premium, if any, paid by the Depositor upon the
concurrent redemption of a Like Amount of Debentures, allocated on a
pro rata basis (based on aggregate Liquidation Amounts) among the
Trust Securities.
(mmm) "Relevant Trustee" shall have the meaning specified in
Section 8.10.
(nnn) "Securities Register" and "Securities Registrar" have
the respective meanings specified in Section 5.4.
(ooo) "Securityholder" or "Holder" means a Person in whose
name a Trust Security or Securities is registered in the Securities
Register; any such Person is a beneficial owner within the meaning of
the Delaware Business Trust Act.
(ppp) "Trust" means the Delaware business trust created and
continued hereby and identified on the cover page to this Trust
Agreement.
(qqq) "Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in
accordance with the applicable provisions hereof, including all
exhibits hereto, including, for all purposes of this Trust Agreement
and any such modification, amendment or supplement, the provisions of
the Trust Indenture Act that are deemed to be a part of and govern
this Trust Agreement and any such modification, amendment or
supplement, respectively.
(rrr) "Trust Indenture Act" means the Trust Indenture Act of
1939 as in force at the date as of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939
is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so
amended.
(sss) "Trust Property" means (a) the Debentures, (b) the
rights of the Property Trustee under the Guarantee, (c) any cash on
deposit in, or owing to, the Payment Account and (d) all proceeds and
rights in respect of the foregoing and any other property and assets
for the time being held or deemed to be held by the Property Trustee
pursuant to the trusts of this Trust Agreement.
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(ttt) "Trust Security" means any one of the Common Securities
or the Preferred Securities.
(uuu) "Trust Securities Certificate" means any one of the
Common Securities Certificates or the Preferred Securities
Certificates.
(vvv) "Trustee" has the meaning set forth in the Preamble.
(www) "Underwriters" means the Persons named as underwriters
in the Underwriting Agreement.
(xxx) "Underwriting Agreement" means the Underwriting
Agreement, dated as of _________ ____, 1998, among the Trust, the
Depositor and the Underwriters named therein.
2. ESTABLISHMENT OF THE TRUST.
2.1 NAME. The Trust created and continued hereby shall be known as
"NCBE Capital Trust I," as such name may be modified from time to time by the
Administrative Trustees following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may engage in the
transactions contemplated hereby, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.
2.2 OFFICE OF THE TRUST; PRINCIPAL EXECUTIVE OFFICE. The address of
the Trust in the State of Delaware is c/o Wilmington Trust Company, 1100 North
Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration, or such other address in the State of Delaware as the Delaware
Trustee may designate by written notice to the Securityholders and the
Depositor. The principal executive office of the Trust is c/o National City
Bancshares, Inc., 227 Main Street, P.O. Box 868, Evansville, Indiana 47705-0868.
2.3 INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL EXPENSES.
The Trustees acknowledge receipt in trust from the Depositor in connection with
the Original Trust Agreement of the sum of $10, which constituted the initial
Trust Property. The Depositor shall pay organizational expenses of the Trust as
they arise or shall, upon request of any Trustee, promptly reimburse such
Trustee for any such expenses paid by such Trustee. The Depositor shall make no
claim upon the Trust Property for the payment of such expenses.
2.4 ISSUANCE OF THE PREFERRED SECURITIES. The Depositor, on behalf
of the Trust and pursuant to the Original Trust Agreement, executed and
delivered the Underwriting Agreement. Contemporaneously with the execution and
delivery of this Trust Agreement, an Administrative Trustee, on behalf of the
Trust, shall execute in accordance with Section 5.2 and deliver in accordance
with the Underwriting Agreement Preferred Securities Certificates, registered in
the
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name of the nominee of the initial Clearing Agency, in an aggregate amount of
___________ Preferred Securities having an aggregate Liquidation Amount of
$_________, against receipt of the aggregate purchase price of such Preferred
Securities of $_____________, which amount such Administrative Trustee shall
promptly deliver to the Property Trustee. If the Underwriters exercise their
Option and there is an Option Closing Date, then an Administrative Trustee, on
behalf of the Trust, shall execute in accordance with Section 5.2, and deliver
in accordance with the Underwriting Agreement, additional Preferred Securities
Certificates, registered in the name of the nominee of the Clearing Agency in an
aggregate amount of up to _____________ Preferred Securities having an aggregate
Liquidation Amount of up to $_________ against receipt of the aggregate purchase
price of such Preferred Securities equal to the product of $25 multiplied by the
number of Preferred Securities purchased pursuant to the Option, which amount
such Administrative Trustee shall promptly deliver to the Property Trustee.
2.5 ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND PURCHASE OF
DEBENTURES.
(a) Contemporaneously with the execution and delivery of this
Trust Agreement, an Administrative Trustee, on behalf of the Trust,
shall execute in accordance with Section 5.2, and deliver Common
Securities Certificates, registered in the name of the Depositor, in
an aggregate amount of ________ Common Securities having an aggregate
Liquidation Amount of $____________, against receipt of the aggregate
purchase price of such Common Securities of $___________, which amount
such Administrative Trustee shall promptly deliver to the Property
Trustee. Contemporaneously therewith, an Administrative Trustee, on
behalf of the Trust, shall subscribe to and purchase from the
Depositor, Debentures, registered in the name of the Property Trustee
on behalf of the Trust and having an aggregate principal amount equal
to $_____________, and, in satisfaction of the purchase price for such
Debentures, the Property Trustee, on behalf of the Trust, shall
transfer $___________ to the Depositor.
(b) If the Underwriters exercise the Option and there is an
Option Closing Date, then an Administrative Trustee, on behalf of the
Trust, shall execute in accordance with Section 5.2, and deliver to
the Depositor, Common Securities Certificates, registered in the name
of the Depositor, in an aggregate amount of up to _____________ Common
Securities having an aggregate Liquidation Amount of up to
$________________ against payment by the Depositor of an amount equal
to the product of $25 multiplied by number of additional Common
Securities purchased by the Depositor. Contemporaneously therewith,
an Administrative Trustee, on behalf of the Trust, shall subscribe to
and purchase from the Depositor, Debentures, registered in the name
of the Property Trustee on behalf of the Trust and having an
aggregate principal amount of up to $________________, and, in
satisfaction of the purchase price of such Debentures, the Property
Trustee, on behalf of the Trust, shall
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deliver to the Depositor an aggregate amount equal to the sum of the
amounts received from one of the Administrative Trustees pursuant
to the first sentence of this Section 2.5(b) and to the last sentence
of Section 2.4.
2.6 DECLARATION OF TRUST. The exclusive purposes and functions of
the Trust are (a) to issue and sell Trust Securities and use the proceeds from
such sale to acquire the Debentures, and (b) to engage in those activities
necessary, convenient or incidental thereto. The Depositor hereby appoints the
Trustees as trustees of the Trust, to have all the rights, powers and duties to
the extent set forth herein, and the Trustees hereby accept such appointment.
The Property Trustee hereby declares that it will hold the Trust Property in
trust upon and subject to the conditions set forth herein for the benefit of the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities, of the Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act.
2.7 AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in
accordance with the terms of this Trust Agreement. Subject to the
limitations set forth in paragraph (b) of this Section and Article 8,
and in accordance with the following provisions (1) and (2), the
Administrative Trustees shall have the authority to enter into all
transactions and agreements determined by the Administrative Trustees
to be appropriate in exercising the authority, express or implied,
otherwise granted to the Administrative Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including
without limitation, the following:
(1) As among the Trustees, each Administrative Trustee, acting
singly or jointly, shall have the power and authority to act on behalf
of the Trust with respect to the following matters:
(A) the issuance and sale of the Trust
Securities;
(B) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the Trust,
the Expense Agreement and the Certificate Depository
Agreement and such other agreements or documents as may
be necessary or desirable in connection with the
purposes and function of the Trust;
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(C) assisting in the registration of the
Preferred Securities under the Securities Act of 1933,
as amended, and under state securities or blue sky
laws, and the qualification of this Trust Agreement as
a trust indenture under the Trust Indenture Act;
(D) assisting in the listing of the Preferred
Securities upon the Nasdaq National Market or such
securities exchange or exchanges as shall be determined
by the Depositor and the registration of the Preferred
Securities under the Exchange Act, and the preparation
and filing of all periodic and other reports and other
documents pursuant to the foregoing;
(E) the sending of notices (other than notices of
default) and other information regarding the Trust
Securities and the Debentures to the Securityholders in
accordance with this Trust Agreement;
(F) the appointment of a Paying Agent and
Securities Registrar in accordance with this Trust
Agreement;
(G) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust and the preparation, execution
and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(H) the taking of 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
Preferred Securities or to enable the Trust to effect
the purposes for which the Trust was created; and
(I) the taking of any action incidental to the
foregoing as the Administrative Trustees may from time
to time determine is necessary or advisable to give
effect to the terms of this Trust Agreement for the
benefit of the
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Securityholders (without consideration of the effect of any
such action on any particular Securityholder).
(2) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect
to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any
other payments made in respect of the Debentures in the
Payment Account;
(D) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities in
accordance with the terms of this Trust Agreement;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Debentures;
(F) the sending of notices of default and other
information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with
this Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust;
(I) after an Event of Default the taking of any
action incidental to the foregoing as the Property
Trustee may from time to time determine is necessary or
advisable to give effect to the terms of this Trust
Agreement and protect and conserve the Trust Property
for the benefit of the Securityholders (without
consideration of the effect of any such action on any
particular Securityholder);
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(J) registering transfers of the Trust Securities
in accordance with this Trust Agreement; and
(K) except as otherwise provided in this
Section 2.7(a)(2), the Property Trustee shall have none
of the duties, liabilities, powers or the authority of
the Administrative Trustees set forth in
Section 2.7(a)(1).
(b) So long as this Trust Agreement remains in effect, the Trust
(or the Trustees acting on behalf of the Trust) shall not undertake
any business, activities or transaction except as expressly provided
herein or contemplated hereby. In particular, the Trust shall not
(i) acquire any investments or engage in any activities not authorized
by this Trust Agreement, (ii) sell, assign, transfer, exchange,
mortgage, pledge, set-off or otherwise dispose of any of the Trust
Property or interests therein, including to Securityholders, except as
expressly provided herein, (iii) take any action that would cause the
Trust to fail or cease to qualify as a "grantor trust" for United
States federal income tax purposes, (iv) incur any indebtedness for
borrowed money or issue any other debt or (v) take or consent to any
action that would result in the placement of a Lien on any of the
Trust Property. The Administrative Trustees shall defend all claims
and demands of all Persons at any time claiming any Lien on any of the
Trust Property adverse to the interest of the Trust or the
Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred
Securities, the Depositor shall have the right and responsibility to
assist the Trust with respect to, or effect on behalf of the Trust,
the following (and any actions taken by the Depositor in furtherance
of the following prior to the date of this Trust Agreement are hereby
ratified and confirmed in all respects):
(1) the preparation and filing by the Trust with the Commission
and the execution on behalf of the Trust of one or more registration
statements on the appropriate form in relation to the Preferred
Securities, the Debentures and the Guarantee, including any amendments
thereto;
(2) the determination of the states in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which
must be taken by or on behalf of the Trust, and advise the Trustees of
actions they must take on behalf of the Trust, and prepare for
execution and filing any documents to be executed and filed by the
Trust or on behalf of the Trust, as the Depositor deems necessary
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or advisable in order to comply with the applicable laws of any such
states;
(3) the preparation for filing by the Trust and execution on
behalf of the Trust of an application to the Nasdaq National Market or
a national stock exchange or other organizations for listing upon
notice of issuance of any Preferred Securities and to file or cause an
Administrative Trustee to file thereafter with such exchange or
organization such notifications and documents as may be necessary from
time to time;
(4) the preparation for filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement
on Form 8-A relating to the registration of the Preferred Securities
under Section 12(b) or 12(g) of the Exchange Act;
(5) the negotiation of the terms of, and the execution and
delivery of, the Underwriting Agreement providing for the sale of the
Preferred Securities; and
(6) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the
affairs of the Trust and to operate the Trust so that the Trust will
not be deemed to be an "investment company" required to be registered
under the Investment Company Act, will be classified as a "grantor
trust" and not as an association taxable as a corporation for United
States federal income tax purposes and so that the Debentures will be
treated as indebtedness of the Depositor for United States federal
income tax purposes. In this connection, subject to Section 10.2, the
Depositor and the Administrative Trustees are authorized to take any
action, not inconsistent with applicable law or this Trust Agreement,
that each of the Depositor and the Administrative Trustees determines
in their discretion to be necessary or desirable for such purposes.
2.8 ASSETS OF TRUST. The assets of the Trust shall consist of the
Trust Property.
2.9 TITLE TO TRUST PROPERTY. Legal title to all Trust Property shall
be vested at all times in the Property Trustee (in its capacity as such) and
shall be held and administered by the Property Trustee for the benefit of the
Securityholders in accordance with this Trust Agreement.
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3. PAYMENT ACCOUNT.
3.1 PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of
the Property Trustee shall have exclusive control and sole right of
withdrawal with respect to the Payment Account for the purpose of
making deposits and withdrawals from the Payment Account in accordance
with this Trust Agreement. All monies and other property deposited or
held from time to time in the Payment Account shall be held by the
Property Trustee in the Payment Account for the exclusive benefit of
the Securityholders and for distribution as herein provided, including
(and subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on,
and any other payments or proceeds with respect to, the Debentures.
Amounts held in the Payment Account shall not be invested by the
Property Trustee pending distribution thereof.
4. DISTRIBUTIONS, REDEMPTION.
4.1 DISTRIBUTIONS.
(a) Distributions on the Trust Securities shall be cumulative,
and will accumulate whether or not there are funds of the Trust
available for the payment of Distributions. Distributions shall
accumulate from _________, 1998, and, except during any Extended
Interest Payment Period with respect to the Debentures, shall be
payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on June 30, 1998 (each date on
which distributions are payable in accordance with the foregoing a
"Distribution Date").
If any date on which a Distribution is otherwise payable on the
Trust Securities is not a Business Day, then the payment of such
Distribution shall be made on the next succeeding day that is a
Business Day (and without any additional Distributions, interest or
other payment in respect of any such delay), in each case with the
same force and effect as if made on the date such payment was
originally payable.
(b) The Trust Securities represent undivided beneficial
interests in the Trust Property, and the Distributions on the Trust
Securities shall be payable at a rate of _____% per annum of the
Liquidation Amount of the Trust Securities. The amount of
Distributions payable for any full period shall be computed on the
basis
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of a 360-day year of twelve 30-day months. The amount of Distributions
for any partial period shall be computed on the basis of the number of
days elapsed in a 360-day year of twelve 30-day months. During any
Extended Interest Payment Period with respect to the Debentures,
Distributions on the Trust Securities will be deferred for a period equal
to the Extended Interest Payment Period. The amount of Distributions
payable for any period shall include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by the
Property Trustee (as or through the Paying Agent) solely from the
Payment Account and shall be payable on each Distribution Date only to
the extent that the Trust has funds then on hand and immediately
available by 12:30 p.m. on each Distribution Date in the Payment
Account for the payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they
appear on the Securities Register for the Trust Securities on the
relevant record date, which shall be one Business Day prior to such
Distribution Date; provided, however, that in the event that the
Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the 15th day of the month in which the
relevant Distribution Date occurs.
4.2 REDEMPTION.
(a) On each Debenture Redemption Date and at maturity of the
Debentures, the Trust will be required to redeem a Like Amount of
Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee
by first-class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the Redemption Date to each Holder of Trust
Securities to be redeemed, at such Holder's address appearing in the
Securities Register. The Property Trustee shall have no responsibility
for the accuracy of any CUSIP number contained in such notice. All notices
of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the CUSIP number;
(4) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the aggregate Liquidation Amount of
the particular Trust Securities to be redeemed; and
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(5) that on the Redemption Date the Redemption Price will become
due and payable upon each such Trust Security to be redeemed and that
interest and Distributions thereon will cease to accumulate on and
after said date.
(c) The Trust Securities redeemed on each Redemption Date shall
be redeemed at the Redemption Price with the proceeds from the
contemporaneous redemption of Debentures. Redemptions of the Trust
Securities shall be made and the Redemption Price shall be payable on
each Redemption Date only to the extent that the Trust has legally and
immediately available funds then on hand and available in the Payment
Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in
respect of any Preferred Securities, then, by 12:00 noon, New York
City time, on the Redemption Date, subject to Section 4.2(c), the
Property Trustee will, so long as the Preferred Securities are in
book-entry-only form, deposit with the Clearing Agency for the
Preferred Securities funds sufficient to pay the applicable Redemption
Price and will give such Clearing Agency irrevocable instructions and
authority to pay the Redemption Price to the Holders thereof. If the
Preferred Securities are no longer in book-entry-only form, the
Property Trustee, subject to Section 4.2(c), will deposit with the
Paying Agent funds sufficient to pay the applicable Redemption Price
and will give the Paying Agent irrevocable instructions and authority
to pay the Redemption Price to the Holders thereof upon surrender of
their Preferred Securities Certificates. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date
for any Trust Securities called for redemption shall be payable to the
Holders of such Trust Securities as they appear on the Securities
Register on the relevant record dates for the related Distribution
Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights
of Securityholders holding Trust Securities so called for redemption
will cease, except the right of such Securityholders to receive the
Redemption Price and any Distribution payable on or prior to the
Redemption Date, but without interest, and such Trust Securities will
cease to be Outstanding. In the event that any date on which any
Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), with the same force and
effect as if made on such date. In the event that payment of the
Redemption Price in respect of any Trust Securities called for
redemption is improperly withheld or refused and not paid either by
the Trust or by the Depositor pursuant to the Guarantee, Distributions
on such Trust Securities will continue to accumulate, at the then
applicable rate, from the Redemption Date originally established by
the Trust for such Trust Securities to the date such
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Redemption Price is actually paid, in which case the actual payment date
will be the date fixed for redemption for purposes of calculating the
Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities
shall be made to the record holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record
date, which shall be one Business Day prior to the relevant Redemption
Date; provided, however, that in the event that the Preferred
Securities do not remain in book-entry-only form, the relevant record
date shall be a date at least 15 days prior to the relevant Redemption
Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding
Trust Securities are to be redeemed on a Redemption Date, then the
aggregate Liquidation Amount of Trust Securities to be redeemed shall
be allocated on a pro rata basis (based on aggregate Liquidation
Amounts) among the Common Securities and the Preferred Securities.
The particular Preferred Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Property
Trustee from the Outstanding Preferred Securities not previously
called for redemption, by such method (including, without limitation,
by lot) as the Property Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal
to $25 or an integral multiple of $25 in excess thereof) of the
Liquidation Amount of Preferred Securities of a denomination larger
than $25. The Property Trustee shall promptly notify the Securities
Registrar in writing of the Preferred Securities selected for
redemption and, in the case of any Preferred Securities selected for
partial redemption, the Liquidation Amount thereof to be redeemed.
For all purposes of this Trust Agreement, unless the context otherwise
requires, all provisions relating to the redemption of Preferred
Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the
Liquidation Amount of Preferred Securities which has been or is to be
redeemed.
4.3 SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made, subject to Section 4.2(f), pro rata among
the Common Securities and the Preferred Securities based on the
aggregate Liquidation Amount of the Trust Securities; provided,
however, that if on any Distribution Date or Redemption Date any Event
of Default resulting from a Debenture Event of Default shall have
occurred and be continuing, no payment of any Distribution (including
Additional Amounts, if applicable) on, or Redemption Price of, any
Common Security, and no other payment on account of the redemption,
liquidation or other acquisition of Common Securities, shall be made
unless payment in full in cash of all accumulated and
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unpaid Distributions (including Additional Amounts, if applicable) on all
Outstanding Preferred Securities for all Distribution periods terminated
on or prior thereto, or in the case of payment of the Redemption Price
the full amount of such Redemption Price on all Outstanding Preferred
Securities then called for redemption, shall have been made or provided
for, and all funds immediately available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions
(including Additional Amounts, if applicable) on, or the Redemption Price
of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default
resulting from a Debenture Event of Default, the Holder of Common
Securities will be deemed to have waived any right to act with respect
to any such Event of Default under this Trust Agreement until the
effect of all such Events of Default with respect to the Preferred
Securities shall have been cured, waived or otherwise eliminated.
Until any such Event of Default under this Trust Agreement with
respect to the Preferred Securities shall have been so cured, waived
or otherwise eliminated, the Property Trustee shall act solely on
behalf of the Holders of the Preferred Securities and not the Holder
of the Common Securities, and only the Holders of the Preferred
Securities will have the right to direct the Property Trustee to act
on their behalf.
4.4 PAYMENT PROCEDURES. Payments of Distributions (including
Additional Amounts, if applicable) in respect of the Preferred Securities shall
be made by check mailed to the address of the Person entitled thereto as such
address shall appear on the Securities Register or by wire transfer or, if the
Preferred Securities are held by a Clearing Agency, such Distributions shall be
made to the Clearing Agency in immediately available funds, which shall credit
the relevant Persons' accounts at such Clearing Agency on the applicable
Distribution Dates. Payments in respect of the Common Securities shall be made
in such manner as shall be mutually agreed between the Property Trustee and the
Common Securityholder.
4.5 TAX RETURNS AND REPORTS. The Administrative Trustees shall
prepare (or cause to be prepared), at the Depositor's expense, and file all
United States federal, state and local tax and information returns and reports
required to be filed by or in respect of the Trust. In this regard, the
Administrative Trustees shall (a) prepare and file (or cause to be prepared and
filed) the appropriate Internal Revenue Service Form required to be filed in
respect of the Trust in each taxable year of the Trust and (b) prepare and
furnish (or cause to be prepared and furnished) to each Securityholder the
appropriate Internal Revenue Service Form required to be furnished to such
Securityholder or the information required to be provided on such form. The
Administrative Trustees shall provide the Depositor with a copy of all such
returns and reports promptly after such filing or furnishing. The Property
Trustee shall comply with the United States federal withholding and backup
withholding tax laws and information reporting requirements with respect to any
payments to Securityholders under the Trust Securities.
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4.6 PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST. Upon receipt under
the Debentures of Additional Sums, the Property Trustee, at the direction of an
Administrative Trustee or the Depositor, shall promptly pay any taxes, duties or
governmental charges of whatsoever nature (other than withholding taxes) imposed
on the Trust by the United States or any other taxing authority.
4.7 PAYMENTS UNDER INDENTURE. Any amount payable hereunder to any
Holder of Preferred Securities shall be reduced by the amount of any
corresponding payment such Holder has directly received under the Indenture
pursuant to Section 5.14(b) or 5.14(c) hereof.
5. TRUST SECURITIES CERTIFICATES.
5.1 INITIAL OWNERSHIP. Upon the creation of the Trust and the
contribution by the Depositor pursuant to Section 2.3 and until the issuance of
the Trust Securities, and at any time during which no Trust Securities are
Outstanding, the Depositor shall be the sole beneficial owner of the Trust.
5.2 THE TRUST SECURITIES CERTIFICATES. The Preferred Securities
Certificates shall be issued in minimum denominations of $25 Liquidation Amount
and integral multiples of $25 in excess thereof, and the Common Securities
Certificates shall be issued in denominations of $25 Liquidation Amount and
integral multiples thereof. The Trust Securities Certificates shall be executed
on behalf of the Trust by manual or facsimile signature of at least one
Administrative Trustee. Trust Securities Certificates bearing the manual
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trust, shall be validly issued
and entitled to the benefits of the Trust Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
delivery of such Trust Securities Certificates or did not hold such offices at
the date of delivery of such Trust Securities Certificates. A transferee of a
Trust Securities Certificate shall become a Securityholder, and shall be
entitled to the rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities Certificate in such
transferee's name pursuant to Sections 5.4, 5.11 and 5.13.
5.3 EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES. On the
Closing Date and on the date on which the Underwriters exercise the Option, as
applicable, the Administrative Trustees shall cause Trust Securities
Certificates, in an aggregate Liquidation Amount as provided in Sections 2.4
and 2.5, to be executed on behalf of the Trust by the manual or facsimile
signature of at least one of the Administrative Trustees and delivered to or
upon the written order of the Depositor, signed by its Chairman of the Board and
Chief Executive Officer, President, any Vice President, the Treasurer or any
Assistant Treasurer without further corporate action by the Depositor, in
authorized denominations.
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(a) A Preferred Securities Certificate shall not be valid until
authenticated by the manual signature of an authorized signatory of
the Property Trustee. The signature shall be conclusive evidence that
the Preferred Securities Certificate has been authenticated under this
Trust Agreement. Each Preferred Securities Certificate shall be dated
the date of its authentication.
(b) Upon the written order of the Trust signed by an
Administrative Trustee, the Property Trustee shall authenticate and
make available for delivery the Preferred Securities Certificates.
(c) The Property Trustee may appoint an Authenticating Agent
acceptable to the Trust to authenticate the Preferred Securities. An
Authenticating Agent may authenticate the Preferred Securities
whenever the Property Trustee may do so. Each reference in this Trust
Agreement to authentication by the Property Trustee includes the
authentication by such agent. An Authenticating Agent has the same
rights as the Property Trustee to deal with the Depositor or the
Trust.
5.4 REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED SECURITIES
CERTIFICATES.
(a) The Depositor shall keep or cause to be kept, at the office
or agency maintained pursuant to Section 5.8, a register or registers
for the purpose of registering Trust Securities Certificates and
transfers and exchanges of Preferred Securities Certificates (herein
referred to as the "Securities Register") in which the registrar
designated by the Depositor (the "Securities Registrar"), subject to
such reasonable regulations as it may prescribe, shall provide for the
registration of Preferred Securities Certificates and Common
Securities Certificates (subject to Section 5.10 in the case of the
Common Securities Certificates) and registration of transfers and
exchanges of Preferred Securities Certificates as herein provided.
The Property Trustee shall be the initial Securities Registrar.
(b) Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to
Section 5.8, the Administrative Trustees or any one of them shall
execute and deliver, in the name of the designated transferee or
transferees, one or more new Preferred Securities Certificates in
authorized denominations of a like aggregate Liquidation Amount dated
the date of execution by such Administrative Trustee or Trustees. The
Securities Registrar shall not be required to register the transfer of
any Preferred Securities that have been called for redemption. At the
option of a Holder, Preferred Securities Certificates may be exchanged
for other Preferred Securities Certificates in authorized
denominations of the same class and of a like aggregate Liquidation
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Amount upon surrender of the Preferred Securities Certificates to be
exchanged at the office or agency maintained pursuant to Section 5.8.
(c) Every Preferred Securities Certificate presented or
surrendered for registration of transfer or exchange shall be
accompanied by a written instrument of transfer in form satisfactory
to the Property Trustee and the Securities Registrar duly executed by
the Holder or his attorney duly authorized in writing. Each Preferred
Securities Certificate surrendered for registration of transfer or
exchange shall be canceled and subsequently disposed of by the
Property Trustee in accordance with its customary practice. The Trust
shall not be required to (i) issue, register the transfer of, or
exchange any Preferred Securities during a period beginning at the
opening of business 15 calendar days before the date of mailing of a
notice of redemption of any Preferred Securities called for redemption
and ending at the close of business on the day of such mailing or
(ii) register the transfer of or exchange any Preferred Securities so
selected for redemption, in whole or in part, except the unredeemed
portion of any such Preferred Securities being redeemed in part.
(d) No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but the
Securities Registrar may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with
any transfer or exchange of Preferred Securities Certificates.
5.5 MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar, the Property Trustee and the Administrative Trustees such security or
indemnity as may be required by them to save each of them harmless, then in the
absence of notice that such Trust Securities Certificate shall have been
acquired by a bona fide purchaser, the Administrative Trustees, or any one of
them, on behalf of the Trust shall execute and make available for delivery, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust
Securities Certificate, a new Trust Securities Certificate of like class, tenor
and denomination. In connection with the issuance of any new Trust Securities
Certificate under this Section, the Administrative Trustees or the Securities
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Trust Securities Certificate issued pursuant to this Section shall constitute
conclusive evidence of an undivided beneficial interest in the assets of the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Trust Securities Certificate shall be found at any time.
5.6 PERSONS DEEMED SECURITYHOLDERS. The Trustees, the Paying Agent
and the Securities Registrar shall treat the Person in whose name any Trust
Securities Certificate shall be
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registered in the Securities Register as the owner of such Trust Securities
Certificate for the purpose of receiving Distributions and for all other
purposes whatsoever, and neither the Trustees nor the Securities Registrar
shall be bound by any notice to the contrary.
5.7 ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES. At any
time when the Property Trustee is not also acting as the Securities Registrar,
the Administrative Trustees or the Depositor shall furnish or cause to be
furnished to the Property Trustee (a) semi-annually on or before January 15 and
July 15 in each year, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Securityholders as of the
most recent record date and (b) promptly after receipt by any Administrative
Trustee or the Depositor of a request therefor from the Property Trustee in
order to enable the Property Trustee to discharge its obligations under this
Trust Agreement, in each case to the extent such information is in the
possession or control of the Administrative Trustees or the Depositor and is not
identical to a previously supplied list or has not otherwise been received by
the Property Trustee in its capacity as Securities Registrar. The rights of
Securityholders to communicate with other Securityholders with respect to their
rights under this Trust Agreement or under the Trust Securities, and the
corresponding rights of the Trustee shall be as provided in the Trust Indenture
Act. Each Holder, by receiving and holding a Trust Securities Certificate, and
each owner shall be deemed to have agreed not to hold the Depositor, the
Property Trustee or the Administrative Trustees accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
5.8 MAINTENANCE OF OFFICE OR AGENCY. The Administrative Trustees
shall maintain in Wilmington, Delaware, an office or offices or agency or
agencies where Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities Certificates may be served. The
Administrative Trustees initially designate the principal corporate trust office
of the Property Trustee, at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attn: Corporate Trust Administration as the
principal corporate trust office for such purposes. The Administrative Trustees
shall give prompt written notice to the Depositor and to the Securityholders of
any change in the location of the Securities Registrar or any such office or
agency.
5.9 APPOINTMENT OF PAYING AGENT. The Paying Agent shall make
Distributions to Securityholders from the Payment Account and shall report the
amounts of such Distributions to the Property Trustee and the Administrative
Trustees. Any Paying Agent shall have the revocable power to withdraw funds
from the Payment Account for the purpose of making the Distributions referred to
above. The Administrative Trustees may revoke such power and remove the Paying
Agent if such Trustees determine in their sole discretion that the Paying Agent
shall have failed to perform its obligations under this Trust Agreement in any
material respect. The Paying Agent shall initially be the Property Trustee, and
any co-paying agent chosen by the Property Trustee, and acceptable to the
Administrative Trustees, and the Depositor. Any Person acting as Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Administrative Trustees, the Property Trustee and the Depositor. In the event
that the Property Trustee shall no
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longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee and the Depositor to act
as Paying Agent (which shall be a bank or trust company). The Administrative
Trustees shall cause such successor Paying Agent or any additional Paying
Agent appointed by the Administrative Trustees to execute and deliver to the
Trustees an instrument in which such successor Paying Agent or additional
Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such Paying Agent shall
also return all funds in its possession to the Property Trustee. The
provisions of Sections 8.1, and 8.6 shall apply to the Property Trustee also
in its role as Paying Agent, for so long as the Property Trustee shall act as
Paying Agent and, to the extent applicable, to any other Paying Agent
appointed hereunder. Any reference to this Agreement to the Paying Agent
shall include any co-paying agent unless the context requires otherwise.
5.10 OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR. On the Closing
Date, the Depositor shall acquire and retain beneficial and record ownership of
the Common Securities. To the fullest extent permitted by law, any attempted
transfer of the Common Securities (other than a transfer in connection with a
merger or consolidation of the Depositor into another corporation pursuant to
Section 2.2 of the Indenture) shall be void. The Administrative Trustees shall
cause each Common Securities Certificate issued to the Depositor to contain a
legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH
THE TRUST AGREEMENT (AS DEFINED HEREIN)".
5.11 BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES; COMMON SECURITIES
CERTIFICATE.
(a) The Preferred Securities Certificates, upon original
issuance, will be issued in the form of a typewritten Preferred
Securities Certificate or Certificates representing Book-Entry
Preferred Securities Certificates, to be delivered to or held on
behalf of The Depository Trust Company, the initial Clearing Agency,
by, or on behalf of, the Trust. Such Book-Entry Preferred Securities
Certificate or Certificates shall initially be registered on the
Securities Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Owner will receive a Definitive
Preferred Securities Certificate representing such Owner's interest in
such Preferred Securities, except as provided in Section 5.13, unless
and until Definitive Preferred Securities Certificates have been
issued to Owners pursuant to Section 5.13:
(1) the provisions of this Section 5.11(a) shall be in full
force and effect;
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(2) the Securities Registrar, the Paying Agent and the Trustees
shall be entitled to deal with the Clearing Agency for all purposes of
this Trust Agreement relating to the Book-Entry Preferred Securities
Certificates (including the payment of the Liquidation Amount and
Redemption Price of and Distributions on the Book-Entry Preferred
Securities) as the sole Holder of Book-Entry Preferred Securities
Certificates and shall have no obligations to the Owners thereof;
(3) to the extent that the provisions of this Section 5.11
conflict with any other provisions of this Trust Agreement, the
provisions of this Section 5.11 shall control; and
(4) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements
between such Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Certificate Depository Agreement,
unless and until Definitive Preferred Securities Certificates are
issued pursuant to Section 5.13, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and
receive and transmit payments on the Preferred Securities to such
Clearing Agency Participants. Any Clearing Agency designated pursuant
hereto will not be deemed an agent of the Trustees for any purpose.
(b) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of a
definitive Common Securities Certificate.
5.12 NOTICES TO CLEARING AGENCY. To the extent that a notice or other
communication to the Owners is required under this Trust Agreement, unless and
until Definitive Preferred Securities Certificates shall have been issued to
Owners pursuant to Section 5.13, the Trustees shall give all such notices and
communications specified herein to be given to Owners to the Clearing Agency,
and shall have no obligations to the Owners.
5.13 DEFINITIVE PREFERRED SECURITIES CERTIFICATES. If (a) the
Depositor advises the Trustees in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Preferred Securities Certificates, and the Depositor is unable to locate a
qualified successor, or if at any time the Clearing Agency ceases to be a
clearing agency registered under the Exchange Act, at a time when the Clearing
Agency is required to be so registered to act as such Clearing Agency, (b) the
Depositor at its sole discretion advises the Trustees
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in writing that it elects to terminate the book-entry system through the
Clearing Agency, or (c) after the occurrence of a Debenture Event of Default,
Owners of Preferred Securities Certificates representing beneficial interests
aggregating at least a majority of the Liquidation Amount advise the Property
Trustee in writing that the continuation of a book-entry system through the
Clearing Agency is no longer in the best interests of the Owners of Preferred
Securities Certificates, then the Property Trustee shall notify the Clearing
Agency, and the Clearing Agency shall notify all Owners of Preferred
Securities Certificates of the occurrence of any such event and of the
availability of the Definitive Preferred Securities Certificates to Owners
requesting the same. Upon surrender to the Property Trustee of the
typewritten Preferred Securities Certificate or Certificates representing the
Book-Entry Preferred Securities Certificates by the Clearing Agency,
accompanied by registration instructions, the Administrative Trustees, or any
one of them, shall execute the Definitive Preferred Securities Certificates
in accordance with the instructions of the Clearing Agency. Neither the
Securities Registrar nor the Trustees shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Preferred Securities Certificates, the Trustees shall recognize the Holders
of the Definitive Preferred Securities Certificates as Securityholders. The
Definitive Preferred Securities Certificates shall be printed, lithographed
or engraved or may be produced in any other manner as is reasonably
acceptable to the Administrative Trustees, as evidenced by the execution
thereof by the Administrative Trustees or any one of them.
5.14 RIGHTS OF SECURITYHOLDERS.
(a) The legal title to the Trust Property is vested exclusively
in the Property Trustee (in its capacity as such) in accordance with
Section 2.9, and the Securityholders shall not have any right or title
therein other than the undivided beneficial interest in the assets of
the Trust conferred by their Trust Securities and they shall have no
right to call for any partition or division of property, profits or
rights of the Trust except as described below. The Trust Securities
shall be personal property giving only the rights specifically set
forth therein and in this Trust Agreement. The Trust Securities shall
have no preemptive or similar rights. When issued and delivered to
the Holders of the Preferred Securities against payment of the
purchase price therefor, the Preferred Securities will be fully paid
and nonassessable interests in the Trust. The Holders of the
Preferred Securities, in their capacities as such, shall be entitled
to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
(b) For so long as any Preferred Securities remain Outstanding,
if, upon a Debenture Event of Default, the Debenture Trustee fails or
the holders of not less than 25% in principal amount of the
outstanding Debentures fail to declare the principal of all of the
Debentures to be immediately due and payable, the Holders of at least
25% in Liquidation Amount of the Preferred Securities then Outstanding
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shall have such right by a notice in writing to the Depositor and the
Debenture Trustee; and upon any such declaration such principal amount
of and the accrued interest on all of the Debentures shall become
immediately due and payable, provided that the payment of principal
and interest on such Debentures shall remain subordinated to the
extent provided in the Indenture.
(c) For so long as any Preferred Securities remain Outstanding,
upon a Debenture Event of Default arising from the failure to pay
interest or principal on the Debentures, the Holders of any Preferred
Securities then Outstanding shall, to the fullest extent permitted by
law, have the right to directly institute proceedings for enforcement
of payment to such Holders of principal of or interest on the
Debentures having a principal amount equal to the Liquidation Amount
of the Preferred Securities of such Holders.
6. ACTS OF SECURITYHOLDERS; MEETINGS; VOTING.
6.1 LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section, in Sections 5.14, 8.10
and 10.2 and in the Indenture and as otherwise required by law, no
Holder of Preferred Securities shall have any right to vote or in any
manner otherwise control the administration, operation and management
of the Trust or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Trust
Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property Trustee,
the Property Trustee shall not (i) direct the time, method and place
of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Debenture
Trustee with respect to such Debentures, (ii) waive any past default
which is waivable under Article 6 of the Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all the
Debentures shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures, where
such consent shall be required, without, in each case, obtaining the
prior approval of the Holders of at least a majority in Liquidation
Amount of all Outstanding Preferred Securities; provided, however,
that where a consent under the Indenture would require the consent of
each Holder of Outstanding Debentures affected thereby, no such
consent shall be given by the Property Trustee without the prior
written consent of each holder of Preferred Securities. The Property
Trustee shall not revoke any action previously authorized or approved
by a vote of the Holders of the Outstanding Preferred Securities,
except by a subsequent vote of the Holders of the Outstanding
Preferred Securities. The
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Property Trustee shall notify each Holder of the Outstanding Preferred
Securities of any notice of default received from the Debenture Trustee
with respect to the Debentures. In addition to obtaining the foregoing
approvals of the Holders of the Preferred Securities, prior to taking
any of the foregoing actions, the Property Trustee shall, at the expense
of the Depositor, obtain an Opinion of Counsel experienced in such
matters to the effect that the Trust will continue to be classified as
a grantor trust and not as an association taxable as a corporation for
United States federal income tax purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement provides
for, or the Trustees otherwise propose to effect, (i) any action that
would adversely affect in any material respect the powers, preferences
or special rights of the Preferred Securities, whether by way of
amendment to the Trust Agreement or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than
pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Securities as a class will be entitled to vote
on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of the Holders of at least a
majority in Liquidation Amount of the Outstanding Preferred
Securities. No amendment to this Trust Agreement may be made if, as a
result of such amendment, the Trust would cease to be classified as a
grantor trust or would be classified as an association taxable as a
corporation for United States federal income tax purposes.
6.2 NOTICE OF MEETINGS. Notice of all meetings of the Preferred
Securityholders, stating the time, place and purpose of the meeting, shall be
given by the Property Trustee pursuant to Section 10.8 to each Preferred
Securityholder of record, at his registered address, at least 15 days and not
more than 90 days before the meeting. At any such meeting, any business
properly before the meeting may be so considered whether or not stated in the
notice of the meeting. Any adjourned meeting may be held as adjourned without
further notice.
6.3 MEETINGS OF PREFERRED SECURITYHOLDERS.
(a) No annual meeting of Securityholders is required to be held.
The Administrative Trustees, however, shall call a meeting of
Securityholders to vote on any matter upon the written request of the
Preferred Securityholders of 25% of the Outstanding Preferred
Securities (based upon their aggregate Liquidation Amount) and the
Administrative Trustees or the Property Trustee may, at any time in
their discretion, call a meeting of Preferred Securityholders to vote
on any matters as to which the Preferred Securityholders are entitled
to vote.
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(b) Preferred Securityholders of record of 50% of the
Outstanding Preferred Securities (based upon their aggregate
Liquidation Amount), present in person or by proxy, shall constitute a
quorum at any meeting of Securityholders.
(c) If a quorum is present at a meeting, an affirmative vote by
the Preferred Securityholders of record present, in person or by
proxy, holding more than a majority of the Preferred Securities (based
upon their aggregate Liquidation Amount) held by the Preferred
Securityholders of record present, either in person or by proxy, at
such meeting shall constitute the action of the Securityholders,
unless this Trust Agreement requires a greater number of affirmative
votes.
6.4 VOTING RIGHTS. Securityholders shall be entitled to one vote for
each $25 of Liquidation Amount represented by their Trust Securities in respect
of any matter as to which such Securityholders are entitled to vote.
6.5 PROXIES, ETC. At any meeting of Securityholders, any
Securityholder entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. When Trust Securities are held jointly
by several persons, any one of them may vote at any meeting in person or by
proxy in respect of such Trust Securities, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Securityholder shall be deemed valid unless challenged at
or prior to its exercise, and, the burden of proving invalidity shall rest on
the challenger. No proxy shall be valid more than three years after its date of
execution.
6.6 SECURITYHOLDER ACTION BY WRITTEN CONSENT. Any action which may
be taken by Securityholders at a meeting may be taken without a meeting if
Securityholders holding a majority of all Outstanding Trust Securities (based
upon their aggregate Liquidation Amount) entitled to vote in respect of such
action (or such larger proportion thereof as shall be required by any express
provision of this Trust Agreement) shall consent to the action in writing (based
upon their aggregate Liquidation Amount).
6.7 RECORD DATE FOR VOTING AND OTHER PURPOSES. For the purposes of
determining the Securityholders who are entitled to notice of and to vote at any
meeting or by written consent, or to participate in any Distribution on the
Trust Securities in respect of which a record date is not otherwise provided for
in this Trust Agreement, or for the purpose of any other action, the
Administrative Trustees may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Securityholders or the payment of a
Distribution or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.
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6.8 ACTS OF SECURITYHOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Trust
Agreement to be given, made or taken by Securityholders or Owners may
be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders or Owners
in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to an
Administrative Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Securityholders signing such
instrument or instruments. Proof of execution of any such instrument
or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1)
conclusive in favor of the Trustees, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that
the individual signing such instrument or writing acknowledged to him
the execution thereof. Where such execution is by a signer acting in
a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority.
The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems
sufficient.
(c) The ownership of Preferred Securityholders shall be proved
by the Securities Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Securityholder of any Trust
Security shall bind every future Securityholder of the same Trust
Security and the Securityholder of every Trust Security issued upon
the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be
done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
(e) Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular
Trust Security may do so with regard to all or any part of the
Liquidation Amount of such Trust Security or by
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one or more duly appointed agents each of which may do so pursuant to
such appointment with regard to all or any part of such Liquidation Amount.
(f) A Securityholder may institute a legal proceeding directly
against the Depositor under the Guarantee to enforce its rights under
the Guarantee without first instituting a legal proceeding against the
Guarantee Trust (as defined in the Guarantee), the Trust or any
Person.
6.9 INSPECTION OF RECORDS. Upon reasonable notice to the
Administrative Trustees and the Property Trustee, the records of the Trust shall
be open to inspection by Securityholders during normal business hours for any
purpose reasonably related to such Securityholder's interest as a
Securityholder.
7. REPRESENTATIONS AND WARRANTIES.
7.1 REPRESENTATIONS AND WARRANTIES OF THE BANK. The Bank and
Property Trustee, as of the date hereof, and each successor Property Trustee at
the time of the successor Property Trustee's acceptance of its appointment as
Property Trustee hereunder (the term "Bank" being used to refer to such
successor Property Trustee in its separate corporate capacity) hereby represents
and warrants (as applicable) for the benefit of the Depositor and the
Securityholders that:
(a) the Bank is a Delaware banking corporation duly organized,
validly existing and in good standing under the laws of the its
jurisdiction of incorporation;
(b) the Bank has full corporate power, authority and legal right
to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized executed and
delivered by the Property Trustee and constitutes the valid and
legally binding agreement of the Property Trustee enforceable against
it in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors, rights and
to general equity principles;
(d) the execution, delivery and performance by the Property
Trustee of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Bank and does
not require any approval of stockholders of the Bank and such
execution, delivery and performance will not (i) violate the Property
Trustee's charter or by-laws, (ii) violate any provision of, or
constitute, with or without notice or lapse of time, a default under,
or result in the creation or
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imposition of, any Lien on any properties included in the Trust Property
pursuant to the provisions of, any indenture, mortgage, credit agreement,
license or other agreement or instrument to which the Property Trustee or
Bank is a party or by which it is bound, or (iii) violate any law,
governmental rule or regulation of the United States or its jurisdiction
of incorporation, as the case may be, governing the banking or trust powers
of the Bank or Property Trustee or any order, judgment or decree applicable
to the Property Trustee or the Bank;
(e) neither the authorization, execution or delivery by the
Property Trustee of this Trust Agreement nor the consummation of any
of the transactions by the Property Trustee contemplated herein or
therein requires the consent or approval of, the giving of notice to,
the registration with or the taking of any other action with respect
to any governmental authority or agency under any existing federal law
governing the banking or trust powers of the Bank or Property Trustee,
as the case may be, under the laws of the United States or
jurisdiction of incorporation, and
(f) there are no proceedings pending or, to the best of the
Property Trustee's knowledge, threatened against or affecting the Bank
or Property Trustee in any court or before any governmental authority,
agency or arbitration board or tribunal which, individually or in the
aggregate, would materially and adversely affect the Trust or would
question the right, power and authority of the Property Trustee to
enter into or perform its obligations as one of the Trustees under
this Trust Agreement.
7.2 REPRESENTATIONS AND WARRANTIES OF THE DELAWARE BANK. The
Delaware Bank and Delaware Trustee, as of the date hereof, and each successor
Delaware Trustee at the time of the successor Delaware Trustee's acceptance
of appointment as Delaware Trustee hereunder (the term "Delaware Bank" being
used to refer to such successor Delaware Trustee in its separate corporate
capacity), hereby represents and warrants (as applicable) for the benefit of
the Depositor and the Securityholders that:
(a) the Delaware Bank is a Delaware banking corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware;
(b) the Delaware Bank has full corporate power, authority and
legal right to execute, deliver and perform its obligations under this
Trust Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee and constitutes the valid and
legally binding
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agreement of the Delaware Trustee enforceable against it in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors, rights and to general equity
principles;
(d) the execution, delivery and performance by the Delaware
Trustee of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Delaware
Trustee and does not require any approval of stockholders of the
Delaware Bank and such execution, delivery and performance will not
(i) violate the Delaware Bank's charter or by-laws, (ii) violate any
provision of, or constitute, with or without notice or lapse of time,
a default under, or result in the creation or imposition of, any Lien
on any properties included in the Trust Property pursuant to the
provisions of, any indenture, mortgage, credit agreement, license or
other agreement or instrument to which the Delaware Bank or Delaware
Trustee is a party or by which it is bound, or (iii) violate any law,
governmental rule or regulation of the United States or the State of
Delaware, as the case may be, governing the banking or trust powers of
the Delaware Bank or Delaware Trustee or any order, judgment or decree
applicable to the Delaware Bank or Delaware Trustee;
(e) neither the authorization, execution or delivery by the
Delaware Trustee of this Trust Agreement nor the consummation of any
of the transactions by the Delaware Trustee contemplated herein or
therein requires the consent or approval of, the giving of notice to,
the registration with or the taking of any other action with respect
to any governmental authority or agency under any existing federal law
governing the banking or trust powers of the Delaware Bank or Delaware
Trustee, as the case may be, under the laws of the United States or
the State of Delaware; and
(f) there are no proceedings pending or, to the best of the
Delaware Trustee's knowledge, threatened against or affecting the
Delaware Bank or Delaware Trustee in any court or before any
governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely
affect the Trust or would question the right, power and authority of
the Delaware Trustee to enter into or perform its obligations as one
of the Trustees under this Trust Agreement.
7.3 REPRESENTATIONS AND WARRANTIES OF DEPOSITOR. The Depositor
hereby represents and warrants for the benefit of the Securityholders that:
(a) the Trust Securities Certificates issued on the Closing Date
or the Option Closing Date, if applicable, on behalf of the Trust have
been duly authorized and will have been, duly and validly executed,
issued and delivered by the Administrative Trustees pursuant to the
terms and provisions of, and in accordance
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with the requirements of, this Trust Agreement and the Securityholders
will be, as of such date, entitled to the benefits of this Trust Agreement;
and
(b) there are no taxes, fees or other governmental charges
payable by the Trust (or the Trustees on behalf of the Trust) under
the laws of the State of Delaware or any political subdivision thereof
in connection with the execution, delivery and performance by the
Property Trustee or the Delaware Trustee, as the case may be, of this
Trust Agreement.
8. THE TRUSTEES.
8.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property
Trustee, by the Trust Indenture Act. Notwithstanding the foregoing,
no provision of this Trust Agreement shall require the Trustees to
expend or risk their own funds or otherwise incur any financial
liability in the performance of any of their duties hereunder, or in
the exercise of any of their rights or powers, if they shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it. No Administrative Trustee nor the Delaware Trustee
shall be liable for its acts or omissions hereunder except as a result
of its own gross negligence or willful misconduct. The Property
Trustee's liability shall be determined under the Trust Indenture Act.
Whether or not therein expressly so provided, every provision of this
Trust Agreement relating to the conduct or affecting the liability of
or affording protection to the Trustees shall be subject to the
provisions of this Section. To the extent that, at law or in equity,
the Delaware Trustee or an Administrative Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the
Trust or to the Securityholders, the Delaware Trustee or such
Administrative Trustee shall not be liable to the Trust or to any
Securityholder for such Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust
Agreement, to the extent that they restrict the duties and liabilities
of the Delaware Trustee or the Administrative Trustees otherwise
existing at law or in equity, are agreed by the Depositor and the
Securityholders to replace such other duties and liabilities of the
Delaware Trustee or Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent
in respect of the Trust Securities shall be made only from the revenue
and proceeds from the Trust Property and only to the extent that there
shall be sufficient revenue or proceeds from the Trust Property to
enable the Property Trustee or a Paying Agent to make payments in
accordance with the terms hereof. Each Securityholder, by its
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acceptance of a Trust Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the
Trustees are not personally liable to it for any amount distributable
in respect of any Trust Security or for any other liability in respect
of any Trust Security. This Section 8.1(b) does not limit the
liability of the Trustees expressly set forth elsewhere in this Trust
Agreement or, in the case of the Property Trustee, in the Trust
Indenture Act.
(c) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(2) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a majority in
Liquidation Amount of the Trust Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Trust Agreement;
(3) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Payment Account shall be to deal with such Property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement and the
Trust Indenture Act;
(4) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the
Depositor and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Payment Account maintained by the Property Trustee pursuant to Section
3.1 and except to the extent otherwise required by law; and
(5) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the
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Depositor with their respective duties under this Trust Agreement,
nor shall the Property Trustee be liable for the negligence, default
or misconduct of the Administrative Trustees or the Depositor.
8.2 CERTAIN NOTICES.
(a) Within five Business Days after the occurrence of any Event
of Default actually known to the Property Trustee, the Property
Trustee shall transmit, in the manner and to the extent provided in
Section 10.8 notice of such Event of Default to the Securityholders,
the Administrative Trustees and the Depositor, unless such Event of
Default shall have been cured or waived. For purposes of this Section
the term "Event of Default" means any event that is, or after notice
or lapse of time or both would become, an Event of Default.
(b) The Administrative Trustees shall transmit, to the
Securityholders in the manner and to the extent provided in
Section 10.8 notice of the Depositor's election to begin or further
extend an Extended Interest Payment Period on the Debentures (unless
such election shall have been revoked) within the time specified for
transmitting such notice to the holders of the Debentures pursuant to
the Indenture as originally executed.
8.3 CERTAIN RIGHTS OF PROPERTY TRUSTEE. Subject to the provisions
of Section 8.1:
(a) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement
the Property Trustee is required to decide between alternative courses
of action or (ii) in construing any of the provisions of this Trust
Agreement the Property Trustee finds the same ambiguous or
inconsistent with other provisions contained herein or (iii) the
Property Trustee is unsure of the application of any provision of this
Trust Agreement, then, except as to any matter as to which the
Preferred Securityholders are entitled to vote under the terms of this
Trust Agreement, the Property Trustee shall deliver a notice to the
Depositor requesting written instructions of the Depositor as to the
course of action to be taken and the Property Trustee shall take such
action, or refrain from taking such action, as the Property Trustee
shall be instructed in
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writing to take, or to refrain from taking, by the Depositor; provided,
however, that if the Property Trustee does not receive such instructions
of the Depositor within ten Business Days after it has delivered such
notice, or such reasonable shorter period of time set forth in such
notice (which to the extent practicable shall not be less than two
Business Days), it may, but shall be under no duty to, take or refrain
from taking such action not inconsistent with this Trust Agreement as it
shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own
bad faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently
evidenced by an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established
before undertaking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officer's Certificate which, upon receipt of
such request, shall be promptly delivered by the Depositor or the
Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or reregistration
thereof;
(f) the Property Trustee may consult with counsel of its choice
(which counsel may be counsel to the Depositor or any of its
Affiliates) and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon and
in accordance with such advice, such counsel may be counsel to the
Depositor or any of its Affiliates, and may include any of its
employees; the Property Trustee shall have the right at any time to
seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any of the Securityholders
pursuant to this Trust Agreement, unless such Securityholders shall
have offered to the Property Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction; nothing contained
herein shall, however, relieve the Property Trustee of the obligation,
upon the occurrence of an Event of
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Default (that has not been cured or waived) to exercise with respect
to the Debentures, such of the rights and powers vested in it by this
Trust Agreement, and to use the same degree of care and skill in their
exercise as a prudent man would exercise under the circumstances in the
conduct of his own affairs;
(h) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, debenture, note or other evidence of
indebtedness or other paper or document, unless requested in writing
to do so by the Holders of not less than a majority in Liquidation
Amount of the Trust Securities, but the Property Trustee may make such
further inquiry or investigation into such facts or matters as it may
see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through its agents or attorneys, provided that the Property Trustee
shall be responsible for its own negligence or recklessness with
respect to selection of any agent or attorney appointed by it
hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request instructions from the
Holders of the Trust Securities which instructions may only be given
by the Holders of the same proportion in Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee
under the terms of the Trust Securities in respect of such remedy,
right or action, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and
(iii) shall be protected in acting in accordance with such
instructions; and
(k) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Trust Agreement. No provision of this Trust Agreement shall be deemed
to impose any duty or obligation on the Property Trustee to perform
any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it, in any jurisdiction in which it shall be
illegal, or in which the Property Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act
or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall
be construed to be a duty.
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8.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The
recitals contained herein and in the Trust Securities Certificates shall be
taken as the statements of the Trust, and the Trustees do not assume any
responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.
8.5 MAY HOLD SECURITIES. Any Trustee or any other agent of any
Trustee or the Trust, in its individual or any other capacity, may become the
owner or pledgee of Trust Securities and, subject to Sections 8.8 and 8.13
and, except as provided in the definition of the term "Outstanding" in
Section 1, may otherwise deal with the Trust with the same rights it would
have if it were not a Trustee or such other agent.
8.6 COMPENSATION; INDEMNITY; FEES. The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Trustees upon request for all reasonable expenses, disbursements
and advances incurred or made by the Trustees in accordance with any
provision of this Trust Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to such Trustee's negligence, bad faith or willful
misconduct (or, in the case of the Administrative Trustees or the
Delaware Trustee, any such expense, disbursement or advance as may be
attributable to his or her gross negligence, bad faith or willful
misconduct); and
(c) to indemnify each of the Trustees or any predecessor Trustee
for, and to hold the Trustees harmless against, any loss, damage,
claims, liability, penalty or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this Trust Agreement, including the
costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or
duties hereunder, except as any such indemnification is attributable
to such Trustee's negligence, bad faith or willful misconduct (or, in
the case of the Administrative Trustees or the Delaware Trustee, any
such expense, disbursement or advance as may be attributable to his or
her gross negligence, bad faith or willful misconduct).
(d) No Trustee may claim any lien or charge on any Trust
Property as a result of any amount due pursuant to this Section 8.6.
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8.7 CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder
with respect to the Trust Securities. The Property Trustee shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as
such and has a combined capital and surplus of at least $50,000,000.
If any such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section, the combined capital
and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each
Administrative Trustee shall be either a natural person who is at
least 21 years of age or a legal entity that shall act through one or
more persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee with respect
to the Trust Securities. The Delaware Trustee shall either be (i) a
natural person who is at least 21 years of age and a resident of the
State of Delaware or (ii) a legal entity with its principal place of
business in the State of Delaware and that otherwise meets the
requirements of applicable Delaware law that shall act through one or
more persons authorized to bind such entity.
8.8 CONFLICTING INTERESTS. If the Property Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Property Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Trust Agreement.
8.9 CO-TRUSTEES AND SEPARATE TRUSTEE.
(a) Unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in
which any part of the Trust Property may at the time be located, the
Depositor shall have power to appoint, and upon the written request of
the Property Trustee, the Depositor shall for such purpose join with
the Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint, one or more
Persons approved by the Property Trustee either to act as co-trustee,
jointly with the Property Trustee, of all or any part of such Trust
Property, or to the extent required by law to act as separate
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trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such Person
or Persons in the capacity aforesaid, any property, title, right or
power deemed necessary or desirable, subject to the other provisions
of this Section. If the Depositor does not join in such appointment
within 15 days after the receipt by it of a request so to do, or in
case a Debenture Event of Default has occurred and is continuing, the
Property Trustee alone shall have power to make such appointment. Any
co-trustee or separate trustee appointed pursuant to this Section
shall either be (i) a natural person who is at least 21 years of age
and a resident of the United States or (ii) a legal entity with its
principal place of business in the United States that shall act
through one or more persons authorized to bind such entity.
(b) Should any written instrument from the Depositor be required
by any co-trustee or separate trustee so appointed for more fully
confirming to such co-trustee or separate trustee such property,
title, right, or power, any and all such instruments shall, on
request, be executed, acknowledged, and delivered by the Depositor.
(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the
following terms, namely:
(1) The Trust Securities shall be executed and delivered and all
rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees specified
hereunder, shall be exercised, solely by such Trustees and not by such
co-trustees or separate trustee.
(2) The rights, powers, duties and obligations hereby conferred
or imposed upon the Property Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and
exercised or performed by the Property Trustee or by the Property
Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that under any law of any jurisdiction
in which any particular act is to be performed, the Property Trustee
shall be incompetent or unqualified to perform such act, in which
event such rights, powers, duties and obligations shall be exercised
and performed by such co-trustee or separate trustee.
(3) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor,
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may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, in case a Debenture Event
of Default has occurred and is continuing, the Property Trustee shall
have the power to accept the resignation of, or remove, any such
co-trustee or separate trustee without the concurrence of the
Depositor. Upon the written request of the Property Trustee, the
Depositor shall join with the Property Trustee in the execution,
delivery and performance of all instruments and agreements necessary
or proper to effectuate such resignation or removal. A successor to
any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section 8.9.
(4) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property
Trustee or any other trustee hereunder.
(5) The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.
(6) Any Act of Holders delivered to the Property Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
8.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of any Trustee (the "Relevant
Trustee") and no appointment of a successor Trustee pursuant to this
Section shall become effective until the acceptance of appointment by
the successor Trustee in accordance with the applicable requirements
of Section 8.11.
(b) Subject to the immediately preceding paragraph, the Relevant
Trustee may resign at any time with respect to the Trust Securities by
giving written notice thereof to the Securityholders. If the
instrument of acceptance by the successor Trustee required by
Section 8.11 shall not have been delivered to the Relevant Trustee
within 30 days after the giving of such notice of resignation, the
Relevant Trustee may petition, at the expense of the Depositor, any
court of competent jurisdiction for the appointment of a successor
Relevant Trustee with respect to the Trust Securities.
(c) Unless a Debenture Event of Default shall have occurred and
be continuing, any Trustee may be removed at any time by Act of the
Common Securityholder. If a Debenture Event of Default shall have
occurred and be
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continuing, the Property Trustee or the Delaware Trustee, or both of them,
may be removed at such time by Act of the Holders of a majority in
Liquidation Amount of the Preferred Securities, delivered to the Relevant
Trustee (in its individual capacity and on behalf of the Trust). An
Administrative Trustee may be removed by the Common Securityholder at
any time.
(d) If any Trustee shall resign, be removed or become incapable
of acting as Trustee, or if a vacancy shall occur in the office of any
Trustee for any cause, at a time when no Debenture Event of Default
shall have occurred and be continuing, the Common Securityholder, by
Act of the Common Securityholder delivered to the retiring Trustee,
shall promptly appoint a successor Trustee or Trustees with respect to
the Trust Securities and the Trust, and the successor Trustee shall
comply with the applicable requirements of Section 8.11. If the
Property Trustee or the Delaware Trustee shall resign, be removed or
become incapable of continuing to act as the Property Trustee or the
Delaware Trustee, as the case may be, at a time when a Debenture Event
of Default shall have occurred and is continuing, the Preferred
Securityholders, by Act of the Securityholders of a majority in
Liquidation Amount of the Preferred Securities then Outstanding
delivered to the retiring Relevant Trustee, shall promptly appoint a
successor Relevant Trustee or Trustees with respect to the Trust
Securities and the Trust, and such successor Trustee shall comply with
the applicable requirements of Section 8.11. If an Administrative
Trustee shall resign, be removed or become incapable of acting as
Administrative Trustee, at a time when a Debenture Event of Default
shall have occurred and be continuing, the Common Securityholder, by
Act of the Common Securityholder delivered to an Administrative
Trustee, shall promptly appoint a successor Administrative Trustee or
Administrative Trustees with respect to the Trust Securities and the
Trust, and such successor Administrative Trustee or Administrative
Trustees shall comply with the applicable requirements of
Section 8.11. If no successor Relevant Trustee with respect to the
Trust Securities shall have been so appointed by the Common
Securityholder or the Preferred Securityholders and accepted
appointment in the manner required by Section 8.11, any Securityholder
who has been a Securityholder of Trust Securities on behalf of himself
and all others similarly situated may petition a court of competent
jurisdiction for the appointment of a successor Relevant Trustee with
respect to the Trust Securities.
(e) The Property Trustee shall give notice of each resignation
and each removal of a Trustee and each appointment of a successor
Trustee to all Securityholders in the manner provided in Section 10.8
and shall give notice to the Depositor. Each notice shall include the
name of the successor Relevant Trustee and the address of its
Corporate Trust Office if it is the Property Trustee.
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(f) Notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event any Administrative Trustee or a Delaware
Trustee who is a natural person dies or becomes, in the opinion of the
Depositor, incompetent or incapacitated, the vacancy created by such
death, incompetence or incapacity may be filled by: (1) the unanimous
act of remaining Administrative Trustees if there are at least two of
them; or (2) otherwise by the Depositor (with the successor in each
case being a Person who satisfies the eligibility requirement for
Administrative Trustees set forth in Section 8.7).
8.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Relevant
Trustee with respect to the Trust Securities and the Trust, the
retiring Relevant Trustee and each successor Relevant Trustee with
respect to the Trust Securities shall execute and deliver an
instrument wherein each successor Relevant Trustee shall accept such
appointment and which shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in,
each successor Relevant Trustee all the rights, powers, trusts and
duties of the retiring Relevant Trustee with respect to the Trust
Securities and the Trust and upon the execution and delivery of such
instrument the resignation or removal of the retiring Relevant Trustee
shall become effective to the extent provided therein and each such
successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Relevant Trustee with respect to the Trust
Securities and the Trust; but, on request of the Trust or any
successor Relevant Trustee such retiring Relevant Trustee shall duly
assign, transfer and deliver to such successor Relevant Trustee all
Trust Property, all proceeds thereof and money held by such retiring
Relevant Trustee hereunder with respect to the Trust Securities and
the Trust.
(b) Upon request of any such successor Relevant Trustee, the
Trust shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Relevant Trustee
all such rights, powers and trusts referred to in the immediately
preceding paragraph, as the case may be.
(c) No successor Relevant Trustee shall accept its appointment
unless at the time of such acceptance such successor Relevant Trustee
shall be qualified and eligible under this Article.
8.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Relevant Trustee shall be a party, or any
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corporation succeeding to all or substantially all the corporate trust
business of such Relevant Trustee, shall be the successor of such Relevant
Trustee hereunder, provided such Person shall be otherwise qualified and
eligible under this Section, without the execution or filing of any paper or
any further act on the part of any of the parties hereto.
8.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST.
If and when the Property Trustee or the Delaware Trustee shall be or become a
creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any
such other obligor).
8.14 REPORTS BY PROPERTY TRUSTEE.
(a) The Property Trustee shall transmit to the Securityholders
such reports concerning the Property Trustee, its actions under this
Trust Agreement and the property and funds in its possession as the
Property Trustee as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to the Holders, be filed by the Property Trustee with the
Nasdaq National Market, and each national securities exchange or other
organization upon which the Trust Securities are listed, and also with
the Commission and the Depositor.
8.15 REPORTS TO THE PROPERTY TRUSTEE. The Depositor and the
Administrative Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by
Section 314(a) of the Trust Indenture Act in the form, in the manner and at
the times required by Section 314 of the Trust Indenture Act.
8.16 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Each of the
Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act shall be given in
the form of an Officers' Certificate.
8.17 NUMBER OF TRUSTEES.
(a) The Property Trustee and the Delaware Trustee may be the
same Person. The number of Trustees shall be four, so long as the
Property Trustee serves
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as Delaware Trustee, provided that the Holder of all of the Common
Securities by written instrument may increase or decrease the number
of Administrative Trustees.
(b) If a Trustee ceases to hold office for any reason and the
number of Administrative Trustees is not reduced pursuant to
Section 8.17(a), or if the number of Trustees is increased pursuant to
Section 8.17(a), a vacancy shall occur. The vacancy shall be filled
with a Trustee appointed in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
dissolution, termination, incompetence or incapacity to perform the
duties of a Trustee shall not operate to annul, dissolve or terminate
the Trust or terminate this Trust Agreement. Whenever a vacancy in
the number of Administrative Trustees shall occur, until such vacancy
is filled by the appointment of an Administrative Trustee in
accordance with Section 8.10, the Administrative Trustees in office,
regardless of their number (and notwithstanding any other provision of
this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed
upon the Administrative Trustees by this Trust Agreement.
8.18 DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person
over the age of 21 his or her power for the purpose of executing any
documents contemplated in Section 2.6(a); and
(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number or to the Depositor the
doing of such things and the execution of such instruments either in
the name of the trust or the names of the Administrative Trustees or
otherwise as the Administrative Trustees may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary
to the provisions of the Trust, as set forth herein.
8.19 VOTING. Except as otherwise provided in this Trust
Agreement, the consent or approval of the Administrative Trustees shall
require consent or approval by not less than a majority of the Administrative
Trustees unless there are only two, in which case both must consent.
9. TERMINATION, LIQUIDATION AND MERGER.
9.1 TERMINATION UPON EXPIRATION DATE. Unless earlier dissolved,
the Trust shall automatically dissolve on _____________ (the "Expiration
Date") subject to distribution of the Trust Property in accordance with
Section 9.4.
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9.2 EARLY TERMINATION. The first to occur of any of the following
events is an "Early Termination Event" upon the occurrence of which, the
Trust shall be dissolved:
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) delivery of written direction to the Property Trustee by the
Depositor at any time (which direction is optional and wholly within
the discretion of the Depositor) to dissolve the Trust and distribute
the Debentures to Securityholders in exchange for the Preferred
Securities in accordance with Section 9.4;
(c) the redemption of all of the Preferred Securities in
connection with the redemption of all of the Debentures; and
(d) an order for dissolution of the Trust shall have been
entered by a court of competent jurisdiction.
9.3 TERMINATION. The respective obligations and responsibilities
of the Trustees and the Trust continued hereby shall terminate upon the
latest to occur of the following: (a) the distribution by the Property
Trustee to Securityholders upon the liquidation of the Trust pursuant to
Section 9.4, or upon the redemption of all of the Trust Securities pursuant
to Section 4.2, of all amounts required to be distributed hereunder upon the
final payment of the Trust Securities; (b) the payment of any expenses owed
by the Trust; (c) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders, and (d) the
filing of a certificate of cancellation by the Administrative Trustees under
the Delaware Business Trust Act.
9.4 LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b),
or (d) of Section 9.2 occurs or upon the Expiration Date, the Trust
shall be liquidated by the Trustees as expeditiously as the Trustees
determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law,
to each Securityholder a Like Amount of Debentures, subject to
Section 9.4(d). Notice of liquidation shall be given by the Property
Trustee by first-class mail, postage pre-paid, mailed not later
than 30 nor more than 60 days prior to the Liquidation Date to each
Holder of Trust Securities at such holder's address appearing in the
Securities Register. All notices of liquidation shall:
(1) state the Liquidation Date;
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(2) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(3) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.4(d) applies receive a Liquidation
Distribution, as the Administrative Trustees or the Property Trustee
shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to
effect the liquidation of the Trust and distribution of the Debentures
to Securityholders, the Property Trustee shall establish a record date
for such distribution (which shall be not more than 45 days prior to
the Liquidation Date) and, either itself acting as exchange agent or
through the appointment of a separate exchange agent, shall establish
such procedures as it shall deem appropriate to effect the
distribution of Debentures in exchange for the Outstanding Trust
Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to
be outstanding, (ii) certificates (or, at the election of the
Depositor a Global Debenture, subject to the provisions of the
Indenture) representing a Like Amount of Debentures will be issued to
holders of Trust Securities Certificates upon surrender of such
certificates to the Administrative Trustees or their agent for
exchange, (iii) the Depositor shall use its reasonable efforts to have
the Debentures listed on the Nasdaq National Market or on such other
securities exchange or other organization as the Preferred Securities
are then listed or traded, (iv) any Trust Securities Certificates not
so surrendered for exchange will be deemed to represent a Like Amount
of Debentures, accruing interest at the rate provided for in the
Debentures from the last Distribution Date on which a Distribution was
made on such Trust Securities Certificates until such certificates are
so surrendered (and until such certificates are so surrendered, no
payments of interest or principal will be made to holders of Trust
Securities Certificates with respect to such Debentures) and (v) all
rights of Securityholders holding Trust Securities will cease, except
the right of such Securityholders to receive Debentures upon surrender
of Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions of
this Section 9.4, whether because of an order for dissolution entered
by a court of competent jurisdiction or otherwise, distribution of the
Debentures in the manner provided herein is determined by the Property
Trustee not to be practical, the Trust Property shall be liquidated,
and the Trust shall be dissolved, wound-up or
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<PAGE>
terminated, by the Property Trustee in such manner as the Property Trustee
determines. In such event, on the date of the dissolution, winding-up or
other termination of the Trust, Securityholders will be entitled to receive
out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, an amount equal to the
Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If, upon any such dissolution, winding-up or
termination, the Liquidation Distribution can be paid only in part because
the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then, subject to the next succeeding sentence,
the amounts payable by the Trust on the Trust Securities shall be paid on a
pro rata basis (based upon Liquidation Amounts, subject to Section 4.7).
The holder of the Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination pro rata
(determined as aforesaid) with Holders of Preferred Securities, except
that, if a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common Securities.
9.5 MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
TRUST. The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Section 9.5 or Section 9.4. At the request of the Depositor, with the
consent of the Administrative Trustees and without the consent of the Holders of
the Preferred Securities, the Property Trustee or the Delaware Trustee, the
Trust may merge with or into, consolidate, amalgamate, be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to a
trust organized as such under the laws of any state; provided, that (i) such
successor entity either (a) expressly assumes all of the obligations of the
Trust with respect to the Preferred Securities or (b) substitutes for the
Preferred Securities other securities having substantially the same terms as the
Preferred Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Preferred Securities rank in priority with
respect to distributions and payments upon liquidation, redemption and
otherwise, (ii) the Depositor expressly appoints a trustee of such successor
entity possessing substantially the same powers and duties as the Property
Trustee as the holder of the Debentures, (iii) the Successor Securities are
listed or traded, or any Successor Securities will be listed or traded upon
notification of issuance, on the Nasdaq National Market or any national
securities exchange or other organization on which the Preferred Securities are
then listed, if any, (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect, (v) such successor entity has a
purpose substantially identical to that of the Trust, (vi) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Depositor has received an Opinion of Counsel to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights,
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<PAGE>
preferences and privileges of the Holders of the Preferred Securities
(including any Successor Securities) in any material respect, and (b)
following such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the Trust nor such successor entity will be
required to register as an "investment company" under the Investment Company
Act and (vii) the Depositor owns all of the common securities of such
successor entity and guarantees the obligations of such successor entity
under the Successor Securities at least to the extent provided by the
Guarantee, the Debentures, the Indenture, this Trust Agreement, and the
Expense Agreement. Notwithstanding the foregoing, the Trust shall not, except
with the consent of Holders of 100% in Liquidation Amount of the Preferred
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as entirety
to any other Person or permit any other Person 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.
10. MISCELLANEOUS PROVISIONS.
10.1 LIMITATION OF RIGHTS OF SECURITYHOLDERS. The bankruptcy,
dissolution, termination, death or incapacity of any Person having an
interest, beneficial or otherwise, in Trust Securities shall not operate to
terminate this Trust Agreement or dissolve, terminate or annul the Trust, nor
entitle the legal representatives or heirs of such Person or any
Securityholder for such Person, to claim an accounting, take any action or
bring any proceeding in any court for a partition or winding-up of the
arrangements contemplated hereby, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
10.2 AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Trustees and the Depositor, without the consent of any
Securityholders, (i) as provided in Section 8.11 with respect to
acceptance of appointment by a successor Trustee, (ii) to cure any
ambiguity, correct or supplement any provision herein or therein which
may be inconsistent with any other provision herein or therein, or to
make any other provisions with respect to matters or questions arising
under this Trust Agreement, that shall not be inconsistent with the
other provisions of this Trust Agreement, or (iii) to modify,
eliminate or add to any provisions of this Trust Agreement to such
extent as shall be necessary to ensure that the Trust will be
classified for United States federal income tax purposes as a grantor
trust at all times that any Trust Securities are outstanding or to
ensure that the Trust will not be required to register as an
"investment company" under the Investment Company Act; provided,
however, that in the case of clause (ii), such action shall not
adversely affect in any material respect the interests of any
Securityholder; and any such amendments of this Trust Agreement shall
become effective when notice thereof is given to the Securityholders.
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<PAGE>
(b) Except as provided in Section 6.1(c) or Section 10.2(c)
hereof, any provision of this Trust Agreement may be amended by the
Trustees and the Depositor (i) with the consent of Trust
Securityholders representing not less than a majority (based upon
Liquidation Amounts) of the Trust Securities then Outstanding and
(ii) upon receipt by the Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment will not affect the Trust's
status as a grantor trust for United States federal income tax
purposes or the Trust's exemption from status as an "investment
company" under the Investment Company Act.
(c) In addition to and notwithstanding any other provision in
this Trust Agreement, without the consent of each affected
Securityholder (such consent being obtained in accordance with
Section 6.3 or 6.6 hereof), this Trust Agreement may not be amended to
(i) change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Trust Securities as
of a specified date or (ii) restrict the right of a Securityholder to
institute suit for the enforcement of any such payment on or after
such date; notwithstanding any other provision herein, without the
unanimous consent of the Securityholders (such consent being obtained
in accordance with Section 6.3 or 6.6 hereof), this paragraph (c) of
this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust
Agreement, no Administrative Trustee shall enter into or consent to
any amendment to this Trust Agreement which would cause the Trust to
fail or cease to qualify for the exemption from status as an
"investment company" under the Investment Company Act or to fail or
cease to be classified as a grantor trust for United States federal
income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor, this Trust Agreement
may not be amended in a manner which imposes any additional obligation
on the Depositor.
(f) In the event that any amendment to this Trust Agreement is
made, the Administrative Trustees shall promptly provide to the
Depositor a copy of such amendment.
(g) Upon the request of the Depositor, accompanied by its Board
Resolutions authorizing the execution of any such amendments to this
Trust Agreement, and upon the filing with the Property Trustee and the
Delaware Trustee of evidence of the consent of the Securityholders
required to consent thereto as
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<PAGE>
aforesaid, the Property Trustee and the Delaware Trustee shall join
with the Depositor in the execution of such amendment to this Trust
Agreement unless such amendment affects the Property Trustee's or the
Delaware Trustee's own rights, duties, and immunities under this Trust
Agreement or otherwise, in which case the Property Trustee and Delaware
Trustee may in their own discretion but shall not be obligated to enter
into such amendment to this Trust Agreement. The Property Trustee and
Delaware Trustee, subject to the provisions of Section 8.1, may receive
an Opinion of Counsel as conclusive evidence that any amendment to this
Trust Agreement 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 Property Trustee and Delaware Trustee under the
provisions of this Article to join in the execution thereof.
10.3 SEPARABILITY. In case any provision in this Trust
Agreement or in the Trust Securities Certificates shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not be in any way affected or impaired thereby.
10.4 GOVERNING LAW. This Trust Agreement and the rights and
obligations of each of the Securityholders, the Trust and the Trustees with
respect to this Trust Agreement and the Trust Securities shall be construed
in accordance with and governed by the laws of the State of Delaware (without
regard to conflict of laws principles).
10.5 PAYMENTS DUE ON NON-BUSINESS DAY. If the date fixed for
any payment on any Trust Security shall be a day that is not a Business Day,
then such payment need not be made on such date but may be made on the next
succeeding day which is a Business Day, with the same force and effect as
though made on the date fixed for such payment, and no distribution shall
accumulate thereon for the period after such date.
10.6 SUCCESSORS. This Trust Agreement shall be binding upon
and shall inure to the benefit of any successor to the Depositor, the Trust
or the Relevant Trustee(s), including any successor by operation of law.
Except in connection with a consolidation, merger or sale involving the
Depositor that is permitted under Article 12 of the Indenture and pursuant to
which the assignee agrees in writing to perform the Depositor's obligations
hereunder, the Depositor shall not assign its obligations hereunder.
10.7 HEADINGS. The Section headings are for convenience only
and shall not affect the construction of this Trust Agreement.
10.8 REPORTS, NOTICES AND DEMANDS.
(a) Any report, notice, demand or other communication which by
any provision of this Trust Agreement is required or permitted to be
given or served to
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<PAGE>
or upon any Securityholder or the Depositor may be given or served in
writing by deposit thereof, first-class postage prepaid, in the United
States mail, hand delivery or facsimile transmission, in each case,
addressed, (a) in the case of a Preferred Securityholder, to such
Preferred Securityholder as such Securityholder's name and address may
appear on the Securities Register; and (b) in the case of the Common
Securityholder or the Depositor, to National City Bancshares, Inc., 227
Main Street, P.O. Box 868, Evansville, Indiana 47705-0868, Attention:
Chief Executive Officer, facsimile no. (812) 464-9825. Such report,
notice, demand or other communication to or upon a Securityholder shall
be deemed to have been sufficiently given or made, for all purposes,
upon hand delivery, mailing or transmission.
(b) Any notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given
or served to or upon the Trust, the Delaware Trustee, the Property
Trustee or the Administrative Trustees shall be given in writing
addressed (until another address is published by the Trust) as
follows: (a) with respect to the Property Trustee to Wilmington Trust
Company, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890, Attention: Corporate Trust Administration; (b) with
respect to the Delaware Trustee, to Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890,
Attention: Corporate Trust Administration; and (c) with respect to
the Administrative Trustees, to them at the address above for notices
to the Depositor, marked "Attention: Administrative Trustees of NCBE
Capital Trust I." Such notice, demand or other communication to or
upon the Trust, the Property Trustee or the Administrative Trustees,
shall be deemed to have been sufficiently given or made only upon
actual receipt of the writing by the Trust, the Property Trustee or
the Administrative Trustees.
10.9 AGREEMENT NOT TO PETITION. Each of the Trustees and the
Depositor agree for the benefit of the Securityholders that, until at least
one year and one day after the Trust has been terminated in accordance with
Article 9, they shall not file, or join in the filing of, a petition against
the Trust under any bankruptcy, insolvency, reorganization or other similar
law (including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of
any proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section, the Property Trustee
agrees, for the benefit of Securityholders, that at the expense of the
Depositor (which expense shall be paid prior to the filing), it shall file an
answer with the bankruptcy court or otherwise properly contest the filing of
such petition by the Depositor against the Trust or the commencement of such
action and raise the defense that the Depositor has agreed in writing not to
take such action and should be stopped and precluded therefrom. The
provisions of this Section shall survive the termination of this Trust
Agreement.
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<PAGE>
10.10 TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(a) This Trust Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Trust
Agreement and shall, to the extent applicable, be governed by such
provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this
Trust Agreement by any of the provisions of the Trust Indenture Act,
such required provision shall control. If any provision of this Trust
Agreement modifies or excludes any provision of the Trust Indenture
Act which may be so modified or excluded, the latter provision shall
be deemed to apply to this Trust Agreement as so modified or to be
excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Trust Securities as
equity securities representing undivided beneficial interests in the
assets of the Trust.
10.11 ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND
INDENTURE. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL OF THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT
AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE
AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
National City Bancshares, Inc.,
as Depositor
By: _________________________________________
Name: ____________________________________
Title: ____________________________________
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Wilmington Trust Company, not in its individual
capacity, but solely as Property Trustee
By: ____________________________________
Name: ______________________________
Title: ______________________________
Wilmington Trust Company, not in its individual
capacity, but solely as Delaware Trustee
By: ____________________________________
Name: ______________________________
Title: ______________________________
__________________________________________
Michael F. Elliott, not in his individual
capacity, but solely as Administrative Trustee
__________________________________________
Robert A. Keil, not in his individual capacity,
but solely as Administrative Trustee
__________________________________________
Stephen C. Byelick, Jr., not in his individual
capacity, but solely as Administrative Trustee
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Exhibit "A"
Certificate of Trust of
NCBE Capital Trust I
This Certificate of Trust of the NCBE CAPITAL TRUST I (the "Trust"),
dated February 12, 1998, is being duly executed and filed by WILMINGTON TRUST
COMPANY, a Delaware banking corporation, as trustee, to form a business trust
under the Delaware Business Trust Act (12 Del. C.(S) 3801 et seq.)
1. NAME. The name of the business trust formed hereby is NCBE Capital
Trust I.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware is Wilmington
Trust Company, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware, 19890-0001, Attn: Corporate Trust Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon
filing of this Certificate of Trust with the Secretary of State of the State of
Delaware.
IN WITNESS WHEREOF, each of the undersigned, being a trustee of the Trust,
has executed this Certificate of Trust as of the date first above written.
WILMINGTON TRUST COMPANY,
not in its individual capacity, but solely as trustee
By /s/ Patricia A. Evans
_______________________________________________
Name: Patricia A. Evans
_____________________________________________
Title: Financial Services Officer
____________________________________________
/s/ Michael F. Elliott
___________________________________________________
Michael F. Elliott, not in his individual capacity,
but solely as trustee
/s/ Robert A. Keil
___________________________________________________
Robert A. Keil, not in his individual capacity,
but solely as trustee
/s/ Stephen C. Byelick, Jr.
___________________________________________________
Stephen C. Byelick, Jr., not in his individual
capacity, but solely as trustee
A-1
<PAGE>
Exhibit "B"
Certificate Depository Agreement
(Letter of Representations)
NCBE CAPITAL TRUST I
(Name of Issuer)
WILMINGTON TRUST COMPANY
(Name of Agent)
Attention: General Counsel's Office
The Depository Trust Company
55 Water Street, 49th Floor
New York, New York 10041-0099
______________ __, 1998
Re: NCBE Capital Trust I Cumulative Trust Preferred Securities
----------------------------------------------------------
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain
matters relating to the above-referenced issue (the "Securities"). Agent
will act as trustee, paying agent, fiscal agent, or other agent of Issuer
with respect to the Securities. The Securities will be issued pursuant to a
trust indenture, resolution, or other such document authorizing the issuance
of the Securities dated _________ __, 1998 (the "Document"). J.J.B.
Hilliard, W.L. Lyons, Inc. and NatCity Investments, Inc. ("Underwriters"),
are distributing the Securities through The Depository Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at
DTC, and to act in accordance with its rules with respect to the Securities,
Issuer and Agent make the following representations to DTC:
1. Prior to the closing on the Securities on _________________
__, 1998, there shall be deposited with DTC one security certificate
registered in the name of DTC's nominee, Cede & Co., for each stated maturity
of the Securities in the face amounts set forth on Schedule A hereto, the
total of which represents 100% of the principal amount of such Securities.
If however, the aggregate principal amount of any maturity exceeds $200
million, one certificate will be issued with respect to each $200 million of
principal amount and an additional certificate will be issued with respect to
any remaining principal amount. Each Security certificate shall bear the
following legend:
B-1
<PAGE>
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to Issuer or its agent for registration
of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co., or in such
other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
2. In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Agent shall establish a record date for
such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall send notice of such record date to DTC not less
than 15 calendar days in advance of such record date. Notices to DTC
pursuant to this Paragraph by telecopy shall be sent to DTC's Reorganization
Department at (212) 709-6896 or (212) 709-6897, and receipt of such notices
shall be confirmed by telephoning (212) 709-6870. Notices to DTC pursuant to
this Paragraph by mail or by any other means shall be sent to DTC's
Reorganization Department as indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Agent
shall send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to
DTC by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date.
Issuer or Agent shall forward such notice either in a separate secure
transmission for each CUSIP number or in a secure transmission for multiple
CUSIP numbers (if applicable) which includes a manifest or list of each CUSIP
number submitted in that transmission. (The party sending such notice shall
have a method to verify subsequently the use of such means and the timeliness
of such notice.) The Publication Date shall be not less than 30 days nor
more than 60 days prior to the redemption date or, in the case of an advance
refunding, the date that the proceeds are deposited in escrow. Notices to
DTC pursuant to this Paragraph by telecopy shall be sent to DTC's Call
Notification Department at (516) 227-4039 or (516) 227-4190. If the party
sending the notice does not receive a telecopy receipt from DTC confirming
that the notice has been received, such party shall telephone (516) 227-4070.
Notices to DTC pursuant to this Paragraph by mail or by any other means
shall be sent to:
B-2
<PAGE>
Manager: Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
4. In the event of an invitation to tender the Securities
(including mandatory tenders, exchanges and capital changes), notice by
Issuer or Agent to Security holders specifying the terms of the tender and
the Publication Date of such notice shall be sent to DTC by a secure means in
the manner set forth in the preceding Paragraph. Notices to DTC pursuant to
this Paragraph and notices of other corporate actions by telecopy shall be
sent to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094,
and receipt of such notices shall be confirmed by telephoning (212) 709-6884.
Notices to DTC pursuant to the above by mail or by any other means shall be
sent to:
Manager: Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall contain the
CUSIP number of the Securities.
6. In the event of a change in the interest rate, Agent shall
send notice of such change to Standard & Poor's Corporation. Such notice,
which shall also include Agent contact's name and telephone number, shall
also be sent to DTC's Dividend Department either by telecopy to (212)
709-1723, or if by mail or by any other means to:
Manager: Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
7. Agent must provide DTC, no later than noon (Eastern Time) on
the payment date, CUSIP numbers for each issue for which payment is being
sent, as well as the dollar amount of the payment for each issue.
Notification of payment details should be sent using automated communications.
8. Interest payments and principal payments that are part of
periodic principal-and-interest payments shall be received by Cede & Co., as
nominee of DTC, or its registered assigns in same-day funds, no later than
2:30 p.m. (Eastern Time) on each payment date (in accordance with existing
arrangements between Issuer or Agent and DTC). Absent any other arrangements
between Issuer or Agent and DTC, such funds shall be wired as follows:
B-3
<PAGE>
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
Issuer or Agent shall provide interest payment information to a standard
announcement service subscribed to by DTC. In the unlikely event that no
such service exists, Issuer agrees that it or Agent shall provide this
information directly to DTC in advance of the interest record date as soon as
the information is available. This information should be conveyed directly
to DTC electronically. If electronic transmission is not available, absent
any other arrangements between Agent and DTC, such information should be sent
by telecopy to DTC's Dividend Department at (212) 709-1723 or (212) 709-1686,
and receipt of such notices shall be confirmed by telephoning (212) 709-1270.
Notices to DTC pursuant to the above by mail or by any other means shall be
sent to:
Manager: Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
9. DTC shall receive maturity and redemption payments allocated
with respect to each CUSIP number on the payable date in same-day funds by
2:30 p.m. (Eastern Time). Absent any other arrangements between Agent and
DTC, such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth
in DTC's SDFS PAYING AGENT OPERATING PROCEDURES, a copy of which has
previously been furnished to Agent.
10. DTC shall receive all reorganization payments and CUSIP-level
detail resulting from corporate actions (such as tender offers, remarketings,
or mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between Agent and DTC, such payments
shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Reorganization Account 066-27608
11. DTC may direct Issuer or Agent to use any other number or
address as the number or address to which notices or payments of interest or
principal may be sent.
B-4
<PAGE>
12. In the event of a redemption, acceleration, or any other
similar transaction (e.g., tender made and accepted in response to Issuer's
or Agent's invitation) necessitating a reduction in the aggregate principal
amount of Securities outstanding or an advance refunding of part of the
Securities outstanding, DTC, in its discretion: (a) may request Issuer or
Agent to issue and authenticate a new Security certificate; or (b) may make
an appropriate notation on the Security certificate indicating the date and
amount of such reduction in principal except in the case of final maturity,
in which case the certificate will be presented to Issuer or Agent prior to
payment, if required.
13. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certified Securities, Issuer or Agent
shall notify DTC of the availability of certificates. In such event, Issuer
or Agent shall issue, transfer, and exchange certificates in appropriate
amounts, as required by DTC and others.
14. DTC may discontinue providing its services as securities
depository with respect to the Securities at any time by giving reasonable
notice to Issuer or Agent (at which time DTC will confirm with Issuer or
Agent the aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Agent shall cooperate fully with
DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
15. Issuer: (a) understands that DTC has no obligation to, and
will not, communicate to its Participants or to any person having an interest
in the Securities any information contained in the Security certificate(s);
and (b) acknowledges that neither DTC's Participants nor any person having an
interest in the Securities shall be deemed to have notice of the provisions
of the Security certificate(s) by virtue of submission of such certificate(s)
to DTC.
16. Nothing herein shall be deemed to require Agent to advance
funds on behalf of Issuer.
B-5
<PAGE>
Very truly yours,
NCBE Capital Trust I
(Issuer)
By: ________________________________________
(Authorized Officer's Signature)
Name:_______________________________________
Title:______________________________________
Wilmington Trust Company, not in its individual
capacity, but solely as Agent
(Agent)
By: _________________________________________
(Authorized Officer's Signature)
Name: _______________________________________
Title: ______________________________________
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By: _____________________________
cc: Underwriters
Underwriters' Counsel
NOTES:
A. If there is an Agent (as defined in this Letter of Representations),
Agent, as well as Issuer, must sign this Letter. If there is no Agent, in
signing this Letter, Issuer itself undertakes to perform all of the
obligations set forth herein.
B. Schedule B contains statements that DTC believes accurately describe
DTC, the method of effecting book-entry transfers of securities distributed
through DTC, and certain related matters.
B-6
<PAGE>
Exhibit "C"
Certificate Evidencing Common Securities
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT
IN ACCORDANCE WITH THE TRUST AGREEMENT (AS DEFINED HEREIN)
Certificate Number _______ Number of Common Securities
Certificate Evidencing Common Securities
of
NCBE Capital Trust I
% Common Securities
(liquidation amount $25 per Common Security)
NCBE Capital Trust I, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that NATIONAL CITY
BANCSHARES, INC. (the "Holder") is the registered owner of _________________
(_____) common securities of the Trust representing undivided beneficial
interests in the assets of the Trust and designated the __________% Common
Securities (liquidation amount $25 per Common Security) (the "Common
Securities"). Except as set forth in Section 5.10 of the Trust Agreement (as
defined below), the Common Securities are not transferable and any attempted
transfer hereof shall be void. The designations, rights, privileges,
restrictions, preferences, and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust, dated
as of __________ _____, 1998, as the same may be amended from time to time (the
"Trust Agreement"), including the designation of the terms of the Common
Securities as set forth therein. The Trust will furnish a copy of the Trust
Agreement to the Holder without charge upon written request to the Trust at its
principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
In witness whereof, one of the Administrative Trustees of the Trust
has executed this certificate this ____ day of ________, 1998.
NCBE Capital Trust I
By: __________________________________
Name: ________________________________
Title: Administrative Trustee
C-1
<PAGE>
Exhibit "D"
Agreement as to Expenses and Liabilities
AGREEMENT dated as of ____________ ____, 1998, between NATIONAL CITY
BANCSHARES, INC., an Indiana corporation ("NCBE"), and NCBE Capital Trust I, a
Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its common securities (the "Common
Securities") to, and receive Debentures from, NCBE and to issue and sell ____%
Cumulative Trust Preferred Securities (the "Preferred Securities") with such
powers, preferences and special rights and restrictions as are set forth in the
Amended and Restated Trust Agreement of the Trust dated as of
_____________ ____, 1998, as the same may be amended from time to time (the
"Trust Agreement");
WHEREAS, NCBE will directly or indirectly own all of the Common
Securities of the Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase NCBE hereby agrees shall benefit NCBE and
which purchase NCBE acknowledges will be made in reliance upon the execution and
delivery of this Agreement, NCBE, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:
1. Article I
1.1 Guarantee by NCBE. Subject to the terms and conditions hereof,
NCBE, including in its capacity as holder of the Common Securities, hereby
irrevocably and unconditionally guarantees to each person or entity to whom the
Trust is now or hereafter becomes indebted or liable (the "Beneficiaries") the
full payment when and as due, of any and all Obligations (as hereinafter
defined) to such Beneficiaries. As used herein, "Obligations" means any costs,
expenses or liabilities of the Trust other than obligations of the Trust to pay
to holders of any Preferred Securities or other similar interests in the Trust
the amounts due such holders pursuant to the terms of the Preferred Securities
or such other similar interests, as the case may be. This Agreement is intended
to be for the benefit of, and to be enforceable by, all such Beneficiaries,
whether or not such Beneficiaries have received notice hereof.
1.2 Term of Agreement. This Agreement shall terminate and be of no
further force and effect upon the later of (a) the date on which full payment
has been made of all amounts payable to all holders of all the Preferred
Securities (whether upon redemption, liquidation, exchange or otherwise) and
(b) the date on which there are no Beneficiaries remaining; provided, however,
that
D-1
<PAGE>
this Agreement shall continue to be effective or shall be reinstated, as the
case may be, if at any time any holder of Preferred Securities or any
Beneficiary must restore payment of any sums paid under the Preferred
Securities, under any Obligation, under the Guarantee Agreement, dated the
date hereof by NCBE and Wilmington Trust Company as guarantee trustee or
under this Agreement for any reason whatsoever. This Agreement is
continuing, irrevocable, unconditional and absolute.
1.3 Waiver of Notice. NCBE hereby waives notice of acceptance of
this Agreement and of any obligation to which it applies or may apply, and NCBE
hereby waives presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
1.4 No Impairment. The obligations, covenants, agreements and duties
of NCBE under this Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or
any portion of the Obligations or for the performance of any other
obligation under, arising out of, or in connection with, the
Obligations;
(b) any failure, omission, delay or lack of diligence on the
part of the Beneficiaries to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Beneficiaries with respect
to the Obligations or any action on the part of the Trust granting
indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement composition
or readjustment of debt of, or other similar proceedings affecting,
the Trust or any of the assets of the Trust.
1.5 Enforcement. A Beneficiary may enforce this Agreement directly
against NCBE, and NCBE waives any right or remedy to require that any action be
brought against the Trust or any other person or entity before proceeding
against NCBE.
2. Article II
2.1 Binding Effect. All guarantees and agreements contained in this
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of NCBE and shall inure to the benefit of the Beneficiaries.
2.2 Amendment. So long as there remains any Beneficiary or any
Preferred Securities are outstanding, this Agreement shall not be modified or
amended in any manner adverse to such Beneficiary or to the holders of the
Preferred Securities.
D-2
<PAGE>
2.3 Notices. Any notice, request or other communication required or
permitted to be given hereunder shall be given in writing by delivering the same
by facsimile transmission (confirmed by mail), telex, or by registered or
certified mail, addressed as follows (and if so given, shall be deemed given
when mailed or upon receipt of an answer back, if sent by telex):
National City Bancshares, Inc.
227 Main Street
P.O. Box 868
Evansville, Indiana 47704-0868
Facsimile No.: (812) 464-9825
Attention: Chief Executive Officer
NCBE Capital Trust I
c/o National City Bancshares, Inc.
227 Main Street
P.O. Box 868
Evansville, Indiana 47705-0868
Facsimile No.: (812) 464-9825
Attention: Chief Executive Officer
2.4 Governing Law. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of Indiana (without
regard to conflict of laws principles).
THIS AGREEMENT is executed as of the day and year first above written.
National City Bancshares, Inc.
By: ______________________________________
Name: ____________________________________
Title: _____________________________________
NCBE Capital Trust I
By: ______________________________________
Name: ____________________________________
Title: Administrative Trustee
D-3
<PAGE>
Exhibit "E"
Certificate Evidencing Preferred Securities
This Preferred Security is a Global Certificate within the meaning of
the Trust Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company, a New York Corporation ("DEPOSITORY TRUST COMPANY") or
a nominee of the DEPOSITORY TRUST COMPANY. This Preferred Security is
exchangeable for Preferred Securities registered in the name of a person other
than the DEPOSITORY TRUST COMPANY or its nominee only in the limited
circumstances described in the Trust Agreement (as defined below) and no
transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by the DEPOSITORY TRUST COMPANY to a nominee of the
DEPOSITORY TRUST COMPANY or by a nominee of the DEPOSITORY TRUST COMPANY to the
DEPOSITORY TRUST COMPANY or another nominee of the DEPOSITORY TRUST COMPANY) may
be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of the DEPOSITORY TRUST COMPANY to NCBE Capital Trust I or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co., or such other name as is
requested by an authorized representative of DEPOSITORY TRUST COMPANY (and any
payment hereon is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
P - CUSIP NO. 628817 20 7
E-1
<PAGE>
Certificate Evidencing Cumulative Trust Preferred Securities
of
NCBE Capital Trust I
% Cumulative Trust Preferred Securities
(liquidation amount $25 per Preferred Security)
NCBE Capital Trust I, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that CEDE & CO.
(the "Holder") is the registered owner of _________________________________
(_________) preferred securities of the Trust representing undivided beneficial
interests in the assets of the Trust and designated the _________% Cumulative
Trust Preferred Securities (liquidation amount $25 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences, and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of ________ ______, 1998, as the same may
be amended from time to time (the "Trust Agreement"), including the designation
of the terms of the Preferred Securities as set forth therein. The Holder is
entitled to the benefits of the Preferred Securities Guarantee Agreement entered
into by National City Bancshares, Inc., an Indiana corporation, as guarantor,
and Wilmington Trust Company, a Delaware banking corporation, as guarantee
trustee, dated as of _________ _____, 1998 (the "Guarantee"), to the extent
provided therein. The Trust will furnish a copy of the Trust Agreement and the
Guarantee to the Holder without charge upon written request to the Trust at its
principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
In Witness Whereof, one of the Administrative Trustees of the Trust
has executed this certificate this ____ day of ________, 1998.
NCBE Capital Trust I
By: ________________________________________
Name: _____________________________________
Title: _____________________________________
E-2
<PAGE>
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Trust Agreement.
WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely as Property Trustee
By:________________________________________________
Name:______________________________________________
Title:_____________________________________________
E-3
<PAGE>
EXHIBIT 4.4
------------------------------------
NATIONAL CITY BANCSHARES, INC.
AND
WILMINGTON TRUST COMPANY,
AS TRUSTEE
INDENTURE
% SUBORDINATED DEBENTURES
------------------------------------
___________, 1998
<PAGE>
<TABLE>
TABLE OF CONTENTS
<S> <C>
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1 DEFINITIONS OF TERMS. . . . . . . . . . . . . . . . . . . . . . . . 7
2. ISSUE, DESCRIPTION, TERMS, CONDITIONS, REGISTRATION AND EXCHANGE OF
THE DEBENTURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
2.1 DESIGNATION, PRINCIPAL AMOUNT, AND MATURITY . . . . . . . . . . . .15
2.2 EXTENDED MATURITY DATE. . . . . . . . . . . . . . . . . . . . . . .15
2.3 FORM AND PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . . .16
2.4 GLOBAL DEBENTURE. . . . . . . . . . . . . . . . . . . . . . . . . .16
2.5 INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
2.6 EXECUTION AND AUTHENTICATION. . . . . . . . . . . . . . . . . . . .18
2.7 REGISTRATION OF TRANSFER AND EXCHANGE . . . . . . . . . . . . . . .19
2.8 TEMPORARY SECURITIES. . . . . . . . . . . . . . . . . . . . . . . .20
2.9 MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES . . . . . . . . . .21
2.10 CANCELLATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .22
2.11 BENEFIT OF INDENTURE. . . . . . . . . . . . . . . . . . . . . . . .22
2.12 AUTHENTICATING AGENT. . . . . . . . . . . . . . . . . . . . . . . .22
3. REDEMPTION OF DEBENTURES. . . . . . . . . . . . . . . . . . . . . . . . .23
3.1 REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
3.2 SPECIAL EVENT REDEMPTION. . . . . . . . . . . . . . . . . . . . . .23
3.3 OPTIONAL REDEMPTION BY COMPANY. . . . . . . . . . . . . . . . . . .23
3.4 NOTICE OF REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . .24
3.5 PAYMENT UPON REDEMPTION . . . . . . . . . . . . . . . . . . . . . .25
3.6 NO SINKING FUND . . . . . . . . . . . . . . . . . . . . . . . . . .26
4. EXTENSION OF INTEREST PAYMENT PERIOD. . . . . . . . . . . . . . . . . . .26
4.1 EXTENSION OF INTEREST PAYMENT PERIOD. . . . . . . . . . . . . . . .26
4.2 NOTICE OF EXTENSION . . . . . . . . . . . . . . . . . . . . . . . .27
4.3 LIMITATION OF TRANSACTIONS. . . . . . . . . . . . . . . . . . . . .27
5. PARTICULAR COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . .28
5.1 PAYMENT OF PRINCIPAL AND INTEREST . . . . . . . . . . . . . . . . .28
5.2 MAINTENANCE OF AGENCY . . . . . . . . . . . . . . . . . . . . . . .28
5.3 PAYING AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . .28
5.4 APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE. . . . . . . . . .29
5.5 COMPLIANCE WITH CONSOLIDATION PROVISIONS. . . . . . . . . . . . . .29
5.6 LIMITATION ON DIVIDENDS . . . . . . . . . . . . . . . . . . . . . .29
5.7 COVENANTS AS TO NCBE TRUST. . . . . . . . . . . . . . . . . . . . .30
6. SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE . . . .30
6.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . .30
</TABLE>
-2-
<PAGE>
<TABLE>
<S> <C>
6.2 PRESERVATION OF INFORMATION; COMMUNICATIONS WITH
SECURITYHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . .31
6.3 REPORTS BY THE COMPANY. . . . . . . . . . . . . . . . . . . . . . .31
6.4 REPORTS BY THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . .32
7. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT . . . . .32
7.1 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . .32
7.2 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE . .34
7.3 APPLICATION OF MONEY COLLECTED. . . . . . . . . . . . . . . . . . .36
7.4 LIMITATION ON SUITS . . . . . . . . . . . . . . . . . . . . . . . .37
7.5 RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT WAIVER. . . .38
7.6 CONTROL BY SECURITYHOLDERS; WAIVER OF DEFAULTS. . . . . . . . . . .38
7.7 UNDERTAKING TO PAY COSTS. . . . . . . . . . . . . . . . . . . . . .39
8. FORM OF DEBENTURE AND ORIGINAL ISSUE. . . . . . . . . . . . . . . . . . .39
8.1 FORM OF DEBENTURE . . . . . . . . . . . . . . . . . . . . . . . . .39
8.2 ORIGINAL ISSUE OF DEBENTURES. . . . . . . . . . . . . . . . . . . .39
9. CONCERNING THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . .39
9.1 CERTAIN DUTIES AND RESPONSIBILITIES OF TRUSTEE. . . . . . . . . . .39
9.2 NOTICE OF DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . .41
9.3 CERTAIN RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . . . . . . .41
9.4 TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OR SECURITIES. . .43
9.5 MAY HOLD SECURITIES . . . . . . . . . . . . . . . . . . . . . . . .43
9.6 MONIES HELD IN TRUST. . . . . . . . . . . . . . . . . . . . . . . .43
9.7 COMPENSATION AND REIMBURSEMENT. . . . . . . . . . . . . . . . . . .43
9.8 RELIANCE ON OFFICERS' CERTIFICATION . . . . . . . . . . . . . . . .44
9.9 DISQUALIFICATION: CONFLICTING INTERESTS. . . . . . . . . . . . . .44
9.10 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY . . . . . . . . . . . . . .44
9.11 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR . . . . . . . . .45
9.12 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. . . . . . . . . . . . . . .46
9.13 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS . . . .47
9.14 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY . . . . . . .47
10. CONCERNING THE SECURITYHOLDERS. . . . . . . . . . . . . . . . . . . . . .47
10.1 EVIDENCE OF ACTION BY SECURITYHOLDERS . . . . . . . . . . . . . . .47
10.2 PROOF OF EXECUTION BY SECURITYHOLDERS . . . . . . . . . . . . . . .48
10.3 WHO MAY BE DEEMED OWNERS. . . . . . . . . . . . . . . . . . . . . .48
10.4 CERTAIN SECURITIES OWNED BY COMPANY DISREGARDED . . . . . . . . . .48
10.5 ACTIONS BINDING ON FUTURE SECURITYHOLDERS . . . . . . . . . . . . .49
11. SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . .49
11.1 SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF SECURITY HOLDERS . .49
11.2 SUPPLEMENT INDENTURES WITH CONSENT OF SECURITYHOLDERS . . . . . . .50
11.3 EFFECT OF SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . .51
</TABLE>
-3-
<PAGE>
<TABLE>
<S> <C>
11.4 SECURITIES AFFECTED BY SUPPLEMENTAL INDENTURES. . . . . . . . . . .51
11.5 EXECUTION OF SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . .51
12. SUCCESSOR CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . .52
12.1 COMPANY MAY CONSOLIDATE, ETC. . . . . . . . . . . . . . . . . . . .52
12.2 SUCCESSOR CORPORATION SUBSTITUTED . . . . . . . . . . . . . . . . .52
12.3 EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE. . . . . . . . . . . . .53
13. SATISFACTION AND DISCHARGE. . . . . . . . . . . . . . . . . . . . . . . .53
13.1 SATISFACTION AND DISCHARGE OF INDENTURE . . . . . . . . . . . . . .53
13.2 DEPOSITED MONEY TO BE HELD IN TRUST . . . . . . . . . . . . . . . .54
13.3 PAYMENT OF MONIES HELD BY PAYING AGENTS . . . . . . . . . . . . . .54
13.4 REPAYMENT TO COMPANY. . . . . . . . . . . . . . . . . . . . . . . .54
14. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS . . . . .54
14.1 NO RECOURSE . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
15. MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . .55
15.1 EFFECT ON SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . .55
15.2 ACTIONS BY SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . .55
15.3 SURRENDER OF COMPANY POWERS . . . . . . . . . . . . . . . . . . . .55
15.4 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
15.5 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . .55
15.6 TREATMENT OF DEBENTURES AS DEBT . . . . . . . . . . . . . . . . . .55
15.7 COMPLIANCE CERTIFICATES AND OPINIONS. . . . . . . . . . . . . . . .55
15.8 PAYMENTS ON BUSINESS DAYS . . . . . . . . . . . . . . . . . . . . .56
15.9 CONFLICT WITH TRUST INDENTURE ACT . . . . . . . . . . . . . . . . .56
15.10 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .56
15.11 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . .56
15.12 ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
15.13 ACKNOWLEDGMENT OF RIGHTS. . . . . . . . . . . . . . . . . . . . . .57
16. SUBORDINATION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . .57
16.1 AGREEMENT TO SUBORDINATE. . . . . . . . . . . . . . . . . . . . . .57
16.2 DEFAULT ON SENIOR DEBT OR ADDITIONAL SENIOR OBLIGATIONS . . . . . .57
16.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY. . . . . . . . . . . . . . . .58
16.4 SUBROGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
16.5 TRUSTEE TO EFFECTUATE SUBORDINATION . . . . . . . . . . . . . . . .60
16.6 NOTICE BY THE COMPANY . . . . . . . . . . . . . . . . . . . . . . .61
16.7 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS . . . . . . .61
16.8 SUBORDINATION MAY NOT BE IMPAIRED . . . . . . . . . . . . . . . . .62
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
Description Exhibit
Form of Face of Debenture. . . . . . . . . . . . . . . . . . . . . . . . . . .A
Certificate of Authentication. . . . . . . . . . . . . . . . . . . . . . . . .B
Subordinated Debenture . . . . . . . . . . . . . . . . . . . . . . . . . . . .C
</TABLE>
TRUST INDENTURE ACT
CROSS-REFERENCE TABLE
<TABLE>
Caption
<S> <C>
Section of Trust Indenture
Acts of 1939, Amended Section of Indenture
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.1
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.9, 9.10
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.14
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.14
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.1, 6.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2(c)
312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2(c)
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4(a)
313(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4(b)
313(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4(a), 6.4(b)
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4(c)
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.3
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.7
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15.7(b)
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6, 9.1(b), 9.3
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.2
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.1
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1(b)
315(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.7
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6, 9.1(b), 9.3
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.4
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.2
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.3
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.9
</TABLE>
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<PAGE>
INDENTURE
This Indenture is entered into and effective as of ___________,
1998, by and between National City Bancshares, Inc. ("Company"), an Indiana
corporation, and Wilmington Trust Company, a Delaware banking corporation, as
trustee ("Trustee"), Wilmington, Delaware.
RECITALS:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of a new series of its securities to be known as its ____%
Subordinated Debentures due 2028 (hereinafter referred to as the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in this
Indenture;
WHEREAS, NCBE Capital Trust I, a Delaware statutory business trust
("NCBE Trust"), has offered to the public $_______________ aggregate
liquidation amount of its ____% Cumulative Trust Preferred Securities (the
"Preferred Securities"), representing undivided beneficial interests in the
assets of NCBE Trust and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by NCBE Trust to the
Company of $__________ aggregate liquidation amount of its ____% Trust Common
Securities, in $___________ aggregate principal amount of the Debentures;
WHEREAS, the Company has requested that the Trustee execute and
deliver this Indenture;
WHEREAS, all requirements necessary to make this 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 Indenture has been duly authorized in all respects;
WHEREAS, to provide the terms and conditions upon which the
Debentures are to be authenticated, issued and delivered, the Company has
duly authorized the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the purchase
of the Debentures by the holders thereof, it is mutually covenanted and
agreed as follows for the equal and ratable benefit of the holders of the
Debentures:
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<PAGE>
1. DEFINITIONS.
1.1 DEFINITIONS OF TERMS. The terms defined in this Section
1.1 (except as in this Indenture otherwise expressly provided 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 plurals 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 that are by reference in such Act defined in the
Securities Act of 1933, as amended (except as herein otherwise expressly
provided or unless the context otherwise requires), shall have the meanings
assigned to such terms in said Trust Indenture Act and in said Securities Act
as in force at the date of the execution of this instrument. All accounting
terms used herein and not expressly defined shall have the meanings assigned
to such terms in accordance with generally accepted accounting principles.
(a) "Additional Sums" shall have the meaning set forth in
Section 2.5.
(b) "Additional Senior Obligations" means all indebtedness of
the Company whether incurred on or prior to the date of this Indenture
or thereafter incurred, for claims in respect of derivative products
such as interest and foreign exchange rate contracts, commodity
contracts and similar arrangements; provided, however, that Additional
Senior Obligations do not include claims in respect of Senior Debt or
obligations which, by their terms, are expressly stated to be not
superior in right of payment to the Debentures or to rank pari passu
in right of payment with the Debentures. For purposes of this
definition, "claim" shall have the meaning assigned thereto in Section
101(4) of the United States Bankruptcy Code of 1978, as amended.
(c) "Administrative Trustee" shall have the meaning set forth in
the Trust Agreement.
(d) "Affiliate" means, with respect to a specified Person, (i)
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, (ii) 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, (iii) any Person directly or
indirectly controlling, controlled by, or under common control with
the specified Person, (iv) a partnership in which the specified Person
is a general partner, (v) any officer or director of the specified
Person, and (vi) if the specified Person is an individual, any entity
of which the specified Person is an officer, director or general
partner.
(e) "Authenticating Agent" means an authenticating agent with
respect to the Securities appointed by the Trustee pursuant to Section
2.12.
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<PAGE>
(f) "Bankruptcy Law" means Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors.
(g) "Board of Directors" means the Board of Directors of the
Company or any duly authorized committee of such Board.
(h) "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.
(i) "Business Day" means, a day other than (i) a Saturday or
Sunday, (ii) a day on which banking institutions in the City of
New York are authorized or required by law or executive order to
remain closed or (iii) a day on which the Trustee's (or Property
Trustee's) Corporate Trust Office is closed for business.
(j) "Capital Event" means that NCBE Trust has received an
opinion of counsel experienced in such matters (which may be counsel
to the Company) that the Company cannot or, within 90 days of such
opinion, will not be permitted by the applicable regulatory
authorities, due to a change in law, regulation, policy or guideline
or a change in interpretation or application of law, regulation,
policy or guideline, to account for the Preferred Securities as Tier 1
Capital under the capital guidelines or policies of the Federal
Reserve.
(k) "Commission" means the Securities and Exchange Commission,
as from time to time constituted, created under the Exchange Act, or,
if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the
Trust Indenture Act, then the body performing such duties at such
time.
(l) "Common Securities" means undivided beneficial interests in
the assets of NCBE Trust which rank pari passu with Preferred
Securities issued by NCBE 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 otherwise are subordinated to the rights
of holders of Preferred Securities.
(m) "Company" means National City Bancshares, Inc., a
corporation duly organized and existing under the laws of the State of
Indiana, and, subject to the provisions of Article 12, shall also
include its successors and assigns.
(n) "Compounded Interest" shall have the meaning set forth in
Section 4.1.
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<PAGE>
(o) "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 Administration.
(p) "Coupon Rate" shall have the meaning set forth in
Section 2.5.
(q) "Custodian" means any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.
(r) "Debentures" shall have the meaning set forth in the
Recitals hereto.
(s) "Debt" means with respect to any Person, whether recourse is
to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed;
(ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses;
(iii) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person
issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business); (v) every capital lease
obligation of such Person; and (vi) every obligation of the type
referred to in clauses (i) through (v) of another Person and all
dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or
indirectly, as obligor or otherwise.
(t) "Default" means any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.
(u) "Deferred Interest" shall have the meaning set forth in
Section 4.1.
(v) "Depositary" means, with respect to any Security issuable or
issued in the form of one or more Global Securities, 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 this Indenture.
(w) "Dissolution Event" means that NCBE Trust is to be
liquidated in accordance with the Trust Agreement and the Debentures
held by the Property Trustee are to be distributed to the holders of
the Trust Securities in accordance with the Trust Agreement.
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<PAGE>
(x) "Event of Default" shall have the meaning set forth in
Section 7.1.
(y) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(z) "Extended Interest Payment Period" shall have the meaning
set forth in Section 4.1.
(aa) "Extended Maturity Date" means, if the Company elects to
extend the Maturity Date in accordance with Section 2.2(b), the date
selected by the Company which is after the Scheduled Maturity Date but
on or before March 31, 2037.
(bb) "Federal Reserve" means the Board of Governors of the
Federal Reserve System.
(cc) "Global Security" or "Global Debenture" means, with respect
to the Securities, a Security executed by the Company and delivered by
the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with the Indenture, which shall be
registered in the name of the Depositary or its nominee.
(dd) "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 of 1933, as amended) 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.
(ee) "Herein," "hereof," and "hereunder," and other words of
similar import, refer to this Indenture as a whole and not to any
particular Section or other subdivision.
(ff) "Holder" means a Person in whose name a Security is
registered in the Security Register.
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<PAGE>
(gg) "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.
(hh) "Interest Payment Date," has the meaning set forth in
Section 2.5.
(ii) "Investment Company Event" means the receipt by NCBE Trust
of an Opinion of Counsel, rendered by a law firm experienced in such
matters, to the effect that, as a result of the occurrence of a change
in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency
or regulatory authority (a "Change in 1940 Act Law"), there is more
than an insubstantial risk that NCBE Trust is or will be considered an
"investment company" that is required to be registered under the
Investment Company Act of 1940, as amended, which Change in 1940 Act
Law becomes effective on or after the date of original issuance of the
Preferred Securities.
(jj) "Maturity Date", when used with respect to any Security,
means the date on which the principal of such Security becomes due and
payable as therein or herein provided, whether at the Scheduled
Maturity Date or the Extended Maturity Date or by declaration of
acceleration, notice of redemption or otherwise, and includes the
Redemption Date.
(kk) "NCBE Trust" means NCBE Capital Trust I, a Delaware business
trust created for the purposes set forth in the Trust Agreement.
(ll) "Non Book-Entry Preferred Securities" shall have the meaning
set forth in Section 2.4.
(mm) "Officers' Certificate" means a certificate signed by the
Chairman of the Board, the President or a Vice President of the
Company and by the Treasurer, an Assistant Treasurer, the Controller,
an Assistant Controller, 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 15.7, if and to the extent required by the
provisions thereof.
(nn) "Opinion of Counsel" means an opinion in writing of legal
counsel, who may not be an employee of the Company but may be counsel
to 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 15.7, if and to the extent required by the
provisions thereof.
(oo) "Outstanding," when used with reference to the Securities,
means, subject to the provisions of Section 10.4, as of any particular
time, all Securities theretofore authenticated and delivered by the
Trustee under this Indenture, except
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<PAGE>
(i) 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; (ii) 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
Securities or portions of such Securities are to be redeemed prior to
the Scheduled Maturity Date thereof, notice of such redemption shall
have been given as provided in Article 3, or provision satisfactory to
the Trustee shall have been made for giving such notice; and
(iii) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered pursuant to the
terms of Section 2.9.
(pp) "Paying Agent" means the Company or any Person authorized by
the Company to pay the principal of and any premium or interest on, or
any Additional Sums with respect to, any Security on behalf of the
Company.
(qq) "Person" means any individual, corporation, limited
liability company, partnership, joint-venture, joint-stock company,
unincorporated organization or government or any agency or political
subdivision thereof.
(rr) "Predecessor Security" of any particular Security means
every previous Security evidencing all or a portion of the same debt
as that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered under
Section 2.9 in lieu of a lost, destroyed or stolen Security shall be
deemed to evidence the same debt as the lost, destroyed or stolen
Security.
(ss) "Preferred Securities" means undivided beneficial interests
in the assets of NCBE Trust which rank pari passu with Common
Securities issued by NCBE 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 otherwise are subordinated to the rights
of holders of Preferred Securities.
(tt) "Preferred Securities Guarantee" means any guarantee that
the Company may enter into with Wilmington Trust Company or other
Persons that operate directly or indirectly for the benefit of holders
of Preferred Securities.
(uu) "Property Trustee" has the meaning set forth in the Trust
Agreement.
(vv) "Redemption Date," when used with respect to any Security or
portion thereof to be redeemed, means the date fixed for such
redemption by or pursuant to this Indenture.
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<PAGE>
(ww) "Redemption Price" shall have the meaning set forth in
Section 3.2.
(xx) "Regular Record Date" for the interest payable on any
Interest Payment Date means the fifteenth day of the month in which
such Interest Payment Date occurs, whether or not a Business Day.
(yy) "Responsible Officer" when used with respect to the Trustee
means the Chairman of the Board of Directors, the President, any Vice
President, the Secretary, the Treasurer, any trust officer, any
corporate trust officer or any other officer or assistant 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.
(zz) "Scheduled Maturity Date" means March 31, 2028.
(aaa) "Securities" means any Debentures.
(bbb) "Security Register" shall have the meaning set forth in
Section 2.7.
(ccc) "Security Registrar" shall have the meaning set forth in
Section 2.7.
(ddd) "Securityholder," "holder of securities," "holder of
Debentures," "registered holder," or other similar term, means a
Holder.
(eee) "Senior Debt" means the principal of (and premium, if any)
and interest, if any (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating to
the Company whether or not such claim for post-petition interest is
allowed in such proceeding), on Debt, whether incurred on or prior to
the date of this Indenture or thereafter incurred, unless, in the
instrument creating or evidencing the same or pursuant to which the
same is outstanding, it is provided that such obligations are not
superior in right of payment to the Debentures or to other Debt which
is pari passu with, or subordinated to, the Debentures; provided,
however, that Senior Debt shall not be deemed to include (i) any Debt
of the Company which when incurred and without respect to any election
under Section 1111(b) of the United States Bankruptcy Code of 1978, as
amended, was without recourse to the Company, (ii) any Debt of the
Company to any of its Subsidiaries, (iii) Debt to any employee of the
Company, and (iv) Debt which by its terms is subordinated to trade
accounts payable or accrued liabilities arising in the ordinary course
of business (collectively, "Trade Debt") to the extent that payments
made to the holders of such Debt by the Holders as a result of the
subordination provisions of this Indenture would be greater than they
otherwise would have been as a result of any obligation of the holders
of such Debt to pay
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<PAGE>
amounts over to the obligees on such Trade Debt as a result of the
subordination provisions to which such Debt is subject.
(fff) "Senior Indebtedness" shall have the meaning set forth in
Section 16.2.
(ggg) "Special Event" means a Tax Event, an Investment Company
Event or a Capital Event.
(hhh) "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.
(iii) "Tax Event" means the receipt by NCBE Trust of an Opinion
of Counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement
or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of
issuance of the Debentures, there is more than an insubstantial risk
that (1) NCBE Trust is, or will be within 90 days after the date of
such Opinion of Counsel subject to United States federal income tax
with respect to interest received or accrued on the Debentures,
(2) interest payable by the Company on the Debentures is not, or
within 90 days after the date of such Opinion of Counsel, will not be,
deductible by the Company, in whole or in part, for United States
federal income tax purposes, or (3) NCBE Trust is, or will be within
90 days after the date of such Opinion of Counsel, subject to more
than a de minimis amount of other taxes, duties, assessments or other
governmental charges.
(jjj) "Trust Agreement" means the Amended and Restated Trust
Agreement, dated __________ __, 1998, of NCBE Trust.
(kkk) "Trustee" means Wilmington Trust Company and, subject to
the provisions of Article 9, 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.
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<PAGE>
(lll) "Trust Indenture Act," means the Trust Indenture Act of
1939 as in effect at the date of execution of this instrument.
(mmm) "Trust Securities" means the Common Securities and the
Preferred Securities.
(nnn) "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.
2. ISSUE, DESCRIPTION, TERMS, CONDITIONS, REGISTRATION AND EXCHANGE
OF THE DEBENTURES.
2.1 DESIGNATION, PRINCIPAL AMOUNT, AND MATURITY. The
Securities authorized by this Indenture are designated the "____%
Subordinated Debentures due 2028" and are limited in aggregate principal
amount to $__________, which amount shall be as set forth in any written
order of the Company for the authentication and delivery of Debentures
pursuant to Section 8.2 of this Indenture. The Securities will mature and
the unpaid principal thereon shall be payable (1) at the Scheduled Maturity
Date, (2) if the Company elects to extend the Maturity Date in accordance
with Section 2.2, at the Extended Maturity Date, or (3) by declaration of
acceleration, notice of redemption, or otherwise, including a Redemption Date.
2.2 EXTENDED MATURITY DATE. The Company may, at any time
before the day which is 90 days before the Scheduled Maturity Date, elect to
extend the Maturity Date to the Extended Maturity Date, which shall be not
later than March 31, 2037, provided that the Company has received the prior
approval of the Federal Reserve (if such approval is then required under
applicable capital guidelines or policies of the Federal Reserve) and further
provided that the following conditions in this Section 2.2 are satisfied both
at the date the Company gives notice in accordance herewith of its election
to extend the Maturity Date and at the Scheduled Maturity Date:
(1) the Company is not in bankruptcy, otherwise insolvent
or in liquidation;
(2) the Company is not in default in the payment of any
interest or principal on the Debentures; and
(3) NCBE Trust is not in arrears on payments of
distributions on the Preferred Securities issued by it and no
deferred distributions have accumulated.
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<PAGE>
If the Company elects to extend the Maturity Date in accordance herewith, the
Company shall give notice to the Holders, the Property Trustee and NCBE Trust of
the extension of the Maturity Date and the Extended Maturity Date at least 90
days and no more than 180 days before the Scheduled Maturity Date.
2.3 FORM AND PAYMENT. The Debentures shall be issued in
fully registered certificated form (initially, to the Property Trustee)
without interest coupons. Principal and interest on the Debentures issued in
certificated form shall be payable, the transfer of such Debentures shall be
registrable, and such Debentures shall be exchangeable for Debentures bearing
identical terms and provisions, at any office or agency of the Company
maintained pursuant to Section 5.2; provided, however, that payment of
interest on any Debenture may be made at the option of the Company by check
mailed to the Holder of such Debenture at such address as shall appear in the
Security Register or by wire transfer to an account maintained by such
Holder. Notwithstanding the foregoing, so long as the Holder of any
Debentures is the Property Trustee, the payment of the principal of and
interest (including Compounded Interest and Additional Sums, if any) on such
Debentures held by the Property Trustee shall be made at such place and to
such account as may be designated by the Property Trustee.
2.4 GLOBAL DEBENTURE.
(a) In connection with a Dissolution Event,
(1) the Debentures in certificated form may be presented
to the Trustee by the Property Trustee in exchange for a Global
Debenture in a like aggregate principal amount 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
Administrative Trustees. The Company upon any such presentation
shall execute a Global Debenture in such aggregate principal
amount and deliver the same to the Trustee for authentication and
delivery in accordance with this Indenture. Payments on the
Debentures issued as a Global Debenture will be made to the
Depositary; and
(2) if any Preferred Securities are held in non book-entry
certificated form ("Non Book-Entry Preferred Securities"), the
Debentures in certificated form may be presented to the Trustee
by the Property Trustee and any certificate which represents Non
Book-Entry Preferred Securities will be deemed to represent
beneficial interests in Debentures presented to the Trustee by
the Property Trustee having an aggregate principal amount equal
to the aggregate liquidation amount of the Non Book-Entry
Preferred Securities until such certificate is presented to the
Security Registrar for transfer or reissuance, at which time such
certificate will be canceled and a Debenture, registered in the
name of the holder of such certificate (or the transferee of such
holder, as the case may be) with an aggregate principal
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<PAGE>
amount equal to the aggregate liquidation amount of the Preferred
Security represented by such certificate, will be executed by the
Company and delivered to the Trustee for authentication and
delivery in accordance with this Indenture. On issuance of such
Debentures, Debentures with an equivalent aggregate principal
amount that were presented by the Property Trustee to the Trustee
will be deemed to have been canceled.
(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 (i) the Depositary notifies the Company that
it is unwilling or unable to continue as Depositary or the Depositary
shall no longer be registered or in good standing as a clearing agency
under the Exchange Act or other applicable statute or regulation, and
in either case 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, or (ii) there shall have
occurred and be continuing an Event of Default with respect to a
Global Debenture, then the Company will execute, and the Trustee, upon
written notice from the Company, will authenticate and deliver, the
Debentures in definitive registered form without coupons, 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 in its sole discretion determine that the
Debentures shall no longer be represented by a Global Debenture. In
such event the Company will execute, and the Trustee, upon receipt of
an Officer's Certificate evidencing such determination by the Company,
will authenticate and deliver, the Debentures in definitive registered
form without coupons, 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 canceled by
the Trustee. Such Debentures in definitive registered form issued in
exchange for the Global Debenture shall be registered in such names as
the Depositary shall instruct the Trustee in writing and shall be
delivered by the Trustee to the Depositary for re-delivery to the
Persons in whose names they are so registered.
2.5 INTEREST.
(a) Each Debenture shall bear interest on the principal amount
thereof 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 quarterly,
payable (subject to the provisions of Article 4) quarterly in arrears
on March 31,
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June 30, September 30 and December 31 of each year (each, an "Interest
Payment Date") commencing on June 30, 1998, to the Person in whose name
such Debenture or any Predecessor Security is registered, at the close of
business on the Regular Record Date for such interest installment.
(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year consisting of twelve 30-day
months and, for any period of less than a full calendar month, the
number of days elapsed in such month. 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 in respect of any such delay) with the same force and
effect as if made on the date such payment was originally payable.
(c) If, at any time while the Property Trustee is the Holder of
any Debentures, NCBE Trust or the Property Trustee is required to pay
any taxes, duties, assessments or other governmental charges of
whatever nature (other than withholding taxes) imposed by the United
States or any other taxing authority, then in any such case the
Company will pay as additional interest ("Additional Sums") on the
Debentures held by the Property Trustee such additional amounts as
shall be required so that the net amounts received and retained by
NCBE Trust and the Property Trustee after paying such taxes, duties,
assessments or other governmental charges will be equal to the amounts
NCBE Trust and the Property Trustee would have received and retained
had no such taxes, duties, assessments or other governmental charges
been imposed.
2.6 EXECUTION AND AUTHENTICATION.
(a) The Debentures shall be signed on behalf of the Company by
its Chairman of the Board, President or one of its Vice Presidents,
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 a 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 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 Securities may contain such notations,
legends or endorsements required by law, stock exchange rule or usage.
Each Security shall be dated the date of its authentication by the
Trustee.
(b) A 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 Security
so authenticated has been duly
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authenticated and delivered hereunder and that the holder is entitled to
the benefits of this Indenture.
(c) At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities
executed by the Company to the Trustee for authentication, together
with a written order of the Company for the authentication and
delivery of such Securities, signed by the Chairman of the Board,
President or any Vice President and its Treasurer or any Assistant
Treasurer or Secretary or Assistant Secretary, and the Trustee in
accordance with such written order shall authenticate and deliver such
Securities.
(d) In authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to
Section 9.1) 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.
(e) The Trustee shall not be required to authenticate such
Securities if the issuance of such Securities pursuant to this
Indenture will affect the Trustee's own rights, duties or immunities
under the Securities and this Indenture or otherwise in a manner that
is not reasonably acceptable to the Trustee.
2.7 REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Company shall keep, or cause to be kept, at an office or
agency of the Company maintained pursuant to Section 5.2, a register
(herein referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall
register the Securities and the transfers of Securities as in this
Article 2 provided and which at all reasonable times shall be open for
inspection by the Trustee. The registrar for the purpose of
registering Securities and transfers of Securities as herein provided
shall initially be the Trustee and thereafter as may be appointed by
the Company as authorized by Board Resolution (the "Security
Registrar").
(b) Securities may be exchanged upon presentation thereof at the
office of the Security Registrar, or at any office or agency of the
Company maintained pursuant to Section 5.2, for other Securities 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 Securities
so surrendered for exchange, the Company shall execute, the Trustee
shall authenticate and such office or agency shall deliver in exchange
therefor the Security or Securities that the Securityholder making the
exchange shall be entitled to receive, bearing numbers not
contemporaneously outstanding.
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(c) Upon surrender for registration of transfer of any Security
at any office or agency of the Company maintained pursuant to
Section 5.2, the Company shall execute, the Trustee shall authenticate
and such office or agency shall deliver in the name of the transferee
or transferees a new Security or Securities for a like aggregate
principal amount.
(d) All 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 Holder or by such Holder's duly authorized attorney in writing.
(e) No service charge shall be made for any exchange or
registration of transfer of Securities, or issue of new Securities in
case of partial redemption, 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 2.8, the
second paragraph of Section 3.5 and Section 11.4 not involving any
transfer.
(f) The Company and Security Registrar shall not be required
(i) to issue, exchange or register the transfer of any 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 Securities and ending at the close of business on the day
of such mailing, nor (ii) to register the transfer of or exchange any
Securities selected for redemption in whole or in part, except in the
case of any Security to be redeemed in part, the portion thereof not
to be redeemed. The provisions of this Section 2.7 are, with respect
to any Global Security, subject to Section 2.4 hereof.
2.8 TEMPORARY SECURITIES. Pending the preparation of
definitive Securities, the Company may execute, and the Trustee shall
authenticate and deliver, temporary Securities (printed, lithographed, or
typewritten). Such temporary Securities shall be substantially in the form of
the definitive Securities in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Company. Every temporary Security
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 Securities. Without unnecessary delay the Company will execute
and will furnish definitive Securities and thereupon any or all temporary
Securities may be surrendered in exchange therefor (without charge to the
Holders), at the office of the Security Registrar and the Trustee shall
authenticate and such office or agency shall deliver in exchange for such
temporary Securities an equal aggregate principal amount of definitive
Securities, unless the Company advises the Trustee to the effect that definitive
Securities need not be executed and furnished until further notice from the
Company. Until so exchanged, the temporary Securities shall be entitled to the
same benefits under this Indenture as definitive Securities authenticated and
delivered hereunder.
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2.9 MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES.
(a) In case any temporary or definitive Security shall become
mutilated or be destroyed, lost or stolen, then, in the absence of
notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company (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
Security, bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated Security, or in lieu of
and in substitution for the Security so destroyed, lost or stolen. In
every case the applicant for a substitute 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 Security and of the
ownership thereof. The Trustee may authenticate any such substitute
Security and deliver the same upon the written request or
authorization of the Company executed by its Chairman of the Board,
the President or any Vice President and by its Treasurer or any
assistant Treasurer or Secretary or Assistant Secretary. Upon the
issuance of any substitute 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 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 Security, pay or authorize the payment
of the same (without surrender thereof except in the case of a
mutilated 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 Security and of the ownership
thereof.
(b) Every replacement 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
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 Securities duly issued
hereunder. All 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
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.
2.10 CANCELLATION. All Securities surrendered for the purpose
of payment, redemption, exchange or registration of transfer shall, if
surrendered to the Company or any Paying
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Agent, be delivered to the Trustee for cancellation, or, if surrendered to
the Trustee, shall be canceled by it, and no 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 Securities held
by the Trustee. In the absence of such request the Trustee may dispose of
canceled 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 Securities, however, such acquisition shall not operate as
a redemption or satisfaction of the indebtedness represented by such
Securities unless and until the same are delivered to the Trustee for
cancellation.
2.11 BENEFIT OF INDENTURE. Nothing in this Indenture or in the
Securities, express or implied, shall give or be construed to give to any
Person, other than the parties hereto, the Holders, the Property Trustee and the
holders of Preferred Securities as provided herein (and, with respect to the
provisions of Article 16, 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
of the Holders, the Property Trustee and the holders of Preferred Securities as
provided herein (and, with respect to the provisions of Article 16, the holders
of Senior Indebtedness).
2.12 AUTHENTICATING AGENT.
(a) So long as any of the Securities remain Outstanding there
may be an Authenticating Agent for the 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 the
Securities issued upon exchange, transfer or partial redemption
thereof, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. All references
in this Indenture to the authentication of Securities by the Trustee
shall be deemed to include authentication by an Authenticating Agent.
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.
(b) 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
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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.
3. REDEMPTION OF DEBENTURES.
3.1 REDEMPTION. Subject to the Company's having received prior
approval of the Federal Reserve, if such approval is then required under the
applicable capital guidelines or policies of the Federal Reserve, the Company
may redeem the Debentures issued hereunder on and after the dates and in
accordance with the terms established pursuant to this Article 3.
3.2 SPECIAL EVENT REDEMPTION. Subject to the Company's
having received the prior approval of the Federal Reserve, if such approval
is then required under the applicable capital guidelines or policies of the
Federal Reserve, if a Special Event has occurred and is continuing, then the
Company shall have the right, upon not less than 30 days' nor more than 60
days' prior written notice to the Holders, to redeem the Debentures, in whole
but not in part, within 180 days following the occurrence of such Special
Event (the "180-Day Period") for cash in an amount equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest thereon
to the date of such redemption (the "Redemption Price"), provided that if the
Special Event is a Tax Event and if there is available to the Company the
opportunity to eliminate, within the 180-Day Period, the Tax Event by taking
some ministerial action ("Ministerial Action"), such as filing a form or
making an election, or pursuing some other similar reasonable measure which
has no adverse effect on the Company, the Holders, NCBE Trust or the holders
of Trust Securities, the Company shall pursue such Ministerial Action during
the 180-day period in lieu of redemption, and, provided, further, that the
Company shall have no right during the 180-day period to redeem the
Debentures while NCBE Trust is pursuing any Ministerial Action pursuant to
its obligations under the Trust Agreement, if any. If the Company pursues
any Ministerial Action as above provided, then the time period in which the
Company may elect to redeem the Debentures pursuant to this Section 3.2 shall
be extended by an additional period of 180 days. The Redemption Price shall
be paid prior to 12:00 noon, New York time, on the Redemption Date or such
earlier time as the Company determines, provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Redemption Price by
10:00 a.m., New York time, on the Redemption Date.
3.3 OPTIONAL REDEMPTION BY COMPANY.
(a) Subject to the provisions of Section 3.3(b), except as
otherwise may be specified in this Indenture, the Company shall have
the right to redeem the Debentures, in whole or in part, from time to
time, on or after March 31, 2003, at the Redemption Price. Any
redemption pursuant to this paragraph will be made upon not less than
30 days' nor more than 60 days' prior written notice to the Holders of
the Debentures to be redeemed. If the Debentures are only partially
redeemed
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pursuant to this Section 3.3, the Debentures will be redeemed pro rata or
by lot or by any other manner the Trustee shall deem appropriate in its
discretion; 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. The Redemption Price
shall be paid prior to 12:00 noon, New York time, on the Redemption Date
or at such earlier time as the Company determines provided that the
Company shall deposit with the Trustee an amount sufficient to pay the
Redemption Price by 10:00 a.m., New York time, on the Redemption Date.
(b) If a partial redemption of the Debentures would result in
the delisting of the Preferred Securities from the Nasdaq National
Market or any national securities exchange or other organization on
which the Preferred Securities are then approved for quotation or
listed, the Company shall not be permitted to effect such partial
redemption and may only redeem the Debentures in whole.
3.4 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 Debentures in
accordance with the right reserved so to do, the Company shall, or
shall cause the Trustee to upon receipt of not less than 45 days'
prior written notice from the Company (which notice shall, in the
event of a partial redemption, include a representation to the effect
that such partial redemption will not result in the delisting of the
Preferred Securities as described in Section 3.3(b) above), give
notice of such redemption to Holders of the Debentures to be redeemed
by mailing, by first class mail, postage prepaid, a notice of such
redemption not less than 30 days and not more than 60 days before the
Redemption Date to such Holders at their addresses as they shall
appear upon the Security Register unless a shorter period is specified
in the Debentures 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 Holder receives the notice. In any
case, failure duly to give such notice to the Holder of any Security
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 Debentures. In the case of any redemption of
Debentures prior to the expiration of any restriction on such
redemption provided in the terms of such Debentures or elsewhere in
this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with any such restriction.
(b) Each such notice of redemption shall specify the Redemption
Date and the Redemption Price, and shall state that payment of the
Redemption Price will be made at the office or agency of the Company
or at the office of the Security Registrar upon presentation and
surrender of such Debentures, that interest accrued to the Redemption
Date will be paid as specified in said notice, and that from and
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after said Redemption Date interest will cease to accrue. If less than all
the Debentures are to be redeemed, the notice shall specify the
particular Debentures to be so redeemed. In case any Security is to be
redeemed in part only, the notice that relates to such 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 Security, a new Security in principal amount equal to the
unredeemed portion thereof will be issued, without charge, to the
Holder of such Security.
(c) If less than all the Debentures are to be redeemed, the
Company shall give the Trustee at least 45 days' notice in advance of
the Redemption Date as to the aggregate principal amount of the
Debentures 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 twenty-five U.S. dollars ($25) or any integral
multiple thereof) of the principal amount of such Debentures of a
denomination larger than $25, the Debentures to be redeemed and shall
thereafter promptly notify the Company in writing of the numbers of
the Debentures to be redeemed, in whole or in part.
(d) The Company may, if and whenever it shall so elect, by
delivery of instructions signed on its behalf by its Chairman of the
Board, President or any Vice President, instruct the Trustee or any
Paying Agent to call all or any part of the Debentures 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 Article.
3.5 PAYMENT UPON REDEMPTION.
(a) If the giving of notice of redemption shall have been
completed as above provided, the Debentures or portions of Debentures
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 and interest on such Debentures or portions of
Debentures shall cease to accrue on and after the Redemption Date,
unless the Company shall default in the payment of such Redemption
Price with respect to any such Security or portion thereof. On
presentation and surrender of such Debentures on or after the
Redemption Date at the place of payment specified in the notice, said
Debentures shall be paid and redeemed at the applicable Redemption
Price (but if the Redemption Date is also an Interest Payment Date,
the interest installment payable on such date shall be payable to the
Holder at the close
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of business on the Regular Record Date for such interest installment
pursuant to Section 2.5).
(b) Upon presentation of any Debenture that is to be redeemed in
part only, the Company shall execute, the Trustee shall authenticate
and the office or agency where the Security is presented shall deliver
to the Holder thereof, at the expense of the Company, a new Security
of authorized denomination in principal amount equal to the unredeemed
portion of the Security so presented.
3.6 NO SINKING FUND. The Debentures are not entitled to the
benefit of any sinking fund.
4. EXTENSION OF INTEREST PAYMENT PERIOD.
4.1 EXTENSION OF INTEREST PAYMENT PERIOD. So long as no Event
of Default has occurred and is continuing, the Company shall have the right, at
any time and from time to time prior to the Maturity Date of the Debentures, to
defer payments of interest by extending the interest payment period of such
Debentures for a period not exceeding 20 consecutive calendar quarters,
including the first such calendar quarter during such extension period (each
such period an "Extended Interest Payment Period"), during which Extended
Interest Payment Period no interest shall be due and payable; provided that no
Extended Interest Payment Period shall end on a date other than an Interest
Payment Date or 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 quarter of the
Extended Interest Payment Period ("Compounded Interest"). At the end of the
Extended Interest Payment Period, the Company shall calculate (and deliver such
calculation to the Trustee) and pay all interest accrued and unpaid on the
Debentures, including any Additional Sums 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
Regular Record Date preceding 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, including the first
calendar quarter thereof and all previous and further extensions thereof, shall
not exceed 20 consecutive calendar quarters or extend beyond the Maturity Date
of the Debentures. Upon the termination of any Extended Interest Payment Period
and 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, without
premium or penalty, all or any portion of the Deferred Interest accrued during
an Extended Interest Payment Period.
4.2 NOTICE OF EXTENSION.
(a) If the Property Trustee is the only Holder of the Debentures
at the time the Company selects an Extended Interest Payment Period,
the Company shall
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give written notice to the Administrative Trustees, the Property Trustee
and the Trustee of its selection of such Extended Interest Payment Period
two Business Days before the earlier of (i) the next succeeding date on
which Distributions (as defined in the Trust Agreement) on the Trust
Securities issued by NCBE Trust are payable, or (ii) the date NCBE Trust
is required to give notice of the record date for such next succeeding
Distributions, or the date such Distributions are payable, to the Nasdaq
National Market or to any national securities exchange or to holders of
the Preferred Securities issued by NCBE Trust, but in any event at least
one Business Day before such record date.
(b) If the Property Trustee is not the only Holder of the
Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the Holders of the Debentures
and the Trustee written notice of its selection of such Extended
Interest Payment Period at least two 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 such Interest Payment Date or of
the Regular Record Date relating thereto to the Nasdaq National Market
or to any national securities exchange or to Holders of the
Debentures.
(c) The calendar quarter in which any notice is given pursuant
to paragraphs (a) or (b) of this Section 4.2 shall be counted as one
of the 20 quarters permitted in the maximum Extended Interest Payment
Period permitted under Section 4.1.
4.3 LIMITATION OF TRANSACTIONS. If the Company shall exercise
its right to defer payment of interest as provided in Section 4.1, then the
Company shall not (a) declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, (b) make any payment of interest,
principal or premium, if any, on, or repay, repurchase or redeem, any debt
securities issued by the Company which rank pari passu with or junior to the
Debentures or (c) make any guarantee payments with respect to any guarantee by
the Company of the debt securities of any Subsidiary of the Company if such
guarantee ranks pari passu with or junior to the Debentures (other than (a)
dividends or distributions payable in Common Stock of the Company, (b) any
declaration of a dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such plan in the
future or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Preferred Securities Guarantee, and (d) purchases of its
common stock related to rights under any of the Company's benefit plans for its
directors, officers or employees).
5. PARTICULAR COVENANTS OF THE COMPANY.
5.1 PAYMENT OF PRINCIPAL AND INTEREST. The Company will duly
and punctually pay or cause to be paid the principal of and interest on the
Debentures at the time and place and in the manner provided herein.
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5.2 MAINTENANCE OF AGENCY. So long as any of the Securities
remain Outstanding, the Company agrees to maintain an office or agency
(a) either in the City of Evansville, Indiana, or at the Corporate Trust Office
of the Trustee, and (b) unless the Property Trustee is the only Holder of the
Debentures, in the Borough of Manhattan, The City of New York, where
(i) Securities may be presented for payment, (ii) Securities 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 Securities
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 Chairman of the Board, 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 at its
Corporate Trust Office as its agent to receive all such presentations, notices
and demands.
5.3 PAYING AGENTS.
(a) The Company hereby appoints the Trustee as the Paying Agent.
If, at any time, the Company shall appoint one or more Paying Agents
other than the Trustee, the Company will cause each such Paying Agent
to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions
of this Section:
(1) that it will hold all sums held by it as such Paying
Agent for the payment of the principal of (and premium, if any)
or interest on the Securities (whether such sums have been paid
to it by the Company or by any other obligor on such 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 on such Securities) to make
any payment of the principal of (and premium, if any) or interest
on the Securities 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
(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 the Securities, it will on or before each due date of the
principal of (and premium, if any)
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or interest on Securities, 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
Securities 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
Securities) to take such action. Whenever the Company shall have one or
more Paying Agents for any of the Securities, it will, prior to each due
date of the principal of (and premium, if any) or interest on any
Securities, 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 Sections 13.3 and 13.4, 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.
5.4 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 9.11, a Trustee, so that there
shall at all times be a Trustee hereunder.
5.5 COMPLIANCE WITH CONSOLIDATION PROVISIONS. The Company will
not, while any of the Securities remain Outstanding, consolidate with, or merge
into, or merge into itself, or sell or convey all or substantially all of its
property to any other company, unless the provisions of Article 12 hereof are
complied with.
5.6 LIMITATION ON DIVIDENDS. If Securities are issued to NCBE
Trust or a trustee of NCBE Trust in connection with the issuance of Trust
Securities by NCBE Trust and (i) there shall have occurred any event that would
constitute an Event of Default, (ii) the Company shall be in default with
respect to its payment of any obligations under the Preferred Securities
Guarantee relating to NCBE Trust or (iii) the Company shall have given notice of
its election to defer payments of interest on such Securities through an
Extended Interest Payment Period as provided in the Indenture and such period,
or any extension thereof, shall be continuing, then (a) the Company shall not
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase or make a liquidation payment with respect to, any of its
capital stock, and (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company which rank pari passu with or
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junior in interest to the Debentures or make any guarantee payments with respect
to any guarantee by the Company of the debt securities of any subsidiary of the
Company if such guarantee ranks pari passu with or junior in interest to the
Subordinated Debentures (other than (a) dividends or distributions in common
stock, (b) any declaration of a dividend in connection with the implementation
of a shareholders' rights plan, or the issuance of stock under any such plan in
the future or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Preferred Securities Guarantee, and (d) purchases of
common stock related to rights under any of the Company's benefit plans for its
directors, officers or employees).
5.7 COVENANTS AS TO NCBE TRUST.
(a) For so long as the Trust Securities of NCBE Trust remain
outstanding, the Company will (i) maintain 100% direct or indirect
ownership of the Common Securities of NCBE 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
voluntarily dissolve, wind up or liquidate NCBE Trust, except upon
prior approval of the Federal Reserve (if such approval is then so
required under applicable capital guidelines or policies of the
Federal Reserve), (iii) use its reasonable efforts, consistent with
the terms of the Trust Agreement, to cause NCBE Trust (a) to remain a
grantor trust, except in connection with a distribution of Securities,
the redemption of all of the Trust Securities or certain mergers,
consolidations or amalgamations, each as permitted by the Trust
Agreement, and (b) to otherwise continue not to be treated as an
association taxable as a corporation or partnership for United States
federal income tax purposes, and (iv) to use its reasonable efforts,
consistent with the terms of the Trust Agreement, to cause each holder
of Trust Securities to be treated as owning an undivided beneficial
interest in the Securities.
(b) If the Debentures are to be issued as a Global Debenture in
connection with the distribution of the Debentures to the holders of
the Preferred Securities upon a Dissolution Event, the Company will
use its best efforts to list such Debentures on the Nasdaq National
Market or on such other exchange as the Preferred Securities are then
approved for quotation or listed.
6. SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE
TRUSTEE.
6.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS. The Company will furnish or cause to be furnished to the
Trustee (a) on a quarterly basis on each Regular Record Date a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
Holders of Securities as of such Regular Record Date, provided that the Company
shall not be obligated to furnish or cause to be furnished such list at any time
that the list shall not differ in any respect from the most recent list
furnished to the Trustee by the Company (in the event the Company fails to
provide such list on a quarterly basis, the Trustee shall be entitled to rely on
the most recent list provided by the Company); and (b) at such other times
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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 when the Trustee shall be
the Security Registrar.
6.2 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 Securities contained in the most recent list
furnished to it as provided in Section 6.1 and as to the names and
addresses of Holders of 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 6.1 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
Securities.
6.3 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
and other 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 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.
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(c) The Company covenants and agrees to transmit by mail, first
class postage prepaid, or reputable over-night 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.
6.4 REPORTS BY THE TRUSTEE.
(a) On or before July 15 in each year in which any of the
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 Section 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 Securities are listed
(if so listed) and also with the Commission. The Company agrees to
notify the Trustee when any Securities become listed on any stock
exchange.
7. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT.
7.1 EVENTS OF DEFAULT.
(a) Whenever used herein with respect to the Debentures, "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 Debentures, 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 this Indenture 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 Debentures as and when the
same shall become due and payable, whether at the Scheduled
Maturity Date, upon redemption, by declaration of acceleration or
otherwise; provided, however,
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that a valid extension of the Maturity Date of such Securities in
accordance with Section 2.2 of this Indenture shall not constitute
a default in the payment of principal or premium, if any;
(3) the Company fails to observe or perform in any material
respect any other of its covenants or agreements with respect to
the Debentures 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 aggregate principal amount of the Debentures 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 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 or
decree 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, in any such
case, the order or decree remains unstayed and in effect for 90
days; or
(6) NCBE Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its
existence except in connection with (i) the distribution of
Securities to holders of Trust Securities in liquidation of their
interests in NCBE Trust, (ii) the redemption of all of the
outstanding Trust Securities of NCBE Trust or (iii) certain
mergers, consolidations or amalgamations, each as permitted by
the Trust Agreement.
(b) In each and every such case, unless the principal of all the
Securities shall have already become due and payable, either the
Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities 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 Securities to be
due and payable immediately, and upon any such declaration, subject to
the provisions of Article 16 of this Indenture, the same shall become
and shall be immediately due and payable, notwithstanding anything to
the contrary other than Article 16 contained in this Indenture or in
the Securities.
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(c) At any time after the principal of the Securities 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 Securities 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 Securities and the principal of
(and premium, if any, on) any and all Debentures 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 Debentures to the
date of such payment or deposit) and the amount payable to the Trustee
under Section 9.7, and (ii) any and all Events of Default under the
Indenture, other than the nonpayment of principal on Debentures that
shall not have become due by their terms, shall have been remedied or
waived as provided in Section 7.6.
(d) No such rescission and annulment shall extend to or shall
affect any subsequent default or impair any right consequent thereon.
(e) In case the Trustee shall have proceeded to enforce any
right with respect to the Debentures under this Indenture and such
proceedings shall have been discontinued or 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.
7.2 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 Securities,
and such default shall have continued for a period of 90 Business
Days, or (2) in case it shall default in the payment of the principal
of (or premium, if any, on) any of the Securities when the same shall
have become due and payable, whether at the Scheduled Maturity Date of
the Securities, upon redemption, upon declaration of acceleration or
otherwise, then, upon demand of the Trustee, the Company will pay to
the Trustee, for the benefit of the Holders of the Securities, the
whole amount that then shall have been become due and payable on all
such 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 Securities are held by
NCBE Trust or a trustee of such trust, without duplication of any
other amounts paid by NCBE Trust or a trustee in respect thereof) upon
overdue installments of interest at the rate per annum expressed
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in the Securities; 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 9.7.
(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 Securities and
collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or other obligor
upon the Securities, wherever situated.
(c) In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other
obligor on the Securities under any applicable Bankruptcy Law, or in
case a Custodian shall have been appointed for the property of the
Company or such obligor, or in the case of any other similar judicial
proceedings relative to the Company or other obligor upon the
Securities, or to the creditors or property of the Company or such
other obligor, 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 the Securities allowed for the entire
amount due and payable by the Company under the 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 9.7; and
any receiver, assignee or trustee in bankruptcy or reorganization is
hereby authorized by each of the Holders of the Securities 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 9.7.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to
Securities, may be enforced by the Trustee without the possession of
any of such 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 9.7, be for the ratable benefit of the Holders of the
Securities.
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(e) In case of an Event of Default hereunder, 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 the 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.
(f) 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 Securities 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.
7.3 APPLICATION OF MONEY COLLECTED. Any money collected by the
Trustee pursuant to this Article 7 with respect to the 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 Securities and notation thereon of
the amount of the payment, if only partially paid, and upon surrender thereof if
fully paid:
(a) FIRST: To the payment of costs and expenses of collection
and of all amounts payable to the Trustee under Section 9.7;
(b) SECOND: To the payment of all Senior Indebtedness of the
Company if and to the extent required by Article 16;
(c) THIRD: To the payment of the amounts then due and unpaid
upon Securities 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 Securities for
principal (and premium, if any) and interest, respectively; and
(d) FOURTH: To the Company.
7.4 LIMITATION ON SUITS.
(a) No Holder of any Security 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 Securities
specifying such Event of Default, as hereinbefore provided; (ii) the
Holders of not less than 25% in
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aggregate principal amount of the Securities 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
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; and (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 during such
60 day period, the Holders of a majority in aggregate principal amount
of the Securities then Outstanding do not give the Trustee a direction
inconsistent with the request. The Company and the Trustee acknowledge
that, pursuant to Section 15.13 of this Indenture, the holders of
Preferred Securities may institute legal proceedings directly against
the Company to enforce the Property Trustee's rights under this
Indenture in the circumstances and subject to the limitations set forth
therein.
(b) Notwithstanding anything contained herein to the contrary,
the right of any Holder of any Security to receive payment of the
principal of (and premium, if any) and interest on such Security, as
therein provided, on or after the respective due dates expressed in
such 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
Security hereunder, it is expressly understood, intended and
covenanted by the taker and Holder of every Security with every other
such taker and Holder and the Trustee, that no one or more Holders of
Securities 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 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 Securities. 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.
7.5 RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER.
(a) All powers and remedies given by this Article 7 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 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 Securities.
(b) No delay or omission of the Trustee or of any Holder of any
of the 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
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be construed to be a waiver of any such default or on acquiescence
therein; and, subject to the provisions of Section 7.4, every power and
remedy given by this Article 7 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.
7.6 CONTROL BY SECURITYHOLDERS; WAIVER OF DEFAULTS. The
Holders of a majority in aggregate principal amount of the Securities at the
time Outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee; provided, however, that such
direction shall not be in conflict with any rule of law or with this Indenture.
Subject to the provisions of Section 9.1, 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 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 Securities at the time Outstanding
may, on behalf of the Holders of all of the Securities, waive any past default
in the performance of any of the covenants contained herein and its
consequences, except (i) a default in the payment of the principal of, or
premium, if any, or interest on, any of the Securities (provided that defaults
relating to declaration of acceleration of Securities are subject to the terms
of Section 7.1(c)), or (ii) in respect of a covenant or provision hereof which
under Section 11.2 cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected; provided, however, that if the
Debentures are held by NCBE Trust or a trustee of such trust, such waiver or
modification to such waiver shall not be effective until the holders of a
majority in aggregate liquidation amount of Trust Securities shall have
consented to such waiver or modification to such waiver; provided further, that
if the consent of the Holder of each Outstanding Security is required, such
waiver shall not be effective until each holder of the Trust Securities shall
have consented to such waiver. 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 Securities 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.
7.7 UNDERTAKING TO PAY COSTS. All parties to this Indenture,
and each Holder of any 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 Debentures, 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 Debentures on or after the respective due dates expressed in
such Debentures or established pursuant to this Indenture.
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8. FORM OF DEBENTURE AND ORIGINAL ISSUE.
8.1 FORM OF DEBENTURE. The Debentures and the Trustee's
Certificate of Authentication to be endorsed thereon are to be substantially in
the forms contained as Exhibits A, B and C to this Indenture, attached hereto
and incorporated herein by reference.
8.2 ORIGINAL ISSUE OF DEBENTURES. Debentures in the aggregate
principal amount of $___________ may, upon execution of this Indenture, be
executed by the Company and delivered to the Trustee for authentication. If the
Underwriters exercise their Option and there is an Option Closing Date (as such
terms are defined in the Trust Agreement), then on such Option Closing Date,
Debentures in the additional aggregate principal amount of
$_____________________ may be executed by the Company and delivered to the
Trustee for authentication. In either such event, the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the written order of the
Company, signed by its Chairman of the Board, its President, or any Vice
President and its Treasurer or an Assistant Treasurer, without any further
action by the Company.
9. CONCERNING THE TRUSTEE.
9.1 CERTAIN DUTIES AND RESPONSIBILITIES OF TRUSTEE.
(a) The Trustee prior to the occurrence of an Event of Default
with respect to the Securities and after the curing of all Events of
Default with respect to the Debentures that may have occurred, shall
undertake to perform with respect to the 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
Debentures has occurred (that has not been cured or waived), the
Trustee shall exercise with respect to Debentures 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 Debentures and after the curing or waiving of all
such Events of Default with respect to the Debentures that may
have occurred:
(A) the duties and obligations of the Trustee shall
with respect to the Debentures be determined solely by the
express provisions of this Indenture, and the Trustee shall
not be liable with respect to the Debentures except for the
performance of such duties
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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 Debentures
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
requirements 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 Debentures 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 Debentures; and
(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.
9.2 NOTICE OF DEFAULTS. Within 90 days after actual knowledge
by a Responsible Officer of the Trustee of the occurrence of any default
hereunder with respect to the Securities, the Trustee shall transmit by mail to
all Holders of Securities, as their names and addresses appear in the Security
Register, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal or (or premium, if any) or interest (including any Additional
Sums) on any Security, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a trust
committee of the directors and/or Responsible Officers of the Trustee determines
in good faith that the withholding of such notice is in the interests of the
Holders of such
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Securities; and provided, further, that in the case of any default of the
character specified in Section 7.1(a)(3), no such notice to Holders of
Securities shall be given until at least 30 days after the occurrence
thereof. For the purposes of this Section, the term "default" means any
event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to the Securities.
9.3 CERTAIN RIGHTS OF TRUSTEE. Except as otherwise provided in
Section 9.1:
(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 instrument signed in the name of the Company by the President or
any Vice President and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer thereof (unless other evidence
in respect thereof is specifically prescribed herein);
(c) The Trustee shall not be deemed to have knowledge of a
default or an Event of Default, other than an Event of Default
specified in Section 7.1(a) (1) or (2), unless and until it receives
written notification of such Event of Default from the Company or by
Holders of at least 25% of the aggregate principal amount of the
Securities at the time Outstanding;
(d) 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;
(e) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request,
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 the Securities (that has not been cured or waived) to
exercise with respect to the Securities 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;
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(f) 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;
(g) 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 Securities affected
thereby (determined as provided in Section 10.4); 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, 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
(h) 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.
9.4 TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OR
SECURITIES.
(a) The recitals contained herein and in the 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 Securities.
(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Securities or of the proceeds
of such Securities, or for the use or application of any moneys paid
over by the Trustee in accordance with any provision of this
Indenture, or for the use or application of any moneys received by any
Paying Agent other than the Trustee.
9.5 MAY HOLD SECURITIES. The Trustee or any Paying Agent or
Security Registrar, in its individual or any other capacity, may become the
owner or pledgee of Securities with the same rights it would have if it were not
Trustee, Paying Agent or Security Registrar.
9.6 MONIES HELD IN TRUST. Subject to the provisions of
Section 13.4, all monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for
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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 monies received by it hereunder except such
as it may agree with the Company to pay thereon.
9.7 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 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. Such additional indebtedness shall
be secured by a lien prior to that of the 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 Securities.
9.8 RELIANCE ON OFFICERS' CERTIFICATION. Except as otherwise
provided in Section 9.1 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.
9.9 DISQUALIFICATION: CONFLICTING INTERESTS. If the Trustee
has or shall acquire any "conflicting interest" within the meaning of
Section 310(b) of the Trust Indenture Act,
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the Trustee and the Company shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
9.10 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all
times be a Trustee with respect to the Debentures 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 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 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 9.11.
9.11 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee or any successor hereafter appointed may at any
time resign with respect to the Securities by giving written notice
thereof to the Company and by transmitting notice of resignation by
mail, first class postage prepaid, to the Securityholders, 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 Securities 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 Securities, or any Securityholder
who has been a bona fide Holder of a Security or Securities for at
least six months may, subject to the provisions of Section 9.10, 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 Section 9.9 after written request therefor by the Company or
by any Securityholder who has been a bona fide Holder of a
Security or Securities for at least six months; or
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(2) the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.10 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 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 9.9,
unless the Trustee's duty to resign is stayed as provided herein,
any Securityholder who has been a bona fide Holder of a Security
or 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 Securities at the time Outstanding may at any time remove the
Trustee by so notifying the Trustee and the Company and may appoint a
successor Trustee with the consent of the Company.
(d) Any resignation or removal of the Trustee and appointment of
a successor trustee with respect to the Securities pursuant to any of
the provisions of this Section shall become effective upon acceptance
of appointment by the successor trustee as provided in Section 9.12.
9.12 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor trustee
with respect to the 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
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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) 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) of this Article 9, as
the case may be.
(c) 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 9.
(d) 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.
9.13 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 substantially all of 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 9.9 and eligible
under the provisions of Section 9.10, 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 Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
9.14 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.
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10. CONCERNING THE SECURITYHOLDERS.
10.1 EVIDENCE OF ACTION BY SECURITYHOLDERS.
(a) Whenever in this Indenture it is provided that the Holders
of a majority or specified percentage in aggregate principal amount of
the Securities 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 have
joined therein may be evidenced by any instrument or any number of
instruments of similar tenor executed by such Holders of Securities in
person or by agent or proxy appointed in writing.
(b) If the Company shall solicit from the Securityholders any
request, demand, authorization, direction, notice, consent, waiver or
other action, the Company may, at its option, as evidenced by an
Officers' Certificate, fix in advance a record date 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 Securities have authorized or
agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other action, and for that purpose the
Outstanding Securities 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.
10.2 PROOF OF EXECUTION BY SECURITYHOLDERS. Subject to the
provisions of Article 9, 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 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 Securities shall be proved by the Security
Register 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.
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10.3 WHO MAY BE DEEMED OWNERS. Prior to the due presentment
for registration of transfer of any Security, the Company, the Trustee, any
Paying Agent and any Security Registrar may deem and treat the Person in
whose name such Security shall be registered upon the Security Register as
the absolute owner of such Security (whether or not such 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 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.
10.4 CERTAIN SECURITIES OWNED BY COMPANY DISREGARDED. In
determining whether the Holders of the requisite aggregate principal amount
of Securities have concurred in any direction, consent of waiver under this
Indenture, the Securities that are owned by the Company or any other obligor
on the Securities or by any Person directly or indirectly controlling or
controlled by or under common control with the Company or any other obligor
on the Securities shall be disregarded and deemed not to be Outstanding for
the purpose of any such determination, except that for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Securities that the Trustee actually knows
are so owned shall be so disregarded. The 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 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.
10.5 ACTIONS BINDING ON FUTURE SECURITYHOLDERS. At any time
prior to (but not after) the evidencing to the Trustee, as provided in
Section 10.1, of the taking of any action by the Holders of the majority or
other specified percentage in aggregate principal amount of the Securities in
connection with such action, any Holder of a Security that is shown by the
evidence to be included in the 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 10.2, revoke such action so far as concerns
such Security. Except as aforesaid any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security, and of any 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 Security. Any action taken by the Holders of the majority or other
specified percentage in aggregate principal amount of the Securities in
connection with such action shall be conclusively binding upon the Company,
the Trustee and the Holders of all the Securities.
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11. SUPPLEMENTAL INDENTURES.
11.1 SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF SECURITY
HOLDERS.
(a) 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:
(1) to cure any ambiguity, defect, or inconsistency
herein, in the Securities;
(2) to comply with Article 9;
(3) to provide for uncertificated Securities in addition
to or in place of certificated Securities;
(4) to add to the covenants of the Company for the benefit
of the Holders of all of the Securities or to surrender any right
or power herein conferred upon the Company;
(5) 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 Securities, as
herein set forth;
(6) to make any change that does not adversely affect the
rights of any Securityholder in any material respect;
(7) to provide for the issuance of and establish the form
and terms and conditions of the Securities, to establish the form
of any certifications required to be furnished pursuant to the
terms of this Indenture, or to add to the rights of the holders
of Securities; or
(8) qualify or maintain the qualification of the Indenture
under the Trust Indenture Act; or
(9) to evidence a merger or consolidation involving the
Company.
(b) 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
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be obligated to enter into any such supplemental indenture that
affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
(c) 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 Securities at the time
Outstanding, notwithstanding any of the provisions of Section 11.2.
11.2 SUPPLEMENT INDENTURES WITH CONSENT OF SECURITYHOLDERS.
(a) With the consent (evidenced as provided in Section 10.1) of
the Holders of not less than a majority in aggregate principal amount
of the Securities at the time Outstanding, the Company, when
authorized by Board Resolutions, 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 11.1 the rights of the Holders of the
Securities under this Indenture; provided, however, that no such
supplemental indenture shall without the consent of the Holders of
each Debenture then Outstanding and affected thereby, (i) extend
(other than in accordance with Section 2.2) the Scheduled Maturity
Date of any Securities, 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 Securities, the Holders of which are
required to consent to any such supplemental indenture; provided
further, that if the Debentures are held by NCBE Trust or a trustee of
such trust, such supplemental indenture shall not be effective until
the Holders of a majority in liquidation amount of Trust Securities
shall have consented to such supplemental indenture; provided further,
that if the consent of the Holder of each Outstanding Security is
required, such supplemental indenture shall not be effective until
each Holder of the Trust Securities shall have consented to such
supplemental indenture.
(b) It shall not be necessary for the consent of the
Securityholders 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.
11.3 EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution
of any supplemental indenture pursuant to the provisions of this Article 11
or otherwise authorized pursuant to this Indenture, this Indenture shall be
and be deemed to be modified and 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
Securities shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and
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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.
11.4 SECURITIES AFFECTED BY SUPPLEMENTAL INDENTURES.
Securities affected by a supplemental indenture, authenticated and delivered
after the execution of such supplemental indenture pursuant to the provisions
of this Article or otherwise authorized pursuant to this Indenture, may bear
a notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which the Securities may be listed as to
any matter provided for in such supplemental indenture. If the Company shall
so determine, new 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
Securities then Outstanding.
11.5 EXECUTION OF SUPPLEMENTAL INDENTURES.
(a) Upon the request of the Company, accompanied by their Board
Resolutions 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 9.1, may receive an
Opinion of Counsel as conclusive evidence that any supplemental
indenture executed pursuant to this Section is authorized or permitted
by, and conforms to, the terms of this Section and that it is proper
for the Trustee under the provisions of this Section to join in the
execution thereof.
(b) 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 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.
12. SUCCESSOR CORPORATION.
12.1 COMPANY MAY CONSOLIDATE, ETC. Nothing contained in this
Indenture or in any of the 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, as the case may be), or
successive consolidations or mergers in which the Company, as the case may
be, or its successor or successors shall be a party or parties, or shall
prevent any sale, conveyance, transfer or
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other disposition of the property of the Company, as the case may be, or its
successor or successors as an entirety, or substantially as an entirety, to
any other corporation (whether or not affiliated with the Company, as the
case may be, or its successor or successors) authorized to acquire and
operate the same; provided, however, the Company hereby covenants and agree
that, (i) upon any such consolidation, merger, sale, conveyance, transfer or
other disposition, the due and punctual payment, in the case of the Company,
of the principal of (premium, if any) and interest on all of the Debentures,
according to their terms and the due and punctual performance and observance
of all the covenants and conditions of this Indenture to be kept or performed
by the Company as the case may be, shall be expressly assumed, by
supplemental indentures (which shall conform to the provisions of the Trust
Indenture Act, as then in effect) satisfactory in form to the Trustee
executed and delivered to the Trustee by the entity formed by such
consolidation, or into which the Company, as the case may be, shall have been
merged, or by the entity which shall have acquired such property; (ii) in
case the Company consolidates with or merges into another Person or conveys
or transfers its properties and assets substantially then as an entirety to
any Person, the successor Person is organized under the laws of the United
States of any state or the District of Columbia, and (iii) immediately after
giving effect thereto, no Event of Default, and no event which, after notice
or lapse of time or both, would become an Event of Default, shall have
occurred and be continuing.
12.2 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, in the case of
the Company, the due and punctual payment of the principal of,
premium, if any, and interest on all of the Debentures Outstanding and
the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, as the
case may be, such successor corporation shall succeed and be
substituted for the Company with the same effect as if it had been
named as the Company herein, and thereupon the predecessor corporation
shall be relieved of all obligations and covenants under this
Indenture and the 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 Securities thereafter to be
issued as may be appropriate.
(c) Nothing contained in this Indenture or in any of the
Securities shall prevent the Company from merging 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).
12.3 EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE. The Trustee,
subject to the provisions of Section 9.1 may receive an Opinion of Counsel as
conclusive evidence that any
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such consolidation, merger, sale, conveyance, transfer or other disposition,
and any such assumption, complies with the provisions of this Article 12.
13. SATISFACTION AND DISCHARGE.
13.1 SATISFACTION AND DISCHARGE OF INDENTURE. If at any
time: (a) the Company shall have delivered to the Trustee for cancellation
all Securities theretofore authenticated (other than any Securities that
shall have been destroyed, lost or stolen and that shall have been replaced
or paid as provided in Section 2.9) and not theretofore canceled or (b) all
such Securities 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, in trust, funds in form of money or Governmental Obligations or a
combination thereof, in an amount 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 Securities (other than any Securities that shall have been
destroyed, lost or stolen and that shall have been replaced or paid as
provided in Section 2.9) 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 Redemption Date, as the case may
be, but excluding, however, the amount of any funds theretofore repaid to the
Company in accordance with the provisions of Section 13.4 or paid to any
State or other governmental entity pursuant to its unclaimed property or
similar laws, and if in either case the Company shall also pay or cause to be
paid all other sums payable hereunder with respect to the Company, then this
Indenture shall thereupon cease to be of further effect except for the
provisions of Sections 2.3, 2.7, 2.9, 5.1, 5.2, 5.3 and 9.10, that shall
survive until the date of maturity or Redemption Date, as the case may be,
and Sections 9.7 and 13.4, 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.
13.2 DEPOSITED MONEY TO BE HELD IN TRUST. All money or
Governmental Obligations deposited with the Trustee pursuant to Section 13.1
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 Securities for the payment or redemption
of which such money or Governmental Obligations have been deposited with the
Trustee.
13.3 PAYMENT OF MONIES HELD BY PAYING AGENTS. In connection
with the satisfaction and discharge of this Indenture all money 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 money or Governmental Obligations.
13.4 REPAYMENT TO COMPANY. Any money 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 Securities that are not applied but remain unclaimed by
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the Holders of such Securities for at least two years after the date upon
which the principal of (and premium, if any) or interest on such Securities
shall have respectively become due and payable, shall be repaid to the
Company, upon written request by the Company, on March 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 money or Governmental Obligations, and the Holder of any
of the Securities entitled to receive such payment shall thereafter, as an
unsecured general creditor, look only to the Company for the payment thereof.
14. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS.
14.1 NO RECOURSE. No recourse under or upon any obligation,
covenant or agreement of this Indenture, or of any 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 Securities or implied therefrom; 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 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 Securities.
15. MISCELLANEOUS PROVISIONS.
15.1 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 its respective successors and assigns,
whether so expressed or not.
15.2 ACTIONS BY SUCCESSORS. 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 sole
successor of the Company.
15.3 SURRENDER OF COMPANY POWERS. The Company by instrument
in writing executed by authority of its Board of Directors and delivered to
the Trustee may surrender
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any of the powers reserved to the Company, and thereupon such power so
surrendered shall terminate both as to the Company, as the case may be, and
as to any successor corporation.
15.4 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
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: National City Bancshares, Inc., 227 Main Street, P.O. Box 868,
Evansville, Indiana 47705-0868, Attention: Chairman of the Board. 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 received in writing at the Corporate Trust Office of the
Trustee.
15.5 GOVERNING LAW. This Indenture and each Security shall
be deemed to be a contract made under the internal laws of the State of
Indiana and for all purposes shall be construed in accordance with the laws
of said State.
15.6 TREATMENT OF DEBENTURES AS DEBT. It is intended that
the Debentures 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.
15.7 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 and opinion of the Company 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.
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15.8 PAYMENTS ON BUSINESS DAYS. In any case where the date
of maturity of interest or principal (and premium, if any) of any Security or
the date of redemption of any 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 to such next succeeding Business Day.
15.9 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.
15.10 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.
15.11 SEVERABILITY. In case any one or more of the
provisions contained in this Indenture or in the 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 Securities, but this Indenture
and such Securities shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
15.12 ASSIGNMENT. This Indenture is binding upon and inures
to the benefit of the parties hereto and their respective successors and
assigns. This Indenture may not otherwise be assigned by the parties hereto.
15.13 ACKNOWLEDGMENT OF RIGHTS. The Company acknowledges
that, with respect to any Debentures held by NCBE Trust or a trustee of such
trust, if the Property Trustee fails to enforce its rights under this
Indenture as the Holder of the Debentures, any Holder of Preferred Securities
may, to the extent permitted by law, institute legal proceedings directly
against the Company to enforce such Property Trustee's rights under this
Indenture without first instituting any legal proceedings against such
Property Trustee or any other person or entity. Notwithstanding Section 7.4,
if an 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 Securities on the date such interest or principal is otherwise payable
(or in the case of redemption, on the Redemption Date), the Company
acknowledges that a Holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such Holder of the principal of or
interest on the Securities having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder on or after the
respective due date specified in the Securities. This Indenture may not be
amended to remove the foregoing direct right of action without the prior
written consent of all Holders of Preferred Securities. The Company shall
have a right of set-off under this Indenture for any payment so made to such
Holder.
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16. SUBORDINATION OF SECURITIES.
16.1 AGREEMENT TO SUBORDINATE.
(a) The Company covenants and agrees, and each Holder of
Debentures issued hereunder by such Holder's acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued
subject to the provisions of this Article 16; and each Holder of a
Debenture, whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions.
(b) The payment by the Company of the principal of, premium, if
any, and interest on all Debentures 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
Debt and Additional Senior Obligations, whether outstanding at the
date of this Indenture or thereafter incurred.
(c) No provision of this Article 16 shall prevent the occurrence
of any default or Event of Default hereunder.
16.2 DEFAULT ON SENIOR DEBT OR ADDITIONAL SENIOR OBLIGATIONS.
(a) In the event and during the continuation of any default by
the Company in the payment of principal, premium, interest or any
other payment due on any Senior Debt or Additional Senior Obligations
of the Company, as the case may be, or in the event that the maturity
of any Senior Debt or Additional Senior Obligations of the Company
(collectively, "Senior Indebtedness"), as the case may be, 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 Debentures.
(b) 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 16.2, 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.
16.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
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(a) 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
Debentures; 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 Holders of the Debentures or the Trustee would
be entitled to receive from the Company, except for the provisions of
this Article 16, 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 Holders of the Debentures 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 Holders of Debentures
or to the Trustee.
(b) 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, as the case may
be, remaining unpaid to the extent necessary to pay such Senior
Indebtedness in 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.
(c) For purposes of this Article 16, 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
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subordinated at least to the extent provided in this Article 16 with
respect to the Debentures to the payment of all Senior Indebtedness of
the Company, as the case may be, 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 12 of this Indenture shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this
Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article 12 of this Indenture. Nothing in Section
16.2 or in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 9.7 of the Indenture.
16.4 SUBROGATION.
(a) Subject to the payment in full of all Senior Indebtedness of
the Company, the rights of the holders of the Debentures 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, as the case may be, applicable to such Senior
Indebtedness until the principal of (and premium, if any) and interest
on the Debentures 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
Holders of the Debentures or the Trustee would be entitled except for
the provisions of this Article 16, and no payment over pursuant to the
provisions of this Article 16 to or for the benefit of the holders of
such Senior Indebtedness by Holders of the Debentures or the Trustee,
shall, as between the Company, its creditors other than holders of
Senior Indebtedness of the Company, and the Holders of the Debentures,
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 16 are and are intended solely for the purposes of defining
the relative rights of the Holders of the Debentures, on the one hand,
and the holders of such Senior Indebtedness on the other hand.
(b) Nothing contained in this Article 16 or elsewhere in this
Indenture or in the Debentures 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 Debentures, the
obligations of the Company, which is absolute and unconditional, to
pay to the Holders of the Debentures the principal of (and premium, if
any) and interest on the Debentures as and when the same shall become
due and payable in accordance with their terms, or is intended to or
shall affect the relative
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rights of the Holders of the Debentures and creditors of the Company, as
the case may be, other than the holders of Senior Indebtedness of the
Company, as the case may be, nor shall anything herein or therein
prevent the Trustee or the Holder of any Debenture from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article 16 of the
holders of such Senior Indebtedness in respect of cash, property or
securities of the Company, as the case may be, received upon the
exercise of any such remedy.
(c) Upon any payment or distribution of assets of the Company
referred to in this Article 16, the Trustee, subject to the provisions
of Article 9 of the Indenture, and the Holders of the Debentures 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 Holders of the Debentures, for the
purposes of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other
indebtedness of the Company, as the case may be, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Article 16.
16.5 TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of
Debentures by such Holder's acceptance thereof authorizes and directs the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article 16 and
appoints the Trustee such Holder's attorney-in-fact for any and all such
purposes.
16.6 NOTICE BY THE COMPANY.
(a) 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 money to or by the
Trustee in respect of the Debentures pursuant to the provisions of
this Article 16. Notwithstanding the provisions of this Article 16 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 money to or by the Trustee in
respect of the Debentures pursuant to the provisions of this
Article 16, 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 or from any trustee therefor;
and before the receipt of any such written notice, the Trustee,
subject to the provisions of Section 9.1 of the 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 16.6 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
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Debenture), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which they
were received, and shall not be affected by any notice to the contrary
that may be received by it within two Business Days prior to such date.
(b) The Trustee, subject to the provisions of Section 9.1 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, as the case may be (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 Section 16, 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 16, and, if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
16.7 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.
(a) The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article 16 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. The Trustee's
right to compensation and reimbursement of expenses as set forth in
Section 9.7 shall not be subject to the subordination provisions of
this Article 16.
(b) 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 16, and no implied covenants or obligations with respect to
the holders of such Senior Indebtedness shall be read into this
Indenture 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 9.1 of the Indenture, the Trustee
shall not be liable to any holder of such Senior Indebtedness if it
shall pay over or deliver to Holders of Debentures, 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 16 or
otherwise.
16.8 SUBORDINATION MAY NOT BE IMPAIRED.
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(a) No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company, as the case may be,
or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by the Company, as the case may be, 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.
(b) 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 Holders of the Debentures, without incurring
responsibility to the Holders of the Debentures and without impairing
or releasing the subordination provided in this Article 16 or the
obligations hereunder of the Holders of the Debentures 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 an
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, as the case may be, and any other Person.
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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.
NATIONAL CITY BANCSHARES, INC.
By:_____________________________________________
Michael F. Elliott, Chairman of the Board and
Chief Executive Officer
ATTEST:
___________________________________
Stephen C. Byelick, Jr., Secretary
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Trustee
By:________________________________________
Name:______________________________________
Title:_____________________________________
STATE OF INDIANA )
) SS:
COUNTY OF VANDERBURGH )
The foregoing instrument was acknowledged before me this ____ day of
________, 1998 by Michael F. Elliott, as Chairman of the Board and Chief
Executive Officer of National City Bancshares, Inc., an Indiana corporation, on
behalf of the corporation.
___________________________________
Notary Public
My commission expires:
____________________.
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<PAGE>
STATE OF DELAWARE )
) SS:
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this ____ day of
________, 1998 by _______________, as _________________________ of Wilmington
Trust Company, a Delaware banking corporation, on behalf of the corporation.
_______________________________________
Notary Public
My commission expires:
___________________.
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<PAGE>
EXHIBIT A
(FORM OF FACE OF DEBENTURE)
No. ____________________ $ ______________________ CUSIP No. _______-__-_
NATIONAL CITY BANCSHARES, INC.
___% SUBORDINATED DEBENTURE
DUE MARCH 31, 2028
National City Bancshares, 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,
________________ (the Holder), or registered assigns, the principal sum of
_______________ Dollars ($_______) at March 31, 2028, which date may be (1)
extended one or more times at the option of the Company to a date not later
than March 31, 2037, subject to the prior approval of the Board of Governors
of the Federal Reserve System (the Federal Reserve) if then required under
applicable capital guidelines or policies of the Federal Reserve (Federal
Reserve Approval), or (2) shortened (a) by redemption at the option of the
Company on or after March 31, 2003, subject to Federal Reserve Approval, or
(b) by declaration of acceleration, notice of redemption (including
redemption following a Tax Event, Investment Company Event, or Capital Event,
as described in the Indenture), or otherwise. The Debenture shall bear
interest on the principal amount hereof at the rate of ___% per annum (the
Coupon Rate) from __________, 1998, until the principal hereof 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 quarterly, payable (subject to the
provisions of the Indenture governing Extended Interest Payment Periods)
quarterly in arrears on March 31, June 30, September 30 and December 31 of
each year (each an Interest Payment Date) commencing on June 30, 1998, to the
Person in whose name such Debenture or any Predecessor Security is
registered, at the close of business on the Regular Record Date for such
interest installment. The amount of interest payable for any period will be
computed on the basis of a 360-day year consisting of twelve 30-day months
and, for any period of less than a full calendar month, the number of days
elapsed in such month. 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 in respect of any
such delay) with the same force and effect as if made on the date such
payment was originally payable. The principal and the interest on this
Debenture shall be payable at the office or agency of the Company maintained
for that purpose; provided, however, that payment of interest may be made at
the option of the Company by check mailed to the registered holder (as
defined in the Indenture) at such address as shall appear in the Security
Register or by wire transfer to an account maintained by the Holder as
specified in the Security Register. Notwithstanding the foregoing, so long as
the Holder of this Debenture is the Property Trustee, the payment of the
principal and interest on this Debenture will be made at such place and to
such account as may be designated by the Property Trustee.
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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 (as defined in the
Indenture), 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. No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided shall
at any time in any way be prejudiced or impaired by any act or failure to act
on the part of the Company, as the case may be, or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the
Company, as the case may be, 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.
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 ___________, 1998
NATIONAL CITY BANCSHARES, INC.
By:______________________________________
Name: Michael F. Elliott
Title: Chairman of the Board and
Chief Executive Officer
Attest:
By: _____________________________
Name: Stephen C. Byelick, Jr.
Title: Secretary
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<PAGE>
EXHIBIT B
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-mentioned
Indenture.
Dated:_________________
WILMINGTON TRUST COMPANY, ___________________________________
not in its individual capacity, Authenticating Agent
but solely as Trustee
or
By:_________________________ By:__________________________________
Authorized Signatory
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<PAGE>
EXHIBIT C
(FORM OF REVERSE OF DEBENTURE)
_____% SUBORDINATED DEBENTURE
(CONTINUED)
This Debenture is one of the subordinated debentures of the Company
(herein sometimes referred to as the "Debentures"), specified in the Indenture,
all issued or to be issued under and pursuant to an Indenture dated as of
_______________, 1998 (the "Indenture") duly executed and delivered between the
Company and Wilmington Trust Company, as Trustee (the "Trustee"), to which
Indenture 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 and the holders of Senior
Indebtedness. The Debentures are limited in aggregate principal amount as
specified in the Indenture.
The Company shall have the right to redeem this Debenture at the
option of the Company, without premium or penalty, in whole or in part at any
time on or after March 31, 2003, or at any time in certain circumstances upon
the occurrence of a Special Event, at a Redemption Price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest thereon to
the date of such redemption. Any redemption pursuant to this paragraph shall be
made upon not less than 30 days' nor more than 60 days' notice, at the
Redemption Price.
In case an Event of Default shall have occurred and be continuing, the
principal of all of the Debentures may be declared, and upon such declaration
shall become, 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 Debentures not less than a
majority in aggregate principal amount of the Debentures at the time
Outstanding 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 without the consent of each Holder of an
Outstanding Debenture affected thereby (i) extend (other than in accordance
with the Indenture's provisions for an Extended Maturity Date) the Scheduled
maturity of the 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
percentages of Debentures, the Holders of which are required to consent to
any such supplemental indenture. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding to, under certain circumstances, rescind
and annul a declaration that the principal of the Debentures shall become
payable following an Event of Default, and its consequences. 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
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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, as further described in the Indenture, shall have the
right at any time during the term of the Debentures and from time to time to
defer payments of interest by extending the interest payment period of such
Debentures for up to 20 consecutive quarters including the first such
calendar quarter during such period (each, an Extended Interest Payment
Period); provided that no Extended Interest Payment Period shall extend
beyond the Maturity Date or end on a date other than an Interest Payment
Date. At the end of the Extended Interest Payment Period, the Company shall
calculate and pay all interest accrued and unpaid, including any Additional
Sums 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 Regular Record Date preceding 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 such period including the first calendar quarter thereof and all
previous and further extensions thereof shall not exceed 20 consecutive
quarters or extend beyond the Maturity Date. At the termination of any such
Extended Interest Payment Period and upon the payment of all Deferred
Payments then due, the Company may commence a new Extended Interest Payment
Period. The Company may prepay at any time, without premium or penalty, all
or any portion of the Deferred Interest accrued during an Extended Interest
Payment Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferrable by the Holder hereof on
the Security Register, upon surrender of this Debenture for registration of
transfer at the office or agency of the Company maintained for that purpose,
accompanied (if required by the Company or Securities Registrar) by a written
instrument or instruments of transfer in form satisfactory to the Company or
the Security Registrar, duly executed by the Holder hereof or his attorney
duly authorized in writing, and thereupon there shall be delivered in the
name of the transferee or transferees a new Debenture or Debentures for a
like aggregate principal amount. No service charge shall 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 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 interest due hereon and
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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.
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, it being understood that all
obligations hereunder and under the Indenture are solely corporate
obligations, and all such liability being, by the acceptance hereof as a
condition of and as part of the consideration for the issuance hereof,
expressly waived and released.
In connection with a Dissolution Event with respect to NCBE Capital
Trust I, this Debenture may become exchangeable for a Global Debenture of
like aggregate principal amount or for debentures to be exchanged for Non
Book-Entry Preferred Securities with aggregate liquidation amounts equal to
the exchangeable aggregate principal amount.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
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EXHIBIT 4.7
--------------------------------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
NATIONAL CITY BANCSHARES, INC.
(as Guarantor)
and
WILMINGTON TRUST COMPANY
(as Preferred Guarantee Trustee)
DATED AS OF _______________ ____, 1998
--------------------------------------
<PAGE>
TABLE OF CONTENTS
1. Definitions And Interpretation. . . . . . . . . . . . . . 1
1.1 Definitions and Interpretations . . . . . . . . . . . 1
2. Trust Indenture Act.. . . . . . . . . . . . . . . . . . . 5
2.1 Trust Indenture Act; Application. . . . . . . . . . 5
2.2 Lists of Holders of Securities . . . . . . . . . . . 5
2.3 Reports by the Preferred Guarantee Trustee . . . . . 5
2.4 Periodic Reports to Preferred Guarantee Trustee. . . 6
2.5 Evidence of Compliance with Conditions Precedent.. . 6
2.6 Events of Default; Waiver. . . . . . . . . . . . . . 6
2.7 Event of Default; Notice . . . . . . . . . . . . . . 6
2.8 Conflicting Interests. . . . . . . . . . . . . . . . 6
3. Powers, Duties And Rights Of Preferred Guarantee Trustee. 7
3.1 Powers and Duties of the Preferred Guarantee
Trustee. . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Certain Rights of Preferred Guarantee Trustee. . . . 9
3.3 Not Responsible for Recitals or Issuance of
Guarantee. . . . . . . . . . . . . . . . . . . . . . 11
4. Preferred Guarantee Trustee.. . . . . . . . . . . . . . . 11
4.1 Preferred Guarantee Trustee; Eligibility.. . . . . . 11
4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustee. . . . . . . . . . . . . . . . . . 12
5. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . 13
5.1 Guarantee. . . . . . . . . . . . . . . . . . . . . . 13
5.2 Waiver of Notice and Demand. . . . . . . . . . . . . 13
5.3 Obligations Not Affected . . . . . . . . . . . . . . 13
5.4 Rights of Holders. . . . . . . . . . . . . . . . . . 14
5.5 Guarantee of Payment . . . . . . . . . . . . . . . . 14
5.6 Subrogation. . . . . . . . . . . . . . . . . . . . . 14
5.7 Independent Obligations. . . . . . . . . . . . . . . 15
6. Limitation Of Transactions; Subordination . . . . . . . . 15
6.1 Limitation of Transactions . . . . . . . . . . . . . 15
6.2 Ranking. . . . . . . . . . . . . . . . . . . . . . . 15
7. Termination . . . . . . . . . . . . . . . . . . . . . . . 15
7.1 Termination. . . . . . . . . . . . . . . . . . . . . 15
8. Indemnification . . . . . . . . . . . . . . . . . . . . . 16
8.1 Exculpation. . . . . . . . . . . . . . . . . . . . . 16
8.2 Indemnification. . . . . . . . . . . . . . . . . . . 16
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9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 16
9.1 Successors and Assigns . . . . . . . . . . . . . . . 16
9.2 Amendments . . . . . . . . . . . . . . . . . . . . . 16
9.3 Notices. . . . . . . . . . . . . . . . . . . . . . . 17
9.4 Benefit. . . . . . . . . . . . . . . . . . . . . . . 17
9.5 Governing Law. . . . . . . . . . . . . . . . . . . . 17
TRUST INDENTURE ACT
CROSS-REFERENCE TABLE
Section of Trust Indenture
Act of 1939, Amended Section of Guarantee Agreement
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . . .2.8, 4.1(c)
310(c) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
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) . . . . . . . . . . . . . . . . . . . . . . 1.1, 2.5, 3.2
314(f) . . . . . . . . . . . . . . . . . . . . . . . . .2.1, 3.2
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
316(a) . . . . . . . . . . . . . . . . . . . . . . . . .1.1, 5.4
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2
317(a) . . . . . . . . . . . . . . . . . . . . . Not Applicable
317(b) . . . . . . . . . . . . . . . . . . . . . Not Applicable
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
318(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
318(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
NOTE: This reconciliation shall not for any purpose be deemed
to be part of the Guarantee Agreement.
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This Preferred Securities Guarantee Agreement (the "Preferred
Securities Guarantee"), dated as of _______________ ____, 1998, is executed
by and between National City Bancshares, Inc. (the "Guarantor"), an Indiana
corporation, and Wilmington Trust Company, a Delaware banking corporation,
as trustee (the "Preferred Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of NCBE Capital Trust I ("NCBE Trust"), a Delaware statutory
business trust.
RECITALS:
A. Whereas, pursuant to an Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of ________ __, 1998, among the trustees of
NCBE Trust named therein, the Guarantor, as sponsor, and the holders from
time to time of undivided beneficial interests in the assets of NCBE Trust,
NCBE Trust is issuing on the date hereof ________ preferred securities,
having an aggregate liquidation amount of $______________, designated the
_____% Cumulative Trust Preferred Securities (the "Preferred Securities") and
having the terms set forth in the Trust Agreement;
B. Whereas, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and unconditionally
to agree, to the extent set forth in this Preferred Securities Guarantee, to
pay to the Holders of the Preferred Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and
conditions set forth herein.
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows: in
consideration of the purchase by each Holder of Preferred Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the
Guarantor executes and delivers this Preferred Securities Guarantee for the
benefit of the Holders.
1. DEFINITIONS AND INTERPRETATION.
1.1 DEFINITIONS AND INTERPRETATIONS.
(a) In this Preferred Securities Guarantee, unless the
context otherwise requires:
(1) Capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;
(2) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
<PAGE>
(3) all references to "the Preferred Securities Guarantee"
or "this Preferred Securities Guarantee" are to this Preferred
Securities Guarantee as modified, supplemented or amended from time
to time;
(4) all references in this Preferred Securities Guarantee to
Sections are to Sections of this Preferred Securities Guarantee,
unless otherwise specified;
(5) a term defined in the Trust Indenture Act has the same
meaning when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or unless
the context otherwise requires; and
(6) a reference to the singular includes the plural and vice
versa.
(b) "Additional Senior Obligations" has the same meaning as given
to that term in the Indenture.
(c) "Affiliate" means, with respect to a specified Person, (i) 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, (ii) 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, (iii) any Person directly or indirectly controlling,
controlled by, or under common control with the specified Person, (iv) a
partnership in which the specified Person is a general partner, (v) any
officer or director of the specified Person, and (vi) if the specified
Person is an individual, any entity of which the specified Person is an
officer, director or general partner.
(d) "Business Day" means any day other than (a) a Saturday or
Sunday, (b) a day on which banking institutions in The City of New York
are authorized or required by law or executive order to remain closed,
or (c) a day on which the Corporate Trust Office of the Property
Trustee (as defined in the Trust Agreement) or the Corporate Trust
Office of the Debenture Trustee is closed for business.
(e) "Corporate Trust Office" means the office of the
Preferred Guarantee Trustee at which the corporate trust business of
the Preferred 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, Attn: Corporate Trust Administration.
(f) "Covered Person" means any Holder or beneficial owner of
Preferred Securities.
(g) "Debentures" means the series of subordinated debt securities
of the Guarantor designated the ___% Subordinated Debentures due 2028
issued pursuant to the Indenture.
(h) "Event of Default" means a default by the Guarantor on any
of its payment or other obligations under this Preferred Securities
Guarantee.
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(i) "Guarantee Payments" means the following payments or
distributions without duplication, with respect to the Preferred
Securities, to the extent not paid or made by NCBE Trust: (i) any
accumulated and unpaid Distributions (as defined in the Trust
Agreement) that are required to be paid on such Preferred Securities to
the extent NCBE Trust shall have funds legally and immediately
available therefor, (ii) the redemption price, including all
accumulated and unpaid Distributions to the date of redemption (the
"Redemption Price") to the extent NCBE Trust has funds legally and
immediately available therefor, with respect to any Preferred
Securities called for redemption by NCBE Trust, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of NCBE
Trust (other than in connection with the distribution of Debentures to
the Holders in exchange for Preferred Securities as provided in the
Trust Agreement), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent NCBE Trust shall have
funds legally and immediately available therefor and (b) the amount of
assets of NCBE Trust remaining available for distribution to Holders in
liquidation of NCBE Trust (in either case, the "Liquidation
Distribution").
(j) "Holder" shall mean any holder, as registered on the books
and records of NCBE Trust of any Preferred Securities; provided,
however, that, in determining whether the holders of the requisite
percentage of Preferred Securities have given any request, notice,
consent or waiver hereunder, "Holder" shall not include the Guarantor
or any Affiliate of the Guarantor.
(k) "Indemnified Person" means the Preferred Guarantee Trustee,
any Affiliate of the Preferred Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Preferred Guarantee Trustee.
(l) "Indenture" means the Indenture dated as of ______________,
1998 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 Property Trustee of NCBE Trust.
(m) "Majority in liquidation amount of the Preferred Securities"
means, except as provided by the Trust Indenture Act, Preferred
Securities representing 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 Preferred
Securities.
(n) "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 Preferred Securities
Guarantee shall include:
(1) a statement that each officer signing the
Officers' Certificate has read the covenant or condition
and the definition relating thereto;
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(2) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(3) 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) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
(o) "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.
(p) "Preferred Guarantee Trustee" means Wilmington Trust Company,
until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Preferred
Securities Guarantee and thereafter means each such Successor Preferred
Guarantee Trustee.
(q) "Responsible Officer" means, with respect to the Preferred
Guarantee Trustee, any officer within the Corporate Trust Office of the
Preferred Guarantee Trustee, including any vice-president, any
assistant vice-president, any assistant secretary, the treasurer, any
assistant treasurer or other officer of the Corporate Trust Officer of
the Preferred 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.
(r) "Senior Debt" has the same meaning as given to that term in
the Indenture.
(s) "Successor Preferred Guarantee Trustee" means a successor
Preferred Guarantee Trustee possessing the qualifications to act as
Preferred Guarantee Trustee under Section 4.1.
(t) "Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
2. TRUST INDENTURE ACT.
2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of
this Preferred Securities Guarantee and shall, to the extent
applicable, be governed by such provisions; and
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(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
2.2 LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall provide the Preferred Guarantee Trustee
with a list, in such form as the Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the
Preferred Securities ("List of Holders") as of such date, (i) within 1
Business Day 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 14 days before
such List of Holders is given to the Preferred 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 Preferred Guarantee
Trustee by the Guarantor. The Preferred Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the
Trust Indenture Act.
2.3 REPORTS BY THE PREFERRED GUARANTEE TRUSTEE. Within
60 days after May 15 of each year, the Preferred Guarantee Trustee shall
provide to the Holders of the Preferred 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
Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
2.4 PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE. The
Guarantor shall provide to the Preferred Guarantee Trustee such documents,
reports and information as required by Section 314 (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.
2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide to the Preferred Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Preferred 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) may be given
in the form of an Officers' Certificate.
2.6 EVENTS OF DEFAULT; WAIVER. The Holders of a Majority in
liquidation amount of the Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred 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 Preferred Securities Guarantee, but no
such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
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2.7 EVENT OF DEFAULT; NOTICE.
(a) The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Preferred Securities, notices of
all Events of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee, unless such defaults have been cured
before the giving of such notice; provided, that, except in the case of
a default in the payment of any Guarantee Payment, the Preferred
Guarantee Trustee shall be protected in withholding such notice if and
so long as a Responsible Officer of the Preferred Guarantee Trustee in
good faith determines that the withholding of such notice is in the
interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee
Trustee shall have received written notice thereof, or of which a
Responsible Officer of the Preferred Guarantee Trustee charged with the
administration of the Trust Agreement shall have obtained actual
knowledge.
2.8 CONFLICTING INTERESTS. The Trust Agreement shall be deemed
to be specifically described in this Preferred Securities Guarantee for the
purposes of clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
3. POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE
TRUSTEE.
3.1 POWERS AND DUTIES OF THE PREFERRED GUARANTEE
TRUSTEE.
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the
Preferred Securities, and the Preferred Guarantee Trustee shall not
transfer this Preferred Securities Guarantee to any Person except a
Holder of Preferred Securities exercising his or her rights pursuant to
Section 5.4(b) or to a Successor Preferred Guarantee Trustee on
acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The
right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred 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 Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Preferred Guarantee Trustee has occurred and is
continuing, the Preferred Guarantee Trustee shall enforce this
Preferred Securities Guarantee for the benefit of the Holders of the
Preferred Securities.
(c) The Preferred 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 Preferred Securities Guarantee, and no
implied covenants shall be read into this Preferred Securities
Guarantee against the Preferred Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to
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Section 2.6) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred
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 Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee 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 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 Preferred
Guarantee Trustee shall be determined solely by the
express provisions of this Preferred Securities
Guarantee, and the Preferred Guarantee Trustee shall
not be liable except for the performance of such
duties and obligations as are specifically set forth
in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into
this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of
the Preferred Guarantee Trustee, the Preferred
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 Preferred Guarantee Trustee
and conforming to the requirements of this Preferred
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
Preferred Guarantee Trustee, the Preferred Guarantee
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(2) the Preferred Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer
of the Preferred Guarantee Trustee, unless it shall be proved that
the Preferred Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(3) the Preferred Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the Holders
of not less than a Majority in liquidation amount of the
Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee; and
(4) no provision of this Preferred Securities Guarantee
shall require the Preferred 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 Preferred
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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 Preferred Securities
Guarantee or indemnity, reasonably satisfactory to the Preferred
Guarantee Trustee, against such risk or liability is not
reasonably assured to it.
3.2 CERTAIN RIGHTS OF PREFERRED GUARANTEE
TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(1) The Preferred 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.
(2) Any direction or act of the Guarantor contemplated by
this Preferred Securities Guarantee shall be sufficiently
evidenced by a direction or an Officers' Certificate.
(3) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall
deem it desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the
Preferred 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.
(4) The Preferred Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any instrument
(or any rerecording, refiling or registration thereof).
(5) The Preferred 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 Preferred Guarantee Trustee
shall have the right at any time to seek instructions
concerning the administration of this Preferred Securities
Guarantee from any court of competent jurisdiction.
(6) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it
by this Preferred Securities Guarantee at the request or
direction of any Holder, unless such Holder shall have provided
to the Preferred Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred 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
Preferred Guarantee Trustee; provided that, nothing contained
in this Section 3.2(a)(6) shall be
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taken to relieve the Preferred Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Preferred
Securities Guarantee.
(7) The Preferred 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, requests, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document, but the Preferred Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(8) The Preferred 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 Preferred 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.
(9) Any action taken by the Preferred Guarantee Trustee
or its agents hereunder shall bind the Holders of the Preferred
Securities, and the signature of the Preferred 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 Preferred Guarantee Trustee
to so act or as to its compliance with any of the terms and
provisions of this Preferred Securities Guarantee, both of
which shall be conclusively evidenced by the Preferred
Guarantee Trustee's or its agent's taking such action.
(10) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem
it desirable to receive instructions with respect to enforcing
any remedy or right or taking any other action hereunder, the
Preferred Guarantee Trustee (i) may request instructions from
the Holders of a Majority in liquidation amount of the
Preferred 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 Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred 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 Preferred 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 Preferred
Guarantee Trustee shall be construed to be a duty.
3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Preferred Securities Guarantee shall be taken
as the statements of the Guarantor, and the Preferred Guarantee Trustee does
not assume any responsibility for their correctness. The Preferred Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Preferred Securities Guarantee.
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4. PREFERRED GUARANTEE TRUSTEE.
4.1 PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred
Guarantee Trustee which shall:
(1) not be an Affiliate of the Guarantor; and
(2) 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)(2), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Preferred Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Preferred Guarantee
Trustee shall immediately resign in the manner and with the effect set
out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF
PREFERRED GUARANTEE TRUSTEE.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee
Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred
Guarantee Trustee and delivered to the Guarantor, which resignation shall
not take effect until a Successor Preferred
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Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee
Trustee and delivered to the Guarantor and the resigning Preferred
Guarantee Trustee.
(d) If no Successor Preferred 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 Preferred Guarantee Trustee may petition any court of
competent jurisdiction for appointment of a Successor Preferred Guarantee
Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Preferred Guarantee
Trustee all amounts accrued to the date of such termination, removal or
resignation.
5. GUARANTEE.
5.1 GUARANTEE. The Guarantor irrevocably and
unconditionally agrees to pay in full, on a subordinated basis
as set forth in Section 6, to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by NCBE Trust),
as and when due, regardless of any defense, right of set-off or
counterclaim that NCBE Trust may have or assert, except the
defense of payment. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing
NCBE Trust to pay such amounts to the Holders.
5.2 WAIVER OF NOTICE AND DEMAND. The Guarantor
hereby waives notice of acceptance of this Preferred 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 NCBE Trust or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices
and demands.
5.3 OBLIGATIONS NOT AFFECTED. The obligations,
covenants, agreements and duties of the Guarantor under this
Preferred Securities Guarantee 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 NCBE
Trust of any express or implied agreement, covenant,
term or condition relating to the Preferred Securities
to be performed or observed by NCBE Trust;
(b) the extension of time for the payment by
NCBE Trust of all or any portion of the Distributions,
Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred
Securities or the extension of time for the
performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities
(other than an
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extension of time for payment of Distributions 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 Preferred Securities, or any action on the part
of NCBE Trust granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership,
insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings
affecting, NCBE Trust or any of the assets of NCBE
Trust;
(e) any invalidity of, or defect or deficiency
in, the Preferred Securities;
(f) the settlement or compromise of any
obligation guaranteed hereby or hereby incurred; or
(g) any other circumstances whatsoever that
might otherwise constitute a legal or equitable
discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give
notice to, or obtain the consent of, the Guarantor with respect
to the happening of any of the foregoing.
5.4 RIGHTS OF HOLDERS.
(a) The Holders of a Majority in liquidation
amount of the Preferred Securities have the right to
direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred
Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under
this Preferred Securities Guarantee.
(b) Any Holder of Preferred Securities may
institute a legal proceeding directly against the
Guarantor to enforce its rights under this Preferred
Securities Guarantee, without first instituting a
legal proceeding against NCBE Trust, the Preferred
Guarantee Trustee or any other Person.
5.5 GUARANTEE OF PAYMENT. This Preferred
Securities Guarantee creates a guarantee of payment and not of
collection. This Preferred Securities Guarantee will not be
discharged except by payment of the Guarantee Payments in full
(without duplication of amounts theretofore paid by NCBE Trust)
or upon the distribution of the Debentures to the Holders as
provided in the Trust Agreement.
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5.6 SUBROGATION. The Guarantor shall be
subrogated to all (if any) rights of the Holders of Preferred
Securities against NCBE Trust in respect of any amounts paid to
such Holders by the Guarantor under this Preferred 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
Preferred Securities Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this Preferred
Securities Guarantee or any payments are due to the Holder of
the Preferred Securities under the Trust Agreement. If any
amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the
Holders.
5.7 INDEPENDENT OBLIGATIONS. The Guarantor
acknowledges that its obligations hereunder are independent of
the obligations of NCBE Trust with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal
and as debtor hereunder to make Guarantee Payments pursuant to
the terms of this Preferred Securities Guarantee notwithstanding
the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
6. LIMITATION OF TRANSACTIONS; SUBORDINATION.
6.1 LIMITATION OF TRANSACTIONS. So long as any
Preferred Securities remain outstanding, if there shall have
occurred an Event of Default or an event of default under the
Trust Agreement, then (a) the Guarantor shall not declare or pay
any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, (b) the Guarantor shall
not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities (including
guarantees) issued by the Guarantor which rank pari passu with
or junior to the Debentures or (c) the Guarantor shall not make
any guarantee payments with respect to the foregoing (other than
pursuant to the Preferred Securities Guarantee); provided,
however, the Guarantor may declare and pay a stock dividend
where the dividend stock is the same stock as that on which the
dividend is being paid.
6.2 RANKING. This Preferred Securities
Guarantee will constitute an unsecured obligation of the
Guarantor and will rank (i) subordinate and junior in right of
payment to all Senior Debt and Additional Senior Obligations of
the Guarantor, (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.
7. TERMINATION.
7.1 TERMINATION. This Preferred Securities
Guarantee shall terminate upon (i) full payment of the
Redemption Price of all Preferred Securities, (ii) upon full
payment of the amounts payable in accordance with the Trust
Agreement upon liquidation of NCBE Trust or (iii) upon
distribution of the Debentures to the holders of the Preferred
Securities. Notwithstanding the foregoing, this
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<PAGE>
Preferred Securities Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any
Holder of Preferred Securities must restore payment of any
sums paid under the Preferred Securities or under this
Preferred Securities Guarantee.
8. INDEMNIFICATION.
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 Preferred
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 Preferred 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 Preferred Securities
might properly be paid.
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 Preferred Securities Guarantee.
9. MISCELLANEOUS.
9.1 SUCCESSORS AND ASSIGNS. All guarantees and
agreements contained in this Preferred 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 Preferred Securities then outstanding.
9.2 AMENDMENTS. Except with respect to any
changes that do not materially adversely affect the rights of
Holders (in which case no consent of the Holders will be
required), this Preferred
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<PAGE>
Securities Guarantee may only be amended with the prior
approval of the Holders of at least a Majority in 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 the outstanding Preferred Securities.
The provisions of Section 6 of the Trust Agreement with
respect to meetings of Holders of the Preferred Securities
shall apply to the giving of such approval.
9.3 NOTICES. All notices provided for in this
Preferred 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 Preferred Guarantee Trustee,
at the Preferred Guarantee Trustee's mailing address
set forth below (or such other address as the
Preferred Guarantee Trustee may give notice of to the
Holders of the Preferred Securities):
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn: Corporate Trust Administration
(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 Preferred Securities):
National City Bancshares, Inc.
227 Main Street
P.O. Box 868
Evansville, Indiana 47705-0868
Attn: Chief Executive Officer
(c) If given to any Holder of Preferred
Securities, at the address set forth on the books and
records of NCBE 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.
9.4 BENEFIT. This Preferred Securities
Guarantee is solely for the benefit of the Holders of the
Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
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<PAGE>
9.5 GOVERNING LAW. This Preferred Securities
Guarantee shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Indiana (without
regard for conflicts of laws principles).
In Witness Whereof, the parties have entered into this
Agreement as of the date first written above.
National City Bancshares, Inc.,
as Guarantor
By:_______________________________________
Title:______________________________________
Wilmington Trust Company,
not in its individual capacity,
but solely as Preferred Guarantee
Trustee
By:_______________________________________
Title:______________________________________
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<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF BAKER & DANIELS]
March 12, 1998
Board of Directors
National City Bancshares, Inc.
227 Main Street
P.O. Box 868
Evansville, Indiana 47705-0868
Ladies and Gentlemen:
We have acted as counsel to National City Bancshares, Inc., an Indiana
corporation (the "Company"), and NCBE Capital Trust I, a Delaware statutory
business trust (the "Trust"), in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"), which is being jointly filed by
the Company and the Trust with the Securities and Exchange Commission (the
"SEC") for the purpose of registering under the Act the issuance and sale of the
Trust's Cumulative Trust Preferred Securities (the "Preferred Securities").
Capitalized terms not defined herein shall have the meanings given such terms in
the Registration Statement.
We have examined the (i) the Certificate of Trust of the Trust as filed
with the Secretary of State of the State of Delaware on February 12, 1998, (ii)
the Trust Agreement of the Trust dated February 12, 1998, (iii) the form of the
Amended and Restated Trust Agreement of the Trust, (iv) the form of the
Preferred Securities, (v) the form of the Guarantee, (vi) the form of the
Indenture, and (vii) the form of the Subordinated Debentures to be issued by the
Company. We have also examined originals or copies, certified, or otherwise
identified to our satisfaction, of such other documents, certificates, and
records as we have deemed necessary or appropriate as a basis for the opinions
set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Company or the Trust, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and that, except as set forth in paragraphs (1) and
(2) below, such documents constitute valid and binding obligations of such
parties. In addition, we have assumed that the Amended and Restated Trust
Agreement of the Trust, the Preferred Securities, the Guarantee, the Indenture
and the Subordinated Debentures, when executed, will be executed in
substantially the forms filed as exhibits to the Registration Statement with
only such modifications which are accepted by us. As to any facts material to
the opinions expressed herein which were not independently established or
verified, we have relied upon oral or written statements and representations of
officers, trustees, and other representatives of the Company, the Trust and
others.
Based upon and subject to the foregoing and to other qualifications and
limitations set forth herein, we are of the opinion that:
1. After the Indenture has been duly executed and delivered, the
Subordinated Debentures, when duly executed, delivered, authenticated and issued
in accordance with the Indenture and delivered and paid for as contemplated by
the Registration Statement, will be valid and binding obligations of the
Company, entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency, fraudulent conveyance or
transfer, reorganization, rearrangement, receivership,
<PAGE>
moratorium, or other laws and matters of public policy now or hereafter in
effect relating to or affecting creditors' rights generally, and (ii) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).
2. The Guarantee, when duly executed and delivered by the parties
thereto, will be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization, rearrangement, receivership, moratorium,
or other laws and matters of public policy now or hereafter in effect relating
to or affecting creditors' rights generally, and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity).
To the extent that laws other than the laws of the State of Indiana or the
federal laws of the United States are applicable to any of the transactions,
agreements, or instruments referred to herein, we express no opinion on such
laws.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Matters" in the Prospectus forming a part of the Registration Statement. This
consent is not to be construed as an indication that we are a person whose
consent is required to be filed with the Registration Statement under the
provisions of the Act or the Rules and Regulations of the SEC promulgated
thereunder.
Very truly yours,
BAKER & DANIELS
<PAGE>
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger, P.A.]
March 12, 1998
NCBE Capital Trust I
c/o National City Bancshares, Inc.
227 Main Street
P.O. Box 868
Evansville, Indiana 47705-0868
Re: NCBE CAPITAL TRUST I
Ladies and Gentlemen:
We have acted as special Delaware counsel for National City Bancshares,
Inc., an Indiana corporation (the "Company"), and NCBE Capital Trust 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 February 12, 1998 (the
"Certificate"), as filed in the office of the Secretary of State of the State of
Delaware (the "Secretary of State") on February 12, 1998;
(b) The Trust Agreement of the Trust, dated as of February 12, 1998, among
the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a preliminary prospectus (the "Prospectus"), relating to the __%
Cumulative Trust Preferred Securities of the Trust representing preferred
undivided beneficial interests in the assets of the Trust (each, a "Preferred
Security" and collectively, the "Preferred Securities"), as proposed to be filed
by the Company and the Trust with the Securities and Exchange Commission on or
about March 12, 1998;
(d) A form of Amended and Restated Trust Agreement of the Trust (including
Exhibits A, C and E thereto) (the "Trust Agreement"), to be entered into among
the Company, the trustees of the Trust named therein, and the holders, from time
to time, of undivided beneficial interests in the assets of the Trust, filed as
an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated March 12, 1998,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are used
as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other than
the documents listed 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
<PAGE>
the foregoing documents, the statements and information set forth therein and
the additional matters recited or assumed herein, all of which we have assumed
to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust Agreement
and the Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Preferred Security is to be issued by the Trust (collectively, the "Preferred
Security Holders") of a Preferred Securities Certificate for such Preferred
Security and the payment for the Preferred Security acquired by it, in
accordance with the Trust Agreement and the Registration Statement, and (vii)
that the Preferred Securities are issued and sold to the Preferred Security
Holders in accordance with the Trust Agreement and the Registration Statement.
We have not participated in the preparation of the Registration Statement and
assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding the
securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder that are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. The Preferred 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 Preferred 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 Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
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, P.A.
<PAGE>
EXHIBIT 8.1
[LETTERHEAD OF BAKER & DANIELS]
March 12, 1998
Board of Directors
National City Bancshares, Inc.
227 Main Street
P.O. Box 868
Evansville, Indiana 47705-0868
Ladies and Gentlemen:
We have acted as counsel to National City Bancshares, Inc., an Indiana
corporation (the "Company"), and NCBE Capital Trust I, a Delaware statutory
business trust (the "Trust"), in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act") which is being jointly filed by
the Company and the Trust with the Securities and Exchange Commission ("SEC")
for the purpose of registering under the Act the issuance and sale of the
Trust's Convertible Preferred Securities (the "Preferred Securities"). In that
connection, you have requested our opinion as to the federal income tax
consequences of the purchase, ownership and disposition of the Preferred
Securities. Capitalized terms not defined herein shall have the meanings given
such terms in the Registration Statement.
We have examined (i) the Certificate of Trust of the Trust filed with the
Secretary of State of the State of Delaware on February 12, 1998, (ii) the Trust
Agreement of the Trust dated February 12, 1998, (iii) the form of the Amended
and Restated Trust Agreement of the Trust, (iv) the form of the Preferred
Securities, (v) the form of the Guarantee, (vi) the form of the Indenture, and
(vii) the form of the Subordinated Debentures. Our opinion is based upon the
premise that the transactions will be consummated in accordance with the
documents in substantially the forms filed as exhibits to the Registration
Statement with only such modifications which are accepted by us.
In our opinion, for federal income tax purposes, the Trust will be
classified as a grantor trust, and not as an association taxable as a
corporation.
We have also reviewed the discussion set forth under the heading "Certain
Federal Income Tax Consequences" in the Registration Statement. While that
discussion does not purport to discuss all possible United States federal income
tax consequences of the purchase, ownership and disposition of Preferred
Securities, in our opinion, such discussion constitutes, in all material
respects, a fair and accurate summary of the United States federal income tax
consequences of the purchase, ownership and disposition of the Preferred
Securities.
The foregoing opinions are based on current provisions of the Internal
Revenue Code of 1986, as amended, the Treasury Regulations promulgated
thereunder, published pronouncements of the Internal Revenue Service and other
relevant authorities, all of which are subject to change. Accordingly, no
assurance can be given that the Internal Revenue Service will not alter its
present views, either prospectively or retroactively, or adopt new views with
regard to any of the matters upon which we are rendering an opinion, nor can any
assurance be given that the Internal Revenue Service will not challenge the
positions which the Company or the Trust intends to take. No opinions are
expressed concerning any matters other than those specifically addressed herein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the headings "Certain
Federal Income Tax Consequences" and "Legal Matters" in the Prospectus forming a
part of the Registration Statement. This consent is not to be construed as an
indication that we are a person whose
<PAGE>
consent is required to be filed with the Registration Statement under the
provisions of the Act, or the Rules and Regulations of the SEC promulgated
thereunder.
Very truly yours,
BAKER & DANIELS
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Prospectus forming a
part of the Registration Statement on Form S-3 filed by National City
Bancshares, Inc. and NCBE Capital Trust I of our report dated February 5, 1998,
on our audits of the consolidated statements of financial position of National
City Bancshares, Inc. and subsidiaries as of December 31, 1997 and 1996, and the
related consolidated statements of income, shareholders' equity, and cash flows
for each of the three years ended December 31, 1997, which are incorporated by
reference in the December 31, 1997 Form 10-K of National City Bancshares, Inc.
and to the reference to our firm under the heading "Experts" in the Prospectus.
McGLADREY & PULLEN, LLP
Champaign, Illinois
March 12, 1998
<PAGE>
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)
NATIONAL CITY BANCSHARES, INC.
NCBE CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Indiana 35-1632155
Delaware
(State of incorporation) (I.R.S. employer identification no.)
227 Main Street
P.O. Box 868
Evansville, Indiana 47705-0868
(Address of principal executive offices) (Zip Code)
NCBE Capital Trust I Preferred Securities
(Title of the indenture securities)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
2
<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 9th day
of March, 1998.
WILMINGTON TRUST COMPANY
[SEAL]
Attest:/s/ Patricia A. Evans By:/s/ Norma P. Closs
------------------------------ --------------------------
Assistant Secretary Name: Norma P. Closs
3
<PAGE>
Title: Vice President
4
<PAGE>
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.
2
<PAGE>
(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
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on any other class or classes, or series of the same or other class of
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 such
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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.
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(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."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
<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. The Board of Directors 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
<PAGE>
at the call of the Chairman of the Board of Directors 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
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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 such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(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. The Vice Chairman of the Board
of
5
<PAGE>
Directors shall preside at all 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 any
7
<PAGE>
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 though
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
9
<PAGE>
was not entitled to the requested indemnification of payment of expenses 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: March 9, 1998 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 December 31, 1997.
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins. . . . . . . . . 236,646
Interest-bearing balances. . . . . . . . . . . . . . . . . . . . . . . . 0
Held-to-maturity securities. . . . . . . . . . . . . . . . . . . . . . . . 331,880
Available-for-sale securities. . . . . . . . . . . . . . . . . . . . . . . 1,258,661
Federal funds sold and securities purchased under agreements to resell . . 91,500
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 3,822,320
LESS: Allowance for loan and lease losses. . . . . . 59,373
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve . . 3,762,947
Assets held in trading accounts. . . . . . . . . . . . . . . . . . . . . . . . . 0
Premises and fixed assets (including capitalized leases) . . . . . . . . . . 129,740
Other real estate owned. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,106
Investments in unconsolidated subsidiaries and associated companies. . . . . . . 22
Customers' liability to this bank on acceptances outstanding . . . . . . . . . . 0
Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,905
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,799
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,919,206
CONTINUED ON NEXT PAGE
</TABLE>
<PAGE>
<TABLE>
LIABILITIES
<S> <C> <C>
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,034,633
Noninterest-bearing . . . . . . . . 839,928
Interest-bearing. . . . . . . . . 3,194,705
Federal funds purchased and Securities sold under agreements to repurchase . . . . . . 575,827
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . . . . . 61,290
Trading liabilities (from Schedule RC-D) . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other borrowed money:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ///////
With original maturity of one year or less . . . . . . . . . . . . . . . . . . . 673,000
With original maturity of more than one year . . . . . . . . . . . . . . . . . . 43,000
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . . . . . . . 0
Subordinated notes and debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other liabilities (from Schedule RC-G) . . . . . . . . . . . . . . . . . . . . . . . . 76,458
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,464,208
EQUITY CAPITAL
Perpetual preferred stock and related surplus. . . . . . . . . . . . . . . . . . . . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Surplus (exclude all surplus related to preferred stock) . . . . . . . . . . . . . . . . 62,118
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . . . . . . . . 385,018
Net unrealized holding gains (losses) on available-for-sale securities . . . . . . . . . 7,362
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454,998
Total liabilities, limited-life preferred stock, and equity capital. . . . . . . . . 5,919,206
</TABLE>
2
<PAGE>
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)
NATIONAL CITY BANCSHARES, INC.
(Exact name of obligor as specified in its charter)
Indiana 35-1632155
(State of incorporation) (I.R.S. employer identification no.)
227 Main Street
P.O. Box 868
Evansville, Indiana 47705-0868
(Address of principal executive offices) (Zip Code)
National City Bancshares, Inc. Guarantee
(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 9th day
of March, 1998.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Patricia A. Evans By: /s/ Norma P. Closs
----------------------- -----------------------
Assistant Secretary Name: Norma P. Closs
2
<PAGE>
Title: Vice President
3
<PAGE>
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.
2
<PAGE>
(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
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on any other class or classes, or series of the same or other class of
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 such
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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.
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(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."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
<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. The Board of Directors 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
<PAGE>
at the call of the Chairman of the Board of Directors 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 such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(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. The Vice Chairman of the Board
of
5
<PAGE>
Directors shall preside at all 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 any
7
<PAGE>
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 though
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
9
<PAGE>
was not entitled to the requested indemnification of payment of expenses 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: March 9, 1998 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 December 31, 1997.
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins . . . . . . . . . . . . . .236,646
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Held-to-maturity securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331,880
Available-for-sale securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,258,661
Federal funds sold and securities purchased under agreements to resell . . . . . . . . . . 91,500
Loans and lease financing receivables:
Loans and leases, net of unearned income.......3,822,320
LESS: Allowance for loan and lease losses..... 59,373
LESS: Allocated transfer risk reserve......... 0
Loans and leases, net of unearned income, allowance, and reserve. . . . . . .3,762,947
Assets held in trading accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0
Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . . . . . .129,740
Other real estate owned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,106
Investments in unconsolidated subsidiaries and associated companies. . . . . . . . . . . . .. 22
Customers' liability to this bank on acceptances outstanding . . . . . . . . . . . . . . . . . .0
Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4,905
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100,799
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5,919,206
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4,034,633
Noninterest-bearing .......... 839,928
Interest-bearing............. 3,194,705
Federal funds purchased and Securities sold under agreements to repurchase . . . . . . . 575,827
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . . . . . . . 61,290
Trading liabilities (from Schedule RC-D) . . . . . . . . . . . . . . . . . . . . . . . . . . . .0
Other borrowed money:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .///////
With original maturity of one year or less. . . . . . . . . . . . . . . . . . .673,000
With original maturity of more than one year. . . . . . . . . . . . . . . . . . 43,000
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . . . . . . . . .0
Subordinated notes and debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0
Other liabilities (from Schedule RC-G) . . . . . . . . . . . . . . . . . . . . . . . . . 76,458
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5,464,208
</TABLE>
EQUITY CAPITAL
<TABLE>
<S> <C>
Perpetual preferred stock and related surplus. . . . . . . . . . . . . . . . . . . . . . . . . .0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .500
Surplus (exclude all surplus related to preferred stock) . . . . . . . . . . . . . . . . . 62,118
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . .385,018
Net unrealized holding gains (losses) on available-for-sale securities . . . . . . . . . . .7,362
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .454,998
Total liabilities, limited-life preferred stock, and equity capital. . . . . . . . . . .5,919,206
</TABLE>
2
<PAGE>
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)
NATIONAL CITY BANCSHARES, INC.
(Exact name of obligor as specified in its charter)
Indiana 35-1632155
(State of incorporation) (I.R.S. employer identification no.)
227 Main Street
P.O. Box 868
Evansville, Indiana 47705-0868
(Address of principal executive offices) (Zip Code)
National City Bancshares, Inc. Subordinated Debentures
(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 9th day
of March, 1998.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Patricia A. Evans By: /s/ Norma P. Closs
------------------------------ -----------------------
Assistant Secretary Name: Norma P. Closs
2
<PAGE>
Title: Vice President
3
<PAGE>
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
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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
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on any other class or classes, or series of the same or other class of
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 such
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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.
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(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."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
<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. The Board of Directors 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
<PAGE>
at the call of the Chairman of the Board of Directors 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 such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(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. The Vice Chairman of the Board
of
5
<PAGE>
Directors shall preside at all 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 any
7
<PAGE>
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 though
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
9
<PAGE>
was not entitled to the requested indemnification of payment of expenses 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: March 9, 1998 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 December 31, 1997.
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins . . . . . . . . . . . . 236,646
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Held-to-maturity securities. . . . . . . . . . . . . . . . . . . . . . . . . . . 331,880
Available-for-sale securities. . . . . . . . . . . . . . . . . . . . . . . . . . 1,258,661
Federal funds sold and securities purchased under agreements to resell . . . . . . 91,500
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 3,822,320
LESS: Allowance for loan and lease losses. . . . . . 59,373
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve. . . . . . 3,762,947
Assets held in trading accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . 129,740
Other real estate owned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,106
Investments in unconsolidated subsidiaries and associated companies. . . . . . . . . 22
Customers' liability to this bank on acceptances outstanding . . . . . . . . . . . . . 0
Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,905
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,799
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,919,206
CONTINUED ON NEXT PAGE
</TABLE>
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,034,633
Noninterest-bearing . . . . . . . . 839,928
Interest-bearing. . . . . . . . . . 3,194,705
Federal funds purchased and Securities sold under agreements to repurchase . . . 575,827
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . . 61,290
Trading liabilities (from Schedule RC-D) . . . . . . . . . . . . . . . . . . . . . . . 0
Other borrowed money:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ///////
With original maturity of one year or less. . . . . . . . . . . . . . . . . 673,000
With original maturity of more than one year. . . . . . . . . . . . . . . . 43,000
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . . . . 0
Subordinated notes and debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other liabilities (from Schedule RC-G) . . . . . . . . . . . . . . . . . . . . . 76,458
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,464,208
EQUITY CAPITAL
Perpetual preferred stock and related surplus. . . . . . . . . . . . . . . . . . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Surplus (exclude all surplus related to preferred stock) . . . . . . . . . . . . 62,118
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . . . . . 385,018
Net unrealized holding gains (losses) on available-for-sale securities . . . . . . 7,362
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454,998
Total liabilities, limited-life preferred stock, and equity capital. . . . . . . 5,919,206
</TABLE>
2
