As filed with the Securities and Exchange Commission on January 22, 1997
REGISTRATION NO. 333-19365
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WACHOVIA CORPORATION NORTH CAROLINA 56-1473727
WACHOVIA CAPITAL TRUST II DELAWARE [ ]
WACHOVIA CAPITAL TRUST III DELAWARE [ ]
WACHOVIA CAPITAL TRUST IV DELAWARE [ ]
(EXACT NAME OF EACH REGISTRANT (State or other jurisdiction of
AS SPECIFIED IN ITS CHARTER) incorporation or organization) (I.R.S. Employer
Identification No.)
100 North Main Street 191 PEACHTREE STREET, N.E.
Winston-Salem, North Carolina 27101 AND ATLANTA, GEORGIA 30303
(910) 732-5141 (404) 332-5000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
KENNETH W. MCALLISTER
WACHOVIA CORPORATION
100 NORTH MAIN STREET
WINSTON-SALEM, NORTH CAROLINA 27101
(910) 732-5141
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
DANIEL M. ROSSNER
BROWN & WOOD LLP
ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 839-5300
Approximate date of commencement of proposed sale
to the public: From time to time after this
Registration Statement becomes effective.
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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 ("Securities Act"), other than Securities
offered only in connection with dividend or interest reinvestment plans, check
the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) PRICE(1) REGISTRATION FEE(2)
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<S> <C> <C> <C> <C>
Junior Subordinated Deferrable Interest Debentures
of Wachovia Corporation(3) ......................... $300,000,000 $25 $300,000,000 N/A
Preferred Securities of Wachovia Capital Trusts II,
III, and IV, severally ("Preferred Securities")(3).... 12,000,000 $25 $300,000,000 $90,909.00
Guarantees (the "Guarantees") of Preferred Securities
of Wachovia Capital Trusts II, III and IV by Wachovia
Corporation(4)(5)................................ N/A N/A N/A N/A
===========================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee, exclusive
of accrued interest and dividends, if any.
(2) Calculated pursuant to Rule 457. $90,605.97 of the registration fee is
being paid herewith and $303.03 of such fee has previously been paid.
(3) The Junior Subordinated Deferrable Interest Debentures of Wachovia
Corporation will be purchased by Wachovia Capital Trust II, Wachovia
Capital Trust III and Wachovia Capital Trust IV with the proceeds of the
sale of the Preferred Securities.
(4) No separate consideration will be received for any Guarantee or any other
obligations
(5) This Registration Statement is deemed to cover the Junior Subordinated
Deferrable Interest Debentures of Wachovia Corporation, the rights of
holders of the Junior Subordinated Deferrable Interest Debentures of
Wachovia Corporation under the Indenture, the rights of the holder of the
Preferred Securities of Wachovia Capital Trust II, Wachovia Capital Trust
III and Wachovia Capital Trust IV under each Declaration, the rights of
holders of Preferred Securities under the Guarantees, which taken together,
fully irrevocably and unconditionally guarantee all of the respective
obligations of Wachovia Capital Trust II, Wachovia Capital Trust III and
Wachovia Capital Trust IV under the Preferred Securities.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED JANUARY 22, 1997
PROSPECTUS SUPPLEMENT
(To Prospectus Dated January , 1997)
$[ ]
WACHOVIA CAPITAL TRUST II
[ ]% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $25 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
WACHOVIA CORPORATION
---------------------------
The [ ]% Capital Securities (the "Capital Securities"), offered hereby
represent preferred beneficial interests in Wachovia Capital Trust II, a
statutory business trust formed under the laws of the State of Delaware (the
"Trust"). Wachovia Corporation, a North Carolina corporation ("Wachovia" or the
"Corporation"), will be the owner of all the beneficial interests represented by
common securities of the Trust (the "Common Securities" and, together with the
Capital Securities, the "Trust Securities"). The
(Continued on next page)
---------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE S-6 HEREOF
FOR CERTAIN INFORMATION RELEVANT TO AN
INVESTMENT IN THE CAPITAL SECURITIES.
---------------------------
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------------
UNDERWRITING PROCEEDS TO
PRICE TO COMMISSIONS THE TRUST
PUBLIC(1) AND DISCOUNTS(2) (3)(4)
-----------------------------------------------------
Per Capital Security...... $25 (3) $25
Total ..................... $ (3) $
- ---------------
(1) Plus accrued distributions from ____________, 1997.
(2) The Trust and the Corporation have each agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(3) In view of the fact that the proceeds of the sale of the Capital Securities
will be invested in the Junior Subordinated Debentures, the Corporation has
agreed to pay to the Underwriters as compensation for their arranging the
investment therein of such proceeds $ per Capital Security (or
$ in the aggregate). See "Underwriting."
(4) Expenses of the offering which are payable by the Corporation are estimated
to be $ .
---------------------------
The Capital Securities are offered, subject to prior sale, when, as and if
accepted by the Underwriters named herein and subject to their right to reject
orders in whole or in part. It is expected that delivery of the Capital
Securities will be made on or about _____________, 1997 through the book entry
facilities of The Depository Trust Company in New York, New York, against
payment therefor in immediately available funds.
---------------------------
January __, 1997.
<PAGE>
(cover page continued)
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER- ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CAPITAL
SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER THE COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
---------------------------
Trust exists for the sole purpose of issuing the Trust Securities and investing
the proceeds thereof in % Junior Subordinated Deferrable Interest Debentures
(the "Junior Subordinated Debentures"), to be issued by the Corporation. The
Junior Subordinated Debentures will mature on [ ] (such date, the "Stated
Maturity Date"). The Capital Securities will have a preference over the Common
Securities under certain circumstances with respect to cash distributions and
amounts payable on liquidation, redemption or otherwise. See "Description of
Preferred Securities--Subordination of Common Securities" in the accompanying
Prospectus.
Holders of the Trust Securities will be entitled to receive cumulative
cash distributions, accumulating from the date of original issuance and payable
semi-annually in arrears on [ ] and [ ] of each year, commencing [ ], at the
annual rate of [ ]% of the Liquidation Amount of $25 per Capital Security
("Distributions"). So long as no Debenture Event of Default (as defined herein)
has occurred and is continuing, the Corporation will have the right to defer
payments of interest on the Junior Subordinated Debentures at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each deferral period (each, an "Extension Period"), provided that no
Extension Period may extend beyond the Stated Maturity Date of the Junior
Subordinated Debentures. Upon the termination of any such Extension Period and
the payment of all amounts then due, the Corporation may elect to begin a new
Extension Period subject to the requirements set forth herein. If and for so
long as interest payments on the Junior Subordinated Debentures are so deferred,
Distributions on the Trust Securities will also be deferred and the Corporation
will not be permitted, subject to certain exceptions described herein, to
declare or pay any cash distributions with respect to the Corporation's capital
stock (which includes common and preferred stock) or to make any payment with
respect to debt securities of the Corporation that rank PARI PASSU with or
junior to the Junior Subordinated Debentures. During an Extension Period,
interest on the Junior Subordinated Debentures will continue to accrue (and the
amount of Distributions to which holders of the Trust Securities are entitled
will continue to accumulate) at the rate of [ ]% per annum, compounded
semi-annually, and holders of Trust Securities will be required to accrue
interest income for United States federal income tax purposes. See "Description
of Junior Subordinated Debentures--Option to Extend Interest Payment Date" and
"Certain Federal Income Tax Considerations--Interest Income and Original Issue
Discount."
The Corporation will, through the Guarantee, the Common Guarantee, the
Declaration, the Junior Subordinated Debentures and the Indenture (each as
defined herein), taken together, fully, irrevocably and unconditionally
guarantee all of the Trust's obligations under the Trust
S-2
<PAGE>
Securities. See "Relationship Among the Preferred Securities, the Corresponding
Junior Subordinated Debentures and the Guarantees--Full and Unconditional
Guarantee" in the accompanying Prospectus. The Guarantee and the Common
Guarantee will guarantee the payments of Distributions and payments on
liquidation or redemption of the Trust Securities, but in each case only to the
extent that the Trust holds funds on hand legally available therefor and has
failed to make such payments, as described herein. See "Description of
Guarantees" in the accompanying Prospectus. If the Corporation fails to make a
required payment on the Junior Subordinated Debentures, the Trust will not have
sufficient funds to make the related payments, including Distributions on the
Trust Securities. The Guarantee and the Common Guarantee will not cover any such
payment when the Trust does not have sufficient funds legally available
therefor. In such event, a holder of Capital Securities may institute a legal
proceeding directly against the Corporation to enforce payment to such holder of
accrued but unpaid interest on Junior Subordinated Debentures with a principal
amount equal to the Liquidation Amount of the
Capital Securities held by such holder. See "Description of Junior Subordinated
Debentures--Enforcement of Certain Rights By Holders of Preferred Securities" in
the accompanying Prospectus. The obligations of the Corporation under the
Guarantee and the Junior Subordinated Debentures will be unsecured and
subordinate and rank junior in right of payment to the extent and in the
manner set forth in the Indenture to all Senior Indebtedness of
the Corporation (as defined in "Description of Junior Subordinated
Debentures--Subordination" in the accompanying Prospectus), which totalled
approximately $1.635 billion at September 30, 1996 (exclusive of $200,000,000 of
6.625% Senior Notes due November 15, 2006 which were issued by the Corporation
on November 12, 1996).
The Trust Securities will be subject to mandatory redemption in a Like
Amount (as defined herein), (i) in whole but not in part, on the Stated Maturity
Date upon repayment of the Junior Subordinated Debentures at a redemption price
equal to the principal amount of, plus accrued interest on, the Junior
Subordinated Debentures (the "Maturity Redemption Price"), (ii) in whole but not
in part, at any time before [ ], contemporaneously with the optional prepayment
of the Junior Subordinated Debentures, upon the occurrence and continuation of a
Special Event (as defined herein) at a redemption price equal to the Special
Event Prepayment Price (as defined herein) (the "Special Event Redemption
Price"), and (iii) in whole or in part, on or after [ ], contemporaneously with
the optional prepayment by the Corporation of the Junior Subordinated
Debentures, at a redemption price equal to the Optional Prepayment Price (as
defined herein) (the "Optional Redemption Price"). Any of the Maturity
Redemption Price, the Special Event Redemption Price and the Optional Redemption
Price may be referred to herein as the "Redemption Price." See "Description of
Capital Securities--Redemption" and "Description of the Junior Subordinated
Debentures--Optional Prepayment" and "--Special Event Prepayment."
Subject to the Corporation having received prior approval of the Board
of Governors of the Federal Reserve System (the "Federal Reserve"), if then
required under applicable capital guidelines or policies of the Federal Reserve,
the Junior Subordinated Debentures will be prepayable prior to the Stated
Maturity Date at the option of the Corporation (i) on or after [
], in whole or in part, at a prepayment price (the "Optional
Prepayment Price") equal to [ ]% of the principal amount thereof on [ ] (the
"Initial Optional Prepayment
S-3
<PAGE>
Date"), declining ratably on each [ ] thereafter to 100% on or after [ ], plus
accrued interest thereon to the date of prepayment, or (ii) at any time before [
], in whole but not in part, upon the occurrence and continuation of a Special
Event, at a prepayment price (the "Special Event Prepayment Price") equal to the
greater of (a) 100% of the principal amount thereof or (b) the sum, as
determined by a Quotation Agent (as defined herein), of the present values of
the principal amount and premium payable as part of the Optional Prepayment
Price with respect to an optional redemption of such Junior Subordinated
Debentures on [
], together with scheduled payments of interest from the prepayment
date to the Initial Optional Prepayment Date, in each case discounted to the
prepayment date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined herein) plus, in
either case, accrued and unpaid interest thereon to the date of prepayment.
Either of the Optional Prepayment Price or the Special Event Prepayment Price
may be referred to herein as the "Prepayment Price." See "Description of Junior
Subordinated Debentures--Optional Prepayment" and "--Special Event Prepayment."
The Corporation, as the direct or indirect holder of the outstanding
Common Securities, will have the right at any time to terminate the Trust and
cause a Like Amount of the Junior Subordinated Debentures to be distributed to
the holders of the Trust Securities in liquidation of the Trust, subject to (i)
the Corporation having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of the Capital Securities
and (ii) the prior approval of the Federal Reserve, if then required under
applicable capital guidelines or policies of the Federal Reserve. Unless the
Junior Subordinated Debentures are distributed to the holders of the Trust
Securities, in the event of a liquidation of the Trust as described herein,
after satisfaction of liabilities to creditors of the Trust as required by
applicable law, the holders of the Capital Securities generally will be entitled
to receive a Liquidation Amount of $25 per Capital Security plus accumulated and
unpaid Distributions thereon to the date of payment. See "Description of
Preferred Securities--Liquidation Distribution upon Termination" in the
accompanying Prospectus and "Certain Federal Income Tax Considerations--Receipt
of Junior Subordinated Debentures or Cash Upon Liquidation of the Trust."
S-4
<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN
THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE CORPORATION, THE TRUST OR THE
UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER
SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION OR THE TRUST SINCE
THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO
NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR
TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
---------------------------
The information in this Prospectus Supplement supplements, and should
be read in conjunction with, the information contained in the accompanying
Prospectus. AS USED HEREIN, (I) THE "INDENTURE" MEANS THE INDENTURE, TO BE DATED
AS OF [JANUARY __, 1997] (THE "ORIGINAL INDENTURE"), AS AMENDED AND SUPPLEMENTED
FROM TIME TO TIME, BETWEEN THE CORPORATION AND THE FIRST NATIONAL BANK OF
CHICAGO, AS TRUSTEE (THE "DEBENTURE TRUSTEE"), AS SUPPLEMENTED BY THE
SUPPLEMENTAL INDENTURE, TO BE DATED [JANUARY __, 1997] (THE "FIRST SUPPLEMENTAL
INDENTURE" AND TOGETHER WITH THE ORIGINAL INDENTURE, THE "INDENTURE") RELATING
TO THE JUNIOR SUBORDINATED DEBENTURES, (II) THE "DECLARATION" MEANS THE AMENDED
AND RESTATED DECLARATION OF TRUST RELATING TO THE TRUST AMONG THE CORPORATION,
AS SPONSOR, THE FIRST NATIONAL BANK OF CHICAGO, AS PROPERTY TRUSTEE (THE
"PROPERTY TRUSTEE"), FIRST CHICAGO DELAWARE INC., AS DELAWARE TRUSTEE (THE
"DELAWARE TRUSTEE"), AND THE ADMINISTRATIVE TRUSTEES NAMED THEREIN
(COLLECTIVELY, WITH THE PROPERTY TRUSTEE AND DELAWARE TRUSTEE, THE "ISSUER
TRUSTEES"), (III) THE "GUARANTEE" MEANS THE GUARANTEE AGREEMENT RELATING TO THE
CAPITAL SECURITIES BETWEEN THE CORPORATION AND THE FIRST NATIONAL BANK OF
CHICAGO, AS TRUSTEE (THE "GUARANTEE TRUSTEE") AND (IV) THE "COMMON GUARANTEE"
MEANS THE GUARANTEE AGREEMENT RELATING TO THE COMMON SECURITIES BETWEEN THE
CORPORATION AND THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE. Each of the
other capitalized terms used in this Prospectus Supplement and not otherwise
defined in this Prospectus Supplement has the meaning set forth in the
accompanying Prospectus.
---------------------------
S-5
<PAGE>
RISK FACTORS
Prospective purchasers of Capital Securities should carefully review
the information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following matters.
In addition, because holders of Capital Securities may receive Junior
Subordinated Debentures in exchange therefor upon liquidation of the Trust,
prospective purchasers of Capital Securities are also making an investment
decision with regard to the Junior Subordinated Debentures and should carefully
review all the information regarding the Junior Subordinated Debentures
contained herein.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND JUNIOR SUBORDINATED
DEBENTURES
The obligations of the Corporation under the Guarantee and under the
Junior Subordinated Debentures will be unsecured and subordinate and rank junior
in right of payment to the extent and in the manner set forth in the
Indenture to all present and future Senior Indebtedness of the
Corporation. No payment may be made of the principal of, or premium, if any, or
interest on the Junior Subordinated Debentures, or in respect of any redemption,
retirement, purchase or other acquisition of any of the Junior Subordinated
Debentures, at any time when (i) there is a default in the payment of the
principal of, or premium, if any, or interest on or otherwise in respect of any
Senior Indebtedness, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise, or (ii) any event of default with respect to any
Senior Indebtedness has occurred and is continuing, or would occur as a result
of such payment on the Junior Subordinated Debentures or any redemption,
retirement, purchase or other acquisition of any of the Junior Subordinated
Debentures, permitting the holders of such Senior Indebtedness (or a trustee on
behalf of the holders thereof) to accelerate the maturity thereof. At September
30, 1996, the aggregate principal amount of outstanding Senior Indebtedness of
the Corporation was approximately $1.635 billion (exclusive of $200,000,000 of
6.625% Senior Notes due November 15, 2006 which were issued by the Corporation
on November 12, 1996). Because the Corporation is a bank holding company, the
right of the Corporation to participate in any distribution of assets of any
subsidiary upon such subsidiary's liquidation or reorganization or otherwise
(and thus the ability of holders of the Capital Securities to benefit indirectly
from such distribution) is subject to the prior claims of creditors of that
subsidiary, except to the extent that the Corporation may itself be recognized
as a creditor of that subsidiary. At September 30, 1996, the subsidiaries of the
Corporation had total liabilities (excluding liabilities owed to the
Corporation) of approximately $41.786 billion. Accordingly, the Junior
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders of Junior
Subordinated Debentures should look only to the assets of the Corporation for
payments on the Junior Subordinated Debentures. None of the Indenture, the
Guarantee, the Common Guarantee or the Declaration places any limitation on the
amount of secured or unsecured debt, including Senior Indebtedness, that may be
incurred by the Corporation or any of its subsidiaries. See "Description of the
Guarantees--Status of the Guarantees" and "Description of the Junior
Subordinated Debentures--Subordination" in the accompanying Prospectus.
S-6
<PAGE>
The ability of the Trust to pay amounts due on the Capital Securities
is dependent upon the Corporation making payments on the Junior Subordinated
Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSIDERATIONS
So long as no Debenture Event of Default shall have occurred and be
continuing, the Corporation will have the right under the Indenture to defer
payments of interest on the Junior Subordinated Debentures at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity Date. Upon any such deferral, semi-annual
Distributions on the Capital Securities by the Trust will be deferred (and the
amount of Distributions to which holders of the Capital Securities are entitled
will accumulate additional Distributions thereon at the rate of % per annum,
compounded semi-annually, but not exceeding the interest rate then accruing on
the Junior Subordinated Debentures) from the relevant payment date for such
Distributions during any such Extension Period.
The Corporation may extend any existing Extension Period, provided that
such extension does not cause such Extension Period to exceed 10 consecutive
semi-annual periods or to extend beyond the Stated Maturity Date. Upon the
expiration of any Extension Period and the payment of all interest then accrued
and unpaid on the Junior Subordinated Debentures (together with interest thereon
at the annual rate of %, compounded semi-annually, to the extent permitted by
applicable law), the Corporation may elect to begin a new Extension Period,
subject to the above requirements. There is no limitation on the number of times
that the Corporation may elect to begin an Extension Period. See "Description of
Capital Securities--Distributions" and "Description of Junior Subordinated
Debentures--Option to Extend Interest Payment Date."
The Corporation has no current plan to exercise its right to defer
payments of interest on the Junior Subordinated Debentures. However, should the
Corporation exercise its right to defer payments of interest on the Junior
Subordinated Debentures, each holder of Capital Securities will be required to
accrue income (as original issue discount ("OID")) in respect of the deferred
stated interest allocable to its Capital Securities for United States federal
income tax purposes, which will be allocated but not distributed to holders of
Capital Securities. As a result, during an Extension Period, each holder of
Capital Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash and will not receive the cash related
to such income from the Trust if the holder disposes of the Capital Securities
prior to the record date for the payment of Distributions thereafter. See
"Certain Federal Income Tax Considerations--Interest Income and Original Issue
Discount" and "--Sales of Capital Securities."
Should the Corporation elect to exercise its right to defer payments of
interest on the Junior Subordinated Debentures, the market price of the Capital
Securities is likely to be affected. A holder that disposes of its Capital
Securities during an Extension Period, therefore, might not receive the same
return on its investment as a holder that continues to hold its Capital
Securities. In addition, the mere existence of the Corporation's right to defer
payments of
S-7
<PAGE>
interest on the Junior Subordinated Debentures may cause the market price of the
Capital Securities to be more volatile than the market prices of other
securities on which OID accrues that are not subject to such deferrals.
REDEMPTION OR DISTRIBUTION
Upon the occurrence and continuation of a Special Event (including a
Tax Event or a Regulatory Capital Event, in each case, as defined under
"Description of Junior Subordinated Debentures--Special Event Prepayment"),
prior to [ ] the Corporation will have the right to prepay the Junior
Subordinated Debentures in whole (but not in part) at the Special Event
Prepayment Price within 90 days following the occurrence of such Special Event
and therefore cause a mandatory redemption of the Capital Securities at the
Special Event Redemption Price. On or after [ ], the Corporation may redeem the
Junior Subordinated Debentures in whole or in part for any reason and thereby
cause an optional redemption of the Capital Securities, in whole or in part, at
the Optional Redemption Price. The Corporation also will have the right at any
time to terminate the Trust and, after satisfaction of claims of creditors as
provided by applicable law, to cause the Junior Subordinated Debentures to be
distributed to the holders of the Trust Securities. Any such distribution or
redemption is subject to the Corporation having received prior approval of the
Federal Reserve to do so if then required under applicable guidelines or
policies of the Federal Reserve. See "Description of Capital
Securities--Redemption" and "--Liquidation of the Trust and Distribution of the
Junior Subordinated Debentures."
Under current United States federal income tax law, a distribution of
Junior Subordinated Debentures upon the dissolution of the Trust would not be a
taxable event to holders of the Capital Securities. If, however, the Trust is
characterized for United States federal income tax purposes as an association
taxable as a corporation at the time of dissolution of the Trust, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Capital Securities. Moreover, upon the occurrence of a
Special Event, a dissolution of the Trust in which holders of the Capital
Securities receive cash would be a taxable event to such holders. See "Certain
Federal Income Tax Considerations--Receipt of Junior Subordinated Debentures or
Cash Upon Liquidation of the Trust."
There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for Capital Securities if a dissolution or liquidation of the Trust
were to occur. Accordingly, the Capital Securities or the Junior Subordinated
Debentures may trade at a discount to the price that an investor pays to
purchase the Capital Securities offered hereby. Because holders of Capital
Securities may receive Junior Subordinated Debentures, prospective purchasers of
Capital Securities are also making an investment decision with regard to the
Junior Subordinated Debentures and should carefully review all the information
regarding the Junior Subordinated Debentures contained herein. See "Description
of Capital Securities--Redemption" and "--Liquidation of the Trust and
Distribution of the Junior Subordinated Debentures" and "Description of Junior
Subordinated Debentures."
S-8
<PAGE>
On March 19, 1996, as part of President Clinton's Fiscal 1997 Budget
Proposal, the Treasury Department proposed legislation (the "Proposed
Legislation") which would, among other things, generally deny corporate issuers
a deduction for interest in respect of certain debt obligations, such as the
Junior Subordinated Debentures, issued on or after December 7, 1995 if such debt
obligations have a maximum term in excess of 20 years and are not shown as
indebtedness on the issuer's applicable consolidated balance sheet. In addition,
the Proposed Legislation would generally deny corporate issuers a deduction for
interest in respect of certain debt obligations, such as the Junior Subordinated
Debentures, issued on or after December 7, 1995 if such debt obligations have a
weighted average maturity of more than 40 years. On March 29, 1996, Senate
Finance Committee Chairman William V. Roth, Jr. and House Ways and Means
Committee Chairman Bill Archer issued a joint statement (the "Joint Statement")
indicating their intent that the Proposed Legislation, if adopted by either of
the tax-writing committees of Congress, would have an effective date that is no
earlier than the date of "appropriate Congressional action." In addition,
subsequent to the publication of the Joint Statement, Senator Daniel Patrick
Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote letters
to the Treasury Department (the "Democrat Letters"), which concurred with the
view expressed in the Joint Statement. If the principles contained in the Joint
Statement and the Democrat Letters were followed and if the Proposed Legislation
were enacted, such legislation would not apply to the Junior Subordinated
Debentures. There can be no assurance, however, that the effective date guidance
contained in the Joint Statement and the Democrat Letters will be incorporated
into the Proposed Legislation, if enacted, or that other legislation enacted
after the date hereof will not otherwise adversely affect the ability of the
Corporation to deduct the interest payable on the Junior Subordinated
Debentures. Such a change could give rise to a Tax Event, which may permit the
Corporation, 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 Trust Securities at the Special Event Redemption Price by
electing to prepay the Junior Subordinated Debentures at the Special Event
Prepayment Price. See "Description of Capital Securities--Redemption,"
"--Description of Junior Subordinated Debentures--Special Event Prepayment" and
"Certain Federal Income Tax Considerations--Proposed Tax Legislation."
POSSIBLE ADVERSE EFFECT ON MARKET PRICES
There can be no assurance as to the market prices for Capital
Securities or Junior Subordinated Debentures distributed to the holders of
Capital Securities if a termination of the Trust were to occur. Accordingly, the
Capital Securities or the Junior Subordinated Debentures may trade at a discount
from the price that the investor paid to purchase the Capital Securities offered
hereby. Because holders of Capital Securities may receive Junior Subordinated
Debentures in liquidation of the Trust and because Distributions are otherwise
limited to payments on the Junior Subordinated Debentures, prospective
purchasers of Capital Securities are also making an investment decision with
regard to the Junior Subordinated Debentures and should carefully review all the
information regarding the Junior Subordinated Debentures contained herein. See
"Description of Junior Subordinated Debentures."
S-9
<PAGE>
RIGHTS UNDER THE GUARANTEE
The Guarantee will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The First
National Bank of Chicago will act as indenture trustee under the Guarantee (the
"Guarantee Trustee") for the purpose of compliance with the Trust Indenture Act
and will hold the Guarantee for the benefit of the holders of the Capital
Securities. The First National Bank of Chicago will also act as Property Trustee
under the Declaration and as Debenture Trustee under the Indenture. First
Chicago Delaware Inc. will act as Delaware Trustee under the Declaration. The
Guarantee will guarantee to the holders of the Capital Securities the following
payments, to the extent not paid by the Trust: (i) any accumulated and unpaid
Distributions required to be paid on the Capital Securities, to the extent that
the Trust has funds on hand legally available therefor; (ii) the applicable
Redemption Price with respect to any Capital Securities called for redemption,
to the extent that the Trust has funds on hand legally available therefor; and
(iii) upon a voluntary or involuntary termination, winding up or liquidation of
the Trust (unless the Junior Subordinated Debentures are distributed to holders
of the Capital Securities), the lesser of (a) the aggregate of the Liquidation
Amount and all accumulated and unpaid Distributions to the date of payment, to
the extent that the Trust has funds on hand legally available therefor on such
date and (b) the amount of assets of the Trust remaining available for
distribution to holders of the Capital Securities on such date. The holders of a
majority in Liquidation Amount of the Capital Securities will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of the Guarantee or to direct the
exercise of any trust power conferred upon the Guarantee Trustee. Any holder of
the Capital Securities may institute a legal proceeding directly against the
Corporation to enforce its rights under the Guarantee without first instituting
a legal proceeding against the Trust, the Guarantee Trustee or any other person
or entity. If the Corporation defaults on its obligation to pay amounts payable
under the Junior Subordinated Debentures, the Trust will not have sufficient
funds for the payment of Distributions or amounts payable on redemption of the
Capital Securities or otherwise, and, in such event, holders of the Capital
Securities will not be able to rely upon the Guarantee for payment of such
amounts. Instead, in the event a Debenture Event of Default shall have occurred
and be continuing and such event is attributable to the failure of the
Corporation to pay principal of or premium, if any, or interest on the Junior
Subordinated Debentures on the payment date on which such payment is due and
payable, then a holder of Capital Securities may institute a legal proceeding
directly against the Corporation for enforcement of payment to such holder of
the principal of or premium, if any, or interest on such Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Capital Securities of such holder (a "Direct Action"). Notwithstanding any
payments made to a holder of Capital Securities by the Corporation in connection
with a Direct Action, the Corporation shall remain obligated to pay the
principal of and premium, if any, and interest on the Junior Subordinated
Debentures, and the Corporation shall be subrogated to the rights of the holder
of such Capital Securities with respect to payments on the Capital Securities to
the extent of any payments made by the Corporation to such holder in any Direct
Action. Except as described herein, holders of Capital Securities will not be
able to exercise directly any other remedy available to the holders of the
Junior Subordinated Debentures or to assert directly any other rights in respect
of the
S-10
<PAGE>
Junior Subordinated Debentures. See "Description of Junior Subordinated
Debentures--Enforcement of Certain Rights by Holders of Preferred Securities"
and "--Debenture Events of Default" and "Description of Guarantees" in the
accompanying Prospectus. The Declaration will provide that each holder of
Capital Securities by acceptance thereof agrees to the provisions of the
Indenture.
LIMITED VOTING RIGHTS
Holders of Capital Securities generally will have voting rights relating
only to the modification of the terms of the Capital Securities, the termination
or liquidation of the Trust, and the exercise of the Trust's rights as holder of
the Junior Subordinated Debentures. Holders of Capital Securities will not be
entitled to vote to appoint, remove or replace, or to increase or decrease the
number of, the Issuer Trustees, which voting rights are vested exclusively in
the holder of the Common Securities, except as described under "Description of
Preferred Securities--Removal of Issuer Trustees" in the accompanying
Prospectus. The Property Trustee, the Administrative Trustees and the
Corporation may amend the Declaration without the consent of holders of Capital
Securities to ensure that the Trust will be classified for United States federal
income tax purposes as a grantor trust even if such action adversely affects the
interests of such holders. See "Description of Preferred Securities--Voting
Rights; Amendment of each Declaration" in the accompanying Prospectus.
TRADING PRICE
The Corporation does not intend to have the Capital Securities listed
on the New York Stock Exchange or any other securities exchange. There is no
existing market for the Capital Securities and there can be no assurance as to
the liquidity of any markets that may develop for the Capital Securities, the
ability of the holders to sell their Capital Securities or at what price holders
of the Capital Securities will be able to sell their Capital Securities as the
case may be. Future trading prices of the Capital Securities will depend on many
factors including, among other things, prevailing interest rates, the
Corporation's operating results, and the market for similar securities. The
Underwriters have informed the Trust and the Corporation that they intend to
make a market in the Capital Securities as permitted by applicable laws and
regulations. However, the Underwriters are not obligated to do so and any such
market making activity may be terminated at any time without notice to the
holders of the Capital Securities.
The Capital Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying Junior
Subordinated Debentures. A holder who uses the accrual method of accounting for
tax purposes (and a cash method holder, if the Junior Subordinated Debentures
are deemed to have been issued with OID) and who disposes of its Capital
Securities between record dates for payments of distributions thereon will be
required to include accrued but unpaid interest on the Junior Subordinated
Debentures through the date of disposition in income as ordinary income (i.e.,
interest or, possibly, OID), and to add such amount to its adjusted tax basis in
its share of the underlying Junior Subordinated Debentures deemed disposed of.
To the extent the selling price is less than the holder's adjusted
S-11
<PAGE>
tax basis (which will include all accrued but unpaid interest), a holder will
recognize a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal income tax
purposes. See "Certain Federal Income Tax Considerations--Interest Income and
Original Issue Discount" and "--Sales of Capital Securities."
S-12
<PAGE>
WACHOVIA CAPITAL TRUST II
The Trust is a statutory business trust formed under Delaware law
pursuant to (i) a declaration of trust, dated as of [January , 1997], executed
by the Corporation, as Sponsor, the Delaware Trustee and the Administrative
Trustees named therein (the "Initial Declaration"), and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware on
[January , 1997]. The Initial Declaration will be replaced by an amended and
restated declaration of trust executed on or prior to [January , 1997] (the
"Issue Date") by the Corporation, as Sponsor, and the Issuer Trustees (the
"Declaration"). The Trust exists for the exclusive purposes of (i) issuing and
selling the Trust Securities, which represent undivided beneficial interests in
the assets of the Trust, (ii) investing the gross proceeds from the sale of the
Trust Securities in the Junior Subordinated Debentures and (iii) engaging in
only those other activities necessary, advisable or incidental thereto.
Accordingly, the Junior Subordinated Debentures will be the sole assets of the
Trust and payments under the Junior Subordinated Debentures will be the sole
revenues of the Trust. All of the Common Securities will be owned directly or
indirectly by the Corporation. The Common Securities will rank pari passu, and
payments will be made thereon pro rata, with the Capital Securities, except that
upon the occurrence and during the continuance of an Event of Default under the
Declaration resulting from a Debenture Event of Default, the rights of the
Corporation as holder of the Common Securities to payments in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated and rank junior to the rights of the holders of the Capital
Securities. See "Description of Preferred Securities--Subordination of Common
Securities" in the accompanying Prospectus. The Corporation will acquire,
directly or indirectly, Common Securities in a Liquidation Amount equal to at
least 3% of the total capital of the Trust. The Trust has a term of [55] years,
but may terminate earlier as provided in the Declaration. The Trust's business
and affairs will be conducted by the Issuer Trustees appointed by the
Corporation as the direct or indirect holder of the Common Securities. The
Issuer Trustees will be The First National Bank of Chicago as the Property
Trustee (the "Property Trustee"), First Chicago Delaware Inc. as the Delaware
Trustee (the "Delaware Trustee"), and three individual trustees (the
"Administrative Trustees"). The First National Bank of Chicago, as Property
Trustee, will act as sole indenture trustee under the Declaration. The First
National Bank of Chicago will also act as indenture trustee under the Guarantee
and the Indenture. See "Description of the Guarantee" and "Description of Junior
Subordinated Debentures." The holder of the Common Securities of the Trust or,
if an Event of Default under the Declaration has occurred and is continuing, the
holders of a majority in Liquidation Amount of the Capital Securities, will be
entitled to appoint, remove or replace the Property Trustee and/or the Delaware
Trustee. In no event will the holders of the Capital Securities have the right
to vote to appoint, remove or replace the Administrative Trustees; such voting
rights will be vested exclusively in the holder of the Common Securities. The
duties and obligations of each Issuer Trustee are governed by the Declaration.
The Corporation will pay, directly or indirectly, all fees, expenses, debts and
obligations (other than the Trust Securities) related to the Trust and the
offering of the Capital Securities, including all ongoing costs, expenses and
liabilities of the Trust. The principal executive office of the Trust is
Wachovia Capital Trust II, c/o Wachovia
S-13
<PAGE>
Corporation, 100 North Main Street, Winston-Salem, North Carolina 27150,
Attention: Chief Financial Officer. See "The Trusts" in the accompanying
Prospectus.
It is anticipated that the Trust will not be subject to the reporting
requirements under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
S-14
<PAGE>
WACHOVIA CORPORATION
Wachovia Corporation ("Wachovia" or the "Corporation"), a North
Carolina corporation, is an interstate bank holding company with dual
headquarters in Atlanta, Georgia and Winston- Salem, North Carolina, serving
regional, national and international markets. The Corporation has three
principal banking subsidiaries, Wachovia Bank of Georgia, N.A. ("Wachovia Bank
of Georgia"), Wachovia Bank of North Carolina, N.A. ("Wachovia Bank of North
Carolina") and Wachovia Bank of South Carolina, N.A. ("Wachovia Bank of South
Carolina" and together with Wachovia Bank of Georgia and Wachovia Bank of North
Carolina, the "Banks"), the assets of which together, as of September 30, 1996,
constituted substantially all of the assets of the Corporation. Wachovia's
common stock is traded on the New York Stock Exchange under the symbol WB.
Wachovia is a registered bank holding company under the Bank Holding Company Act
of 1956, as amended, and is a savings and loan holding company within the
meaning of the Home Owners' Loan Act of 1933, as amended.
The Banks had a total of 486 offices as of September 30, 1996. As of
September 30, 1996, Wachovia Bank of Georgia had 125 offices in 49 Georgia
cities and communities, Wachovia Bank of North Carolina had 219 offices in 95
North Carolina cities and communities, and Wachovia Bank of South Carolina had
142 offices in 64 South Carolina cities and communities. Subsidiaries of the
Corporation have domestic representative offices in Chicago and New York City;
international representative offices in New York City, London and Tokyo; foreign
branch offices in Grand Cayman; residential mortgage loan offices in Florida,
Georgia, North Carolina and South Carolina; operations centers in Atlanta,
Georgia, Charlotte, Greenville, Raleigh and Winston-Salem, North Carolina, and
Columbia, South Carolina; a major credit card operation in Delaware; and a
credit life and accident insurance company in Georgia.
At September 30, 1996, on a consolidated basis, Wachovia had total
assets of $47.5 billion, deposits of $27.4 billion, and a market capitalization
of $8.2 billion. Based on its consolidated asset size and market capitalization
at September 30, 1996, Wachovia was ranked 20th and 21st, respectively, among
domestic U.S. bank holding companies.
The Banks serve domestic U.S. retail and mid-market corporate customers
in their home markets. Also, at September 30, 1996, the Banks administered trust
assets totaling over $93.3 billion, including more than $23.0 billion in assets
under discretionary management, and provided a comprehensive array of trust
related services and products to institutional and retail clients. Other major
subsidiaries of the Corporation include Wachovia Corporate Services, Inc. which
directs large corporate and institutional relationship management and business
development in national and international markets; Wachovia Leasing Corporation
which provides corporate leasing services; Wachovia Operational Services
Corporation which provides remittance processing services for customers through
three operations centers; and Wachovia Investments, Inc. which offers brokerage
services to institutional and retail clients.
S-15
<PAGE>
USE OF PROCEEDS
The proceeds to the Trust (without giving effect to expenses of the
offering payable by the Corporation) from the offering of the Capital Securities
will be $ . All of the proceeds from the sale of Capital Securities (together
with the proceeds of the Common Securities) will be invested by the Trust in the
Junior Subordinated Debentures. The Corporation intends that the net proceeds
from the sale of the Junior Subordinated Debentures will be used for general
corporate purposes, which may include, but not be limited to, investments in and
advances to the Corporation's subsidiaries and the redemption of certain of the
Corporation's outstanding debt securities. The precise amount and timing of the
application of such net proceeds used for such corporate purposes will depend on
the funding requirements and the availability of other funds to the Corporation
and its subsidiaries. Pending such application by the Corporation, such net
proceeds may be temporarily invested in short-term interest bearing securities.
The Capital Securities will be eligible to qualify as Tier I Capital under the
capital guidelines of the Federal Reserve, provided that under current Federal
Reserve guidelines no more than 25% of the Corporation's Tier I Capital may
comprise Capital Securities and other capital securities and cumulative
preferred stock of the Corporation.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges
of the Corporation for the respective periods indicated.
NINE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Ratio of Earnings to Fixed
Charges:
Excluding interest on deposits 2.14x 2.13 2.48 3.32 3.57 1.71
Including interest on deposits 1.55x 1.54 1.72 1.81 1.61 1.19
For purposes of computing the ratios of earnings to fixed charges,
earnings represent net income (loss) before extraordinary items and cumulative
effect of changes in accounting principles plus applicable income taxes and
fixed charges. Fixed charges, excluding interest on deposits, include gross
interest expense (other than on deposits) and the proportion deemed
representative of the interest factor of rent expense, net of income from
subleases. Fixed charges, including gross interest on deposits, include all
interest expense and the proportion deemed representative of the interest factor
of rent expense, net of income from subleases.
S-16
<PAGE>
CAPITALIZATION
The following table sets forth the actual unaudited consolidated
capitalization of the Corporation at September 30, 1996, as adjusted to give
effect to the consummation of the offering of Capital Securities and the
application of the estimated net proceeds from the sale of the Capital
Securities. See "Use of Proceeds." The table should be read in conjunction
with the Corporation's consolidated financial statements and notes thereto
included in the documents incorporated by reference herein. See "Incorporation
of Certain Documents by Reference."
At September 30, 1996
ACTUAL AS ADJUSTED
(in thousands)
Long-Term Debt(1)........................... $6,171,070 $ 6,171,070
Redeemable capital securities of
subsidiaries(2)................. 0 [ ]
STOCKHOLDERS' EQUITY
Preferred Stock............................. __ __
Common Stock at $5 par value................ 826,067 826,067
Capital surplus............................. 500,613 500,613
Retained earnings........................... 2,369,590 2,369,590
Net unrealized gain (loss) on securities.... 32,924 32,924
Total stockholders' equity.................. 3,729,194 3,729,194
---------------- -----------------
Total.............................. $9,900,264 $[ ]
================ =================
- -----------------------
(1) Not reflected in this table are $200,000,000 Wachovia Corporation
6.625% Senior Notes due November 15, 2006, issued November 12, 1996.
(2) Redeemable capital securities of subsidiaries reflects the Capital
Securities. Not reflected in this table is $300,000,000 aggregate
Liquidation Amount of Capital Securities issued by Wachovia Capital
Trust I on December 16, 1996. The Trust is a subsidiary of the
Corporation and will hold the Junior Subordinated Debentures as its
sole asset.
SUMMARY FINANCIAL DATA
The summary below should be read in connection with the financial
information included in the Corporation's 1995 Annual Report on Form 10-K. The
summary below should also be read in conjunction with the financial information
contained in the Corporation's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996. Interim unaudited data for the nine months ended
September 30, 1996 and 1995 reflect, in the opinion of management of the
Corporation, all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of such data. Results for the nine months
ended September 30, 1996 are not necessarily indicative of results which may be
expected for any other interim period or for the year as a whole.
S-17
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Year Ended December 31,
--------------------- ---------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
(unaudited)
(dollars in millions, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net interest revenue $1,150 $1,074 $1,441 $1,324 $1,284 $1,255 $1,169
Provision for credit losses 103 74 104 72 93 119 293
-------- ---------- -------- -------- -------- -------- ------
Net interest revenue after provision for credit losses 1,047 1,000 1,337 1,252 1,191 1,136 876
Noninterest income 582 547 736 607 628 556 501
Noninterest expense 935 889 1,204 1,098 1,131 1,096 1,096
-------- ---------- -------- -------- -------- -------- ------
Income (Loss) before income taxes, extraordinary items &
cumulative effect of changes in accounting principles 694 658 869 761 688 596 281
Provision for (Benefit from) income taxes 220 202 266 222 196 163 51
-------- ---------- -------- -------- -------- -------- -----
Income (Loss) before extraordinary items & cumulative effect
of changes in accounting principles 474 456 603 539 492 433 230
Extraordinary items, net of tax
Cumulative effect of changes in accounting principles, net
-------- ---------- -------- -------- -------- -------- ------
Net income (Loss) $474 $456 $603 $539 $492 $433 $230
======== ========== ======== ======== ======== ======== ======
Per common share:
Income (Loss) before extraordinary items & cumulative
effect of changes in accounting principles:
Primary $2.79 $2.65 $3.50 $3.13 $2.83 $2.51 $1.34
Fully diluted 2.78 2.64 3.49 3.12 2.81 2.48 1.32
Net Income (Loss):
Primary 2.79 2.65 3.50 3.13 2.83 2.51 1.34
Fully diluted 2.78 2.64 3.49 3.12 2.81 2.48 1.32
Book value 22.57 21.24 22.15 19.23 17.61 16.18 14.56
Cash dividends declared 1.12 1.02 1.38 1.23 1.11 1.00 .92
Average number of common shares (in thousands):
Primary 169,758 171,993 172,089 172,339 173,941 172,641 171,481
Fully diluted 170,251 172,882 172,957 172,951 175,198 175,512 175,218
AVERAGE BALANCE SHEET DATA:
Loans and lease financing $29,963 $27,180 $27,505 $24,213 $21,546 $20,032 $20,589
Total earning assets 40,270 36,420 36,997 32,794 29,780 28,097 28,360
Total assets 45,059 40,797 41,473 37,029 33,629 31,832 32,045
Deposits 26,028 23,654 24,262 22,315 22,373 22,831 22,519
Long-term debt 6,025 4,797 4,902 4,350 2,073 449 178
Stockholders' equity 3,654 3,354 3,410 3,096 2,872 2,596 2,462
</TABLE>
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<PAGE>
DESCRIPTION OF CAPITAL SECURITIES
GENERAL
The following summary of certain terms and provisions of the Capital
Securities supplements the description of the terms and provisions of the
Preferred Securities set forth in the accompanying Prospectus under the heading
"Description of Preferred Securities," to which description reference is hereby
made. This summary of certain terms and provisions of the Capital Securities,
which describes the material provisions thereof, does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the
Declaration, to which reference is hereby made. The form of the Declaration has
been filed as an exhibit to the Registration Statement of which this Prospectus
Supplement and accompanying Prospectus form a part.
DISTRIBUTIONS
The Capital Securities represent beneficial ownership interests in the
Trust, and Distributions on each Capital Security will be payable at the annual
rate of % of the stated Liquidation Amount of $25, payable semi-annually in
arrears on [__________ and ________] of each year, to the holders of the Capital
Securities on the relevant record dates. The record dates for the Capital
Securities will be, for so long as the Capital Securities remain in book-entry
form, one Business Day (as defined in the accompanying Prospectus) prior to the
relevant Distribution Date (as defined herein) and, in the event the Capital
Securities are not in book-entry form, the first day of the month in which the
relevant Distribution Date (as defined herein) falls. Distributions will
accumulate from the date of original issuance. The first Distribution Date for
the Capital Securities will be [ ]. The amount of Distributions 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 Distributions are
payable on the Capital Securities is not a Business Day (as defined herein),
then payment of the Distributions 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 (each date on which Distributions are
payable in accordance with the foregoing, a "Distribution Date"). A "Business
Day" shall mean any day other than a Saturday or a Sunday, or a day on which
banking institutions in New York, New York or Winston-Salem, North Carolina are
authorized or required by law to close. See "Description of Preferred
Securities--Distributions" in the accompanying Prospectus.
So long as no Debenture Event of Default under the Indenture has
occurred and is continuing, the Corporation has the right under the Indenture to
defer the payment of interest on the Junior Subordinated Debentures at any time
or from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension Period
may extend beyond the Stated Maturity Date of the Junior Subordinated
Debentures. Upon any such election, semi-annual Distributions on the Capital
Securities by the Trust will be deferred during such Extension Period.
Distributions to which holders of the Capital Securities are entitled will
accumulate additional Distributions thereon at the rate per annum of % thereof,
compounded semi-annually from the relevant Distribution Date, but not
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<PAGE>
exceeding the interest rate then accruing on the Junior Subordinated Debentures.
The term "Distributions" as used herein shall include any such additional
Distributions. During any such Extension Period, the Corporation may extend such
Extension Period, provided that such extension does not cause such Extension
Period to exceed 10 consecutive semi-annual periods including the first
semi-annual period during such Extension Period or to extend beyond the
Stated Maturity Date. Upon the termination of any such Extension Period and the
payment of all amounts then due, and subject to the foregoing limitations, the
Corporation may elect to begin a new Extension Period. The Corporation must give
the Property Trustee, the Administrative Trustees and the Debenture Trustee
notice of its election of any Extension Period or any extension thereof at least
five Business Days prior to the earlier of (i) the date the Distributions on the
Capital Securities would have been payable except for the election to begin or
extend such Extension Period and (ii) the date the Administrative Trustees are
required to give notice to any securities exchange or to holders of the Capital
Securities of the record date or the date such Distributions are payable, but in
any event not less than five Business Days prior to such record date. There is
no limitation on the number of times that the Corporation may elect to begin an
Extension Period. See "Description of Junior Subordinated Debentures--Option to
Extend Interest Payment Date" and "Certain Federal Income Tax
Considerations--Interest Income and Original Issue Discount."
During any such Extension Period, the Corporation 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 Corporation's capital stock
(which includes common and preferred stock) or (ii) make any payment of
principal of or premium, if any, or interest on or repay, repurchase or redeem
any debt securities of the Corporation (including other junior subordinated
debentures issued by the Corporation) that rank PARI PASSU with or junior in
right of payment to the Junior Subordinated Debentures or (iii) make any
guarantee payments with respect to any guarantee by the Corporation of the debt
securities of any subsidiary of the Corporation if such guarantee ranks PARI
PASSU with or junior in right of payment to the Junior Subordinated Debentures
(other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, common stock of the Corporation,
(b) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) as a result of a reclassification of the
Corporation's capital stock or the exchange or conversion of one class, or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in shares
of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (f) purchases of common stock related to the issuance of common stock or
rights under any of the Corporation's benefit plans for its directors, officers
or employees or any of the Corporation's dividend reinvestment plans).
Although the Corporation may in the future exercise its option to defer
payments of interest on the Junior Subordinated Debentures, the Corporation has
no such current intention.
The revenue of the Trust available for distribution to holders of the
Capital Securities will be limited to payments under the Junior Subordinated
Debentures in which the Trust will invest the proceeds from the issuance and
sale of the Trust Securities. See "Description of Junior Subordinated
Debentures--General." If the Corporation does not make interest payments on the
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Junior Subordinated Debentures, the Property Trustee will not have funds
available to pay Distributions on the Capital Securities. The payment of
Distributions (if and to the extent the Trust has funds on hand legally
available for the payment of such Distributions) will be guaranteed by the
Corporation on a limited basis as set forth herein under "Description of the
Guarantee."
REDEMPTION
Upon the repayment on the Stated Maturity Date or prepayment prior to
the Stated Maturity Date of the Junior Subordinated Debentures, the proceeds
from such repayment or prepayment 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 of a date of redemption (the "Redemption
Date") at the applicable Redemption Price, which shall be equal to (i) in the
case of the repayment of the Junior Subordinated Debentures on the Stated
Maturity Date, the Maturity Redemption Price (equal to the principal of and
accrued interest on the Junior Subordinated Debentures), (ii) in the case of the
optional prepayment of the Junior Subordinated Debentures prior to [ ] upon the
occurrence and continuation of a Special Event, the Special Event Redemption
Price (equal to the Special Event Prepayment Price in respect of the Junior
Subordinated Debentures) and (iii) in the case of the optional prepayment of the
Junior Subordinated Debentures other than as contemplated in clause (ii) above,
the Optional Redemption Price (equal to the Optional Prepayment Price in respect
of the Junior Subordinated Debentures). See "Description of Junior Subordinated
Debentures--Optional Prepayment" and "--Special Event Prepayment."
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Junior Subordinated Debentures to be paid in accordance with their
terms and (ii) with respect to a distribution of Junior Subordinated Debentures
upon the liquidation of the Trust, Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Junior Subordinated Debentures are distributed.
The Corporation will have the option to prepay the Junior Subordinated
Debentures, (i) in whole or in part, on or after [ ], at the applicable Optional
Prepayment Price and (ii) in whole but not in part, at any time prior to [ ],
upon the occurrence of a Special Event, at the Special Event Prepayment Price,
in each case subject to receipt of prior approval by the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal Reserve.
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
The Corporation will have the right at any time to terminate the Trust
and cause the Junior Subordinated Debentures to be distributed to the holders of
the Capital Securities in exchange therefor upon liquidation of the Trust. Such
right is subject to (i) the Corporation having received an opinion of counsel to
the effect that such distribution will not be a taxable event to holders of
Capital Securities and (ii) the prior approval of the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal Reserve.
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If the Corporation elects not to prepay the Junior Subordinated
Debentures prior to maturity in accordance with their terms and either elects
not to or is unable to liquidate the Trust and distribute the Junior
Subordinated Debentures to holders of the Trust Securities, the Trust Securities
will remain outstanding until the repayment of the Junior Subordinated
Debentures on the Stated Maturity Date.
LIQUIDATION VALUE
The amount payable on the Capital Securities in the event of any
liquidation of the Trust is $25 per Capital Security plus accumulated and unpaid
Distributions, which amount may be paid in the form of a distribution of a Like
Amount of Junior Subordinated Debentures, subject to certain exceptions. See
"Description of Preferred Securities--Liquidation Distribution Upon Termination"
in the accompanying Prospectus.
REGISTRATION OF CAPITAL SECURITIES
The Capital Securities will be represented by global certificates
registered in the name of The Depository Trust Company ("DTC") or its nominee.
Beneficial interests in the Capital Securities will be shown on, and transfers
thereof will be effected only through, records maintained by participants in
DTC. Except as described below and in the accompanying Prospectus, Capital
Securities in certificated form will not be issued in exchange for the global
certificates. See "Book-Entry Issuance" in the accompanying Prospectus.
A global security shall be exchangeable for Capital Securities
registered in the names of persons other than DTC or its nominee only if (i) DTC
notifies the Trust that it is unwilling or unable to continue as a depositary
for such global security and no successor depositary shall have been appointed,
or if at any time DTC ceases to be a clearing agency registered under the
Exchange Act at a time when DTC is required to be so registered to act as such
depositary, (ii) the Trust in its sole discretion determines that such global
security shall be so exchangeable or (iii) there shall have occurred and be
continuing an event of default under the Indenture with respect to the Junior
Subordinated Debentures. Any global security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for definitive certificates
registered in such names as DTC shall direct. It is expected that such
instructions will be based upon directions received by DTC from its Participants
(as defined in the accompanying Prospectus) with respect to ownership of
beneficial interests in such global security. In the event that Capital
Securities are issued in definitive form, such Capital Securities will be in
denominations of $25 and integral multiples thereof and may be transferred or
exchanged at the offices described below.
Payments on Capital Securities represented by a global security will be
made to DTC, as the depositary for the Capital Securities. In the event Capital
Securities are issued in certificated form, the Liquidation Amount and
Distributions will be payable, the transfer of the Capital Securities will be
registrable, and Capital Securities will be exchangeable for Capital Securities
of other denominations of a like aggregate Liquidation Amount, at the corporate
office of the Property Trustee in New York, New York, or at the offices of any
paying agent or transfer agent appointed by the Administrative Trustees,
provided that payment of any Distribution may be made at the option of the
Administrative Trustees by check mailed to the
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address of the persons entitled thereto or by wire transfer. In addition, if the
Capital Securities are issued in certificated form, the record dates for payment
of Distributions will be the first day of the month preceding the month in which
the relevant Distribution payment is scheduled to be paid. For a description of
DTC and the terms of the depositary arrangements relating to payments,
transfers, voting rights, redemptions and other notices and other matters, see
"Book- Entry Issuance" in the accompanying Prospectus.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
GENERAL
The following summary of certain terms and provisions of the Junior
Subordinated Debentures supplements the description of the terms and provisions
of the Corresponding Junior Subordinated Debentures (as defined in the
accompanying Prospectus) set forth in the accompanying Prospectus under the
heading "Description of Junior Subordinated Debentures" to which description
reference is hereby made. The summary of certain terms and provisions of the
Junior Subordinated Debentures set forth below, which describes the material
provisions thereof, does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Indenture, to which reference is
hereby made. The form of Indenture has been filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and accompanying
Prospectus form a part.
Concurrently with the issuance of the Capital Securities, the Trust
will invest the proceeds thereof, together with the consideration paid by the
Corporation for the Common Securities, in the Junior Subordinated Debentures
issued by the Corporation. The Junior Subordinated Debentures will bear interest
at the annual rate of % of the principal amount thereof, payable semi-annually
in arrears on [_________ and __________] of each year (each, an "Interest
Payment Date"), commencing , 1997, to the person in whose name each Junior
Subordinated Debenture is registered at the close of business on the first day
of the month in which the relevant payment date falls. It is anticipated that,
until the liquidation, if any, of the Trust, each Junior Subordinated Debenture
will be held in the name of the Property Trustee in trust for the benefit of the
holders of the Trust 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
Junior Subordinated Debentures is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day that is a
Business Day (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. Accrued interest that is not paid on the applicable Interest
Payment Date will bear additional interest on the amount thereof (to the extent
permitted by law) at the rate per annum of % thereof, compounded semi-annually
from the relevant Interest Payment Date. The term "interest" as used herein
shall include semi-annual interest payments, interest on semi-annual interest
payments not paid on the applicable Interest Payment Date and Additional Sums
(as defined below), as applicable.
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The Junior Subordinated Debentures will be issued in denominations of
$25 and integral multiples thereof. The Junior Subordinated Debentures will
mature on _________.
The Junior Subordinated Debentures will rank PARI PASSU with all other
junior subordinated debentures to be issued by the Corporation and will be
unsecured and subordinate and rank junior in right of payment to the extent and
in the manner set forth in the Indenture to all Senior Indebtedness of the
Corporation. See "Description of Junior Subordinated Debentures--Subordination"
in the accompanying Prospectus. The Corporation is a non-operating holding
company and almost all of the operating assets of the Corporation and its
consolidated subsidiaries are owned by such subsidiaries. The Corporation relies
primarily on dividends from such subsidiaries to meet its obligations. The
Corporation is a legal entity separate and distinct from its banking and
non-banking affiliates. The principal sources of the Corporation's income are
dividends, interest and fees from its banking and non-banking affiliates. The
Banks are subject to certain restrictions imposed by federal law on any
extensions of credit to, and certain other transactions with, the Corporation
and certain other affiliates, and on investments in stock or other securities
thereof. Such restrictions prevent the Corporation and such other affiliates
from borrowing from the Banks unless the loans are secured by various types of
collateral. Further, such secured loans, other transactions and investments by
any of the Banks are generally limited in amount as to the Corporation and as to
each of such other affiliates to 10% of such Bank's capital and surplus and as
to the Corporation and all of such other affiliates to an aggregate of 20% of
such Bank's capital and surplus. In addition, payment of dividends to the
Corporation by the Banks is subject to ongoing review by banking regulators and
is subject to various statutory limitations and in certain circumstances
requires approval by banking regulatory authorities. Because the Corporation is
a holding company, the right of the Corporation to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise, is subject to the prior claims of creditors of the
subsidiary, except to the extent the Corporation may itself be recognized as a
creditor of that subsidiary. Accordingly, the Junior Subordinated Debentures
will be effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and holders of Junior Subordinated Debentures should
look only to the assets of the Corporation for payments on the Junior
Subordinated Debentures. The Indenture does not limit the incurrence or issuance
of other secured or unsecured debt of the Corporation, including Senior
Indebtedness. See "Description of Junior Subordinated Debentures--Subordination"
in the accompanying Prospectus.
OPTION TO EXTEND INTEREST PAYMENT DATE
So long as no Debenture Event of Default has occurred and is
continuing, the Corporation will have the right under the Indenture at any time
during the term of the Junior Subordinated Debentures to defer the payment of
interest at any time or from time to time for a period not exceeding 10
consecutive semi-annual periods with respect to each Extension Period, provided
that no Extension Period may extend beyond the Stated Maturity Date. At the end
of an Extension Period, the Corporation must pay all interest then accrued and
unpaid (together with interest then accrued at the annual rate of %,
compounded semi-annually, to the extent permitted by applicable law). During
an Extension Period, interest will continue to accrue and holders of Junior
Subordinated Debentures (and holders of the Trust Securities while Trust
Securities are outstanding) will be required to accrue interest income for
United States
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federal income tax purposes prior to the receipt of cash attributable to such
income. See "Certain Federal Income Tax Considerations--Interest Income and
Original Issue Discount."
During any such Extension Period, the Corporation 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 Corporation's capital stock
(which includes common and preferred stock), (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Corporation (including other junior subordinated debentures
issued by the Corporation) that rank PARI PASSU with or junior in right of
payment to the Junior Subordinated Debentures or (iii) make any guarantee
payments with respect to any guarantee by the Corporation of the debt securities
of any subsidiary of the Corporation if such guarantee ranks PARI PASSU with or
junior in right of payment to the Junior Subordinated Debentures (other than (a)
dividends or distributions in shares of or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) as a result of a reclassification of the
Corporation's capital stock or the exchange or conversion of one class or series
of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in shares
of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (f) purchases of common stock related to the issuance of common stock or
rights under any of the Corporation's benefit plans for its directors, officers
or employees or any of the Corporation's dividend reinvestment plans).
Prior to the termination of any such Extension Period, the Corporation
may further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due on any Interest Payment
Date, the Corporation may elect to begin a new Extension Period, subject to the
above requirements. No interest shall be due and payable during an Extension
Period, except at the end thereof. The Corporation must give the Property
Trustee, the Administrative Trustees and the Debenture Trustee notice of its
election of any Extension Period (or an extension thereof) at least five
Business Days prior to the earlier of (i) the date the Distributions on the
Trust Securities would have been payable except for the election to begin or
extend such Extension Period or (ii) the date the Administrative Trustees are
required to give notice to any securities exchange or to holders of Capital
Securities of the record date or the date such Distributions are payable, but in
any event not less than five Business Days prior to such record date. The
Debenture Trustee shall give notice of the Corporation's election to begin or
extend a new Extension Period to the holders of the Capital Securities. There is
no limitation on the number of times that the Corporation may elect to begin an
Extension Period. See "Description of Junior Subordinated Debentures--Option to
Defer Interest Payments" in the accompanying Prospectus.
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OPTIONAL PREPAYMENT
The Junior Subordinated Debentures will be prepayable, in whole or in
part, at the option of the Corporation, on or after [ ] (the "Initial Optional
Prepayment Date"), subject to the Corporation having received prior approval of
the Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve, at a prepayment price (the "Optional Prepayment
Price") equal to the percentage of the outstanding principal amount of the
Junior Subordinated Debentures specified below, plus, in each case, accrued
interest thereon to the date of prepayment if redeemed during the 12-month
period beginning [ ] of the years indicated below:
YEAR PERCENTAGE
................................................ %
................................................ %
................................................ %
................................................ %
................................................ %
................................................ %
................................................ %
................................................ %
................................................ %
................................................ %
and thereafter................................. %
SPECIAL EVENT PREPAYMENT
If a Special Event shall occur and be continuing, the Corporation may,
at any time prior to the Initial Optional Prepayment Date, at its option and
subject to receipt of prior approval of the Federal Reserve if then required
under applicable capital guidelines or policies of the Federal Reserve, prepay
the Junior Subordinated Debentures in whole (but not in part) at any time within
90 days of the occurrence of such Special Event, at a prepayment price (the
"Special Event Prepayment Price") equal to the greater of (i) 100% of the
principal amount of such Junior Subordinated Debentures or (ii) the sum, as
determined by a Quotation Agent, of the present values of the principal amount
and premium payable as part of the Optional Prepayment Price with respect to an
optional redemption of such Junior Subordinated Debentures on [
], together with scheduled payments of interest from the prepayment date to
the Initial Optional Prepayment Date (the "Remaining Life"), in each case
discounted to the prepayment date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus, in
either case, accrued and unpaid interest thereon to the date of prepayment.
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A "Special Event" means a Tax Event or a Regulatory Capital Event, as
the case may be.
A "Tax Event" means the receipt by the Corporation and the 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
such pronouncement or decision is announced on or after the Issue Date, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90 days
of the date of such opinion, subject to United States federal income tax with
respect to income received or accrued on the Junior Subordinated Debentures,
(ii) interest payable by the Corporation on the Junior Subordinated Debentures
is not, or within 90 days of the date of such opinion will not be, deductible by
the Corporation, in whole or in part, for United States federal income tax
purposes, or (iii) the Trust is, or will be within 90 days of the date of such
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
A "Regulatory Capital Event" means that the Corporation shall have
received an opinion of independent bank regulatory counsel experienced in such
matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any rules, guidelines or policies of the
Federal Reserve or (b) any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement or decision is announced on or after
the Issue Date, the Capital Securities do not constitute, or within 90 days of
the date of such opinion, will not constitute, Tier I Capital (or its then
equivalent); provided, however, that the distribution of the Junior Subordinated
Debentures in connection with the liquidation of the Trust by the Corporation
shall not in and of itself constitute a Regulatory Capital Event unless such
liquidation shall have occurred in connection with a Tax Event.
"Adjusted Treasury Rate" means, with respect to any prepayment date,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such prepayment date plus (i) [ ]% if such prepayment date
occurs on or prior to [ ] and (ii) [ ]% in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Remaining
Life that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the Remaining Life.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Debenture Trustee after consultation with the Corporation. "Reference Treasury
Dealer" means: (i) [ ] and its respective successors; PROVIDED, HOWEVER, that if
the foregoing shall cease to be a primary U.S. Government securities dealer in
New York City (a "Primary Treasury Dealer"), the Corporation shall substitute
therefor another Primary Treasury Dealer, and (ii) any
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other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Corporation.
"Comparable Treasury Price" means, with respect to any prepayment date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such prepayment date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Debenture Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such prepayment date.
"Additional Sums" means such additional amounts as may be necessary in
order that the amount of Distributions then due and payable by the Trust on the
outstanding Capital Securities and Common Securities shall not be reduced as a
result of any additional taxes, duties or other governmental charges to which
the Trust has become subject as a result of a Tax Event.
Notice of any prepayment will be mailed at least 30 days but not more
than 60 days before the prepayment date to each holder of Junior Subordinated
Debentures to be prepaid at its registered address. Unless the Corporation
defaults in payment of the prepayment price, on and after the prepayment date
interest ceases to accrue on such Junior Subordinated Debentures called for
prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the Junior Subordinated Debentures the Additional Sums.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
As described under "Description of Capital Securities--Liquidation of
the Trust and Distribution of Junior Subordinated Debentures," under certain
circumstances involving the termination of the Trust, Junior Subordinated
Debentures may be distributed to the holders of the Capital Securities in
exchange therefor upon liquidation of the Trust after satisfaction of
liabilities to creditors of the Trust as provided by applicable law. If
distributed to holders of Capital Securities, the Junior Subordinated Debentures
will initially be issued in the form of one or more global securities and DTC,
or any successor depositary for the Capital Securities, will act as depositary
for the Junior Subordinated Debentures. It is anticipated that the depositary
arrangements for the Junior Subordinated Debentures would be substantially
identical to those
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in effect for the Capital Securities. There can be no assurance as to the market
price of any Junior Subordinated Debentures that may be distributed to the
holders of Capital Securities.
REGISTRATION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures will be registered in the name of
the Trust. In the event that the Junior Subordinated Debentures are distributed
to holders of Capital Securities, it is anticipated that the depositary and
other arrangements for the Junior Subordinated Debentures will be substantially
identical to those in effect for the Capital Securities as applicable. See
"Description of Capital Securities--Registration of Capital Securities."
DESCRIPTION OF THE GUARANTEE
The Guarantee will be executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Capital Securities for the
benefit of the holders from time to time of the Capital Securities. The First
National Bank of Chicago will act as indenture trustee ("Guarantee Trustee")
under the Guarantee. The Guarantee will be qualified as an indenture under the
Trust Indenture Act. First National Bank of Chicago will act as the Guarantee
Trustee for the purposes of compliance with the Trust Indenture Act and will
hold the Guarantee for the benefit of the holders of the Capital Securities.
First National Bank of Chicago will also act as Debenture Trustee for the Junior
Subordinated Debentures and as Property Trustee. This summary of certain
provisions of the Guarantee does not purport to be complete and is subject to,
and qualified in its entirety by reference to, all of the provisions of the
Guarantee, including the definitions therein of certain terms, and the Trust
Indenture Act.
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined below)
to the holders of the Capital Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that the Trust may have or assert
other than the defense of payment. The following payments with respect to the
Capital Securities, to the extent not paid by or on behalf of the Trust (the
"Guarantee Payments"), will be subject to the Guarantee: (i) any accumulated and
unpaid Distributions required to be paid on Capital Securities, to the extent
the Trust has funds on hand legally available therefor, (ii) the Redemption
Price with respect to any Capital Securities called for redemption, to the
extent that the Trust has funds on hand legally available therefor, or (iii)
upon a voluntary or involuntary termination and liquidation of the Trust (unless
the Junior Subordinated Debentures are distributed to holders of the Capital
Securities), the lesser of (a) the Liquidation Distribution and (b) the amount
of assets of the Trust remaining available for distribution to holders of
Capital Securities. The Corporation's obligation to make a Guarantee Payment may
be satisfied by direct payment of the required amounts by the Corporation to the
holders of the Capital Securities or by causing the Trust to pay such amounts to
such holders.
The holders of a majority in Liquidation Amount of the Capital
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust power conferred
upon the Guarantee Trustee under the Guarantee. Any holder of the Capital
Securities may institute a legal proceeding directly against the Corporation to
enforce its rights under the
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Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity. If the Corporation were to
default on its obligation to pay amounts payable under the Junior Subordinated
Debentures, the Trust would lack funds for the payment of Distributions or
amounts payable on redemption of the Capital Securities or otherwise, and, in
such event, holders of the Capital Securities would not be able to rely upon the
Guarantee for payment of such amounts. Instead, if an event of default under the
Indenture shall have occurred and be continuing and such event is attributable
to the failure of the Corporation to pay interest or premium, if any, on or
principal of the Junior Subordinated Debentures on the applicable payment date,
then a holder of Capital Securities may institute a Direct Action against the
Corporation pursuant to the terms of the Indenture for enforcement of payment to
such holder of the principal of or interest or premium, if any, on such Junior
Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Capital Securities of such holder. In connection with
such Direct Action, the Corporation will have a right of set-off under the
Indenture to the extent of any payment made by the Corporation to such holder of
Capital Securities in the Direct Action. Except as described herein, holders of
Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Junior Subordinated Debentures or assert
directly any other rights in respect of the Junior Subordinated Debentures. See
"Description of Guarantees" in the accompanying Prospectus. The Declaration
provides that each holder of Capital Securities by acceptance thereof agrees to
the provisions of the Guarantee and the Indenture.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
In the opinion of Brown & Wood LLP, special federal income tax counsel
to the Corporation and the Trust ("Tax Counsel"), the following is a summary of
certain of the material United States federal income tax consequences of the
purchase, ownership and disposition of Capital Securities held as capital assets
by a holder who purchases such Capital Securities upon initial issuance. It does
not deal with special classes of holders such as banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, tax-exempt investors, or persons that will hold the
Capital Securities as a position in a "straddle," as part of a "synthetic
security" or "hedge," as part of a "conversion transaction" or other integrated
investment, or as other than a capital asset. This summary also does not address
the tax consequences to persons that have a functional currency other than the
U.S. dollar or the tax consequences to shareholders, partners or beneficiaries
of a holder of Capital Securities. Further, it does not include any description
of any alternative minimum tax consequences or the tax laws of any state or
local government or of any foreign government that may be applicable to the
Capital Securities. This summary is based on the Internal Revenue Code of 1986,
as amended (the "Code"), Treasury regulations thereunder, and the administrative
and judicial interpretations thereof, as of the date hereof, all of which are
subject to change, possibly on a retroactive basis.
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CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
In connection with the issuance of the Junior Subordinated Debentures,
Tax Counsel will render its opinion generally to the effect that, under then
current law and assuming full compliance with the terms of the Indenture (and
certain other documents), and based on certain facts and assumptions contained
in such opinion, the Junior Subordinated Debentures will be classified for
United States federal income tax purposes as indebtedness of the Corporation. An
opinion of Tax Counsel, however, is not binding on the Internal Revenue Service
(the "IRS") or the courts. Prospective investors should note that no rulings
have been or are expected to be sought from the IRS with respect to any of these
issues and no assurance can be given that the IRS will not take contrary
positions. Moreover, no assurance can be given that any of the opinions
expressed herein will not be challenged by the IRS or, if challenged, that such
a challenge would not be successful.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Capital Securities, Tax Counsel
will render its opinion generally to the effect that, under then current law and
assuming full compliance with the terms of the Declaration and the Indenture
(and certain other documents), and based on certain facts and assumptions
contained in such opinion, the Trust will be classified for United States
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation. Accordingly, for United States federal income tax purposes,
each holder of Capital Securities generally will be considered the owner of an
undivided interest in the Junior Subordinated Debentures, and each holder will
be required to include in its gross income any interest (or OID accrued) with
respect to its allocable share of those Junior Subordinated Debentures.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations (the "Regulations")
applicable to debt instruments on or after August 13, 1996, a "remote"
contingency that stated interest will not be timely paid will be ignored in
determining whether a debt instrument is issued with OID. The Corporation
believes that the likelihood of its exercising its option to defer payments of
interest is "remote" since exercising that option would prevent the Corporation
from declaring dividends on any class of its equity securities. Accordingly, the
Corporation intends to take the position, based on the advice of Tax Counsel,
that the Junior Subordinated Debentures will not be considered to be issued with
OID and, accordingly, stated interest on the Junior Subordinated Debentures
generally will be taxable to a holder as ordinary income at the time it is paid
or accrued in accordance with such holder's method of accounting.
Under the Regulations, if the Corporation were to exercise its option
to defer payments of interest, the Junior Subordinated Debentures would at that
time be treated as issued with OID, and all stated interest on the Junior
Subordinated Debentures would thereafter be treated as OID as long as the Junior
Subordinated Debentures remain outstanding. In such event, all of a holder's
taxable interest income with respect to the Junior Subordinated Debentures would
thereafter be accounted for on an economic accrual basis regardless of such
holder's method of tax accounting, and actual distributions of stated interest
would not be reported as taxable
S-31
<PAGE>
income. Consequently, a holder of Capital Securities would be required to
include in gross income OID even though the Corporation would not make actual
cash payments during an Extension Period. Moreover, under the Regulations, if
the option to defer the payment of interest was determined not to be "remote,"
the Junior Subordinated Debentures would be treated as having been originally
issued with OID. In such event, all of a holder's taxable interest income with
respect to the Junior Subordinated Debentures would be accounted for on an
economic accrual basis regardless of such holder's method of tax accounting, and
actual distributions of stated interest would not be reported as taxable income.
The Regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to Tax Counsel's interpretation herein.
Because income on the Capital Securities will constitute interest or
OID, corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Capital Securities.
RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE TRUST
The Corporation will have the right at any time to liquidate the Trust
and cause the Junior Subordinated Debentures to be distributed to the holders of
the Trust Securities. Under current law, such a distribution, for United States
federal income tax purposes, would be treated as a nontaxable event to each
holder, and each holder would have an aggregate tax basis in the Junior
Subordinated Debentures equal to such holder's aggregate tax basis in its
Capital Securities. A holder's holding period in the Junior Subordinated
Debentures so received in liquidation of the Trust would include the period
during which the Capital Securities were held by such holder. If, however, the
Trust is characterized for United States federal income tax purposes as an
association taxable as a corporation at the time of its dissolution, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Capital Securities and a holder's holding period in Junior
Subordinated Debentures would begin on the date such Junior Subordinated
Debentures were received.
Under certain circumstances described herein (see "Description of
Capital Securities"), the Junior Subordinated Debentures may be redeemed for
cash and the proceeds of such redemption distributed to holders in redemption of
their Capital Securities. Under current law, such a redemption would, for United
States federal income tax purposes, constitute a taxable disposition of the
redeemed Capital Securities, and a holder could recognize gain or loss as if it
sold such redeemed Capital Securities for cash. See "--Sales of Capital
Securities" below.
SALES OF CAPITAL SECURITIES
A holder that sells Capital Securities will recognize gain or loss
equal to the difference between its adjusted tax basis in the Capital Securities
and the amount realized on the sale of such Capital Securities (other than with
respect to accrued and unpaid interest which has not yet been included in
income, which will be treated as ordinary income). A holder's adjusted tax basis
in the Capital Securities generally will be its initial purchase price increased
by OID (if any) previously includable in such holder's gross income to the date
of disposition and decreased
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<PAGE>
by payments (if any) received on the Capital Securities in respect of OID. Such
gain or loss generally will be a capital gain or loss and generally will be a
long-term capital gain or loss if the Capital Securities have been held for more
than one year.
The Capital Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder who uses the accrual method of
accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debentures are deemed to have been issued with OID) who disposes of
such holder's Capital Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest on
the Junior Subordinated Debentures through the date of disposition in income as
ordinary income (I.E., interest or, possibly, OID), and to add such amount to
such holder's adjusted tax basis in such holder's pro rata share of the
underlying Junior Subordinated Debentures deemed disposed of. To the extent the
selling price is less than the holder's adjusted tax basis (which will include
all accrued but unpaid interest), a holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes.
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed the Proposed Legislation,
which would, among other things, generally deny corporate issuers a deduction
for interest in respect of certain debt obligations, such as the Junior
Subordinated Debentures, issued on or after December 7, 1995 if such debt
obligations have a maximum term in excess of 20 years and are not shown as
indebtedness on the issuer's applicable consolidated balance sheet. In addition,
the Proposed Legislation would generally deny corporate issuers a deduction for
interest in respect of certain debt obligations, such as the Junior Subordinated
Debentures, issued on or after December 7, 1995 if such debt obligations have a
weighted average maturity of more than 40 years. On March 29, 1996, Senate
Finance Committee Chairman William V. Roth, Jr. and House Ways and Means
Committee Chairman Bill Archer issued the Joint Statement indicating their
intent that the Proposed Legislation, if adopted by either of the tax-writing
committees of Congress, would have an effective date that is no earlier than the
date of "appropriate Congressional action." In addition, subsequent to the
publication of the Joint Statement, Senator Daniel Patrick Moynihan and
Representatives Sam M. Gibbons and Charles B. Rangel wrote the Democrat Letters,
which concurred with the view expressed in the Joint Statement. If the
principles contained in the Joint Statement and the Democrat Letters were
followed and if the Proposed Legislation were enacted, such legislation would
not apply to the Junior Subordinated Debentures. There can be no assurance,
however, that the effective date guidance contained in the Joint Statement and
the Democrat Letters will be incorporated into the Proposed Legislation, if
enacted, or that other legislation enacted after the date hereof will not
otherwise adversely affect the ability of the Corporation to deduct the interest
payable on the Junior Subordinated Debentures. Accordingly, there can be no
assurance that a Tax Event will not occur. The occurrence of a Tax Event may
result in the redemption of the Junior Subordinated Debentures for cash, in
which event the holders of the Capital Securities would receive cash in
redemption of their Capital Securities. See "Description of Capital
Securities--Special Redemption."
S-33
<PAGE>
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S. Holder
for United States federal income tax purposes.
A "U.S. Holder" is a holder of Capital Securities who or which is a
citizen or individual resident (or is treated as a citizen or individual
resident) of the United States for federal income tax purposes, a corporation or
partnership created or organized (or treated as created or organized for federal
income tax purposes) in or under the laws of the United States or any political
subdivision thereof, or a trust or estate the income of which is includable in
its gross income for federal income tax purposes without regard to its source.
Notwithstanding the foregoing, for taxable years beginning after December 31,
1996 (or for the immediately preceding taxable year, if the trustee of a trust
so elects), a trust is a U.S. Holder for federal income tax purposes if, and
only if, (i) a court within the United States is able to exercise primary
supervision over the administration of the trust and (ii) one or more United
States trustees have the authority to control all substantial decisions of the
trust.
Under present United States federal income tax laws: (i) payments by
the Trust or any of its paying agents to any holder of a Capital Security who or
which is a United States Alien Holder will not be subject to United States
federal withholding tax; provided that, (a) the beneficial owner of the Capital
Security does not actually or constructively own 10 percent or more of the total
combined voting power of all classes of stock of the Corporation entitled to
vote, (b) the beneficial owner of the Capital Security is not a controlled
foreign corporation that is related to the Corporation through stock ownership,
and (c) either (A) the beneficial owner of the Capital Security certifies to the
Trust or its agent, under penalties of perjury, that it is not a United States
holder and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Capital Security in such capacity, certifies to the
Trust or its agent, under penalties of perjury, that such statement has been
received from the beneficial owner by it or by a Financial Institution between
it and the beneficial owner and furnishes the Trust or its agent with a copy
thereof; and (ii) a United States Alien Holder of a Capital Security will not be
subject to United States federal withholding tax on any gain realized upon the
sale or other disposition of a Capital Security.
S-34
<PAGE>
As discussed above, changes in legislation affecting the United States
federal income tax treatment of the Junior Subordinated Debentures are possible,
and could adversely affect the ability of the Corporation to deduct the interest
payable on the Junior Subordinated Debentures. Moreover, any such legislation
could, as the Proposed Legislation would have, adversely affect United States
Alien Holders by characterizing income derived from the Junior Subordinated
Debentures as dividends, generally subject to a 30% income tax (on a withholding
basis) when paid to a United States Alien Holder, rather than as interest which,
as discussed above, is generally exempt from income tax in the hands of a United
States Alien Holder.
A United States Alien Holder that holds Capital Securities in
connection with the active conduct of a United States trade or business will be
subject to income tax on all income and gains recognized with respect to its
proportionate share of the Junior Subordinated Debentures.
INFORMATION REPORTING TO HOLDERS
Generally, income on the Capital Securities will be reported to holders
on Forms 1099, which forms should be mailed to holders of Capital Securities by
January 31 following each calendar year.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Capital Securities
may be subject to a "backup" withholding tax of 31 percent unless the holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the holder's United States federal income tax,
provided the required information is provided to the IRS.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE CAPITAL 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
The Corporation, the obligor with respect to the Junior Subordinated
Debentures held by the Trust, and its affiliates and the Property Trustee
may be considered a "party in interest" (within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) or a
"disqualified person" (within the meaning of Section 4975 of the Code) with
respect to many employee benefit plans ("Plans") that are subject to ERISA.
Any purchaser proposing to acquire Capital Securities with assets of any
Plan should consult with its counsel. The purchase and/or holding of Capital
Securities by a Plan that is subject to the fiduciary responsibility
provisions of ERISA or the prohibited transaction provisions of Section
4975 of the Code (including individual retirement arrangements and other
plans described in Section 4975(e)(l) of the Code) and with respect to
which the Corporation, the Property Trustee or any affiliate is a service
provider (or otherwise is 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 Capital Securities are acquired pursuant to and in
accordance with an applicable exemption, such as Prohibited Transaction
Class Exemption ("PTCE") 84-14 (an exemption for certain transactions determined
by an independent qualified professional asset manager), PTCE 91-38 (an
exemption for certain transactions involving bank collective investment
funds), PTCE 90-1 (an exemption for certain transactions involving insurance
company pooled separate accounts), PTCE 95-60 (an exemption for transactions
involving certain insurance company general accounts) or PTCE 96-23 (an
exception for certain transactions determined by an in-house asset manager).
In addition, a Plan fiduciary considering the purchase of Capital Securities
should be aware that the assets of the Trust may be considered "plan assets"
for ERISA purposes. Therefore, a Plan fiduciary should consider whether the
purchase of Capital Securities could result in a delegation of fiduciary
authority to the Property Trustee, and, if so, whether such a delegation
of authority is permissible under the Plan's governing instrument or any
investment management agreement with the Plan. In making such determination,
a Plan fiduciary should note that the Property Trustee is a U.S. bank qualified
to be an investment manager (within the meaning of section 3(38) of ERISA) to
which such a delegation of authority generally would be permissible under
ERISA. Further, prior to an Event of Default with respect to the Junior
Subordinated Debentures, the Property Trustee will have only limited custodial
and ministerial authority with respect to Trust assets.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Corporation and the Trust have agreed that the Trust will sell to
each of the Underwriters named below, and each of such Underwriters, for whom
______________________ is acting as representative (the "Representative"), has
severally agreed to purchase from the Trust, the respective number of Capital
Securities set forth opposite its name below.
S-35
<PAGE>
NUMBER
OF
CAPITAL
NAME SECURITIES
--------------------------------------- -------------
............................
...........................
............................
............................
............................
............................
...........................
-------------
Total..........................................
============
In the Underwriting Agreement, the several Underwriters have agreed,
subject to the terms and conditions set forth therein, to purchase all the
Capital Securities offered hereby if any of the Capital Securities are
purchased. In the event of default by an Underwriter, the Underwriting Agreement
provides that, in certain circumstances, the purchase commitments of the
nondefaulting Underwriters may be increased or the Underwriting Agreement may be
terminated.
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Capital Securities are
subject to the approval of certain legal matters by their counsel and to certain
other conditions. The Underwriters are committed to take and pay for all of the
Capital Securities if any are taken.
The Underwriters propose initially to offer the Capital Securities to
the public at the public offering price set forth on the cover page of this
Prospectus Supplement and to certain dealers at such price less a concession not
in excess of $ per Capital Security. The Underwriters may allow, and such
dealers may reallow, a discount not in excess of $ per Capital Security to
certain other dealers. After the initial public offering, the public offering
price, concession and discount may be changed.
In view of the fact that the proceeds from the sale of the Capital
Securities will be used to purchase the Junior Subordinated Debentures issued by
the Corporation, the Underwriting Agreement provides that the Corporation will
pay as Underwriters' compensation for the Underwriters' arranging the investment
therein of such proceeds an amount of $ per Capital Security for the accounts
of the several Underwriters.
During a period of 30 days from the date of this Prospectus Supplement,
neither the Trust nor the Company will, without the prior written consent of the
Representative, directly or indirectly, sell, offer to sell, grant any option
for the sale of, or otherwise dispose of, any Capital Securities, any security
convertible into or exchangeable into or exercisable for Capital Securities or
Junior Subordinated Debentures or any debt securities substantially similar to
the
S-36
<PAGE>
Junior Subordinated Debentures or equity securities substantially similar to the
Capital Securities (except for the Junior Subordinated Debentures and the
Capital Securities offered hereby).
The Capital Securities are a new issue of securities with no
established trading market. The Trust does not intend to apply for listing of
the Capital Securities on a national securities exchange, but has been advised
by the Underwriters that they presently intend to make a market in the Capital
Securities as permitted by applicable laws and regulations. The Underwriters are
not obligated, however, to make a market in the Capital Securities and any such
market making may be discontinued at any time at the sole discretion of the
Underwriters. Accordingly, no assurance can be given as to the liquidity of, or
trading markets for, the Capital Securities.
The Corporation and the Trust have agreed to indemnify the several
Underwriters against, or contribute to payments that the Underwriters may be
required to make in respect of, certain liabilities, including liabilities under
the Securities Act.
[ ] will serve as Quotations Agent with respect to the Capital
Securities and in certain instances will calculate the Redemption Price thereof.
Certain of the Underwriters or their affiliates have provided from time
to time, and expect to provide in the future, investment or commercial banking
services to the Corporation and its affiliates, for which such Underwriters or
their affiliates have received or will receive customary fees and commissions.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Capital
Securities, the enforceability of the Declaration and the formation of the Trust
will be passed upon by Richards, Layton & Finger, special Delaware counsel to
the Corporation and the Trust. The validity of the Guarantee and the Junior
Subordinated Debentures will be passed upon for the Corporation by Kenneth W.
McAllister, General Counsel of the Corporation and for the Underwriters by Brown
& Wood LLP. Kenneth W. McAllister and Brown & Wood LLP will rely on the opinion
of Richards, Layton & Finger as to matters of Delaware law. Brown & Wood LLP
from time to time performs legal services for the Corporation. Certain matters
relating to United States federal income tax considerations described in this
Prospectus Supplement will be passed upon for the Corporation by Brown & Wood
LLP.
S-37
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION DATED JANUARY 22, 1997
$300,000,000
WACHOVIA CORPORATION
JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES
WACHOVIA CAPITAL TRUST II
WACHOVIA CAPITAL TRUST III
WACHOVIA CAPITAL TRUST IV
PREFERRED SECURITIES FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED HEREIN, BY
WACHOVIA CORPORATION
Wachovia Corporation, a North Carolina corporation ("Wachovia" or the
"Corporation"), may from time to time offer in one or more series or issuances
its junior subordinated deferrable interest debentures (the "Junior Subordinated
Debentures"). The Junior Subordinated Debentures will be unsecured and
subordinate and junior in right of payment to the extent and in the manner
set forth herein to Senior Indebtedness (as defined in "Description of
Junior Subordinated Debentures--Subordination") of the Corporation.
If provided in an accompanying Prospectus Supplement, the Corporation will
have the right to defer payments of interest on any series of Junior
Subordinated Debentures by extending the interest payment period thereon
at any time or from time to time for up to such number of consecutive interest
payment periods (which shall not extend beyond the Stated Maturity Date (as
defined herein) of the Junior Subordinated Debentures) with respect to each
deferral period as may be specified in such Prospectus Supplement (each, an
"Extension Period"). In such circumstance, however, the Corporation would not be
permitted, subject to certain exceptions set forth herein, to declare or pay any
dividends, distributions or other payments with respect to, or repay,
repurchase, redeem or otherwise acquire, the Corporation's capital stock or debt
securities that rank pari passu with or junior to such series of Junior
Subordinated Debentures. See "Description of Junior Subordinated
Debentures--Option to Defer Interest Payments" and "--Restrictions on Certain
Payments."
Wachovia Capital Trust II, Wachovia Capital Trust III and Wachovia
Capital Trust IV, each a trust created under the laws of the State of Delaware
(each, a "Trust," and collectively, the "Trusts"), may severally offer, from
time to time, preferred securities (the "Preferred Securities") representing
beneficial ownership interests in such Trust. The Corporation will be the owner
of the common securities (the "Common Securities" and, together with the
Preferred Securities, the "Trust Securities") representing common beneficial
ownership interests in such Trust. Holders of the Preferred Securities will be
entitled to receive preferential cumulative cash distributions ("Distributions")
accumulating from the date of original issuance and payable periodically as
specified in an accompanying Prospectus Supplement.
(continued on next page)
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
---------------------------
The date of this Prospectus is [ ], 1997.
<PAGE>
(cover page continued)
Concurrently with the issuance by a Trust of its Preferred Securities,
such Trust will invest the proceeds thereof and of contributions received in
respect of the Common Securities in a corresponding series of the Corporation's
Junior Subordinated Debentures (the "Corresponding Junior Subordinated
Debentures") with terms corresponding to the terms of that Trust's Preferred
Securities (the "Related Preferred Securities"). Accordingly, if, as provided in
an accompanying Prospectus Supplement, the Corporation has the right to defer
the payment of interest on a series of Corresponding Junior Subordinated
Debentures, then, if interest payments are so deferred, Distributions on the
Related Preferred Securities would also be deferred, but would continue to
accumulate at the rate per annum set forth in the related Prospectus Supplement.
See "Description of Preferred Securities--Distributions."
Taken together, the Corporation's obligations under each series of
Corresponding Junior Subordinated Debentures, the Indenture and the related
Declaration and the related Guarantee (each, as defined herein), in the
aggregate, provide a full, irrevocable and unconditional guarantee of payments
of Distributions and other amounts due on the Related Preferred Securities. See
"Relationship Among the Preferred Securities, the Corresponding Junior
Subordinated Debentures and the Guarantees--Full and Unconditional Guarantee."
The payment of Distributions with respect to the Preferred Securities of each
Trust and payments on liquidation of such Trust or redemption of such Preferred
Securities, in each case out of funds held by such Trust, are each irrevocably
guaranteed by the Corporation to the extent described herein (each, a
"Guarantee"). See "Description of Guarantees." The obligations of the
Corporation under each Guarantee will be unsecured and subordinate and junior in
right of payment to all Senior Indebtedness of the Corporation to the extent
and in the manner set forth herein.
The Corresponding Junior Subordinated Debentures will be the sole
assets of each Trust, and payments under the Corresponding Junior Subordinated
Debentures will be the only revenue of each Trust. If so provided in
an accompanying Prospectus Supplement, the Corporation may, upon receipt
of approval of the Board of Governors of the Federal Reserve System (the
"Federal Reserve") (if such approval is then required under the
applicable capital guidelines or policies), redeem the Corresponding Junior
Subordinated Debentures (and thereby cause the redemption of the Trust
Securities) or may terminate each Trust and, after satisfaction of liabilities
to the creditors of such Trust as required by applicable law, cause the
Corresponding Junior Subordinated Debentures to be distributed to the holders of
Preferred Securities in exchange therefor upon liquidation of their interests in
such Trust. See "Description of Preferred Securities--Liquidation Distribution
Upon Termination."
The Junior Subordinated Debentures and Preferred Securities may be
offered in amounts, at prices and on terms to be determined at the time of
offering; provided, however, the aggregate initial public offering price of all
Junior Subordinated Debentures (other than Corresponding Junior Subordinated
Debentures) and Preferred Securities (including the Corresponding Junior
Subordinated Debentures) issued pursuant to the Registration Statement of which
this Prospectus forms a part shall not exceed $300,000,000. Certain specific
terms of the Junior Subordinated Debentures or Preferred Securities in respect
of which this Prospectus is being delivered will be described in an accompanying
Prospectus Supplement, including without
2
<PAGE>
limitation and where applicable and to the extent not set forth herein, (a) in
the case of Junior Subordinated Debentures, the specific designation, aggregate
principal amount, denominations, Stated Maturity Date (including any provisions
for the shortening or extension thereof), interest payment dates, interest rate
(which may be fixed or variable) or method of calculating interest, if any,
applicable Extension Period or interest deferral terms, if any, place or places
where principal, premium, if any, and interest, if any, will be payable, any
terms of redemption, any sinking fund provisions, terms for any conversion or
exchange into other securities, initial offering or purchase price, methods of
distribution and any other special terms, and (b) in the case of Preferred
Securities, the identity of the Trust, specific title, aggregate stated
liquidation amount, number of securities, Distribution rate or method of
calculating such rate, Distribution payment dates, applicable Distribution
deferral terms, if any, place or places where Distributions will be payable, any
terms of redemption, exchange, initial offering or purchase price, methods of
distribution and any other special terms.
The Prospectus Supplement also will contain information, as applicable,
about certain United States federal income tax consequences relating to the
Junior Subordinated Debentures or Preferred Securities.
The Junior Subordinated Debentures and Preferred Securities may be sold
to or through underwriters, through dealers, remarketing firms or agents or
directly to purchasers. See "Plan of Distribution." The names of any
underwriters, dealers, remarketing firms or agents involved in the sale of
Junior Subordinated Debentures or Preferred Securities in respect of which this
Prospectus is being delivered and any applicable fee, commission or discount
arrangements with them will be set forth in a Prospectus Supplement. The
Prospectus Supplement will state whether the Junior Subordinated Debentures or
Preferred Securities will be listed on any national securities exchange or
automated quotation system. If the Junior Subordinated Debentures or Preferred
Securities are not listed on any national securities exchange or automated
quotation system, there can be no assurance that there will be a secondary
market for the Junior Subordinated Debentures or Preferred Securities.
This Prospectus may not be used to consummate sales of Junior
Subordinated Debentures or Preferred Securities unless accompanied by a
Prospectus Supplement.
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, Suite 1300, New York,
New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material can also be obtained at
prescribed rates by writing to the Public Reference Section of the Commission at
450 Fifth Street, N.W., Judiciary Plaza, Washington,
3
<PAGE>
D.C. 20549. Such material may also be accessed electronically by means of the
Commission's home page on the Internet at http://www.sec.gov. In addition, such
reports, proxy statements and other information concerning the Corporation can
be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
The Corporation and the Trusts have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain portions of which have been omitted as permitted
by the rules and regulations of the Commission. For further information with
respect to the Corporation and the securities offered hereby, reference is made
to the Registration Statement and the exhibits and the financial statements,
notes and schedules filed as a part thereof or incorporated by reference
therein, which may be inspected at the public reference facilities of the
Commission at the addresses set forth above or through the Commission's home
page on the Internet. Statements made in this Prospectus concerning the contents
of any documents referred to herein are not necessarily complete, and in each
instance are qualified in all respects by reference to the copy of such document
filed as an exhibit to the Registration Statement.
No separate financial statements of any Trust have been included
herein. The Corporation and the Trusts do not consider that such financial
statements would be material to holders of the Preferred Securities because each
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 Corresponding Junior
Subordinated Debentures of the Corporation and issuing the Trust Securities. See
"The Trusts," "Description of Preferred Securities," "Description of Junior
Subordinated Debentures--Corresponding Junior Subordinated Debentures" and
"Description of Guarantees." In addition, the Corporation does not expect
that any of the Trusts will be filing reports under the Exchange Act with
the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission
are incorporated into this Prospectus by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1995.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31,
1996, June 30, 1996 and September 30, 1996.
Each document or report filed by the Corporation pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference into this Prospectus and to be a part of
this Prospectus from the date of filing of such document. Any statement
contained herein, or in a document all or a portion of which is incorporated or
deemed
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to be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of the Registration Statement and this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
The Corporation will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference herein (other
than exhibits not specifically incorporated by reference into the texts of such
documents). Requests for such documents should be directed to: Wachovia
Corporation, 100 North Main Street, Winston-Salem, North Carolina 27150,
Attention: Chief Financial Officer of Wachovia Corporation, telephone number
910-770-5000.
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WACHOVIA CORPORATION
Wachovia Corporation ("Wachovia" or the "Corporation"), a North
Carolina corporation, is an interstate bank holding company with dual
headquarters in Atlanta, Georgia and Winston- Salem, North Carolina, serving
regional, national and international markets. The Corporation has three
principal banking subsidiaries, Wachovia Bank of Georgia, N.A. ("Wachovia Bank
of Georgia"), Wachovia Bank of North Carolina, N.A. ("Wachovia Bank of North
Carolina") and Wachovia Bank of South Carolina, N.A. ("Wachovia Bank of South
Carolina" and together with Wachovia Bank of Georgia and Wachovia Bank of North
Carolina, the "Banks"), the assets of which together, as of September 30, 1996,
constituted substantially all of the assets of the Corporation. Wachovia's
common stock is traded on the New York Stock Exchange under the symbol WB.
Wachovia is a registered bank holding company under the Bank Holding Company Act
of 1956, as amended, and is a savings and loan holding company within the
meaning of the Home Owners' Loan Act of 1933, as amended.
The Banks had a total of 486 offices as of September 30, 1996. As of
September 30, 1996, Wachovia Bank of Georgia had 125 offices in 49 Georgia
cities and communities, Wachovia Bank of North Carolina had 219 offices in 95
North Carolina cities and communities, and Wachovia Bank of South Carolina had
142 offices in 64 South Carolina cities and communities. Subsidiaries of the
Corporation have domestic representative offices in Chicago and New York City;
international representative offices in New York City, London and Tokyo; foreign
branch offices in Grand Cayman; residential mortgage loan offices in Florida,
Georgia, North Carolina and South Carolina; operations centers in Atlanta,
Georgia, Charlotte, Greenville, Raleigh and Winston-Salem, North Carolina, and
Columbia, South Carolina; a major credit card operation in Delaware; and a
credit life and accident insurance company in Georgia.
At September 30, 1996, on a consolidated basis, Wachovia had total
assets of $47.5 billion, deposits of $27.4 billion, and a market capitalization
of $8.2 billion. Based on its consolidated asset size and market capitalization
at September 30, 1996, Wachovia was ranked 20th and 21st, respectively, among
domestic U.S. bank holding companies.
The Banks serve domestic U.S. retail and mid-market corporate customers
in their home markets. Also, at September 30, 1996, the Banks administered trust
assets totaling over $93.3 billion, including more than $23.0 billion in assets
under discretionary management, and provided a comprehensive array of trust
related services and products to institutional and retail clients. Other major
subsidiaries of the Corporation include Wachovia Corporate Services, Inc. which
directs large corporate and institutional relationship management and business
development in national and international markets; Wachovia Leasing Corporation
which provides corporate leasing services; Wachovia Operational Services
Corporation which provides remittance processing services for customers through
three operations centers; and Wachovia Investments, Inc. which offers brokerage
services to institutional and retail clients.
The Corporation is a North Carolina corporation with dual executive
offices at 100 North Main Street, Winston-Salem, North Carolina 27150 and 191
Peachtree Street, N.E., Atlanta, Georgia 30303 and its telephone numbers are
(910) 770-5000 and (404) 332-5000, respectively.
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THE TRUSTS
Each Trust is a statutory business trust created under Delaware law
pursuant to (i) a declaration of trust executed by the Corporation, as Sponsor
of the Trust, the Delaware Trustee and three Administrative Trustees (each as
defined herein) of such Trust and (ii) the filing of a certificate of trust with
the Delaware Secretary of State. Each declaration of trust will be amended and
restated in its entirety (each, as so amended and restated, a "Declaration")
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. Each Declaration will be qualified as an
indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). Each Trust exists for the exclusive purposes of (i) issuing and
selling its Trust Securities, which represent undivided beneficial interests in
the assets of such Trust, (ii) investing the gross proceeds from the sale of
such Trust Securities in a series of Corresponding Junior Subordinated
Debentures issued by the Corporation, and (iii) engaging in only those other
activities necessary, advisable or incidental thereto (such as registering the
transfer of Trust Securities). Accordingly, the Corresponding Junior
Subordinated Debentures will be the sole assets of each Trust, and payments
under the Corresponding Junior Subordinated Debentures will be the sole revenue
of each Trust.
All of the Common Securities of each Trust will be owned directly or
indirectly by the Corporation. The Common Securities of a Trust will rank pari
passu, and payments will be made thereon pro rata, with the Preferred Securities
of such Trust, except that upon the occurrence and continuance of an event of
default under a Declaration resulting from an event of default under the
Indenture, the rights of the Corporation as holder of the Common Securities to
payment in respect of Distributions and payments upon liquidation or redemption
will be subordinated to the rights of the holders of the Preferred Securities of
such Trust. See "Description of Preferred Securities--Subordination of Common
Securities." The Corporation will acquire, directly or indirectly, Common
Securities in an aggregate Liquidation Amount equal to at least 3% of the total
capital of each Trust.
Unless otherwise specified in the applicable Prospectus Supplement,
each Trust has a term of approximately 55 years, but may terminate earlier as
provided in the applicable Declaration. Each Trust's business and affairs are
conducted by its trustees, each appointed by the Corporation as holder of the
Common Securities. The trustees for each Trust will be The First National Bank
of Chicago, as the Property Trustee (the "Property Trustee"), First Chicago
Delaware Inc., as the Delaware Trustee (the "Delaware Trustee"), and three
individual trustees (the "Administrative Trustees") who are employees or
officers of or affiliated with the Corporation (collectively, the "Issuer
Trustees"). The First National Bank of Chicago, as Property Trustee, will act as
sole trustee under each Declaration for purposes of compliance with the Trust
Indenture Act. The First National Bank of Chicago will also act as trustee under
the Guarantees and the Indenture. See "Description of Guarantees" and
"Description of Junior Subordinated Debentures." The holder of the Common
Securities of a Trust, or the holders of a majority in Liquidation Amount of the
Related Preferred Securities if an event of default under the Declaration for
such Trust has occurred and is continuing, will be entitled to appoint, remove
or replace the Property Trustee and/or the Delaware Trustee for such Trust. In
no event will the holders of the Preferred Securities have the right to vote to
appoint, remove or replace the Administrative Trustees; such voting rights are
vested exclusively in the holder of the Common
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Securities. The duties and obligations of each Issuer Trustee are governed by
the applicable Declaration. The Corporation will pay all fees and expenses
related to each Trust and the offering of the Preferred Securities and will pay,
directly or indirectly, all ongoing costs, expenses and liabilities of each
Trust.
The principal executive office of each Trust is c/o Wachovia Corporation,
100 North Main Street, Winston-Salem, North Carolina 27150, Attention: Chief
Financial Officer of Wachovia Corporation and its telephone number is
910-770-5000.
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement,
the Corporation intends to use the net proceeds from the sale of its Junior
Subordinated Debentures (including Corresponding Junior Subordinated Debentures
issued to the Trusts in connection with the investment by the Trusts of all of
the proceeds from the sale of Trust Securities) for general corporate purposes,
which may include, but not be limited to, investments in and advances to the
Corporation's subsidiaries and the redemption of certain of the Corporation's
outstanding debt securities. The precise amount and timing of the application of
such net proceeds used for such corporate purposes will depend on the funding
requirements and the availability of other funds to the Corporation and its
subsidiaries. Pending such application by the Corporation, such net proceeds may
be temporarily invested in short-term interest bearing securities. The Preferred
Securities will be eligible to qualify as Tier I Capital under current capital
guidelines of the Federal Reserve, provided that under current Federal Reserve
guidelines no more than 25% of the Corporation's Tier I Capital may comprise
Preferred Securities and other similar preferred securities and cumulative
preferred stock of the Corporation.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued in one or more
series under a Junior Subordinated Indenture, as supplemented from time to time
(as so supplemented, the "Indenture"), between the Corporation and The First
National Bank of Chicago, as trustee (the "Debenture Trustee"). This summary of
certain terms and provisions of the Junior Subordinated Debentures,
Corresponding Junior Subordinated Debentures and the Indenture, which summarizes
the material provisions thereof, does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the Indenture, the form of
which is filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, and to the Trust Indenture Act, to each of which
reference is hereby made. The Indenture is qualified under the Trust Indenture
Act. Whenever particular defined terms of the Indenture (as supplemented or
amended from time to time) are referred to herein or in a Prospectus Supplement,
such defined terms are incorporated herein or therein by reference.
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GENERAL
Each series of Junior Subordinated Debentures will rank pari passu with
all other series of Junior Subordinated Debentures and will be unsecured and
subordinate and junior in right of payment to the extent and in the manner set
forth in the Indenture to all Senior Indebtedness (as defined below) of the
Corporation. See "--Subordination." Because the Corporation is a holding
company, the right of the Corporation to participate in any distribution of
assets of any subsidiary, including Wachovia Bank of Georgia, Wachovia Bank of
North Carolina and Wachovia Bank of South Carolina, upon such subsidiary's
liquidation or reorganization or otherwise, is subject to the prior claims of
creditors of the subsidiary, except to the extent the Corporation may itself be
recognized as a creditor of that subsidiary. Accordingly, the Junior
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders of Junior
Subordinated Debentures should look only to the assets of the Corporation for
payments on the Junior Subordinated Debentures. Except as otherwise provided in
the applicable Prospectus Supplement, the Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of the Corporation,
including Senior Indebtedness, whether under the Indenture, any other existing
indenture or any other indenture that the Corporation may enter into in the
future or otherwise. See "--Subordination" and the applicable Prospectus
Supplement relating to any offering of Preferred Securities or Junior
Subordinated Debentures.
The Junior Subordinated Debentures will be issuable in one or more
series pursuant to an indenture supplemental to the Indenture or a resolution of
the Corporation's Board of Directors or a committee thereof.
The applicable Prospectus Supplement will describe the following terms
of the Junior Subordinated Debentures: (1) the title of the Junior Subordinated
Debentures; (2) any limit upon the aggregate principal amount of the Junior
Subordinated Debentures; (3) the date or dates on which the principal of the
Junior Subordinated Debentures is payable (the "Stated Maturity Date") or the
method of determination thereof; (4) the rate or rates, if any, at which the
Junior Subordinated Debentures shall bear interest, the dates on which any such
interest shall be payable (the "Interest Payment Dates"), the right, if any, of
the Corporation to defer or extend an Interest Payment Date, and the record
dates for any interest payable on any Interest Payment Date (the "Regular Record
Dates") or the method by which any of the foregoing shall be determined; (5) the
place or places where, subject to the terms of the Indenture as described below
under "--Payment and Paying Agents," the principal of and premium, if any, and
interest on the Junior Subordinated Debentures will be payable and where,
subject to the terms of the Indenture as described below under "--Denominations,
Registration and Transfer," the Junior Subordinated Debentures may be presented
for registration of transfer or exchange and the place or places where notices
and demands to or upon the Corporation in respect of the Junior Subordinated
Debentures and the Indentures may be made ("Place of Payment"); (6) any period
or periods within which, or date or dates on which, the price or prices at which
and the terms and conditions upon which Junior Subordinated Debentures may be
redeemed, in whole or in part, at the option of the Corporation or a holder
thereof; (7) the obligation or the right, if any, of the Corporation or a holder
thereof to redeem, purchase or repay the Junior Subordinated Debentures and the
period or periods within which, the price or prices at which, the currency
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or currencies (including currency unit or units) in which and the other terms
and conditions upon which the Junior Subordinated Debentures shall be redeemed,
repaid or purchased, in whole or in part, pursuant to such obligation; (8) the
denominations in which any Junior Subordinated Debentures shall be issuable if
other than denominations of $25 and any integral multiple thereof; (9) if other
than in U.S. Dollars, the currency or currencies (including currency unit or
units) in which the principal of (and premium, if any) and interest, if any, on
the Junior Subordinated Debentures shall be payable, or in which the Junior
Subordinated Debentures shall be denominated; (10) any additions, modifications
or deletions in the events of default under the Indenture or covenants of the
Corporation specified in the Indenture with respect to the Junior Subordinated
Debentures; (11) if other than the principal amount thereof, the portion of the
principal amount of Junior Subordinated Debentures that shall be payable upon
declaration of acceleration of the maturity thereof; (12) any additions or
changes to the Indenture with respect to a series of Junior Subordinated
Debentures as shall be necessary to permit or facilitate the issuance of such
series in bearer form, registrable or not registrable as to principal, and with
or without interest coupons; (13) any index or indices used to determine the
amount of payments of principal of and premium, if any, on the Junior
Subordinated Debentures and the manner in which such amounts will be determined;
(14) the terms and conditions relating to the issuance of a temporary Global
Security representing all of the Junior Subordinated Debentures of such series
and the exchange of such temporary Global Security for definitive Junior
Subordinated Debentures of such series; (15) subject to the terms described
herein under "--Global Junior Subordinated Debentures," whether the Junior
Subordinated Debentures of the series shall be issued in whole or in part in the
form of one or more Global Securities and, in such case, the depositary for such
Global Securities, which depositary shall be a clearing agency registered under
the Exchange Act; (16) the appointment of any paying agent or agents; (17) the
terms and conditions of any obligation or right of the Corporation or a holder
to convert or exchange the Junior Subordinated Debentures into Preferred
Securities; (18) the form of Declaration and Guarantee Agreement, if applicable;
(19) the relative degree, if any, to which such Junior Subordinated Debentures
of the series shall be senior to or be subordinated to other series of such
Junior Subordinated Debentures or other indebtedness of the Corporation in right
of payment, whether such other series of Junior Subordinated Debentures or other
indebtedness are outstanding or not; and (20) any other terms of the Junior
Subordinated Debentures not inconsistent with the provisions of the Indenture.
Junior Subordinated Debentures may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. Certain United States
federal income tax consequences and special considerations applicable to any
such Junior Subordinated Debentures will be described in the applicable
Prospectus Supplement.
If the purchase price of any of the Junior Subordinated Debentures is
payable in one or more foreign currencies or currency units or if any Junior
Subordinated Debentures are denominated in one or more foreign currencies or
currency units or if the principal of, premium, if any, or interest on any
Junior Subordinated Debentures is payable in one or more foreign currencies or
currency units, the restrictions, elections, certain United States federal
income tax consequences, specific terms and other information with respect to
such series of Junior
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Subordinated Debentures and such foreign currency or currency units will be set
forth in the applicable Prospectus Supplement.
If any index is used to determine the amount of payments of principal
of, premium, if any, or interest on any series of Junior Subordinated
Debentures, special United States federal income tax, accounting and other
considerations applicable thereto will be described in the applicable Prospectus
Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Junior Subordinated Debentures will be issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. Junior
Subordinated Debentures of any series will be exchangeable for other Junior
Subordinated Debentures of the same issue and series, of any authorized
denominations, of a like aggregate principal amount, of the same original issue
date and stated maturity and bearing the same interest rate.
Junior Subordinated Debentures may be presented for exchange as
provided above, and may be presented for registration of transfer (with the form
of transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the appropriate securities registrar or at the
office of any transfer agent designated by the Corporation for such purpose with
respect to any series of Junior Subordinated Debentures and referred to in the
applicable Prospectus Supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the Indenture. The
Corporation will appoint the Debenture Trustee as securities registrar under the
Indenture. If the applicable Prospectus Supplement refers to any transfer agents
(in addition to the securities registrar) initially designated by the
Corporation with respect to any series of Junior Subordinated Debentures, the
Corporation may at any time rescind the designation of any such transfer agent
or approve a change in the location through which any such transfer agent acts,
provided that the Corporation maintains a transfer agent in each place of
payment for such series. The Corporation may at any time designate additional
transfer agents with respect to any series of Junior Subordinated Debentures.
In the event of any redemption, neither the Corporation nor the
Debenture Trustee shall be required to (i) issue, register the transfer of or
exchange Junior Subordinated Debentures of any series during a period beginning
at the opening of business 15 days before the day of selection for redemption of
Junior Subordinated Debentures of that series and ending at the close of
business on the day of mailing of the relevant notice of redemption or (ii)
transfer or exchange any Junior Subordinated Debentures so selected for
redemption, except, in the case of any Junior Subordinated Debentures being
redeemed in part, any portion thereof not to be redeemed.
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GLOBAL JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures of a series may be issued in whole
or in part in the form of one or more Global Junior Subordinated Debentures that
will be deposited with, or on behalf of, a depositary (the "Depositary")
identified in the Prospectus Supplement relating to such series. Global Junior
Subordinated Debentures may be issued only in fully registered form and in
either temporary or permanent form. Unless and until it is exchanged in whole or
in part for the individual Junior Subordinated Debentures represented thereby, a
Global Junior Subordinated Debenture may not be transferred except as a whole by
the Depositary for such Global Junior Subordinated Debenture to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by the Depositary or any nominee to a successor
Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a
series of Junior Subordinated Debentures will be described in the Prospectus
Supplement relating to such series. The Corporation anticipates that the
following provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Junior Subordinated Debenture, and the
deposit of such Global Junior Subordinated Debenture with or on behalf of the
Depositary, the Depositary for such Global Junior Subordinated Debenture or its
nominee will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture to the accounts of
persons that have accounts with such Depositary ("Participants"). Such accounts
shall be designated by the dealers, underwriters or agents with respect to such
Junior Subordinated Debentures or by the Corporation if such Junior Subordinated
Debentures are offered and sold directly by the Corporation. Ownership of
beneficial interests in a Global Junior Subordinated Debenture will be limited
to Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Junior Subordinated Debenture
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the 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 Junior Subordinated
Debenture.
So long as the Depositary for a Global Junior Subordinated Debenture,
or its nominee, is the registered owner of such Global Junior Subordinated
Debenture, such Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture for all purposes under
the Indenture governing such Junior Subordinated Debentures. Except as provided
below, owners of beneficial interests in a Global Junior Subordinated Debenture
will not be entitled to have any of the individual Junior Subordinated
Debentures of the series represented by such Global Junior Subordinated
Debenture registered in their names, will not receive or be entitled to receive
physical delivery of any such Junior Subordinated Debentures
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of such series in definitive form and will not be considered the owners or
holders thereof under the Indenture.
Payments of principal of (and premium, if any) and interest on
individual Junior Subordinated Debentures represented by a Global Junior
Subordinated Debenture registered in the name of a Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as the
registered owner of the Global Junior Subordinated Debenture representing such
Junior Subordinated Debentures. None of the Corporation, the Debenture Trustee,
any Paying Agent, or the Securities Registrar for such Junior Subordinated
Debentures will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Junior Subordinated Debenture representing such Junior
Subordinated Debentures or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Corporation expects that the Depositary for a series of Junior
Subordinated Debentures or its nominee, upon receipt of any payment of
principal, premium, if any, or interest in respect of a permanent Global Junior
Subordinated Debenture representing any of such Junior Subordinated Debentures,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount of
such Global Junior Subordinated Debenture for such Junior Subordinated
Debentures as shown on the records of such Depositary or its nominee. The
Corporation also expects that payments by Participants to owners of beneficial
interests in such Global Junior Subordinated Debenture held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." Such payments will be the responsibility of
such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if
a Depositary for a series of Junior Subordinated Debentures is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Corporation within 90 days or there shall
have occurred and be continuing an Event of Default with respect to such
Global Security, the Corporation will issue individual Junior Subordinated
Debentures of such series in exchange for the Global Junior Subordinated
Debenture representing such series of Junior Subordinated Debentures.
In addition, the Corporation may at any time and in its
sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Junior Subordinated Debentures, determine not to
have any Junior Subordinated Debentures of such series represented by one or
more Global Junior Subordinated Debentures and, in such event, will issue
certificated Junior Subordinated Debentures of such series in exchange for the
Global Junior Subordinated Debenture. Further, if the Corporation so specifies
with respect to the Junior Subordinated Debentures of a series, an owner of a
beneficial interest in a Global Junior Subordinated Debenture representing
Junior Subordinated Debentures of such series may, on terms acceptable to the
Corporation, the Debenture Trustee and the Depositary for such Global Junior
Subordinated Debenture, receive certificated Junior Subordinated Debentures of
such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Junior
Subordinated Debentures. In any such instance, an owner of a beneficial interest
in a Global Junior Subordinated Debenture will be entitled to physical delivery
of certificated Junior Subordinated Debentures of the series represented by such
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Global Junior Subordinated Debenture equal in principal amount to such
beneficial interest and to have such Junior Subordinated Debentures registered
in its name. Individual Junior Subordinated Debentures of such series so issued
will be issued in denominations, unless otherwise specified by the Corporation,
of $25 and integral multiples thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal of (and premium, if any) and any interest on Junior
Subordinated Debentures will be made at the office of the Debenture Trustee in
the City of New York or at the office of such paying agent or paying agents as
the Corporation may designate from time to time in the applicable Prospectus
Supplement, except that at the option of the Corporation payment of any interest
may be made (i) except in the case of Global Junior Subordinated Debentures, by
check mailed to the address of the person entitled thereto as such address shall
appear in the securities register or (ii) by transfer to an account maintained
by the person entitled thereto as specified in the securities register, provided
that proper transfer instructions have been received by the Regular Record Date.
Unless otherwise indicated in the applicable Prospectus Supplement, payment of
any interest on Junior Subordinated Debentures will be made to the person in
whose name such Junior Subordinated Debenture is registered at the close of
business on the Regular Record Date for such interest, except in the case of
defaulted interest. The Corporation may at any time designate additional paying
agents or rescind the designation of any paying agent; however the Corporation
will at all times be required to maintain a paying agent in each place of
payment for each series of Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any paying agent, or
then held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debenture and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall, at the request of the Corporation, be repaid
to the Corporation and the holder of such Junior Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Corporation for
payment thereof.
OPTION TO DEFER INTEREST PAYMENTS
If provided in the applicable Prospectus Supplement, the Corporation
will have the right at any time and from time to time during the term of any
series of Junior Subordinated Debentures to defer payment of interest for up to
such number of consecutive interest payment periods as may be specified in the
applicable Prospectus Supplement (each, an "Extension Period"), subject to the
terms, conditions and covenants, if any, specified in such Prospectus
Supplement, provided that such Extension Period may not extend beyond the Stated
Maturity Date of such series of Junior Subordinated Debentures. Certain United
States federal income tax consequences and special considerations applicable to
any such Junior Subordinated Debentures will be described in the applicable
Prospectus Supplement.
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REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement,
Junior Subordinated Debentures will not be subject to any sinking fund.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation may, at its option and subject to receipt of prior approval by the
Federal Reserve if then required under applicable capital guidelines or
policies, redeem the Junior Subordinated Debentures of any series in whole at
any time or in part from time to time. If the Junior Subordinated Debentures of
any series are so redeemable only on or after a specified date or upon the
satisfaction of additional conditions, the applicable Prospectus Supplement will
specify such date or describe such conditions. Junior Subordinated Debentures in
denominations larger than $25 may be redeemed in part but only in integral
multiples of $25. Except as otherwise specified in the applicable Prospectus
Supplement, the redemption price for any Junior Subordinated Debenture so
redeemed shall equal any accrued and unpaid interest thereon to the redemption
date, plus 100% of the principal amount thereof.
Except as otherwise specified in the applicable Prospectus Supplement,
if a Tax Event (as defined below) in respect of a series of Junior Subordinated
Debentures or a Regulatory Capital Event (as defined herein) shall occur and be
continuing, the Corporation may, at its option and subject to receipt of prior
approval by the Federal Reserve if then required under applicable capital
guidelines or policies, redeem such series of Junior Subordinated Debentures in
whole (but not in part) at any time within 90 days following of the occurrence
of such Tax Event or Regulatory Capital Event, at a redemption price equal to
100% of the principal amount of such Junior Subordinated Debentures then
outstanding plus accrued and unpaid interest to the date fixed for redemption,
except as otherwise specified in the applicable Prospectus Supplement.
"Tax Event" means the receipt by the Corporation 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 proposed change) in, the laws
or any regulations thereunder of the United States or any political subdivision
or taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after the date of issuance of the
applicable series of Junior Subordinated Debentures under the Indenture, there
is more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on such series of Junior Subordinated
Debentures, (ii) interest payable by the Corporation on such series of Junior
Subordinated Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Corporation, in whole or in part, for United
States federal income tax purposes, or (iii) the Trust is, or will be within 90
days of the date of such opinion, subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
A "Regulatory Capital Event" means that the Corporation shall have
received an opinion of independent bank regulatory counsel experienced in such
matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws
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(or any regulations thereunder) of the United States or any rules, guidelines or
policies of the Federal Reserve or (b) any official administrative pronouncement
or judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or such pronouncement or decision is announced
on or after the date of issuance of the applicable series of Junior Subordinated
Debentures under the Indenture, the applicable Preferred Securities do not
constitute, or within 90 days of the date of such opinion, will not constitute,
Tier I Capital (or its then equivalent); provided, however, that the
distribution of such series of Junior Subordinated Debentures in connection with
the liquidation of the Trust by the Corporation shall not in and of itself
constitute a Regulatory Capital Event unless such liquidation shall have
occurred in connection with a Tax Event.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Junior Subordinated
Debentures to be redeemed at its registered address. Unless the Corporation
defaults in payment of the redemption price, on and after the redemption date
interest ceases to accrue on such Junior Subordinated Debentures or portions
thereof called for redemption.
RESTRICTIONS ON CERTAIN PAYMENTS
The Corporation will also covenant, as to each series of Junior
Subordinated Debentures, that it will not, (i) declare or pay any dividends
or distributions on, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of the Corporation's capital stock, (ii) make
any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Corporation (including other
series of Junior Subordinated Debentures) that rank pari passu with or junior
in right of payment to the Junior Subordinated Debentures or (iii) make any
guarantee payments with respect to any guarantee by the Corporation of the
debt securities of any subsidiary of the Corporation if such guarantee
ranks pari passu with or junior in right of payment to the Junior Subordinated
Debentures (other than (a) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, common stock of the
Corporation, (b) any declaration of a dividend in connection with the
implementation of a stockholder's 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 with respect to the series of
Related Preferred Securities, (d) as a result of a reclassification of the
Corporation's capital stock or the exchange or conversion of one class or series
of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in shares
of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (f) purchases of common stock related to the issuance of common stock or
rights under any of the Corporation's benefit plans for its directors, officers
or employees or any of the Corporation's dividend reinvestment plans) if at such
time (i) there shall have occurred any event of which the Corporation has actual
knowledge (a) that with the giving of notice or the lapse of time, or both,
would constitute an "Event of Default" under the Indenture with respect to the
Junior Subordinated Debentures of such series and (b) in respect of which the
Corporation shall not have taken reasonable steps to cure, (ii) the Corporation
shall be in default with respect to its payment of any obligations under the
Guarantee relating to the Related Preferred Securities or (iii) the Corporation
shall have
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given notice of its election of an Extension Period, or any extension thereof,
as provided in the Indenture with respect to the Junior Subordinated Debentures
of such series and shall not have rescinded such notice, and such Extension
Period, or any extension thereof, shall have commenced.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may,
without the consent of the holders of any series of Junior Subordinated
Debentures, amend, waive or supplement the Indenture for specified purposes,
including, among other things, curing ambiguities, defects or inconsistencies
(provided that any such action does not materially adversely affect the interest
of the holders of any series of Junior Subordinated Debentures) and qualifying,
or maintaining the qualification of, the Indenture under the Trust Indenture
Act. The Indenture contains provisions permitting the Corporation and the
Debenture Trustee, with the consent of the holders of not less than a majority
in principal amount of each outstanding series of Junior Subordinated Debentures
affected, to modify the Indenture in a manner adversely affecting the rights of
the holders of such series of the Junior Subordinated Debentures in any material
respect; provided, that no such modification may, without the consent of the
holder of each outstanding Junior Subordinated Debenture so affected, (i) change
the Stated Maturity Date of any series of Junior Subordinated Debentures (except
as otherwise specified in the applicable Prospectus Supplement), or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon or (ii) reduce the percentage of principal amount of Junior
Subordinated Debentures of any series, the holders of which are required to
consent to any such modification of the Indenture.
In addition, the Corporation and the Debenture Trustee may execute,
without the consent of any holder of Junior Subordinated Debentures, any
supplemental Indenture for the purpose of creating any new series of Junior
Subordinated Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of Junior Subordinated Debentures that has
occurred and is continuing constitutes a "Debenture Event of Default" with
respect to such series of Junior Subordinated Debentures (whatever the reason
for such Debenture 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 of any order, rule or regulation or any
administrative or governmental body):
(i) failure for 30 days to pay any interest on such
series of Junior Subordinated Debentures or any other series of Junior
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 or premium, if any,
on such series of Junior Subordinated Debentures or any other series
of Junior Subordinated Debentures when due
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whether at maturity, upon redemption, by declaration of acceleration of
maturity or otherwise; or
(iii) failure to observe or perform in any material
respect certain other covenants contained in the Indenture for 90 days
after written notice to the Corporation from the Debenture Trustee or
to the Corporation and the Debenture Trustee from the holders of
at least 25% in aggregate outstanding principal amount of such
affected series of outstanding Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or
reorganization of the Corporation.
The holders of a majority in aggregate outstanding principal amount of
Junior Subordinated Debentures of each series affected have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Debenture Trustee. The Debenture Trustee or the holders of not less than
25% in aggregate outstanding principal amount of Junior Subordinated Debentures
of each series affected may declare the principal due and payable immediately
upon a Debenture Event of Default. The holders of a majority in aggregate
outstanding principal amount of Junior Subordinated Debentures of each series
affected may annul such declaration and waive the default if the default (other
than the nonpayment of the principal of such Junior 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.
The holders of a majority in aggregate outstanding principal amount of
each series of the Junior Subordinated Debentures affected thereby may, on
behalf of the holders of all the Junior Subordinated Debentures, waive any past
default, except a default in the payment of principal or interest (unless such
default has been cured and a sum sufficient to pay all matured installments of
interest and principal due otherwise than by acceleration has been deposited
with the Debenture Trustee) or a default in respect of a covenant or provision
which under the Indenture cannot be modified or amended without the consent of
the holder of each outstanding Junior Subordinated Debenture. The Corporation is
required to file annually with the Debenture Trustee a certificate as to whether
or not the Corporation is in compliance with all the conditions and covenants
applicable to it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing as
to a series of Corresponding Junior Subordinated Debentures, the Property
Trustee will have the right to declare the principal of and the interest on such
Corresponding Junior Subordinated Debentures, and any other amounts payable
under the Indenture, to be forthwith due and payable and to enforce its other
rights as a creditor with respect to such Corresponding Junior Subordinated
Debentures.
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ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Debenture Event of Default with respect to a series of
Corresponding Junior Subordinated Debentures has occurred and is continuing and
such event is attributable to the failure of the Corporation to pay interest, or
premium, if any, on or principal of such Corresponding Junior Subordinated
Debentures on the due date, a holder of Preferred Securities may institute a
legal proceeding directly against the Corporation for enforcement of payment to
such holder of the principal of, or premium, if any, or interest on such
Corresponding Junior Subordinated Debentures having a principal amount equal to
the aggregate Liquidation Amount of the Related Preferred Securities of such
holder (a "Direct Action"). The Corporation may not amend the Indenture to
remove the foregoing right to bring a Direct Action without the prior written
consent of the holders of all of the Preferred Securities outstanding. If the
right to bring a Direct Action is removed, the applicable Trust may become
subject to the reporting obligations under the Exchange Act. Notwithstanding any
payments made to a holder of Preferred Securities by the Corporation in
connection with a Direct Action, the Corporation shall remain obligated to pay
the principal of or premium, if any, or interest on the Corresponding Junior
Subordinated Debentures, and the Corporation shall be subrogated to the rights
of the holder of such Preferred Securities with respect to payments on the
Preferred Securities to the extent of any payments made by the Corporation to
such holder in any Direct Action.
The holders of the Preferred Securities will not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the Junior Subordinated Debentures unless there
shall have been an event of default under the Declaration.
See "Description of Preferred Securities--Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation shall not consolidate with
or merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Corporation or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to the
Corporation, unless (i) in case the Corporation 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 Corporation's obligations on the Junior
Subordinated Debentures issued under the Indenture; (ii) immediately after
giving effect thereto, no Debenture Event of Default, and no event which, after
notice or lapse of time or both, would become a Debenture Event of Default,
shall have occurred and be continuing; and (iii) certain other conditions as
prescribed by the Indenture are met.
The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debentures protection in the event of a highly leveraged or
other transaction involving the Corporation that may adversely affect holders of
the Junior Subordinated Debentures.
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SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at their Stated Maturity Date within one year of the date of deposit or (iii)
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense of, the Corporation, and the Corporation deposits or
causes to be deposited with the Debenture Trustee funds, in trust, for the
purpose and in an amount in the currency or currencies in which the Junior
Subordinated Debentures are payable sufficient to pay and discharge the entire
indebtedness on the Junior Subordinated Debentures not previously delivered to
the Debenture Trustee for cancellation, for the principal (and premium, if any)
and interest to the date of the deposit or to the Stated Maturity Date or
redemption date, as the case may be, then the Indenture will cease to be of
further effect (except as to the Corporation's obligations to pay all other
sums due pursuant to the Indenture and to provide the officers' certificates
and opinions of counsel described therein), and the Corporation will be deemed
to have satisfied and discharged the Indenture.
CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable Prospectus Supplement,
the Junior Subordinated Debentures of any series may be convertible or
exchangeable into Junior Subordinated Debentures of another series or into
Preferred Securities of another series. The specific terms on which Junior
Subordinated Debentures of any series may be so converted or exchanged will be
set forth in the applicable Prospectus Supplement. Such terms may include
provisions for conversion or exchange, either mandatory, at the option of the
holder, or at the option of the Corporation, in which case the number of shares
of Preferred Securities or other securities to be received by the holders of
Junior Subordinated Debentures would be calculated as of a time and in the
manner stated in the applicable Prospectus Supplement.
SUBORDINATION
In the Indenture, the Corporation has covenanted and agreed that any
Junior Subordinated Debentures issued thereunder will be subordinate and junior
in right of payment to all Senior Indebtedness to the extent provided in the
Indenture. Upon any payment or distribution of assets of the Corporation upon
any liquidation, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Corporation, the holders of Senior Indebtedness
will first be entitled to receive payment in full of all Allocable Amounts (as
defined below) in respect of such Senior Indebtedness before the holders of
Junior Subordinated Debentures will be entitled to receive or retain any payment
in respect thereof.
In the event of the acceleration of the maturity of any Junior
Subordinated Debentures, the holders of all Senior Indebtedness outstanding at
the time of such acceleration will first be entitled to receive payment in full
of all Allocable Amounts in respect of such Senior Indebtedness before the
holders of Junior Subordinated Debentures will be entitled to receive or retain
any payment in respect of the Junior Subordinated Debentures.
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No payments on account of principal (or premium, if any) or interest in
respect of the Junior Subordinated Debentures may be made if there shall have
occurred and be continuing a default in any payment with respect to Senior
Indebtedness, or an event of default with respect to any Senior Indebtedness
resulting in the acceleration of the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default.
"Allocable Amounts," when used with respect to any Senior Indebtedness,
means all amounts due or to become due on such Senior Indebtedness less, if
applicable, any amount which would have been paid to, and retained by, the
holders of such Senior Indebtedness (whether as a result of the receipt of
payments by the holders of such Senior Indebtedness from the Corporation or any
other obligor thereon or from any holders of, or trustee in respect of, other
indebtedness that is subordinate and junior in right of payment to such Senior
Indebtedness pursuant to any provision of such indebtedness for the payment over
of amounts received on account of such indebtedness to the holders of such
Senior Indebtedness or otherwise) but for the fact that such Senior Indebtedness
is subordinate or junior in right of payment to (or subject to a requirement
that amounts received on such Senior Indebtedness be paid over to obligees on)
trade accounts payable or accrued liabilities arising in the ordinary course of
business.
"Indebtedness" shall mean (i) any obligation of, or any obligation
guaranteed by, the Corporation for the repayment of borrowed money, whether or
not evidenced by bonds, debentures, notes or other written instruments and any
deferred obligation for the payment of the purchase price of property or assets
acquired other than in the ordinary course of business and (ii) all indebtedness
of the Corporation for claims in respect of derivative products such as interest
and foreign exchange rate contracts, commodity contracts and similar
arrangements, whether outstanding on the date of execution of the Indenture or
thereafter created, assumed or incurred. For purposes of this definition "claim"
shall have the meaning assigned in Section 101(5) of the Bankruptcy Code of
1978, as amended and in effect on the date of the execution of the Indenture.
"Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures" shall mean (i) all Indebtedness, whether outstanding on the date of
execution of the Indenture or thereafter created, assumed or incurred, which
specifically by its terms ranks equally with and not prior to the Junior
Subordinated Debentures in the right of payment upon the happening of the
dissolution or winding-up or liquidation or reorganization of the Corporation
and (ii) the 7.64% Junior Subordinated Deferrable Interest Debentures Due
January 15, 2027 of the Corporation.
"Indebtedness Ranking Junior to the Junior Subordinated Debentures"
shall mean any Indebtedness, whether outstanding on the date of execution of the
Indenture or thereafter created, assumed or incurred, which specifically by its
terms ranks junior to and not equally with or prior to the Junior Subordinated
Debentures (and any other Indebtedness Ranking on a Parity with the Junior
Subordinated Debentures) in right of payment upon the happening of the
dissolution or winding-up or liquidation or reorganization of the Corporation.
The securing of any Indebtedness, otherwise constituting Indebtedness Ranking on
a Parity with the Junior Subordinated Debentures or Indebtedness Ranking Junior
to the Junior Subordinated Debentures, as the case may be, shall not be deemed
to prevent such Indebtedness from constituting Indebtedness Ranking On a Parity
with the Junior Subordinated Debentures or Indebtedness Ranking Junior to the
Junior Subordinated Debentures, as the case may be.
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"Senior Indebtedness" shall mean all Indebtedness, whether outstanding
on the date of execution of the Indenture or thereafter created, assumed or
incurred, except Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures or Indebtedness Ranking Junior to the Junior Subordinated Debentures,
and any deferrals, renewals or extensions of such Senior Indebtedness.
The Corporation is a non-operating holding company and almost all of
the operating assets of the Corporation are owned by the Corporation's
subsidiaries. The Corporation relies primarily on dividends from such
subsidiaries to meet its obligations for payment of principal and interest on
its outstanding debt obligations and corporate expenses. The Corporation is a
legal entity separate and distinct from its banking and non-banking affiliates.
The principal sources of the Corporation's income are dividends, interest and
fees from its banking and non-banking affiliates. The Banks are subject to
certain restrictions imposed by federal law on any extensions of credit to, and
certain other transactions with, the Corporation and certain other affiliates,
and on investments in stock or other securities thereof. Such restrictions
prevent the Corporation and such other affiliates from borrowing from the Banks
unless the loans are secured by various types of collateral. Further, such
secured loans, other transactions and investments by any of the Banks are
generally limited in amount as to the Corporation and as to each of such other
affiliates to 10% of such Bank's capital and surplus and as to the Corporation
and all of such other affiliates to an aggregate of 20% of such Bank's capital
and surplus. In addition, payment of dividends to the Corporation by the
subsidiary banks is subject to ongoing review by banking regulators and is
subject to various statutory limitations and in certain circumstances requires
approval by banking regulatory authorities. Accordingly, the Junior Subordinated
Debentures will be effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries. Holders of Junior Subordinated
Debentures should look only to the assets of the Corporation for payments of
interest and principal and premium, if any.
The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Corporation. The Corporation expects
from time to time to incur additional indebtedness constituting Senior
Indebtedness.
TRUST EXPENSES
Pursuant to the Indenture, the Corporation will irrevocably and
unconditionally agree with each Trust that holds Junior Subordinated Debentures
that the Corporation will pay to such Trust, and reimburse such Trust for, the
full amount of any costs, expenses or liabilities of the Trust, other than
obligations of the Trust to pay to the 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. Such payment obligation will include any such costs, expenses or
liabilities of the Trust that are required by applicable law to be satisfied in
connection with a termination of such Trust.
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GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed
by and construed in accordance with the laws of the State of New York, and for
all purposes shall be governed by and construed in accordance with the
laws of such State, without regard to the conflicts of laws principles thereof.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Junior Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
The Corresponding Junior Subordinated Debentures may be issued in one
or more series of Junior Subordinated Debentures under the Indenture with terms
corresponding to the terms of a series of Related Preferred Securities. In that
event, concurrently with the issuance of each Trust's Preferred Securities, such
Trust will invest the proceeds thereof and the consideration paid by the
Corporation for the Common Securities of such Trust in such series of
Corresponding Junior Subordinated Debentures issued by the Corporation to such
Trust. Each series of Corresponding Junior Subordinated Debentures will be in
the principal amount equal to the aggregate stated Liquidation Amount of the
Related Preferred Securities and the Common Securities of such Trust and will
rank pari passu with all other series of Junior Subordinated Debentures.
Unless otherwise specified in the applicable Prospectus Supplement, if
a Tax Event or a Regulatory Capital Event in respect of a Trust shall occur and
be continuing, the Corporation may, at its option and subject to prior approval
of the Federal Reserve if then so required under applicable capital guidelines
or policies, redeem the Corresponding Junior Subordinated Debentures at any time
within 90 days of the occurrence of such Tax Event or Regulatory Capital Event,
in whole but not in part, subject to the provisions of the Indenture and
whether or not such Corresponding Junior Subordinated Debentures are then
otherwise redeemable at the option of the Corporation. The redemption price
for any Corresponding Junior Subordinated Debentures shall be set forth in
the applicable Prospectus Supplement. For so long as the applicable Trust
is the holder of all the outstanding Corresponding Junior Subordinated
Debentures of such series, the proceeds of any such redemption will be
used by the Trust to redeem the corresponding Trust Securities in
accordance with their terms. The Corporation may not redeem a series of
Corresponding Junior Subordinated Debentures in part unless all
accrued and unpaid interest has been paid in full on all outstanding
Corresponding Junior Subordinated Debentures of such series for all interest
periods terminating on or prior to the Redemption Date.
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The Corporation will covenant in the Indenture, as to each series of
Corresponding Junior Subordinated Debentures, that if and so long as (i) the
Trust of the related series of Trust Securities is the holder of all such
Corresponding Junior Subordinated Debentures, (ii) a Tax Event in respect
of such Trust has occurred and is continuing and (iii) the Corporation has
elected, and has not revoked such election, to pay Additional Sums
(as defined under "Description of Preferred Securities--Redemption or
Exchange") in respect of such Trust Securities, the Corporation will pay
to such Trust such Additional Sums. The Corporation will also covenant,
as to each series of Corresponding Junior Subordinated Debentures,
(i) to directly or indirectly maintain 100 percent ownership of the
Common Securities; provided, however, that any permitted successor of the
Corporation under the Indenture may succeed to the Corporation's ownership of
the Common Securities, (ii) to use its reasonable efforts to cause the Trust (a)
to remain a business trust, except in connection with the distribution
of Junior Subordinated Debentures to the holders of Trust Securities in
liquidation of the Trust, the redemption of all of the Trust Securities of the
Trust, or certain mergers, consolidations or amalgamations, each as permitted by
the related Declaration of the Trust, and (b) to continue not to be classified
as a grantor trust and not as an association taxable as a corporation or a
partnership for United States federal income tax purposes and (iii) to use its
reasonable efforts to cause each holder of Trust Securities to be treated as
owning an undivided beneficial interest in the Corresponding Junior
Subordinated Debentures.
DESCRIPTION OF PREFERRED SECURITIES
Pursuant to the terms of the Declaration for each Trust, the Issuer
Trustees on behalf of such Trust will issue the Preferred Securities and the
Common Securities. The Preferred Securities of a particular issue will represent
beneficial ownership interests in the Trust and the holders thereof will be
entitled to a preference in certain circumstances with respect to Distributions
and amounts payable on redemption or liquidation over the Common Securities of
such Trust, as well as other benefits as described in the corresponding
Declaration. This summary of certain provisions of the Preferred Securities and
each Declaration, which summarizes the material terms thereof, does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, all the provisions of each Declaration, including the definitions therein of
certain terms, and the Trust Indenture Act, to each of which reference is hereby
made. Wherever particular defined terms of a Declaration (as amended or
supplemented from time to time) are referred to herein or in a Prospectus
Supplement, such defined terms are incorporated herein or therein by reference.
The form of the Declaration has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. Each of the Trusts is a legally
separate entity and the assets of one are not available to satisfy the
obligations of any of the others.
GENERAL
The Preferred Securities of a Trust will rank pari passu, and payments
will be made thereon pro rata, with the Common Securities of that Trust except
as described under "--Subordination of Common Securities." Legal title to the
Corresponding Junior Subordinated Debentures will be held by the Property
Trustee in trust for the benefit of the holders of the
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related Preferred Securities and Common Securities. Each Guarantee Agreement
executed by the Corporation for the benefit of the holders of a Trust's Trust
Securities (the "Guarantee") will be a guarantee on a subordinated basis with
respect to the related Trust Securities but will not guarantee payment of
Distributions or amounts payable on redemption or liquidation of such Trust
Securities when the related Trust does not have funds on hand available to make
such payments. See "Description of Guarantees."
DISTRIBUTIONS
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such dates
as specified in the applicable Prospectus Supplement. In the event that any date
on which Distributions are payable on the Preferred Securities is not a Business
Day (as defined below), payment of the Distribution payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), in either case with the same
force and effect as if made on the date such payment was originally payable
(each date on which Distributions are payable in accordance with the foregoing,
a "Distribution Date"). A "Business Day" shall mean any day other than a
Saturday or a Sunday, or a day on which banking institutions in New York, New
York or Winston-Salem, North Carolina are authorized or required by law or
executive order to close.
Each Trust's Preferred Securities represent beneficial ownership
interests in the applicable Trust, and the Distributions on each Preferred
Security will be payable at a rate specified in the applicable Prospectus
Supplement for such Preferred Securities. The amount of Distributions payable
for any period will be computed on the basis of a 360-day year of twelve 30-day
months and, for any period of less than a full calendar month, the number of
days elapsed in such month, unless otherwise specified in the applicable
Prospectus Supplement. Distributions to which holders of Preferred Securities
are entitled will accumulate additional Distributions at the rate per annum if
and as specified in the applicable Prospectus Supplement. The term
"Distributions" as used herein includes any such additional Distributions unless
otherwise stated.
If provided in the applicable Prospectus Supplement, the Corporation
has the right under the Indenture, pursuant to which it will issue the
Corresponding Junior Subordinated Debentures, to elect to defer the payment of
interest at any time or from time to time on any series of the Corresponding
Junior Subordinated Debentures for up to such number of consecutive interest
payment periods which will be specified in such Prospectus Supplement relating
to such series (each, an "Extension Period"), provided that no Extension Period
may extend beyond the Stated Maturity Date of the Corresponding Junior
Subordinated Debentures. As a consequence of any such deferral, Distributions on
the Related Preferred Securities would be deferred (but would continue to
accumulate additional Distributions thereon at the rate per annum set forth in
the Prospectus Supplement for such Preferred Securities) by the Trust of such
Preferred Securities during any such Extension Period. During such Extension
Period, the Corporation 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 Corporation's capital stock, (ii) make any
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payment of principal of or premium, if any, or interest on or repay, repurchase
or redeem any debt securities of the Corporation that rank pari passu with or
junior in right of payment to the Corresponding Junior Subordinated Debentures
or (iii) make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation if such
guarantee ranks pari passu with or junior in right of payment to the
Corresponding Junior Subordinated Debentures (other than (a) dividends or
distributions in shares of, or options, warrants or rights to subscribe for or
purchase shares of, common stock of the Corporation, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Guarantee
with respect to such Preferred Securities, (d) as a result of a reclassification
of the Corporation's capital stock or the exchange or conversion of one class,
or series of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in shares
of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (f) purchases of common stock related to the issuance of common stock or
rights under any of the Corporation's benefit plans for its directors, officers
or employees or any of the Corporation's dividend reinvestment plans).
The revenue of each Trust available for distribution to holders of its
Preferred Securities will be limited to payments under the Corresponding Junior
Subordinated Debentures in which the Trust will invest the proceeds from the
issuance and sale of its Trust Securities. See "Description of Junior
Subordinated Debentures--Corresponding Junior Subordinated Debentures." If the
Corporation does not make interest payments on such Corresponding Junior
Subordinated Debentures, the Property Trustee will not have funds available to
pay Distributions on the Related Preferred Securities. The payment of
Distributions (if and to the extent the Trust has funds legally available for
the payment of such Distributions and cash sufficient to make such payments) is
guaranteed by the Corporation on the basis set forth herein under "Description
of Guarantees."
Distributions on the Preferred Securities will be payable to the
holders thereof as they appear on the register of such Trust on the relevant
record dates, which, as long as the Preferred Securities remain in book-entry
form, will be one Business Day prior to the relevant Distribution Date. Subject
to any applicable laws and regulations and the provisions of the applicable
Declaration, each such payment will be made as described under "Book-Entry
Issuance." In the event any Preferred Securities are not in book-entry form, the
relevant record date for such Preferred Securities shall be the date at least 15
days prior to the relevant Distribution Date, as specified in the applicable
Prospectus Supplement.
REDEMPTION OR EXCHANGE
MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in
part, of any Corresponding Junior Subordinated Debentures, whether at maturity
or upon earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the Trust Securities, upon not less than 30
nor more than 60 days notice, at a redemption price (the "Redemption
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Price") equal to the aggregate Liquidation Amount of such Trust Securities plus
accumulated and unpaid Distributions thereon to the date of redemption (the
"Redemption Date") and the related amount of the premium, if any, paid by the
Corporation upon the concurrent redemption of such Corresponding Junior
Subordinated Debentures. See "Description of Junior Subordinated
Debentures--Redemption." If less than all of any series of Corresponding Junior
Subordinated Debentures are to be repaid or redeemed on a Redemption Date, then
the proceeds from such repayment or redemption shall be allocated to the
redemption pro rata of the related Preferred Securities and the Common
Securities. The amount of premium, if any, paid by the Corporation upon the
redemption of all or any part of any series of any Corresponding Junior
Subordinated Debentures to be repaid or redeemed on a Redemption Date shall be
allocated to the redemption pro rata of the related Preferred Securities and the
Common Securities.
The Corporation will have the right to redeem any series of
Corresponding Junior Subordinated Debentures (i) on or after such date as may be
specified in the applicable Prospectus Supplement, in whole at any time or in
part from time to time, or (ii) at any time, in whole (but not in part), upon
the occurrence of a Tax Event or Regulatory Capital Event, in either case
subject to receipt of prior approval by the Federal Reserve if then required
under applicable capital guidelines or policies.
DISTRIBUTION OF CORRESPONDING JUNIOR SUBORDINATED DEBENTURES. Subject
to the Corporation having received prior approval of the Federal Reserve to do
so if then required under applicable capital guidelines or policies, the
Corporation has the right at any time to liquidate the related Trust and, after
satisfaction of the liabilities of creditors of such Trust as provided by
applicable law, cause such Corresponding Junior Subordinated Debentures in
respect of the Preferred Securities and Common Securities issued by such issuer
to be distributed to the holders of such Preferred Securities and Common
Securities in exchange therefor upon liquidation of the Trust.
TAX EVENT OR REGULATORY CAPITAL EVENT REDEMPTION. If a Tax Event or
Regulatory Capital Event in respect of a series of Preferred Securities and
Common Securities shall occur and be continuing, the Corporation has the right
to redeem the Corresponding Junior Subordinated Debentures in whole (but not in
part) and thereby cause a mandatory redemption of such Preferred Securities and
Common Securities in whole (but not in part) at the Redemption Price within 90
days following the occurrence of such Tax Event or Regulatory Capital Event. In
the event a Tax Event or Regulatory Capital Event in respect of a series of
Preferred Securities and Common Securities has occurred and is continuing and
the Corporation does not elect to redeem the Corresponding Junior Subordinated
Debentures and thereby cause a mandatory redemption of such Preferred Securities
and Common Securities or to liquidate the related Trust and cause the
Corresponding Junior Subordinated Debentures to be distributed to holders of
such Preferred Securities and Common Securities in exchange therefor upon
liquidation of the Trust as described above, such Preferred Securities will
remain outstanding and, if a Tax Event has occurred, Additional Sums
(as defined below) may be payable on the Corresponding Junior Subordinated
Debentures.
POSSIBLE TAX LAW CHANGES. On March 19, 1996, the Revenue Reconciliation
Bill of 1996 (the "Bill"), was introduced in the 104th Congress which would
have, among other things, generally denied interest deductions for interest on
an instrument issued by a corporation that
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has a maximum weighted average maturity of more than 40 years. The Bill also
would generally have denied interest deductions for interest on an instrument
issued by a corporation that has a maximum term of more than 20 years and that
is not shown as indebtedness on the separate balance sheet of the issuer or,
where the instrument is issued to a related party (other than a corporation),
where the holder or some other related party issues a related instrument that is
not shown as indebtedness on the issuer's consolidated balance sheet. For
purposes of determining the weighted average maturity or the term of an
instrument, any right to extend would be treated as exercised. The
above-described provisions of the Bill were proposed to be effective generally
for instruments issued on or after December 7, 1995. If either provision were to
apply to the Junior Subordinated Debentures, the Corporation would not be able
to deduct interest on the Junior Subordinated Debentures. However, on March 29,
1996, the Chairmen of the Senate Finance and House Ways and Means Committees
issued a joint statement (the "Joint Statement") to the effect that it was their
intention that the effective date of the Bill, if enacted, would be no earlier
than the date of "appropriate Congressional action". In addition, subsequent to
the publication of the Joint Statement, Senator Daniel Patrick Moynihan and
Representatives Sam M. Gibbons and Charles B. Rangel wrote letters to Treasury
Department officials concurring with the view expressed in the Joint Statement
(the "Democrat Letters"). The 104th Congress adjourned without enacting the
Bill. Moreover, if the principles contained in the Joint Statement and the
Democrat Letters were followed, any similar legislation in this area that is
subsequently proposed would not apply to the Junior Subordinated Debentures.
Although the 104th Congress adjourned without enacting the Bill, there can be no
assurance that current or future legislative proposals or final legislation will
not adversely affect the ability of the Corporation to deduct interest on the
Junior Subordinated Debentures or otherwise affect the tax treatment of the
transaction described herein. Moreover, such a change could give rise to a Tax
Event, which may permit the Corporation to cause a redemption of the Related
Preferred Securities.
"Additional Sums" means such additional amounts as may be necessary in
order that the amount of Distributions then due and payable by a Trust on the
outstanding Preferred Securities and Common Securities of the Trust shall not be
reduced as a result of any additional taxes, duties and other governmental
charges to which such Trust has become subject as a result of a Tax Event.
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount (as defined below)
equal to the principal amount of Corresponding Junior Subordinated Debentures to
be paid in accordance with their terms and (ii) with respect to a distribution
of Corresponding Junior Subordinated Debentures upon the liquidation of the
related Trust, Corresponding Junior Subordinated Debentures having a principal
amount equal to the Liquidation Amount of the Trust Securities of the holder to
whom such Corresponding Junior Subordinated Debentures are distributed.
"Liquidation Amount" means (unless otherwise provided in the Prospectus
Supplement) the stated amount of $25 per Trust Security.
After the liquidation date is fixed for any distribution of
Corresponding Junior Subordinated Debentures to holders of the Trust Securities,
(i) the Trust Securities will no longer be deemed to be outstanding, (ii) each
holder of Trust Securities will receive a registered certificate or certificates
representing the Corresponding Junior Subordinated Debentures to be
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delivered upon such distribution and (iii) Trust Securities will be deemed to
represent Corresponding Junior 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 accumulated and unpaid
Distributions on such Trust Securities, until such Trust Securities are
presented to the Administrative Trustees or their agent for cancellation,
whereupon the Corporation will issue to such holder, and the Debenture Trustee
will authenticate, a certificate representing such Corresponding Junior
Subordinated Debentures.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Junior Subordinated Debentures that may be
distributed in exchange for Preferred Securities if a dissolution and
liquidation of a Trust were to occur. Accordingly, the Preferred Securities that
an investor may purchase, or the Corresponding Junior Subordinated Debentures
that the investor may receive on dissolution and liquidation of a Trust, may
trade at a discount to the price that the investor paid to purchase the
Preferred Securities offered hereby.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Subordinated Debentures. Redemptions of
the Preferred Securities shall be made and the Redemption Price shall be payable
on each Redemption Date only to the extent that the related Trust has funds on
hand available for the payment of such Redemption Price.
See also "--Subordination of Common Securities."
If a Trust 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 available, the Property Trustee will pay the Redemption
Price to The Depository Trust Company ("DTC"). See "Book-Entry Issuance."
If such Preferred Securities are no longer in book-entry form, the Property
Trustee, to the extent funds are available, will irrevocably deposit with the
paying agent for such Preferred Securities funds sufficient to pay or cause
the paying agent to pay the applicable Redemption Price to the holders
thereof upon surrender of their certificates evidencing such Preferred
Securities. Distributions payable on or prior to the Redemption Date for
any Preferred Securities called for redemption shall be payable to the
holders of such Preferred Securities on the relevant record dates for the
related Distribution Dates. If notice of redemption shall have been given
and funds deposited as required, then upon the date of such deposit,
all rights of the holders of such Preferred Securities so called for
redemption will cease, except the right of the holders of such Preferred
Securities to receive the Redemption Price, but without interest on such
Redemption Price, and such Preferred Securities will cease to be outstanding. In
the event that any date fixed for redemption of Preferred Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay). In the event
that payment of the Redemption Price in respect of Preferred Securities
called for redemption is improperly withheld or refused and not paid either
by the Trust or by the Corporation pursuant to the Guarantee as described under
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"Description of Guarantees," (i) Distributions on such Preferred Securities will
continue to accrue at the then applicable rate, from the Redemption Date
originally established by the Trust for such Preferred Securities to the date
such Redemption Price is actually paid, and (ii) the actual payment date will be
the date fixed for redemption for purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law and the regulations of the Federal Reserve), the
Corporation 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 Corresponding Junior Subordinated Debentures to holders of
Preferred Securities shall be made to the applicable recordholders thereof as
they appear on the register for such Preferred Securities on the relevant record
date, which shall be one Business Day prior to the relevant Redemption Date or
liquidation date, as applicable; provided, however, that in the event that any
Preferred Securities are not in book-entry form, the relevant record date for
such Preferred Securities shall be a date at least 15 days prior to the
Redemption Date or liquidation date, as applicable, as specified in the
applicable Prospectus Supplement.
If less than all of the Preferred Securities and Common Securities
issued by a Trust are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Preferred Securities and Common Securities to be
redeemed shall be allocated pro rata to the Preferred Securities and the Common
Securities based upon the relative Liquidation Amounts of such classes. The
particular Preferred Securities to be redeemed shall be selected on a pro rata
basis not more than 60 days prior to the Redemption Date by the Property Trustee
from the outstanding Preferred Securities not previously called for redemption,
by such method as the Property Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions (equal to $25 or an
integral multiple of $25 in excess thereof) of the Liquidation Amount of
Preferred Securities of a denomination larger than $25. The Property Trustee
shall promptly notify the trust registrar in writing of the Preferred Securities
selected for redemption and, in the case of any Preferred Securities selected
for partial redemption, the Liquidation Amount thereof to be redeemed. For all
purposes of each Declaration, unless the context otherwise requires, all
provisions relating to the redemption of Preferred Securities shall relate, in
the case of any Preferred Securities redeemed or to be redeemed only in part, to
the portion of the aggregate Liquidation Amount of Preferred Securities which
has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each holder of Trust Securities to be
redeemed at its registered address.
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SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, each Trust's
Preferred Securities and Common Securities, as applicable, shall be made pro
rata based on the Liquidation Amount of such Preferred Securities and Common
Securities; provided, however, that if on any Distribution Date or Redemption
Date a Debenture Event of Default shall have occurred and be continuing, no
payment of any Distribution on, or Redemption Price of, any of the Trust's
Common Securities, and no other payment on account of the redemption,
liquidation or other acquisition of such Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions on all of
the Trust's outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all of the Trust's outstanding
Preferred Securities then called for redemption, shall have been made or
provided for, and all funds available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, or Redemption
Price of, the Trust's Preferred Securities then due and payable.
In the case of any event of default under the applicable Declaration
resulting from a Debenture Event of Default, the Corporation as holder of such
Trust's Common Securities will be deemed to have waived any right to act with
respect to any such event of default under the applicable Declaration until the
effect of all such events of default with respect to such Preferred Securities
have been cured, waived or otherwise eliminated. Until all events of default
under the applicable Declaration with respect to the Preferred Securities have
been so cured, waived or otherwise eliminated, the Property Trustee shall act
solely on behalf of the holders of such Preferred Securities and not on behalf
of the Corporation as holder of the Trust's Common Securities, and only the
holders of such Preferred Securities will have the right to direct the Property
Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to each Declaration, each Trust shall automatically terminate
upon expiration of its term and shall terminate on the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Corporation;
(ii) the distribution of a Like Amount of the Corresponding Junior Subordinated
Debentures to the holders of its Trust Securities, if the Corporation, as
Sponsor, has given written direction to the Property Trustee to terminate such
Trust (which direction is optional and, except as otherwise provided herein,
wholly within the discretion of the Corporation, as Sponsor); (iii) redemption
of all of the Trust Securities as described under --Redemption or
Exchange--Mandatory Redemption;" (iv) expiration of the term of the Trust; and
(v) the entry of an order for the dissolution of the Trust by a court of
competent jurisdiction.
If an early termination occurs as described in clause (i), (ii), (iv)
or (v) above, the Trust shall be liquidated by the Administrative Trustees as
expeditiously as the Administrative Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of such Trust as
provided by applicable law, to the holders of such Trust Securities in exchange
therefor a Like Amount of the Corresponding Junior Subordinated Debentures,
unless such distribution is
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determined by the Property Trustee not to be practicable, in which event such
holders will be entitled to receive out of the assets of the Trust available for
distribution to holders, after satisfaction of liabilities to creditors of such
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 such Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by such
Trust on its Trust Securities shall be paid on a pro rata basis, except that if
a Debenture Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities.
EVENTS OF DEFAULT; NOTICE
The occurrence of a Debenture Event of Default under the Indenture (see
"Description of Junior Subordinated Debentures--Debenture Events of Default")
constitutes an "Event of Default" under each Declaration with respect to the
Preferred Securities issued thereunder.
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 such Trust's Preferred
Securities, the Administrative Trustees and the Corporation, as Sponsor, unless
such Event of Default shall have been cured or waived. The Corporation, as
Sponsor, 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 each Declaration.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities as
described above. See "--Subordination of Common Securities" and "--Liquidation
Distribution Upon Termination." The existence of an Event of Default does not
entitle the holders of Preferred Securities to accelerate the maturity thereof.
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be
continuing, any Issuer Trustee may be removed at any time by the holder of the
Common Securities. If a Debenture Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be removed at such
time by the holders of a majority in Liquidation Amount of the outstanding
Preferred Securities. In no event will the holders of the Preferred Securities
have the right to vote to appoint, remove or replace the Administrative
Trustees, which voting rights are vested exclusively in the Corporation as the
holder of the Common Securities. No resignation or removal of an Issuer Trustee
and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the applicable Declaration.
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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 from time to time, for the purpose of meeting the legal requirements
of the Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Corporation, as the holder of the
Common Securities shall have power to appoint one or more persons either
to act as a co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to act as separate trustee of any such
property, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such person or persons in such capacity any
property, title, right or power deemed necessary or desirable,
subject to the provisions of the applicable Declaration. In case a Debenture
Event of Default has occurred and is continuing, the Property Trustee alone
shall have power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Issuer Trustee shall be a party, or
any Person succeeding to all or substantially all the corporate trust business
of such Issuer Trustee, shall be the successor of such Issuer Trustee under each
Declaration, provided such Person shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUSTS
A 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. A Trust may, at the request of the Corporation, with the
consent of the Administrative Trustees but without the consent of the holders of
the Preferred Securities, the Property Trustee or the Delaware Trustee, merge
with or into, consolidate, amalgamate, or be replaced by, or convey, transfer
or lease its properties and assets as an entirety or 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 such 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 in priority with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Corporation expressly appoints a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Corresponding Junior Subordinated
Debentures, (iii) the Successor Securities are listed or quoted, or any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Preferred
Securities are then listed or quoted, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Preferred Securities (including any Successor Securities) to be downgraded by
any nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Preferred Securities (including
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any Successor Securities) in any material respect (other than any dilution of
such holders' interests in the new entity), (vi) such successor entity has a
purpose identical to that of the Trust, (vii) prior to such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Corporation has received an opinion from independent counsel to the Trust
experienced in such matters to the effect that (a) such merger, conversion,
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 (other than any dilution of such holders' interests in the new entity),
and (b) following such merger, conversion, 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 of 1940, as amended (the "Investment Company Act"), and
(viii) the Corporation or any permitted successor or assignee owns all of the
Common Securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, a Trust shall not,
except with the consent of holders of 100% in Liquidation Amount of the
Preferred Securities, consolidate, amalgamate, merge or convert with or into, or
be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety or substantially as an entirety to any other entity
or permit any other entity to consolidate, amalgamate, merge or convert with or
into, or replace it if such consolidation, amalgamation, merger, conversion,
replacement, conveyance, transfer or lease would cause the Trust or the
successor entity not to be classified as a grantor trust for United States
federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF EACH DECLARATION
Except as provided below and under "Description of
Guarantees--Amendments and Assignment" and as otherwise required by law and the
applicable Declaration, the holders of the Preferred Securities will have no
voting rights.
Each Declaration may be amended from time to time by the Corporation,
the Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities (i) to cure any ambiguity, correct or supplement
any provisions in such Declaration that may be inconsistent with any other
provision, or to make any other provisions with respect to matters or questions
arising under such Declaration, which shall not be inconsistent with the other
provisions of such Declaration, or (ii) to modify, eliminate or add to any
provisions of such Declaration 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 (i) such action shall not adversely affect in any material respect the
interests of the holders of the Trust Securities, and any amendments of such
Declaration shall become effective when notice thereof is given to the holders
of Trust Securities. Each Declaration may be amended by the Issuer Trustees and
the Corporation with (i) the consent of holders representing not less than a
majority (based upon Liquidation Amounts) of the outstanding Trust Securities,
and (ii) upon receipt by the Issuer Trustees of an opinion of counsel to the
effect that such amendment or the exercise of any power granted to the Issuer
Trustees in accordance with such
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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, provided that, without
the consent of each holder of Trust Securities, such Declaration may not be
amended to (i) change the amount or timing of any Distribution or other payment
on the Trust Securities or otherwise adversely affect the amount of any
Distribution or other payment 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 Corresponding Junior Subordinated Debentures are held by
the Property Trustee, the Issuer Trustees shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee, or exercising any trust or power conferred on the Debenture Trustee
with respect to such Corresponding Junior Subordinated Debentures, (ii) waive
certain past defaults under the Indenture, (iii) exercise any right to rescind
or annul a declaration of acceleration of the maturity of principal of such
Corresponding Junior Subordinated Debentures or (iv) consent to any amendment,
modification or termination of the Indenture or such Corresponding Junior
Subordinated Debentures, where such consent shall be required, without, in each
case, obtaining the prior approval of the holders of a majority in aggregate
Liquidation Amount of all outstanding Preferred Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Corresponding Junior Subordinated Debentures affected thereby, no such
consent shall be given by the Property Trustee without the prior consent of each
holder of the Related Preferred Securities. The Issuer Trustees shall not revoke
any action previously authorized or approved by a vote of the holders of the
Preferred Securities except by subsequent vote of the holders of the Preferred
Securities. The Property Trustee shall notify each holder of Preferred
Securities of any notice of default with respect to the Corresponding Junior
Subordinated Debentures. In addition to obtaining the foregoing approvals of the
holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Issuer Trustees shall obtain an opinion of counsel experienced in
such matters to the effect that the 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 each Declaration.
No vote or consent of the holders of Preferred Securities will be
required for a Trust to redeem and cancel its Preferred Securities in accordance
with the applicable Declaration.
Notwithstanding that holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Corporation or any affiliate of the
Corporation shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
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GLOBAL PREFERRED SECURITIES
The Preferred Securities of a series may be issued in whole or in part
in the form of one or more Global Preferred Securities that will be deposited
with, or on behalf of, the Depositary identified in the Prospectus Supplement
relating to such series. Unless otherwise indicated in the applicable Prospectus
Supplement for such series, the Depositary will be DTC. Global Preferred
Securities may be issued only in fully registered form and in either temporary
or permanent form. Unless and until it is exchanged in whole or in part for the
individual Preferred Securities represented thereby, a Global Preferred Security
may not be transferred except as a whole by the Depositary for such Global
Preferred Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor.
The specific terms of the depositary arrangement with respect to a
series of Preferred Securities will be described in the Prospectus Supplement
relating to such series. The Corporation anticipates that the following
provisions will generally apply to depositary arrangements.
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 Participants. Such accounts shall
be designated by the dealers, underwriters or agents with respect to such
Preferred Securities or by the Corporation if such Preferred Securities are
offered and sold directly by the Corporation. 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 Indenture governing such Preferred
Securities. Except as provided below, owners of beneficial interests in a Global
Preferred Security will not be entitled to have any of the individual Preferred
Securities of the series 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 of such series in definitive form and
will not be considered the owners or holders thereof under the Indenture.
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Payments of principal of (and premium, if any) and interest on
individual Preferred Securities represented by a Global Preferred Security
registered in the name of a Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of the
Global Preferred Security representing such Preferred Securities. None of the
Corporation, 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 Corporation expects that the Depositary for a series of Preferred
Securities or its nominee, upon receipt of any payment of Liquidation Amount,
Redemption Price, premium or Distributions in respect of a permanent Global
Preferred Security representing any of such Preferred Securities, immediately
will credit Participants' accounts with payments in amounts proportionate to
their respective beneficial interest in the aggregate Liquidation Amount of such
Global Preferred Security for such Preferred Securities as shown on the records
of such Depositary or its nominee. The Corporation also expects that payments by
Participants to owners of beneficial interests in such Global Preferred Security
held through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if
a Depositary for a series of Preferred Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by the Trust within 90 days, the Trust will issue individual Preferred
Securities of such series in exchange for the Global Preferred Security
representing such series of Preferred Securities. In addition, the Trust may at
any time and in its sole discretion, subject to any limitations described in the
Prospectus Supplement relating to such Preferred Securities, determine not to
have any Preferred Securities of such series represented by one or more Global
Preferred Securities and, in such event, will issue individual Preferred
Securities of such series in exchange for the Global Preferred Security or
Securities representing such series of Preferred Securities. Further, if the
Trust so specifies with respect to the Preferred Securities of a series, an
owner of a beneficial interest in a Global Preferred Security representing
Preferred Securities of such series may, on terms acceptable to the Trust, the
Property Trustee and the Depositary for such Global Preferred Security, receive
individual Preferred Securities of such series in exchange for such beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to such Preferred Securities. In any such instance, an owner of a
beneficial interest in a Global Preferred Security will be entitled to physical
delivery of individual Preferred Securities of the series represented by such
Global Preferred Security equal in principal amount to such beneficial interest
and to have such Preferred Securities registered in its name. Individual
Preferred Securities of such series so issued will be issued in denominations,
unless otherwise specified by the Trust, of $25 and integral multiples thereof.
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PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to the
Depositary, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any Trust's 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. Unless otherwise specified in the applicable Prospectus Supplement,
the paying agent (the "Paying Agent") shall initially be the Property Trustee
and any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Corporation. The Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Property Trustee
and the Corporation. In the event that the Property Trustee shall no longer be
the Paying Agent, the Administrative Trustees shall appoint a successor (which
shall be a bank or trust company acceptable to the Administrative Trustees and
the Corporation) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected
without charge by or on behalf of each Trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The Trusts will not be required to register or cause to be
registered the transfer of their Preferred Securities after such Preferred
Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance
of an Event of Default, undertakes to perform only such duties as are
specifically set forth in each Declaration 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 applicable Declaration 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 applicable Declaration or is unsure of the application of any provision of
the applicable Declaration, and the matter is not one on which holders of
Preferred Securities are entitled under such Declaration to vote, then the
Property Trustee shall take such action as is directed by the Corporation 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.
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MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trusts in such a way that no Trust will 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 Corresponding Junior Subordinated
Debentures will be treated as indebtedness of the Corporation for United States
federal income tax purposes. In this connection, the Corporation and the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the certificate of trust of each Trust or each Declaration, that
the Corporation 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.
No Trust may borrow money or issue debt or mortgage or pledge any of
its assets.
BOOK-ENTRY ISSUANCE
DTC will act as securities depositary for all of the Preferred
Securities and the Junior Subordinated Debentures, unless otherwise referred to
in the Prospectus Supplement relating to an offering of Preferred Securities or
Junior Subordinated Debentures. The Preferred Securities and the Junior
Subordinated Debentures will be issued only as fully-registered securities
registered in the name of Cede & Co. (DTC's nominee). One or more
fully-registered global certificates will be issued for the Preferred Securities
of each Trust and the Junior Subordinated Debentures, representing in the
aggregate the total number of such Trust's Preferred Securities or aggregate
principal balance of Junior Subordinated Debentures, respectively, and will be
deposited with DTC.
DTC is a limited purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its Participants deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. "Direct Participants" include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. DTC is owned by a number of its Direct Participants and by
the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain custodial relationships with Direct
Participants, either directly or indirectly
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("Indirect Participants"). The rules applicable to DTC and its Participants are
on file with the Commission.
Purchases of Preferred Securities or Junior Subordinated Debentures
within the DTC system must be made by or through Direct Participants, which will
receive a credit for the Preferred Securities or Junior Subordinated Debentures
on DTC's records. The ownership interest of each actual purchaser of each
Preferred Security and each Junior Subordinated Debenture ("Beneficial Owner")
is in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchases, but Beneficial Owners are expected to receive written confirmations
providing details of the transactions, as well as periodic statements of their
holdings, from the Direct or Indirect Participants through which the Beneficial
Owners purchased Preferred Securities or Junior Subordinated Debentures.
Transfers of ownership interests in the Preferred Securities or Junior
Subordinated Debentures are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in Preferred
Securities or Junior Subordinated Debentures, except in the event that use of
the book-entry system for the Preferred Securities of such Trust or Junior
Subordinated Debentures is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities or Junior Subordinated Debentures; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Preferred Securities
or Junior Subordinated Debentures are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping account
of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder
of the Preferred Securities or Junior Subordinated Debentures. If less than all
of a Trust's Preferred Securities or the Junior Subordinated Debentures are
being redeemed, DTC's current practice is to determine by lot the amount of the
interest of each Direct Participant to be redeemed.
Although voting with respect to the Preferred Securities or the Junior
Subordinated Debentures is limited to the holders of record of the Preferred
Securities or Junior Subordinated Debentures, in those instances in which a vote
is required, neither DTC nor Cede & Co. will itself consent or vote with respect
to Preferred Securities or Junior Subordinated Debentures. Under its usual
procedures, DTC would mail an omnibus proxy (the "Omnibus Proxy") to the
relevant Trustee as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts such Preferred Securities or Junior Subordinated Debentures are
credited on the record date (identified in a listing attached to the Omnibus
Proxy).
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Distribution payments on the Preferred Securities or the Junior
Subordinated Debentures will be made by the relevant Trustee to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Participant and not of DTC, the relevant Trustee, the Trust thereof or the
Corporation, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of Distributions to DTC is the responsibility
of the relevant Trustee, disbursement of such payments to Direct Participants is
the responsibility of DTC, and disbursements of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositary
with respect to any of the Preferred Securities or the Junior Subordinated
Debentures at any time by giving reasonable notice to the relevant Trustee and
the Corporation. In the event that a successor securities depositary is not
obtained, definitive Preferred Security or Junior Subordinated Debenture
certificates representing such Preferred Securities or Junior Subordinated
Debentures are required to be printed and delivered. The Corporation, at its
option, may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor depositary). After a Debenture Event of Default, the
holders of a majority in liquidation preference of Preferred Securities or
aggregate principal amount of Junior Subordinated Debentures may determine to
discontinue the system of book-entry transfers through DTC. In any such event,
definitive certificates for such Preferred Securities or Junior Subordinated
Debentures will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Trusts and the Corporation
believe to be accurate, but the Trusts and the Corporation assume no
responsibility for the accuracy thereof. Neither the Trusts nor the Corporation
has any responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
DESCRIPTION OF GUARANTEES
A Guarantee will be executed and delivered by the Corporation
concurrently with the issuance by each Trust of its Preferred Securities for the
benefit of the holders from time to time of such Preferred Securities. The First
National Bank of Chicago will act as indenture trustee ("Guarantee Trustee")
under each Guarantee for the purposes of compliance with the Trust Indenture Act
and each Guarantee will be qualified as an indenture under the Trust Indenture
Act. This summary of certain provisions of the Guarantees, which summarizes the
material terms thereof, does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all of the provisions of each
Guarantee, including the definitions therein of certain terms, and the Trust
Indenture Act, to each of which reference is hereby made. The form of the
Guarantee has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part. Reference in this summary to Preferred Securities
means that Trust's Preferred
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Securities to which a Guarantee relates. The Guarantee Trustee will hold each
Guarantee for the benefit of the holders of the related Trust's Preferred
Securities.
GENERAL
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined below)
to the holders of the Preferred Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that such 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 the related
Trust (the "Guarantee Payments"), will be subject to the Guarantee: (i) any
accumulated and unpaid Distributions required to be paid on such Preferred
Securities, to the extent that such Trust has funds on hand available therefor
at such time, (ii) the Redemption Price with respect to any Preferred Securities
called for redemption, to the extent that such Trust has funds on hand available
therefor, or (iii) upon a voluntary or involuntary termination and liquidation
of such Trust (unless the Corresponding Junior Subordinated Debentures are
distributed to holders of such Preferred Securities in exchange therefor), the
lesser of (a) the Liquidation Distribution and (b) the amount of assets of such
Trust remaining available for distribution to holders of Preferred Securities.
The Corporation's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Corporation to the holders of the
applicable Preferred Securities or by causing the Trust to pay such amounts to
such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis
of the related Trust's obligations under the Preferred Securities, but will
apply only to the extent that such related Trust has funds sufficient to make
such payments, and is not a guarantee of collection.
If the Corporation does not make interest payments on the Corresponding
Junior Subordinated Debentures held by the Trust, the Trust will not be able to
pay Distributions on the Preferred Securities and will not have funds legally
available therefor. Each Guarantee will rank subordinate and junior in right of
payment to all Senior Indebtedness of the Corporation to the extent and in the
manner set forth in the Guarantee. See "--Status of the Guarantees." Because
the Corporation is a holding company, the right of the Corporation to
participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise, is subject to the
prior claims of creditors of that subsidiary, except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Corporation's obligations under the Guarantees will be
effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and claimants should look only to the assets of the
Corporation for payments thereunder. See "Wachovia Corporation." Except as
otherwise provided in the applicable Prospectus Supplement, the Guarantees do
not limit the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Indebtedness, whether under the Indenture, any
other existing indenture or any other indenture that the Corporation may enter
into in the future or otherwise. See the applicable Prospectus Supplement
relating to any offering of Preferred Securities.
The Corporation will, through the applicable Guarantee, the applicable
Declaration, the applicable series of Corresponding Junior Subordinated
Debentures and the Indenture, taken
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together, fully, irrevocably and unconditionally guarantee all of the Trust's
obligations under the Preferred Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Preferred Securities. See "Relationship Among the
Preferred Securities, the Corresponding Junior Subordinated Debentures and the
Guarantees."
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the
Corporation and will rank subordinate and junior in right of payment to all
Senior Indebtedness of the Corporation in the same manner as the Junior
Subordinated Debentures.
Each Guarantee will rank pari passu with all other guarantees issued by
the Corporation with respect to preferred securities issued by other issuers to
be established by the Corporation similar to the Trusts. Each Guarantee will
constitute a guarantee of payment and not of collection (i.e., the guaranteed
party may institute a legal proceeding directly against the Corporation to
enforce its rights under the Guarantee without first instituting a legal
proceeding against any other person or entity). Each Guarantee will be held for
the benefit of the holders of the related Preferred Securities. Each Guarantee
will not be discharged except by payment of the Guarantee Payments in full to
the extent not paid by the Trust or upon distribution to the holders of the
Preferred Securities of the Corresponding Junior Subordinated Debentures. None
of the Guarantees places a limitation on the amount of additional Senior
Indebtedness that may be incurred by the Corporation. The Corporation expects
from time to time to incur additional indebtedness constituting Senior
Indebtedness.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of
the Corporation to perform any of its payment or other obligations thereunder.
The holders of not less than a majority in aggregate Liquidation Amount of the
Related 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 such Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under such Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
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CERTAIN COVENANTS OF THE CORPORATION
In each Guarantee, the Corporation will covenant that, so long as any
Related Preferred Securities remain outstanding, if there shall have occurred
any event that would constitute an event of default under the Guarantee or the
Declaration, then the Corporation will not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Corporation's capital stock (which includes common
and preferred stock), (ii) make any payment of principal, interest or premium,
if any, on or repay, repurchase or redeem any debt securities of the Corporation
that rank pari passu with or junior in right of payment to the Junior
Subordinated Debentures or (iii) make any guarantee payments with respect to any
guarantee by the Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks pari passu with or junior in right of
payment to the Junior Subordinated Debentures (other than (a) dividends or
distributions in shares of or options, warrants or rights to subscribe for or
purchase shares of, common stock of the Corporation, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) as a result of a reclassification of the Corporation's capital
stock or the exchange or conversion of one class or series of the Corporation's
capital stock for another class or series of the Corporation's capital stock,
(e) the purchase of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, and (f) purchases of common stock
related to the issuance of common stock or rights under any of the Corporation's
benefit plans for its directors, officers or employees or any of the
Corporation's dividend reinvestment plans).
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance
of a default by the Corporation in performance of any Guarantee, undertakes to
perform only such duties as are specifically set forth in each Guarantee and,
after default with respect to any 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 any 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. The Guarantee Trustee is not required to expend or risk its
own funds or otherwise incur personal financial liability in the performance of
its duties if it reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely
affect the rights of holders of the Related Preferred Securities (in which case
no vote will be required), no Guarantee may be amended without the prior
approval of the holders of not less than a majority of the aggregate Liquidation
Amount of such outstanding Preferred Securities. The manner of
obtaining any such approval will be as set forth under "Description of Preferred
Securities
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- --Voting Rights; Amendment of Each Declaration." All guarantees and
agreements contained in each Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Corporation and shall inure to
the benefit of the holders of the related Preferred Securities then outstanding.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect
upon full payment of the Redemption Price of the Related Preferred Securities,
upon full payment of the Liquidation Amount payable upon liquidation of the
related Trust or upon distribution of Corresponding Junior Subordinated
Debentures to the holders of the Related Preferred Securities. Each Guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any holder of the Related Preferred Securities must restore payment of
any sums paid under such Preferred Securities or such Guarantee.
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the
laws of the State of New York, without regard to conflicts of laws principles
thereof.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
AND THE GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred
Securities (to the extent the Trust has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Corporation as and to the
extent set forth under "Description of Guarantees." Taken together, the
Corporation's obligations under each series of Corresponding Junior Subordinated
Debentures, the Indenture, the related Declaration and the related Guarantee
provide, in the aggregate, a full, irrevocable and unconditional guarantee of
payments of Distributions and other amounts due on the Related Preferred
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Trust's obligations under the
Related Preferred Securities. If and to the extent that the Corporation does not
make payments on any series of Corresponding Junior Subordinated Debentures,
such Trust will not pay Distributions or other amounts due on the Related
Preferred Securities. The Guarantees do not cover payment of Distributions when
the related Trust does not have sufficient funds to pay such Distributions. In
such event, the remedy of a holder of a series of Preferred Securities is to
institute a legal proceeding directly against the Corporation pursuant to the
terms of the Indenture for enforcement of payment of amounts equal to such
Distributions to such holder. The obligations of the Corporation under each
Guarantee are subordinate and junior in right of payment to all Senior
Indebtedness of the Corporation in the same manner as the Junior Subordinated
Debentures.
45
<PAGE>
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
each series of Corresponding Junior Subordinated Debentures, such payments will
be sufficient to cover Distributions and other payments due on the Related
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Subordinated Debentures will be equal to the
sum of the aggregate stated Liquidation Amount of the Related Preferred
Securities and related Common Securities; (ii) the interest rate and interest
and other payment dates on each series of Corresponding Junior Subordinated
Debentures will match the Distribution rate and Distribution and other payment
dates for the Related Preferred Securities; (iii) the Corporation shall pay for
all and any costs, expenses and liabilities of such Trust except the Trust's
obligations to holders of its Trust Securities under such Trust Securities; and
(iv) each Declaration further provides that the Trust will not engage in any
activity that is not consistent with the limited purposes of such Trust.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Related Preferred Security may institute a legal
proceeding directly against the Corporation to enforce its rights under the
related Guarantee without first instituting a legal proceeding against the
Guarantee Trustee, the related Trust or any other person or entity.
A default or event of default under any Senior Indebtedness of the
Corporation would not constitute a default or Event of Default under the
Indenture. However, in the event of payment defaults under, or acceleration of,
Senior Indebtedness of the Corporation, the subordination provisions of the
Indenture provide that no payments may be made in respect of the Corresponding
Junior Subordinated Debentures until such Senior Indebtedness has been paid in
full or any payment default thereunder has been cured or waived. Failure to make
required payments on any series of Corresponding Junior Subordinated Debentures
would constitute an Event of Default under the Indenture.
LIMITED PURPOSE OF TRUSTS
Each Trust's Preferred Securities evidence a preferred beneficial
interest in such Trust, and each Trust exists for the sole purpose of issuing
and selling the Trust Securities, using the proceeds from the sale of the Trust
Securities to acquire the Corresponding Junior Subordinated Debentures and
engaging in only those other activities necessary, advisable or incidental
thereto. A principal difference between the rights of a holder of a Preferred
Security and a holder of a Corresponding Junior Subordinated Debenture is that a
holder of a Corresponding Junior Subordinated Debenture will be entitled to
receive from the Corporation the principal amount of and premium, if any, and
interest on Corresponding Junior Subordinated Debentures held, while a holder of
Preferred Securities will be entitled to receive Distributions from such Trust
(or, in certain circumstances, from the Corporation under the applicable
Guarantee) if and to the extent such Trust has funds available for the payment
of such Distributions.
46
<PAGE>
RIGHTS UPON TERMINATION
Unless the Corresponding Junior Subordinated Debentures are distributed to
holders of the Trust Securities, upon any voluntary or involuntary termination
and liquidation of any Trust, the holders of the related Trust Securities will
be entitled to receive, out of the assets held by such Trust, the Liquidation
Distribution in cash. See "Description of Preferred Securities--Liquidation
Distribution Upon Termination." Upon any voluntary or involuntary liquidation or
bankruptcy of the Corporation, the Property Trustee, as holder of the
Corresponding Junior Subordinated Debentures, would be a subordinated creditor
of the Corporation, subordinated in right of payment to all Senior Indebtedness
as and in the manner set forth in the Indenture, but entitled to receive payment
in full of principal (and premium, if any) and interest, before any stockholders
of the Corporation receive payments or distributions. Since the Corporation will
be the guarantor under each Guarantee and will agree to pay for all costs,
expenses and liabilities of each Trust (other than the Trust's obligations to
the holders of its Trust Securities), the positions of a holder of such
Preferred Securities and a holder of such Corresponding Junior Subordinated
Debentures relative to other creditors and to stockholders of the
Corporation in the event of liquidation or bankruptcy of the Corporation
are expected to be substantially the same.
PLAN OF DISTRIBUTION
Wachovia may sell the Junior Subordinated Debentures and any Trust may
sell Preferred Securities (such Junior Subordinated Debentures and Preferred
Securities, the "Offered Securities") in any of, or any combination of, the
following ways: (i) directly to purchasers, (ii) through agents and (iii)
through underwriters or dealers. Such underwriters, dealers or agents may be
affiliates of Wachovia, and offers or sales of such securities may include
secondary market transactions by affiliates of Wachovia to the extent
permitted by applicable law.
Offers to purchase Offered Securities may be solicited directly by
Wachovia and/or any Trust, as the case may be, or by agents designated by
Wachovia and/or any Trust, as the case may be, from time to time. Any such
agent, who may be deemed to be an underwriter as that term is defined in the
Securities Act, involved in the offer or sale of the Offered Securities in
respect of which this Prospectus is delivered will be named, and any commissions
payable by Wachovia to such agent will be set forth, in the Prospectus
Supplement. Unless otherwise indicated in the Prospectus Supplement, any such
agency will be acting on a best efforts basis for the period of its appointment
(ordinarily five business days or less). Agents, dealers and underwriters may be
customers of, engage in transactions with, or perform services for Wachovia in
the ordinary course of business.
If an underwriter or underwriters are utilized in the sale, Wachovia
will execute an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transaction
will be set forth in the Prospectus Supplement, which will be used by the
underwriters to make releases of the Offered Securities in respect of which this
Prospectus is delivered to the public.
47
<PAGE>
If a dealer is utilized in the sale of the Offered Securities in
respect of which this Prospectus is delivered, Wachovia and/or any Trust, as the
case may be, will sell such Offered Securities to the dealer, as principal. The
dealer may then resell such Offered Securities to the public at varying prices
to be determined by such dealer at the time of resale. The name of the dealer
and the terms of the transaction will be set forth in the Prospectus Supplement.
Agents, underwriters, and dealers may be entitled under the relevant agreements
to indemnification by Wachovia and/or any Trust, as the case may be, against
certain liabilities, including liabilities under the Securities Act.
This Prospectus and related Prospectus Supplement may be used by direct
or indirect subsidiaries of Wachovia in connection with offers and sales related
to secondary market transactions. Such subsidiaries may act as principal or
agent in such transactions. Such sales may be made at prices related to
prevailing market prices at the time of sale.
In connection with the offering of the Preferred Securities of any
Trust, such Trust may grant to the underwriters an option to purchase additional
Preferred Securities to cover over-allotments, if any, at the initial public
offering price (with an additional underwriting commission), as may be set forth
in the accompanying Prospectus Supplement. If such Trust grants any
over-allotment option, the terms of such over-allotment option will be set forth
in the Prospectus Supplement for such Preferred Securities.
Underwriters and dealers may engage in transactions with, or perform
services for, the Corporation and/or the applicable Trust and/or any of their
affiliates in the ordinary course of business.
The Offered Securities will be new issues of securities and will have
no established trading market. Any underwriters to whom Offered Securities are
sold for public offering and sale may make a market in such Offered Securities,
but such underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. Such Offered Securities may or may not
be listed on a national securities exchange or the Nasdaq National Market. No
assurance can be given as to the liquidity of or the existence of trading
markets for any Offered Securities.
VALIDITY OF SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement,
certain legal matters will be passed upon for the Corporation by Kenneth W.
McAllister, General Counsel of the Corporation, and for the Trusts by Richards,
Layton & Finger, special Delaware counsel to the
48
<PAGE>
Trusts and the Corporation. The validity of the Guarantees and the Junior
Subordinated Debentures will be passed upon for the Underwriters by Brown & Wood
LLP. Kenneth W. McAllister and Brown & Wood LLP will rely on the opinion of
Richards, Layton & Finger as to matters of Delaware law.
EXPERTS
The consolidated financial statements of Wachovia Corporation and
subsidiaries at December 31, 1995 and 1994, and for each of the three years in
the period ended December 31, 1995, incorporated by reference in this Prospectus
and Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in its report thereon and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
49
<PAGE>
- -----------------------------------------------------
No dealer, salesperson or other person has
been authorized to give any information or to make
any representation not contained in this
Prospectus Supplement or the Prospectus and, if
given or made, such information or representation
must not be relied upon as having been authorized
by Wachovia Corporation, Wachovia Capital Trust II
or any Underwriter. This Prospectus Supplement and
the Prospectus do not constitute an offer to sell
or a solicitation of an offer to buy any of the
securities offered hereby in any jurisdiction to
any person to whom it is unlawfu to make such
offer or solicitation in such jurisdiction. The
delivery of this Prospectus Supplement and the
Prospectus at any time does not imply that the
information they contain is correct as of any time
subsequent to their respective dates.
---------------
TABLE OF CONTENTS
PAGE
Risk Factors................................ S-6
Wachovia Capital Trust II................... S-13
Wachovia Corporation........................ S-15
Use of Proceeds............................. S-16
Ratio of Earnings to Fixed Charges.......... S-16
Capitalization.............................. S-17
Summary Financial Data ..................... S-17
Description of Capital Securities........... S-19
Description of Junior
Subordinated Debentures................... S-23
Description of the Guarantee................ S-29
Certain Federal Income Tax Considerations... S-30
ERISA Considerations........................ S-35
Underwriting................................ S-35
Validity of Securities...................... S-37
PROSPECTUS
Available Information.......................3
Incorporation of Certain Documents
by Reference..............................4
Wachovia Corporation........................6
The Trusts..................................7
Use of Proceeds.............................8
Description of Junior
Subordinated Debentures...................8
Description of Preferred Securities.........24
Book-Entry Issuance.........................39
Description of Guarantees...................41
Relationship Among the Preferred
Securities, the Corresponding Junior
Subordinated Debentures and the
Guarantees................................45
Plan of Distribution........................47
Validity of Securities......................48
Experts.....................................49
WACHOVIA CAPITAL TRUST II
$
% Capital Securities
(Liquidation Amount $25 per Capital Security)
fully and unconditionally guaranteed,
to the extent set forth herein, by
WACHOVIA CORPORATION
------------------------
PROSPECTUS SUPPLEMENT
-------------------------
January , 1997
- -------------------------------------------- ------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution
of the securities being registered, other than underwriting compensation, are:
Securities and Exchange Commission Registration Fee.......... $90,909
Printing and Engraving Expenses.............................. 50,000
Legal Fees and Expenses...................................... 25,000
Accounting Fees and Expenses................................. 15,000
Trustee Fees and Expenses.................................... 15,500
Rating Agency Fees and Expenses.............................. 187,500
Miscellaneous................................................ 3,000
Total..................................................$386,909
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the North Carolina Business Corporation Act (the
"NCBCA"), the Corporation's Articles of Incorporation provide that no director
of the Corporation will be held personally liable for monetary damages for such
director's breach of duty as a director. This limitation of liability does not
relieve directors from liability for (i) acts or omissions that the director at
the time of such breach knew or believed were clearly in conflict with the best
interests of the Corporation, (ii) any liability under Section 55-8-33 of the
NCBCA for unlawful distributions or other acts for which the director is
personally liable to the Corporation, (iii) any transaction from which the
director is adjudged to have derived an improper personal benefit, or (iv) acts
or omissions occurring prior to the date the provision in the Articles of
Incorporation became effective.
Pursuant to the NCBCA, Sections 55-8-50, et seq., as amended, a
director may be indemnified against liability and litigation expense, including
reasonable attorneys' fees, arising out of his status as such or his activities
in such capacity, provided, however, that such person (i) conducted himself in
good faith; (ii) reasonably believed (x) in the case of conduct in his official
capacity with the Corporation, that his conduct was in its best interests, and
(y) in all other cases that his conduct was at least not opposed to its best
interests; and (iii) in the case of any criminal proceeding, had no reason to
believe his conduct was unlawful.
Mandatory indemnification is available under the NCBCA for a director
who is wholly successful, on the merits or otherwise, in the defense of any
proceeding to which he was a party because he is or was a director of the
Corporation, against reasonable expenses incurred by him in connection with the
proceeding.
A corporation may not indemnify under the NCBCA in connection with any
proceeding by or in the right of a corporation in which the director was
adjudged liable to the corporation, or with any other proceeding charging
improper personal benefit to him, whether or not in connection with his official
capacity, in which he was adjudged liable on the basis that personal benefit was
improperly received by him. Where a proceeding is by or in the right of a
corporation, indemnification of a director is limited to reasonable expenses if
the proceeding is concluded without a final adjudication of the issue of
liability.
The NCBCA provides for an advance for expenses incurred by a director
in defending a proceeding. The expenses may be paid by a corporation in advance
of the final disposition of such proceeding as authorized by the board of
directors in specific cases or as authorized or required under any provision in
the articles of incorporation or bylaws or by any applicable resolution or
contract upon receipt of an undertaking by or on behalf of the director to repay
such amount unless it shall ultimately be determined that he is entitled to be
indemnified by the corporation against such expenses.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
<S> <C>
1 -- Form of Underwriting Agreement for offering of Preferred Securities.+
4(a)(i) -- Certificate of Trust of Wachovia Capital Trust II.*
4(a)(ii) -- Certificate of Trust of Wachovia Capital Trust III.*
4(a)(iii)-- Certificate of Trust of Wachovia Capital Trust IV.*
4(b)(i) -- Declaration of Trust of Wachovia Capital Trust II.*
4(b)(ii) -- Declaration of Trust of Wachovia Capital Trust III.*
4(b)(iii)-- Declaration of Trust of Wachovia Capital Trust IV.*
4(b)(iv) -- Form of Amended and Restated Declaration of Trust to be used in connection with the issuance
of the Preferred Securities.+
4(c) -- Form of Indenture between Wachovia Corporation and The First National Bank of Chicago, as
Trustee.+
4(e) -- Form of Preferred Security (included in Exhibit 4(b)(iv)).+
4(f) -- Form of Junior Subordinated Deferrable Interest Debenture (included in Exhibit 4(c)).+
4(g) -- Form of Preferred Securities Guarantee.+
5(a) -- Opinion of Richards, Layton & Finger LLP.+
5(b) -- Opinion of Kenneth W. McAllister, General Counsel of Wachovia Corporation.+
8 -- Tax Opinion of Brown & Wood LLP.+
12 -- Statement setting forth computation of the ratio of earnings to fixed charges (incorporated by
reference from Exhibit 12 to Wachovia Corporation's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1996).
23(a) -- Consent of Ernst & Young LLP as to Wachovia Corporation.+
23(b) -- Consent of Richards, Layton & Finger LLP (included in Exhibit 5(a)).+
23(c) __ Consent of Kenneth W. McAllister, General Counsel of Wachovia Corporation (included in Exhibit
5(b)).+
23(d) -- Consent of Brown & Wood LLP (included in Exhibit 8).+
24(a) -- Powers of Attorney for Wachovia Corporation.+
24(b) -- Powers of Attorney for Wachovia Corporation, as sponsor, to sign the Registration Statement on
behalf of Wachovia Capital Trust I, Wachovia Capital Trust II and Wachovia Capital Trust III
(included in Exhibit 4(b)(i), 4(b)(ii) and 4(b)(iii)).*
25(a) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Indenture.*
25(b) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Amended and Restated Declaration of Trust of Wachovia
Capital Trust II.*
25(c) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Amended and Restated Declaration of Trust of Wachovia
Capital Trust III.*
25(d) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Amended and Restated Declaration of Trust of Wachovia
Capital Trust IV.*
25(e) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Preferred Securities Guarantee of Wachovia Corporation with
respect to the Preferred Securities of Wachovia Capital Trust II.*
25(f) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Preferred Securities Guarantee of Wachovia Corporation with
respect to the Preferred Securities of Wachovia Capital Trust III.*
25(g) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Preferred Securities Guarantee of Wachovia Corporation with
respect to the Preferred Securities of Wachovia Capital Trust IV.*
</TABLE>
+ Filed herewith.
* Previously filed.
ITEM 17. UNDERTAKINGS.
a. The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement; (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement (notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be
II-2
<PAGE>
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the
"Calculation or Registration Fee" table in the effective registration
statement); and (iii) to include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
Provided, however,that (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those items
is contained in periodic reports filed with the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
b. The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
c. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the foregoing provisions, or otherwise,
the registrants have been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in said Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by a registrant
of expenses incurred or paid by a director, officer or controlling person of
such registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, such registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against policy as expressed in the Act and will be governed by the final
adjudication of such issue.
d. The undersigned registrants hereby undertake that;
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430 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.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Amendment No. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Winston-Salem, State of North Carolina, on January
21, 1997.
WACHOVIA CORPORATION
By: /s/ L.M. Baker, Jr.
--------------------------
L.M. Baker, Jr.
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons on behalf
of the registrant and in the capacities indicated, on January 21, 1997.
SIGNATURE CAPACITY
/S/ L.M. BAKER, JR.
----------------------- President, Chief Executive Officer and
L.M. Baker, Jr. Director (Principal Executive Officer)
/S/ JOHN G. MEDLIN, JR.
------------------------ Chairman and Director
John G. Medlin, Jr.
/S/ RUFUS C. BARKLEY, JR.* Director
-----------------------------
Rufus C. Barkley, Jr.
/S/ JOHN L. CLENDENIN*
------------------------------ Director
John L. Clendenin
/S/ LAWRENCE M. GRESSETTE, JR.* Director
--------------------------------
Lawrence M. Gressette, Jr.
/S/ THOMAS K. HEARN, JR.* Director
-------------------------------
Thomas K. Hearn, Jr.
II-4
<PAGE>
SIGNATURE CAPACITY
/S/ W. HAYNE HIPP* Director
-----------------------------
W. Hayne Hip
/S/ ROBERT M. HOLDER, JR.*
------------------------------- Director
Robert M. Holder, Jr.
/S/ DONALD R. HUGHES* Director
--------------------------------
Donald R. Hughes
/S/ JAMES W. JOHNSTON* Director
-----------------------------------
James W. Johnston
/S/ WYNDHAM ROBERTSON*
--------------------------------- Director
Wyndham Robertson
/S/ HERMAN J. RUSSELL*
----------------------------------- Director
Herman J. Russell
/S/ SHERWOOD H. SMITH, JR.* Director
- ---------------------------------------
Sherwood H. Smith, Jr.
/S/ CHARLES MCKENZIE TAYLOR* Director
--------------------------------------
Charles McKenzie Taylor
/S/ JOHN C. WHITAKER, JR.* Director
- ---------------------------------------
John C. Whitaker, Jr.
/S/ ROBERT S. MCCOY, JR. Executive Vice President and Chief Financial
- --------------------------------- Officer (Principal Financial Officer)
Robert S. McCoy, Jr.
/S/ DONALD K. TRUSLOW Comptroller (Principal Accounting Officer)
-------------------------------
Donald K. Truslow
*By: /S/ ALICE WASHINGTON GROGAN
------------------------------
Alice Washington Grogan
Attorney-in-Fact
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933; Wachovia
Capital Trust II, Wachovia Capital Trust III and Wachovia Capital Trust IV each
has duly caused this Amendment No.1 to the registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Winston-Salem, State of North Carolina on January 21, 1997.
WACHOVIA CAPITAL TRUST II
by Wachovia Corporation
by /s/ L.M. Baker, Jr.
--------------------------
Name: L.M. Baker, Jr.
Title: President and Chief Executive Officer
WACHOVIA CAPITAL TRUST III
by Wachovia Corporation
by /s/ L.M. Baker, Jr.
---------------------------
Name: L.M. Baker, Jr.
Title: President and Chief Executive Officer
WACHOVIA CAPITAL TRUST IV
by Wachovia Corporation
by /s/ L.M. Baker, Jr.
----------------------------
Name: L.M. Baker, Jr.
Title: President and Chief Executive Officer
II-6
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequentially
NO. DESCRIPTION NUMBERED PAGE
<S> <C> <C>
1 -- Form of Underwriting Agreement for offering of Preferred Securities.+
4(a)(i) -- Certificate of Trust of Wachovia Capital Trust II.*
4(a)(ii) -- Certificate of Trust of Wachovia Capital Trust III.*
4(a)(iii)-- Certificate of Trust of Wachovia Capital Trust IV.*
4(b)(i) -- Declaration of Trust of Wachovia Capital Trust II.*
4(b)(ii) -- Declaration of Trust of Wachovia Capital Trust III.*
4(b)(iii)-- Declaration of Trust of Wachovia Capital Trust IV.*
4(b)(iv) -- Form of Amended and Restated Declaration of Trust to be used in connection with the issuance
of the Preferred Securities.+
4(c) -- Form of Indenture between Wachovia Corporation and The First National Bank of Chicago, as
Trustee.+
4(e) -- Form of Preferred Security (included in Exhibit 4(b)(iv)).+
4(f) -- Form of Junior Subordinated Deferrable Interest Debenture (included in Exhibit 4(c)).+
4(g) -- Form of Preferred Securities Guarantee.+
5(a) -- Opinion of Richards, Layton & Finger LLP.+
5(b) -- Opinion of Kenneth W. McAllister, General Counsel of Wachovia Corporation.+
8 -- Tax Opinion of Brown & Wood LLP.+
12 -- Statement setting forth computation of the ratio of earnings to fixed charges (incorporated by
reference from Exhibit 12 to Wachovia Corporation's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1996).
23(a) -- Consent of Ernst & Young LLP as to Wachovia Corporation.+
23(b) -- Consent of Richards, Layton & Finger LLP (included in Exhibit 5(a)).+
23(c) __ Consent of Kenneth W. McAllister, General Counsel of Wachovia Corporation (included in Exhibit
5(b)).+
23(d) -- Consent of Brown & Wood LLP (included in Exhibit 8).+
24(a) -- Powers of Attorney for Wachovia Corporation.+
24(b) -- Powers of Attorney for Wachovia Corporation, as sponsor, to sign the Registration Statement on
behalf of Wachovia Capital Trust I, Wachovia Capital Trust II and Wachovia Capital Trust III
(included in Exhibit 4(b)(i), 4(b)(ii) and 4(b)(iii)).*
25(a) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Indenture.*
25(b) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Amended and Restated Declaration of Trust of Wachovia
Capital Trust II.*
25(c) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Amended and Restated Declaration of Trust of Wachovia
Capital Trust III.*
25(d) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Amended and Restated Declaration of Trust of Wachovia
Capital Trust IV.*
25(e) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Preferred Securities Guarantee of Wachovia Corporation with
respect to the Preferred Securities of Wachovia Capital Trust II.*
25(f) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Preferred Securities Guarantee of Wachovia Corporation with
respect to the Preferred Securities of Wachovia Capital Trust III.*
25(g) -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Preferred Securities Guarantee of Wachovia Corporation with
respect to the Preferred Securities of Wachovia Capital Trust IV.*
</TABLE>
+ Filed herewith.
* Previously filed.
<PAGE>
EXHIBIT 1
FORM OF UNDERWRITING AGREEMENT
$___,000,000
Capital Securities
WACHOVIA CAPITAL TRUST [ ]
(a Delaware Trust)
UNDERWRITING AGREEMENT
January __, 1997
Ladies and Gentlemen:
Wachovia Capital Trust [ ] (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 Code, 12 Del. Section 3801 et
seq.), and Wachovia Corporation, a North Carolina corporation (the "Company"
and, together with the Trust, the "Offerors"), confirm their agreement (the
"Agreement") with [ ] and each of the other Underwriters named in Schedule A
hereto (collectively, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom
[ ] are acting as representatives (in such capacity, the "Representatives"),
with respect to the sale by the Trust and the purchase by the Underwriters,
acting severally and not jointly, of the respective numbers of _____% Capital
Securities (liquidation amount of $25 per capital security) of the Trust (the
"Initial Capital Securities") set forth in said Schedule A. The Company also
grants to the Underwriters, severally and not jointly, the option described in
Section 2(c) (the "Option") to purchase up to
<PAGE>
_______ additional ____% Capital Securities (liquidation amount of $25 per
capital security) of the Trust (the "Option Capital Securities" and together
with the Initial Capital Securities the "Capital Securities") solely to cover
over-allotments. The Capital Securities will be guaranteed on a subordinated
basis by the Company, to the extent set forth in the Prospectus (as defined
herein), with respect to distributions and payments upon liquidation, redemption
and otherwise (the "Capital Securities Guarantee") pursuant to the Capital
Securities Guarantee Agreement, dated as of January __, 1997, and as may be
amended, if necessary, in connection with an exercise of the Option (the
"Capital Securities Guarantee Agreement"), between the Company and The First
National Bank of Chicago, as trustee (the "Guarantee Trustee"). The Capital
Securities and the related Capital Securities Guarantees are referred to herein
as the "Securities."
The Offerors have filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-19365) and a
related preliminary prospectus for the registration under the Securities Act of
1933, as amended (the "1933 Act") of (i) the Capital Securities, (ii) the
Capital Securities Guarantee, and (iii) the Junior Subordinated Debentures (as
defined below) to be issued and sold to the Trust by the Company, have filed
such amendments thereto, if any, and such amended preliminary prospectuses 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.
Such registration statement (as amended) and the prospectus constituting a part
thereof (including, in each case, all documents incorporated or deemed to be
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act and the information, if any, deemed to be part thereof pursuant to Rule
430A(b) of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations")), as from time to time amended or supplemented pursuant
to the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934
Act"), or otherwise, are hereinafter referred to as the "Registration Statement"
and the "Prospectus," respectively, except that, if any revised prospectus shall
be provided to the Underwriters by the Offerors for use in connection with the
offering of the Capital Securities 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 by the Offerors pursuant
to Rule 424(b) of the 1933 Act Regulations), the term "Prospectus" shall refer
to such revised prospectus from and after the time it is first provided to the
Underwriters for such use. All references in this Agreement to financial
statements and schedules and other information that is "contained," "included"
or "stated" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and
2
<PAGE>
include all such financial statements and schedules and other information that
are or are deemed to be incorporated by reference in the Registration Statement
or the Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the 1934 Act that
is or is deemed to be incorporated by reference in the Registration Statement or
the Prospectus, as the case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Capital Securities as soon as the Representatives deem advisable
after this Agreement has been executed and delivered and the Declaration (as
defined herein), the Indenture (as defined herein) and the Capital Securities
Guarantee have been qualified under the Trust Indenture Act of 1939, as amended
(the "1939 Act"). The entire proceeds to the Trust from the sale of the Capital
Securities will be combined with the entire proceeds from the sale by the Trust
to the Company of its common securities (the "Common Securities"), as guaranteed
on a subordinated basis by the Company, to the extent set forth in the
Prospectus, with respect to distributions and payments upon liquidation and
redemption thereof (the "Common Securities Guarantee" and together with the
Capital Securities Guarantee, the "Guarantees") pursuant to the Common
Securities Guarantee Agreement, dated as of January __, 1997, as amended, if
necessary, in connection with an exercise of the Option (the "Common Securities
Guarantee Agreement" and, together with the Capital Securities Guarantee
Agreement, the "Guarantee Agreements"), between the Company and the Guarantee
Trustee, as Trustee, and will be used by the Trust to purchase the $______
aggregate principal amount of ___% Junior Subordinated Deferrable Interest
Debentures due _______________ (the "Junior Subordinated Debentures") issued by
the Company (and such additional aggregate principal amount of Junior
Subordinated Debentures as may be necessary if the Option is exercised), under
the Indenture (as defined herein). The Capital Securities and the Common
Securities will be issued pursuant to the amended and restated declaration of
trust of the Trust, dated as of January __, 1997 (the "Declaration") (as may be
further amended, if necessary, subject to the exercise of the Option), among the
Company, as Sponsor, Robert S. McCoy, John J. Milani and Richard B. Roberts, as
trustees (the "Administrative Trustees"), and The First National Bank of
Chicago, as property trustee (the "Property Trustee" and, together with the
Administrative Trustees, the "Trustees"), and the holders from time to time of
undivided beneficial interests in the assets of the Trust. The Junior
Subordinated Debentures will be issued pursuant to an indenture, dated as of
January __, 1997 (the "Base Indenture"), between the Company and The First
National Bank of Chicago, as trustee (the "Debenture Trustee"), and a supplement
to the Base Indenture, dated as of January __, 1997 (the "Supplemental
Indenture," and together with the Base
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<PAGE>
Indenture and any other amendments or supplements thereto, the "Indenture"),
between the Company and the Debenture Trustee.
Section 1. Representations and Warranties. (a) The Offerors jointly and
severally represent and warrant to each Underwriter as of the date hereof and as
of the Closing Time (as hereinafter defined) and as of the Option Closing Time
(as hereinafter defined), if any, as follows:
(i) At the time the Registration Statement became effective
and as of the date hereof, the Registration Statement complied in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations"), and did not
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. The Prospectus, dated the date
hereof (unless the term "Prospectus" refers to a prospectus that has
been provided to the Underwriters by the Trust for use in connection
with the offering of the Securities and that differs from the
Prospectus on file at the Commission at the time the Registration
Statement became effective, in which case, at the time it is first
provided to the Underwriters for such use) and at Closing Time or
Option Closing Time referred to in Section 2 hereof, does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, the Offerors make no representations or warranties as to (A)
that part of the Registration Statement which constitutes the
Statements of Eligibility and Qualification (Forms T-1) under the 1939
Act of the Debenture Trustee, the Property Trustee or the Guarantee
Trustee or (B) the information contained in the statements set forth in
the first paragraph on page S-2 of the Prospectus Supplement and under
the headings "Underwriting" in the Prospectus Supplement and "Plan of
Distribution" in the Prospectus.
(ii) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement or Prospectus, at the time
they were or hereafter are filed with the Commission complied and will
comply in all material respects with the requirements of the 1934 Act
and the rules and regulations of the Commission under the 1934 Act (the
"1934 Act Regulations").
(iii) To the best knowledge of the Offerors, Ernst & Young, LLP,
the accountants who certified the financial statements and supporting
schedules included in or
4
<PAGE>
incorporated by reference into the Registration Statement, are
independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iv) The Trust has been duly created and is validly existing and
in good standing as a business trust under the Delaware Act with the
power and authority to own property and to conduct its business as
described in the Registration Statement and Prospectus and to enter
into and perform its obligations under this Agreement, the Common
Securities Subscription Agreement, dated as of January __, 1997,
between the Company and the Trust (the "Common Securities Subscription
Agreement"), the Debenture Subscription Agreement, dated as of January
__, 1997, between the Company and the Trust (the "Debenture
Subscription Agreement"), the Capital Securities, the Common Securities
and the Declaration; the Trust is not a party to or otherwise bound by
any agreement other than those described in the Prospectus; the Trust
is and will be classified for United States federal income tax purposes
as a grantor trust and not as an association taxable as a corporation;
and the Trust is and will be treated as a consolidated subsidiary of
the Company pursuant to generally accepted accounting principles.
(v) The Common Securities have been duly authorized by the Trust
pursuant to the Declaration and, when issued and delivered by the Trust
to the Company against payment therefor as described in the
Registration Statement and Prospectus, will be validly issued and,
subject to the terms of the Declaration, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust and will
conform to all statements relating thereto contained in the Prospectus;
the issuance of the Common Securities is not subject to preemptive or
other similar rights.
(vi) This Agreement has been duly authorized, executed and
delivered by each of the Offerors.
(vii) Each of the Common Securities Subscription Agreement and the
Debenture Subscription Agreement have been duly authorized by the
Company and the Trust and will have been duly executed and delivered by
the Company and the Trustees, and will constitute a valid and binding
obligation of the Company and the Trust, enforceable against the
Company and the Trust in accordance with its terms, except to the
extent that enforcement thereof may be limited by the receivership,
conservatorship and supervisory powers of bank regulatory agencies
generally as well as to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors, rights generally
or by general principles of equity (regardless of whether enforcement
is
5
<PAGE>
considered in a proceeding at law or in equity) and the
availability of equitable remedies (collectively, the
"Enforceability Exceptions").
(viii) The Declaration has been duly authorized by the Company, as
Sponsor, and will have been duly executed and delivered by the Company
and the Trustees, and assuming due authorization, execution and
delivery of the Declaration by the Property Trustee, the Declaration is
and will be a valid and binding obligation of the Company, the Trust
and the Administrative Trustees, enforceable against the Company and
the Administrative Trustees in accordance with its terms, except to the
extent that enforcement thereof may be limited by the Enforceability
Exceptions and will conform to all statements relating thereto in the
Prospectus; and the Declaration has been duly qualified under the 1939
Act.
(ix) Each of the Guarantee Agreements has been duly authorized
by the Company and, when validly executed and delivered by the Company,
and, in the case of the Capital Securities Guarantee Agreement,
assuming due authorization, execution and delivery of the Capital
Securities Guarantee by the Guarantee Trustee, will constitute a valid
and binding obligation of the Company, enforceable against the Company
in accordance with its terms except to the extent that enforcement
thereof may be limited by the Enforceability Exceptions, and each of
the Guarantees and the Guarantee Agreements will conform to all
statements relating thereto contained in the Prospectus; and the
Capital Securities Guarantee Agreement has been duly qualified under
the 1939 Act.
(x) The Capital Securities have been duly authorized by the
Trust pursuant to the Declaration and, when issued and delivered
pursuant to this Agreement against payment of the consideration
therefor set forth in Schedule B hereto, will be validly issued and,
subject to the terms of the Declaration, fully paid and non-assessable
undivided beneficial interests in the Trust, will be entitled to the
benefits of the Declaration and will conform to all statements relating
thereto contained in the Prospectus; the issuance of the Capital
Securities is not subject to preemptive or other similar rights; and,
subject to the terms of the Declaration, holders of Capital Securities
will be entitled to the same limitation of personal liability under
Delaware law as extended to stockholders of private corporations for
profit.
(xi) Each of the Administrative Trustees of the Trust is an
employee of the Company and has been duly authorized by the Company to
execute and deliver the Declaration; the Declaration has been duly
executed and delivered by
6
<PAGE>
the Administrative Trustees and is a valid and binding obligation of
each Administrative Trustee, enforceable against such Administrative
Trustee in accordance with its terms except to the extent that
enforcement thereof may be limited by the Enforceability Exceptions.
(xii) None of the Offerors is, and upon the issuance and sale of
the Capital Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus none 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).
(xiii) No authorization, approval, consent or order of 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
Capital Securities, the Junior Subordinated Debentures or the
Guarantees hereunder, except such as may be required under the 1933 Act
or the 1933 Act Regulations or state securities laws and the
qualification of the Declaration, the Capital Securities Guarantee
Agreement and the Indenture under the 1939 Act.
(b) The Company represents and warrants to each Underwriter as
of the date hereof and as of the Closing Time (as hereinafter defined) and as of
the Option Closing Time (as hereinafter defined), if any, as follows:
(i) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) 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 and its subsidiaries, considered as
one enterprise, whether or not arising in the ordinary course of
business.
(ii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of North
Carolina with corporate power to own, lease and operate its properties
and to conduct its business as described in the Prospectus, to enter
into and perform its obligations under this Agreement, the Common
Securities Subscription Agreement, the Debenture Subscription
Agreement, the Declaration, as Sponsor, the Indenture and each of the
Guarantees and to purchase, own, and hold the Common Securities issued
by the Trust; the Company is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended; and the Company
is duly qualified as a foreign corporation to transact business and is
in good standing in each
7
<PAGE>
jurisdiction in which the character or location of its properties or
the nature or the conduct of its business requires such qualification,
except for any failures to be so qualified or in good standing which,
taken as a whole, are not material to the Company and its
subsidiaries, considered as one enterprise.
(iii) Each of Wachovia Bank of Georgia, N.A. ("Wachovia
Bank of Georgia"), Wachovia Bank of North Carolina, N.A.
("Wachovia Bank of North Carolina"), and Wachovia Bank of
South Carolina, N.A. ("Wachovia Bank of South Carolina")
(or the successors to such entities) is a duly organized and validly
existing national banking associations under the laws of the United
States, continues to hold a valid certificate to do business as such
and has full power and authority to conduct its business as such
(Wachovia Bank of Georgia, Wachovia Bank of North Carolina and Wachovia
Bank of South Carolina are referred collectively as the "Significant
Subsidiaries"); each Significant Subsidiary has the authority under its
jurisdiction of organization to own, lease and operate its properties
and to conduct its business and is duly authorized to transact business
and is in good standing in each jurisdiction in which it owns or
leases property of a nature, or transacts business of a type, that
would make such qualification necessary, except to the extent that
the failure to so qualify or to be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
considered as one enterprise.
(iv) The Indenture has been duly authorized by the Company and,
when validly executed and delivered by the Company, will constitute a
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms except to the extent that
enforcement thereof may be limited by the Enforceability Exceptions;
the Indenture will conform to all statements relating thereto contained
in the Prospectus; and the Indenture has been duly qualified under the
1939 Act.
(v) The Junior Subordinated Debentures have been duly authorized
by the Company and have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered
against payment therefor as described in the Prospectus, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms except to the extent
that enforcement thereof may be limited by the Enforceability
Exceptions, will be in the form contemplated by, and subject to the
Enforceability Exceptions entitled to the benefits of, the Indenture
and will conform to all statements relating thereto in the Prospectus.
8
<PAGE>
(vi) The Company's obligations under the Guarantees are subordinate
and junior in right of payment to the prior payment in full of all
Allocable Amounts (as defined in the Indenture) with respect to "Senior
Indebtedness" (as defined in the Indenture) of the Company.
(vii) The Junior Subordinated Debentures are subordinated and junior
in right of payment to the prior payment in full of all Allocable
Amounts (as defined in the Indenture) with respect to "Senior
Indebtedness" (as defined in the Indenture) of the Company.
(viii) 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 Significant Subsidiaries pursuant
to, any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of the Significant
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
Significant 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 applicable law, administrative regulation or
administrative or court decree.
(c) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
(d) The Trust represents and warrants to each Underwriter as
of the date hereof and as of the Closing Time (as hereinafter defined) and as of
the Option Closing Time (as hereinafter defined), if any, as follows:
(i) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the a
condition, financial or otherwise, or in the earnings or business
affairs of the Trust, whether or not arising in the ordinary course of
business, and (B) there have been no transactions entered
9
<PAGE>
into by the Trust, other than in the ordinary course of business, which
are material with respect to the Trust.
(ii) 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 Trust, threatened, against or affecting the Trust
that is required to be disclosed in the Prospectus, other than actions,
suits or proceedings which 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, whether or not arising in the ordinary course of business; and
there are no transactions, contracts or documents of the Trust that are
required to be filed as exhibits to the Registration Statement by the
1933 Act or by the 1933 Act Regulations that have not been so filed.
(iii) The Trust possesses adequate certificates, authorities or
permits issued by the appropriate state, federal or foreign 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
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 in the earnings or business
affairs of the Trust.
(iv) The execution, delivery and performance of this Agreement, the
Common Securities Subscription Agreement, the Debenture Subscription
Agreement, the Declaration, the Guarantee Agreements and the
Guarantees, the issuance and sale of the Capital Securities and the
Common Securities, and the consummation of the transactions
contemplated herein and therein and compliance by the Trust with its
obligations hereunder and thereunder have been duly authorized by all
necessary action (corporate or otherwise) on the part of the Trust and
do not and will not result in any violation of the Declaration 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
10
<PAGE>
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).
(e) Each certificate signed by any Trustee of the
Trust and delivered to the Representatives or counsel for the
Underwriters shall be deemed to be a representation and warranty
by the Trust to each Underwriter as to the matters covered
thereby.
Section 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Trust
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Trust, at
the price per security set forth in the Schedule B, the number of Initial
Capital Securities set forth in Schedule A opposite the name of such Underwriter
(except as otherwise provided in Schedule B), plus any additional number of
Initial Capital Securities that such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
The purchase price per security to be paid by the several Underwriters
for the Initial Capital Securities shall be an amount equal to the initial
public offering price. The initial public offering price per Capital Security
shall be a fixed price to be determined by agreement between the Representatives
and the Offerors. The initial public offering price and the purchase price are
be set forth in Schedule B. As compensation to the Underwriters for their
commitments hereunder and in view of the fact that the proceeds of the sale of
the Initial Capital Securities will be used to purchase the Junior Subordinated
Debentures of the Company, the Company hereby agrees to pay at Closing Time to
the Representatives, for the accounts of the several Underwriters, a commission
per Initial Capital Security determined by agreement between the Representatives
and the Company for the Initial Capital Securities to be delivered by the Trust
hereunder at Closing Time. The commission is set forth in Schedule B.
(b) Payment of the purchase price, and delivery of
certificates, for the Initial Capital Securities shall be made at the office of
Brown & Wood LLP, or at such other place as shall be agreed upon by the
Representatives, the Company and the Trust, at 10:00 A.M. New York time on the
[third] business day (unless postponed in accordance with the provisions of
Section 10) after
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<PAGE>
the date hereof, or such other time not later than ten business days after such
date as shall be agreed upon by Representatives, the Trust and the Company (such
time and date of payment and delivery being herein called "Closing Time").
Payment shall be made to the Trust by wire transfer or certified or official
bank check or similar same day funds payable to the order of the Trust to an
account designated by the Trust, against delivery to the Representatives for the
respective accounts of the Underwriters of certificates for the Initial Capital
Securities to be purchased by them. Unless otherwise agreed, certificates for
the Initial Capital Securities shall be in the form set forth in the
Declaration, and such certificates shall be deposited with a custodian (the
"Custodian") for The Depository Trust Company ("DTC") and registered in the name
of Cede & Co., as nominee for DTC.
At the Closing Time, the Company will pay, or cause to be paid, the
commission payable at such time to the Underwriters under Section 2 hereof by
wire transfer or certified or official bank check or checks payable to the
Representatives in same day funds.
(c) In addition, on the basis of the representations and
warranties contained herein, and subject to the terms and conditions set forth
herein, the Trust grants an option to the Underwriters, severally and not
jointly, to purchase up to an additional _______ Option Capital Securities at
the same price per security determined as provided above for the Initial Capital
Securities plus any accrued distributions thereon. The option hereby granted
will expire 30 days after the date hereof, and may be exercised, in whole or in
part, only for the purpose of covering over-allotments upon written notice by
the Representatives to the Trust and the Company setting forth the number of
Option Capital Securities as to which the several Underwriters are exercising
the option, the time and date of payment and delivery thereof. Such times and
dates of delivery (each, on "Option Closing Time") shall be determined by the
Representatives but shall not be later than [three] full business days after the
exercise of such option and not in any event prior to the Closing Time. If the
option is exercised as to all or any portion of the Option Capital Securities,
the Option Capital Securities as to which the option is exercised shall be
purchased by the Underwriters severally and not jointly, in proportion to, as
nearly as practicable, their respective Initial Capital Securities underwriting
obligations as set forth on Schedule A. The Company hereby agrees to pay at the
Option Closing Time to the Representatives, for the accounts of the several
Underwriters, a commission per Option Capital Security equal to the commission
set forth on Schedule B.
In addition, in the event that any or all of the Option Capital
Securities are purchased by the Underwriters, delivery
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<PAGE>
and payment for the Option Capital Securities shall be made at the offices of
Brown & Wood LLP, or at such other place as the Trust, the Company and the
Representatives shall determine, on each Option Closing Time as specified in the
notice from the Representatives to the Company. Delivery of the Option Capital
Securities shall be made to the Representatives against payment by the
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Company in the manner set forth in Section 2(b) above.
Unless otherwise agreed, certificates for the Option Capital Securities shall be
in the form set forth in the Declaration, and such certificates shall be
deposited with the Custodian for DTC and registered in the name of Cede & Co.,
as nominee for DTC.
Section 3. Covenants of the Offerors. Each of the Offerors jointly and
severally covenants with each Underwriter as follows:
(a) The Offerors will notify the Representatives promptly, and
confirm the notice in writing, (i) of the effectiveness of the Registration
Statement and any amendment thereto (including any post-effective amendment),
(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 the initiation of any proceedings for that purpose.
The Offerors will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) The Offerors will give the Representatives notice of their
intention to file or prepare (i) any amendment to the Registration Statement
(including any post-effective amendment), (ii) any amendment or supplement to
the Prospectus (including any revised prospectus which the Offerors propose for
use by the Underwriters in connection with the offering of the Capital
Securities 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), or (iii) any document that would as a result thereof be
incorporated by reference in the Prospectus whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will furnish the Representatives with copies of any
such amendment, supplement or other document within a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file any
such amendment, supplement or other document or use any such prospectus to which
the Representatives or counsel for the Underwriters shall reasonably object.
Subject to the foregoing, the Offerors will file the Prospectus pursuant to Rule
424(b) and Rule 430A under
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the Act not later than the Commission's close of business on the second business
day following the execution and delivery of this Agreement.
(c) The Offerors will deliver to the Representatives as many
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) as the Representatives may reasonably request and will also
deliver to the Representatives a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters.
(d) The Offerors will furnish to each Underwriter, from time
to time during the period when the Prospectus is required to be delivered under
the 1933 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act or the respective applicable rules and regulations
of the Commission thereunder.
(e) If at any time when the Prospectus is required by the 1933
Act to be delivered in connection with sales of the Capital Securities, any
event shall occur as a result of which the Prospectus as then amended or
supplemented will include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading or if it shall be
necessary to amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Offerors will,
subject to paragraph (b) above, promptly prepare and file with the Commission
such amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance and the Offerors will furnish to the
Underwriters a reasonable number of copies of such amendment or supplement.
(f) The Offerors will endeavor, in cooperation with the
Underwriters, to qualify the Capital Securities (and the Capital Securities
Guarantee) and the Junior Subordinated Debentures for offering and sale under
the applicable securities laws of such states and the other jurisdictions of the
United States as the Representatives may designate; provided, however, that none
of the Offerors shall be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified.
(g) The Company will make generally available to its security
holders and to the Underwriters as soon as practicable, but not later than 90
days after the close of the period covered thereby, an earnings statement (which
need not be audited) of the Company and its subsidiaries, covering an applicable
period beginning not later than the first day of the Company's fiscal quarter
next following the "Effective Date" (as defined in Rule 158(c) under the Act) of
the
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Registration Statement, which will satisfy the provisions of Section 11(a)
of the 1933 Act.
(h) During a period of 30 days from the date hereof, neither
the Trust nor the Company will, without the Representatives' prior written
consent, directly or indirectly, sell, offer to sell, grant any option for the
sale of, or otherwise dispose of, any Capital Securities, any security
convertible into or exchangeable into or exercisable for Capital Securities or
the Junior Subordinated Debentures or any junior subordinated debt securities
substantially similar to the Junior Subordinated Debentures or equity securities
substantially similar to the Capital Securities (except for the Junior
Subordinated Debentures and the Capital Securities issued pursuant to this
Agreement), and except for any capital securities with a liquidation amount of
greater than $25 which are non-callable for at least 10 years (except for any
call provisions relating to unanticipated tax or accounting consequences to the
Sponsor, the Trust or holders of such capital securities or status of the Trust
under the 1940 Act) and any junior subordinated debt securities issued in
connection therewith.
Section 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of each Offerors' obligations under this Agreement,
and will pay: (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Capital Securities, (iii) the fees and
disbursements of the Company's and the Trust's counsel and accountants, (iv) the
qualification of the Capital Securities, the Capital Securities Guarantee and
the Junior Subordinated Debentures under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of Brown & Wood LLP, counsel for the Underwriters, in connection
therewith and in connection with the preparation of any blue sky survey, (v) the
printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, of each preliminary
prospectus, and of the Prospectus and any amendments or supplements thereto,
(vi) the printing and delivery to the Underwriters of copies of any blue sky
survey, (vii) the fee of the National Association of Securities Dealers, Inc.,
if applicable, (viii) the fees and expenses of the Debenture Trustee, including
the fees and disbursements of counsel for the Debenture Trustee in
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connection with the Indenture and the Junior Subordinated Debentures, (ix) the
fees and expenses of the Property Trustee, and the Guarantee Trustee, including
the fees and disbursements of counsel for the Property Trustee in connection
with the Declaration and the Certificate of Trust; (x) any fees payable in
connection with the rating of the Capital Securities and Junior Subordinated
Debentures; (xi) the cost and charges of any transfer agent or registrar and
(xii) the cost of qualifying the Capital Securities with DTC.
If this Agreement is terminated by the Representatives in accordance
with the provisions of Section 5 or Section 9 hereof, the Company shall
reimburse the Underwriters for all of their reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of Brown & Wood LLP, counsel
for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Offerors herein contained or in certificates of officers
of the Company, to the performance by the Offerors of their obligations
hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not
later than 5:30 P.M. on the date hereof, or with the consent of the
Representatives, at a later time and date, not later, however, than 5:30 P.M. on
the first business day following the date hereof, or at such later time and date
as may be approved by the Representatives; and at Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by the
Commission. The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
1933 Regulations and in accordance with Section 3(b) and prior to Closing Time
the Offerors shall have provided evidence satisfactory to the Representatives of
such timely filing.
(b) At Closing Time the Representatives shall have
received:
(1) The favorable opinion, dated as of the Closing Time, of
Kenneth W. McAllister, General Counsel to the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company is a duly organized and validly existing
corporation in good standing under the laws of the State of North
Carolina, has the corporate power and authority to own its properties,
conduct its business as described in the Prospectus and perform its
obligations under this Agreement, and is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended;
the Significant Subsidiaries are national
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banking associations formed under the laws of the United States and
authorized thereunder to transact business.
(ii) The Company is duly qualified to transact business as a
foreign corporation and is in good standing in each other jurisdiction
in which it owns or leases property of a nature, or transacts business
of a type, that would make such qualification necessary, except to the
extent that the failure to so qualify or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
considered as one enterprise.
(iii) The Company had at the date indicated (i) a duly authorized
and outstanding capitalization as set forth in the Prospectus, (ii) all
of the outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and
non-assessable, and (iii) the stockholders of the Company have no
preemptive rights.
(iv) Each Significant Subsidiaries (or the successors to such
entities) is a duly organized and validly existing national banking
association under the laws of the United States, continues to hold a
valid certificate to do business as such and has full power and
authority to conduct its business as such.
(v) Each Significant Subsidiary (or the successors to such entities)
has the authority under its jurisdiction of organization to own, lease
and operate its properties and to conduct its business and is duly
authorized to transact business and is in good standing in each
jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or to be
in good standing would not have a material adverse effect on the
Company and its subsidiaries, considered as one enterprise; and all of
the outstanding shares of capital stock of each Significant Subsidiary
have been duly authorized and validly issued and are fully paid and
non-assessable, and all of such shares are owned by the Company,
directly or through one or more subsidiaries, free and clear of any
pledge, lien, security interest, charge, claim, equity or encumbrance
of any kind, and none of such shares was issued in violation of the
preemptive rights of any stockholder of the Significant Subsidiaries.
(vi) To the best knowledge of such counsel, there is no pending
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or
any of its Significant Subsidiaries, of a character required to be
disclosed in the
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Registration Statement which is not adequately
disclosed in the Prospectus, and there is no franchise, contract, or
other document of a character required to be described in
the Registration Statement or Prospectus, or to be filed as an
exhibit, which is not described or filed as required.
(vii) The Registration Statement has become effective under the
1933 Act; to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
threatened; the Registration Statement, the Prospectus and each
amendment thereof or supplement thereto (other than the financial
statements and other financial and statistical information contained
therein or incorporated by reference therein, as to which such counsel
need express no opinion) comply as to form in all material respects
with the applicable requirements of the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations.
(viii) Each of the Declaration, the Underwriting Agreement, the
Common Securities Subscription Agreement, the Indenture and the
Debenture Subscription Agreement (referred to collectively herein as
the "Operative Documents") has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by the
Enforceability Exceptions, and the Declaration and Indenture have been
duly qualified under the 1939 Act.
(ix) The Junior Subordinated Debentures have been duly authorized
for issuance by the Company; and the Junior Subordinated Debentures,
when executed, authenticated and delivered in the manner provided for
in the Indenture and paid for in accordance with the Debenture
Subscription Agreement will constitute 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 as
enforcement thereof may be limited by the Enforceability Exceptions.
(x) Each of the Capital Securities Guarantee and the Common
Securities Guarantee has been duly authorized, executed and delivered
by the Company and each of the Capital Securities Guarantee and the
Common Securities Guarantee constitutes a valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by the
Enforceability Exceptions, and the Capital Securities Guarantee has
been duly qualified under the 1939 Act.
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(xi) The Initial Capital Securities conform in all material respects
to the description thereof contained in the Prospectus and such
description conforms in all material respects to the rights set forth
in the instruments defining the same.
(xii) Each authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign
(other than under the 1933 Act, the 1939 Act, the 1940 Act, and the
securities or blue sky laws of the various states), which is required
for (A) the valid authorization, issuance, sale and delivery of the
Subordinated Debentures, the Capital Securities Guarantee, and the
Common Securities Guarantee or (B) the execution, delivery or
performance of each of the Operative Documents, as applicable, by
the Company has been received.
(xiii) The descriptions in the Prospectus of the statutes,
regulations, legal or governmental proceedings, contracts and other
documents therein described are accurate and fairly discuss in all
material respects the information required to be shown.
(xiv) To the best knowledge of such counsel, no default exists in
the performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, loan
agreement, note, lease or other agreement or instrument that is
described or referred to in the Prospectus.
(xv) The statements in the Prospectus under the captions "Wachovia
Capital Trust [ ]", "Description of Capital Securities", "Description
of Guarantees", "Description of Junior Subordinated Debentures" and
"Relationship Among the Capital Securities, the Junior Subordinated
Debentures and the Guarantees", to the extent that such statements
constitute matters of law or legal conclusions, have been reviewed by
such counsel, or attorneys in such counsel's office working under such
counsel's direction, and are accurate and fairly present the
information disclosed therein in all material respects.
(xvi) The execution and delivery of each of the Operative Documents,
as applicable, by the Company, the issuance and delivery of the Initial
Capital Securities, the Common Securities, the Junior Subordinated
Debentures, the Capital Securities Guarantee and the Common Securities
Guarantee and the consummation by the Company of the transactions
contemplated in this Agreement and in the Prospectus and compliance by
the Company with the terms of each of the Operative Documents, as
applicable, do not and will not result in any violation of the charter
or By-laws of the
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Company or any Significant Subsidiary, 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 Company or any Significant Subsidiary under, (A) any
indenture, mortgage or loan agreement, or any other agreement or
instrument known to such counsel, to which the Company or any
Significant Subsidiary is a party or by which it may be bound or to
which any of its properties may be subject, (B) any existing applicable
law, rule or regulation (other than the securities or blue sky laws of
the various states, as to which such counsel need express no opinion),
(C) any judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any Significant Subsidiary or any of its
properties.
(xvii) The documents incorporated by reference in the Prospectus
(except for the financial statements and other financial or statistical
data included therein or omitted therefrom, as to which such counsel
need express no opinion, and except to the extent that any statement
therein is modified or superseded in the Prospectus), as of the dates
they were filed with the Commission and as of the date of this
Agreement, appear on their face to have been appropriately responsive
in all material respects to the requirements of the 1934 Act and the
rules and regulations promulgated thereunder.
(xviii) Such counsel, or attorneys in such counsel's office working
under such counsel's direction, have participated in the preparation of
the Prospectus and are familiar with or have participated in the
preparation of the documents incorporated by reference therein and no
facts have come to their attention which leads them to believe that
either the Prospectus (except for the financial statements and other
financial or statistical data included therein or omitted therefrom, as
to which such counsel need express no opinion), as of its date or the
Closing Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(xix) Neither the Company nor the Trust is, and upon the issuance and
sale of the Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus neither will
be, an "investment company" or a company "controlled" by an "investment
company" within the meaning of the 1940 Act.
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In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
North Carolina or the United States, to the extent deemed proper and specified
in such opinion, upon the opinion of other counsel of good standing believed to
be reliable and who are satisfactory to counsel for the Underwriters; and (B) as
to matters of fact, to the extent deemed proper, on the representations and
warranties of the Offerors contained herein or in the Declaration, the
Indenture, the Guarantees, the Common Securities Subscription Agreement, the
Debenture Subscription Agreement or on certificates of responsible officers of
the Company and its subsidiaries and public officials.
(2) The favorable opinion, dated as of the Closing Time, of
Richards, Layton & Finger, Special Delaware counsel to the Offerors, 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; the Trust has all necessary power and authority to (A) own
property and to conduct its business as described in the Registration
Statement and the Prospectus, (B) execute, deliver and perform its
obligations under the Operative Documents, (C) issue and perform its
obligations under the Capital Securities and the Common Securities, and
(D) purchase and hold the Junior Subordinated Debentures.
(ii) Each of the Operative Documents to which the Trust is a party
has been duly authorized by the Trust.
(iii) Assuming due authorization, execution and delivery by the
Company and the Trustees, the Declaration is a valid and binding
obligation of the Company and the Trustees, enforceable against the
Company and the Trustees in accordance with its terms, except as
enforcement thereof may be limited by the Enforceability Exceptions.
(iv) The Capital Securities have been duly authorized by the
Declaration and are validly issued and, subject to the terms of the
Declaration, when delivered to and paid for by the Underwriters
pursuant to this Agreement, will be validly issued, fully paid and
non-assessable beneficial interests in the assets of the Trust and are
entitled to the benefits of the Declaration; the holders of the Capital
Securities will, subject to the terms of the Declaration, be entitled
to the same limitation of personal liability under Delaware law as is
extended to stockholders of private corporations for profit; and the
issuance of the Capital
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Securities is not subject to preemptive or other similar rights.
(v) The execution, delivery and performance of this Agreement, the
Declaration, the Capital Securities and the Common Securities; the
consummation of the transactions contemplated herein and therein; and
the compliance by the Trust with its obligations hereunder and
thereunder do not and will not result in any violation of the
Declaration, the Certificate of Trust or any applicable Delaware law or
administrative regulation thereunder.
(vi) Except as previously made or obtained, as the case may be, no
filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any Delaware court or
Delaware governmental authority or agency is necessary or required in
connection with the execution or delivery by the Trust of the Operative
Documents, or the performance by the Trust of the transactions
contemplated thereby.
(3) The favorable opinion, dated as of the Closing Time, of
the Legal Department of The First National Bank of Chicago, as Property Trustee
under the Declaration and Guarantee Trustee under the Capital Securities
Guarantee Agreement, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The First National Bank of Chicago is a national banking
corporation with trust powers, duly organized, validly existing and in
good standing under the laws of the United States of America with all
necessary power and authority to execute and deliver, and carry out and
perform its obligations under the terms of the Indenture, the
Declaration, the Capital Securities Guarantee Agreement and the Common
Securities Guarantee Agreement.
(ii) The execution, delivery and performance by the Debenture
Trustee of the Indenture and the execution, delivery and performance by
the Property Trustee of the Declaration and the execution, delivery and
performance by the Guarantee Trustee of the Capital Securities
Guarantee Agreement and Common Securities Guarantee Agreement
(collectively, the "Guarantee Agreements") have been duly authorized by
all necessary corporate action on the part of the Debenture Trustee,
the Property Trustee and the Guarantee Trustee, respectively. The
Indenture, the Declaration and the Guarantee Agreements have been duly
executed and delivered by the Debenture Trustee, the Property Trustee
and the Guarantee Trustee, respectively, and constitute the legal,
valid and binding obligations of the Debenture Trustee, the Property
Trustee and the Guarantee Trustee, respectively, enforceable against
the Debenture Trustee, the Property Trustee and the
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Guarantee Trustee, respectively, in accordance with their terms,
except as enforcement thereof may be limited by the Enforceability
Exceptions.
(iii) The execution, delivery and performance of the Indenture, the,
Declaration and the Guarantee Agreements by the Debenture Trustee,
Property Trustee and the Guarantee Trustee, respectively, does not
conflict with or constitute a breach of the Articles of Association or
Bylaws of the Debenture Trustee, Property Trustee and the Guarantee
Trustee, respectively.
(iv) No consent, approval or authorization of, or registration with
or notice to, any governmental authority or agency of the State of
Illinois or the United States of America governing the banking or trust
powers of The First National Bank of Chicago is required for the
execution, delivery or performance by the Debenture Trustee, the
Property Trustee and the Guarantee Trustee of the Indenture, the
Declaration and the Guarantee Agreements, respectively.
(4) The favorable opinion, dated as of Closing Time, of
Pepper, Hamilton & Scheetz, Special Delaware counsel to First Chicago Delaware
Inc., as Delaware Trustee under the Declaration, in form and substance
satisfactory to counsel for the
Underwriters, to the effect that:
(i) First Chicago Delaware Inc. is a Delaware banking corporation
with trust powers, duly organized, validly existing and in good
standing under the laws of the State of Delaware with all necessary
power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of the Declaration.
(ii) The execution, delivery and performance by First Chicago
Delaware Inc. of the Declaration, has been duly authorized by all
necessary corporate action on the part of First Chicago Delaware Inc.,
and the Declaration has been duly executed and delivered by First
Chicago Delaware Inc. and constitutes the legal, valid and binding
obligation of First Chicago Delaware Inc., enforceable against First
Chicago Delaware Inc. in accordance with its terms, except as
enforcement thereof may be limited by the Enforceability Exceptions.
(iii) The execution, delivery and performance of the Declaration by
the Delaware Trustee does not conflict with or constitute a breach of
the Certificate of Incorporation or Bylaws of the Delaware Trustee.
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(iv) No consent, approval or authorization of, or registration
with or notice to, any governmental authority or agency of the State of
Delaware or the United States of America governing the corporate powers
of First Chicago Delaware Inc. is required for the execution, delivery
or performance by the Delaware Trustee of the Declaration.
(5) The favorable opinion, dated as of Closing Time, of Brown
& Wood LLP, counsel for the Underwriters, in form and substance satisfactory to
the Underwriters with respect to the legal existence of the Company and the
Trust, the Capital Securities, the Indenture, the Capital Securities Guarantee
Agreement, this Agreement, the Registration Statement, the Prospectus and other
related matters as the Representatives may require.
In giving its opinion, Brown & Wood LLP may rely as to certain matters
of North Carolina law upon the opinion of Kenneth W. McAllister, General Counsel
to the Company, which shall be delivered in accordance with Section 5(b)(1) and
as to certain matters of Delaware law upon the opinion of Richards, Layton &
Finger, counsel for the Offerors, which shall be delivered in accordance with
Section 5(b)(2) hereto.
(6) The favorable opinion of Brown & Wood LLP, special tax
counsel to the Company and the Trust, as to certain Federal tax matters set
forth in the Prospectus Supplement under "Certain Federal Income Tax
Considerations".
(7) At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings or business affairs of the
Trust or the Company and its subsidiaries, considered as one enterprise, whether
or not arising in the ordinary course of business, and the Representatives shall
have received a certificate of a Senior Vice President of the Company and of the
chief financial or chief accounting officer of the Company and a certificate of
the Trustee of the Trust, and dated as of Closing Time, to the effect that (i)
there has been no such material adverse change, (ii) the representations and
warranties in Section 1 hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time, (iii) the Trust and
the Company have complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to Closing Time, and (iv) no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been initiated or threatened by
the Commission.
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(8) At the Closing Time, Ernst & Young LLP shall have
furnished to the Representatives a letter or letters (which may refer to letters
previously delivered to the Representatives), dated as of the Closing Time, in
form and substance satisfactory to the Representatives, confirming that the
response, if any, to Item 10 of the Registration Statement is correct insofar as
it relates to them and stating in effect that:
(i) They are independent accountants within the meaning of the
1933 Act and the 1934 Act and the 1933 Act Regulations and the 1934 Act
Regulations.
(ii) In their opinion, the consolidated financial statements of the
Company and its subsidiaries audited by them and included or
incorporated by reference in the Registration Statement and Prospectus
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations
with respect to registration statements on Form S-3 and the 1934 Act
and the 1934 Act Regulations.
(iii) On the basis of procedures (but not an audit in accordance
with generally accepted auditing standards) consisting of:
(a) Reading the minutes of the meetings of the shareholders,
the board of directors, executive committee and audit committee of the
Company and the boards of directors and executive committees of its
subsidiaries as set forth in the minute books through a specified date
not more than five business days prior to the date of delivery of such
letter;
(b) Performing the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial
Information, on the unaudited condensed consolidated interim financial
statements of the Company and its consolidated subsidiaries included or
incorporated by reference in the Registration Statement and Prospectus
and reading the unaudited interim financial data, if any, for the
period from the date of the latest balance sheet included or
incorporated by reference in the Registration Statement and Prospectus
to the date of the latest available interim financial data; and
(c) Making inquiries of certain officials of the Company who
have responsibility for financial and accounting matters regarding the
specific items for which representations are requested below; nothing
has come to their attention as a result of the foregoing procedures
that caused them to believe that:
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(1) the unaudited condensed consolidated interim
financial statements, included or incorporated by reference in
the Registration Statement and Prospectus, do not comply as to
form in all material respects with the applicable accounting
requirements of the 1934 Act and the 1934 Act Regulations
thereunder;
(2) any material modifications should be made to the
unaudited condensed consolidated interim financial statements,
included or incorporated by reference in the Registration
Statement and Prospectus, for them to
be in conformity with generally accepted accounting
principles;
(3) (i) at the date of the latest available interim
financial data and at the specified date not more than five
business days prior to the date of the delivery of such
letter, there was any change in the capital stock or the
long-term debt (other than scheduled repayments of such debt)
or any decreases in shareholders' equity of the Company and
the subsidiaries on a consolidated basis as compared with the
amounts shown in the latest balance sheet included or
incorporated by reference in the Registration Statement and
the Prospectus or (ii) for the period from the date of the
latest available financial data to a specified date not more
than five business days prior to the delivery of such letter,
there was any change in the capital stock or the long-term
debt (other than scheduled repayments of such debt) or any
decreases in shareholders' equity of the Company and the
subsidiaries on a consolidated basis, except in all instances
for changes or decreases which the Registration Statement and
Prospectus discloses have occurred or may occur, or Ernst &
Young LLP shall state any specific changes or decreases.
(iv) The letter shall also state that Ernst & Young LLP has carried
out certain other specified procedures, not constituting an audit, with
respect to certain amounts, percentages and financial information which
are included or incorporated by reference in the Registration Statement
and Prospectus and which are specified by the Representatives and
agreed to by Ernst & Young LLP, and has found such amounts, percentages
and financial information to be in agreement with the relevant
accounting, financial and other records of the Company and its
subsidiaries identified in such letter.
In addition, at the time this Agreement is executed, Ernst & Young LLP
shall have furnished to the Representatives a letter or letters, dated the date
of this Agreement, in form and substance
26
<PAGE>
satisfactory to the Representatives, to the effect set forth in this
subsection 8.
(9) At Closing Time, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the Initial
Capital Securities as herein contemplated and related proceedings, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Offerors, in connection with the issuance and sale of the Initial
Capital Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and Brown & Wood LLP, counsel for the
Underwriters.
(10) At Closing Time, at least one "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the 1933 Act), has rated the Initial Capital Securities in one of its four
highest rating categories and there shall not have occurred any decrease in the
ratings of any of the securities of the Company or of the Initial Capital
Securities by any nationally recognized statistical rating organization, and no
such organization shall have publicly announced that it has under surveillance
or review its rating of any of the Company's securities or any of the Initial
Capital Securities.
If any condition specified in this Section shall not have been
fulfilled in all material respects when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Offerors, in
writing or by telephone or telegraph confirmed in writing, at any time at or
prior to Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 4 hereof, and except that
Sections 1, 7, and 8 shall survive any such termination and will remain in full
force and effect.
Section 6. Conditions to Purchase of Option Securities. In the event
the Underwriters exercise the Option to purchase all or any portion of the
Option Capital Securities and the Option Closing Time determined by the
Representatives pursuant to Section 2 is later than the Closing Time, the
obligations of the several Underwriters to purchase and pay for the Option
Capital Securities that they shall have respectively agreed to purchase
hereunder are subject to the accuracy of the representations and warranties of
the Offerors contained herein, to the performance by the Offerors of their
obligations hereunder and to the following additional conditions:
27
<PAGE>
(a) No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been issued and
no proceedings for that purpose shall have been instituted or threatened; and
any required filing of the Prospectus pursuant to Rule 424(b) under the Act
shall have been made within the proper time period.
(b) As of the Option Closing Time, the Representatives shall
have received, each dated as of the Option Closing Time and relating to the
Option Capital Securities:
(i) the favorable opinions of Kenneth W. McAllister,
General Counsel to the Company, to the same effect as the
opinions required by Section 5(b)(1);
(ii) the favorable opinion of Richards Layton & Finger, Special
Delaware counsel to the Company, to the same effect as the opinion
required by Section 5(b)(2);
(iii) the favorable opinion of the Legal Department of The First
National Bank of Chicago, to the same effect as the opinion required by
Section 5(b)(3);
(iv) the favorable opinion of Pepper, Hamilton & Scheetz, Special
Delaware counsel to First Chicago Delaware Inc., to the same effect as
the opinion required by Section
5(b)(4);
(iv) the favorable opinion of Brown & Wood LLP, counsel for the
Underwriters, to the same effect as the opinion required by Section
5(b)(5);
In giving its opinion, Brown & Wood LLP may rely as to certain matters
of North Carolina law upon the opinion of Kenneth W. McAllister, General Counsel
to the Company, which shall be delivered in accordance with Section 6(b)(i) and
as to certain matters of Delaware law upon the opinion of Richards, Layton &
Finger, counsel for the Offerors, which shall be delivered in accordance with
Section 6(b)(ii) hereto;
(v) the favorable opinion of Brown & Wood LLP, special tax counsel
to the Company and the Trust, to the same effect as the opinion
required by Section 5(b)(6);
(vi) a certificate, of a Senior Vice President of the Company and
of the chief financial or chief accounting officer of the Company with
respect to the matters set forth in Section 5(b)(7);
(vii) a letter from Ernst & Young LLP, in form and substance
satisfactory to the Underwriters, substantially the same in scope and
substance as the letter furnished to
28
<PAGE>
the Underwriters pursuant to Section 5(b)(8) except that the
"specified date" in the letter furnished pursuant to this Section
6(b)(vii) shall be a date not more than three days prior to the Option
Closing Time; and
(viii) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not
have been (i) any change or decrease specified in the letter or letters
referred to in paragraph (b)(vii) of this Section 6 or (ii) any change
in the condition, financial or otherwise, or in the earnings or
business affairs of the Company and its subsidiaries, considered as one
enterprise, the effect of which, in any case referred to in clause (i)
or (ii) of this Section 6(b)(viii), is, in the judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or the delivery of the
Securities as contemplated by the Registration Statement and the
Prospectus;
(ix) At the Option Closing Time, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Option Capital Securities as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Offerors
in connection with the issuance and sale of the Option Capital
Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and Brown & Wood LLP, counsel for the
Underwriters; and
(x) At the Option Closing Time, at least one "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the 1933 Act), has rated the Capital Securities in
one of its four highest rating categories and there shall not have
occurred any decrease in the ratings of any of the securities of the
Company or of the Capital Securities by any nationally recognized
statistical rating organization, and no such organization shall have
publicly announced that it has under surveillance or review its rating
of any of the Company's securities or any of the Capital Securities.
If any condition specified in this Section shall not have been
fulfilled in all material respects when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Offerors, in
writing or by telephone or telegraph confirmed in writing, at any time at or
prior to Option Closing Time, and such termination shall be
29
2
<PAGE>
without liability of any party to any other party except as provided in Section
4 hereof, and except that Sections 1, 7, and 8 shall survive any such
termination and will remain in full force and effect.
Section 7. Indemnification and Contribution
(a) The Offerors jointly and severally agree to indemnify and
hold harmless each Underwriter and each of its partners, officers, directors,
and employees and each person, if any, who controls any Underwriter within the
meaning of the 1933 Act or the 1934 Act against any losses, claims, damages or
liabilities, and any action in respect thereof (including, but not limited to,
any loss, claim, damage, liability or action relating to purchases and sales of
the Capital Securities), joint or several, which arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a material fact
contained in (A) the Registration Statement, or any amendment or supplement
thereto, including information deemed to be part of the Registration Statement
pursuant to Rule 430A(b) of the 1933 Act Regulations, if applicable, (B) the
Prospectus and any amendment or supplement thereto, or (C) any application or
other document, any amendment or supplement thereto, executed by the Offerors or
based upon information furnished by or on behalf of the Offerors filed in any
jurisdiction in order to qualify the Capital Securities under the securities or
blue sky laws thereof (each, an "Application") or (ii) the omission or alleged
omission to state in the Registration Statement, or any amendment or supplement
thereto, 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 shall reimburse as incurred each
Underwriter and each such controlling person for any legal and other expenses
incurred in investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that neither of the Offerors
shall be liable to any Underwriter in any such case to the extent that any such
loss, claim, damage or liability arises out of, or is based upon, any untrue
statement or alleged untrue statement made in the Prospectus, including any
amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Offerors by or on behalf of such
Underwriter specifically for inclusion and actually included therein; and
provided further that, as to any Prospectus that has been amended or
supplemented as provided herein, this indemnity agreement shall not inure to the
benefit of any Underwriter, on account of any loss, claim, damage, liability or
action arising out of the sale of Capital Securities to any person by such
Underwriter if (A) such Underwriter failed to send or give a copy of the final
Prospectus as so amended or supplemented to that person at or prior to the
confirmation of the sale of such Capital Securities
30
<PAGE>
to such person in any case where such delivery is required by the 1933 Act, and
(B) the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact in any preliminary
Prospectus was corrected in an amendment or supplement thereto (but only if the
sale to such person occurred after the Offerors provided such Underwriter and
the Underwriter received copies of such amendment or supplement for
distribution). This indemnity agreement will be in addition to any liability
which the Offerors may otherwise have.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, the Trust, the Trustees and each of the
Company's directors, each of its officers and each person, if any, who controls
the Company or the Trust within the meaning of the 1933 Act or the 1934 Act, to
the same extent as the foregoing indemnity from the Offerors to each
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Offerors by such Underwriter and specifically
included in the Prospectus. This indemnity shall be in addition to any liability
which such Underwriter may otherwise have. The Offerors acknowledge that the
statements set forth in the first paragraph on page S-2 of the Prospectus
Supplement and under the headings "Underwriting" in the Prospectus Supplement
and "Plan of Distribution" in the Prospectus constitute the only information
furnished in writing by the several Underwriters for inclusion in the
Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against one or more
indemnifying parties under this Section 7, notify such indemnifying party or
parties of the commencement thereof; but the omission so to notify the
indemnifying party or parties will not relieve it or them from any liability
which it or they may have to any indemnified party otherwise than under
subsection (a) or (b) of this Section 7 or to the extent that the indemnifying
party was not adversely affected by such omission. In case any such action is
brought against an indemnified party and it notifies an indemnifying party or
parties of the commencement thereof, the indemnifying party or parties against
which a claim is to be made will be entitled to participate therein and, to the
extent that it or they may wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified
31
party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 7 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the lead Underwriter in the case of
paragraph (a) of this Section 7, representing the indemnified parties under such
paragraph (a) who are parties to such action or actions), or (ii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party, which will not be unreasonably withheld, unless such indemnified party
waived its rights under this Section 7 in writing in which case the indemnified
party may effect such a settlement without such consent.
(d) The Company agrees to indemnify the Trust against all
losses, claims, damages or liabilities due from the Trust under Section 7(a)
hereof.
(e) If the indemnification provided for in the preceding
paragraphs of this Section 7 is unavailable or insufficient to hold harmless an
indemnified party under paragraph (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then the Offerors or the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) to which
the Offerors and one or more of the Underwriters may be subject in such
proportion so that the Underwriters are responsible for that portion represented
by the percentage that the total discounts and/or commissions received by the
Underwriters bears to the sum of such discounts and/or commissions and the
purchase price of the Capital Securities specified in Schedule B hereto and the
Offerors are responsible
32
<PAGE>
for the balance; provided, however, that (y) in no case shall any Underwriter
(except as may be provided in any agreement among Underwriters relating to the
offering of the Capital Securities) be responsible for any amount in excess of
the total discounts and/or commissions received by it with respect to the
Capital Securities purchased by such Underwriter under this Agreement and (z) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section 7,
each person who controls an Underwriter within the meaning of the 1933 Act shall
have the same rights to contribution as such Underwriter, and each person who
controls either of the Offerors within the meaning of either the 1933 Act or the
1934 Exchange Act, each officer or trustee of the Offerors who shall have signed
the Registration Statement and each director or trustee of the Offerors shall
have the same rights to contribution as the Offerors, subject in each case to
clause (y) of this paragraph (e). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this paragraph (e), notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers or Trustees of the Offerors
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Offerors and shall survive
delivery of the Capital Securities to the Underwriters.
Section 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement, by
notice to the Offerors, at any time at or prior to Closing Time or the Option
Closing Time (i) if there has been, since the date of this Agreement or since
the respective dates as of which information is given in the Registration
Statement, any material adverse change in the condition, financial or otherwise,
or in the earnings or business affairs of the Trust or the Company and its
subsidiaries, considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or elsewhere or any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
33
<PAGE>
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representatives,
impracticable to market the Capital Securities or to enforce contracts for the
sale of the Capital Securities, or (iii) if trading in any securities of the
Company or the Trust has been suspended or materially limited by the Commission
or the applicable exchange, or if trading generally on the New York Stock
Exchange, the American Stock Exchange or on the NASDAQ National Market, has been
suspended, limited or restricted or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices for securities have been required,
by said exchanges or such system or by order of the Commission, the NASD or any
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal, New York, North Carolina or Delaware authorities, or (v) if
there has been any decrease in the ratings of any of the securities of the
Company or of the Capital Securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act) or
if any such organization shall have publicly announced that it has under
surveillance or review its rating of any of the Company's securities or any of
the Capital Securities.
(b) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and except that Sections 1, 7, and 8
shall survive any such termination and will remain in full force and effect.
Section 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or the Option Closing Time to
purchase the Capital Securities or the Option Capital Securities, as the case
may be, that it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the Capital Securities or the Option Capital Securities, as the case may be,
each of the non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
Capital Securities or the Option Capital Securities, as the
34
<PAGE>
case may be, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representatives or the Offerors shall have the
right to postpone Closing Time or the Option Closing Time, as the case may be,
for a period not exceeding seven days in order to effect any required changes
in the Registration Statement or Prospectus or in any other documents or
arrangements.
Section 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at
____________________________________, attention of
_______________________________; notices to the Trust, and the Company shall be
directed to them at Wachovia Corporation, 100 North Main Street, Winston-Salem,
North Carolina 27150, attention of Alice Grogan, Esq.
Section 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters and the Trust, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Trust and the Company and their respective successors and
the controlling persons and officers, directors and trustees referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriters
and the Trust and the Company and their respective successors, and said
controlling persons and officers, directors and trustees and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Capital Securities from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Except as otherwise set forth
herein, specified times of day refer to New York City time.
Section 14. Counterparts. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original,
35
<PAGE>
but all such respective counterparts shall together constitute one and the same
instrument.
36
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Trust a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Trust and the Company in accordance with its
terms.
Very truly yours,
WACHOVIA CORPORATION
By:_______________________
Title:
WACHOVIA CAPITAL TRUST [ ]
By:________________________
Title: Trustee
By:________________________
Title: Trustee
CONFIRMED AND ACCEPTED, as of the date first above written:
By:
By:________________________
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
37
<PAGE>
SCHEDULE A
Number of
Capital
Name of Underwriter Securities
......................................................
......................................................
......................................................
......................................................
......................................................
......................................................
Total.............................
38
<PAGE>
SCHEDULE B
Underwriting Agreement dated ____________, 1997
Registration Statement No. 333-19365
Representatives:
Address of Representatives:
Title, Purchase Price and Description of Securities:
Title:
1. The initial public offering price per security for
the Capital Securities, determined as provided in said
Section 2, shall be _____________.
2. The purchase price per security for the Capital Securities
to be paid by the several Underwriters shall be $______, being an
amount equal to the initial public offering price set forth above,
plus, in the case of Option Capital Securities, any accrued
distributions thereon.
3. The compensation per Capital Securities to be paid by the
Company to the several Underwriters in respect of their commitments
hereunder shall be _________[; provided, however, that the compensation
per Capital Securities for sales of 10,000 or more Capital Securities
to a single purchaser shall be ________].
39
<PAGE>
EXHIBIT 4(b)(iv)
AMENDED AND RESTATED DECLARATION
OF TRUST
WACHOVIA CAPITAL TRUST II
[ ], 1997
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act
of 1939, as amended Section of Declaration
- ------------------------ -------------------------------
310(a) 5.3(a)
310(b) 5.3(c)
310(c) Inapplicable
311(a) and (b) 5.3(c)
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(e) 1.1, 2.5
314(f) Inapplicable
315(a) 3.9(b)
315(b) 2.7(a)
315(c) 3.9(a)
315(d) 3.9(b)
316(a) and (b) 2.6 and Annex I (Sections 5 and 6)
316(c) 3.6(e)
317(a) 3.8(c)
317(b) 3.8(i)
318(a) 2.1(c)
* This Cross-Reference Table does not constitute part of the
Declaration and shall not affect the interpretation of any
of its terms or provisions.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.................................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act;
Application.................................. 9
SECTION 2.2 Lists of Holders of
Securities................................... 9
SECTION 2.3 Reports by the Property
Trustee...................................... 10
SECTION 2.4 Periodic Reports to Property
Trustee...................................... 10
SECTION 2.5 Evidence of Compliance with
Conditions Precedent......................... 10
SECTION 2.6 Events of Default; Waiver.................... 10
SECTION 2.7 Event of Default; Notice..................... 12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name......................................... 13
SECTION 3.2 Office....................................... 13
SECTION 3.3 Purpose...................................... 13
SECTION 3.4 Authority.................................... 14
SECTION 3.5 Title to Property of the
Trust........................................ 14
SECTION 3.6 Powers and Duties of the
Administrative Trustees...................... 14
SECTION 3.7 Prohibition of Actions by the
Trust and the Trustees....................... 17
SECTION 3.8 Powers and Duties of the
Property Trustee............................. 18
SECTION 3.9 Certain Duties and
Responsibilities of the
Property Trustee............................. 21
SECTION 3.10 Certain Rights of Property
Trustee...................................... 23
SECTION 3.11 Delaware Trustee............................. 25
SECTION 3.12 Execution of Documents....................... 25
SECTION 3.13 Not Responsible for Recitals
or Issuance of Securities.................... 26
SECTION 3.14 Duration of Trust............................ 26
SECTION 3.15 Mergers...................................... 26
i
<PAGE>
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common
Securities................................... 28
SECTION 4.2 Responsibilities of the
Sponsor...................................... 28
SECTION 4.3 Right to Proceed............................. 29
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees;
Appointment of Co-Trustee.................... 29
SECTION 5.2 Delaware Trustee............................. 30
SECTION 5.3 Property Trustee; Eligibility................ 30
SECTION 5.4 Certain Qualifications of
Administrative Trustees and
Delaware Trustee Generally................... 31
SECTION 5.5 Administrative Trustees...................... 31
SECTION 5.6 Delaware Trustee............................. 32
SECTION 5.7 Appointment, Removal and
Resignation of Trustees...................... 32
SECTION 5.8 Vacancies Among Trustees..................... 34
SECTION 5.9 Effect of Vacancies.......................... 34
SECTION 5.10 Meetings..................................... 35
SECTION 5.11 Delegation of Power.......................... 35
Section 5.12 Merger, Conversion,
Consolidation or Succession to
Business..................................... 36
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions................................ 36
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding
Securities................................... 36
SECTION 7.2 Execution and Authentication................. 37
SECTION 7.3 Form and Dating.............................. 38
SECTION 7.4 Registrar and Paying Agent................... 39
SECTION 7.5 Paying Agent to Hold Money in
Trust........................................ 40
SECTION 7.6 Replacement Securities....................... 40
SECTION 7.7 Outstanding Capital
Securities................................... 41
SECTION 7.8 Capital Securities in
Treasury..................................... 41
SECTION 7.9 Temporary Securities......................... 41
ii
<PAGE>
SECTION 7.10 Cancellation................................. 42
SECTION 7.11 CUSIP Numbers................................ 43
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust......................... 43
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities....................... 44
SECTION 9.2 Deemed Security Holders...................... 45
SECTION 9.3 Book Entry Interests......................... 45
SECTION 9.4 Notices to Clearing Agency................... 46
SECTION 9.5 Appointment of Successor
Clearing Agency.............................. 46
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.................................... 46
SECTION 10.2 Exculpation.................................. 47
SECTION 10.3 Fiduciary Duty............................... 47
SECTION 10.4 Indemnification.............................. 48
SECTION 10.5 Outside Businesses........................... 52
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.................................. 52
SECTION 11.2 Certain Accounting Matters................... 52
SECTION 11.3 Banking...................................... 53
SECTION 11.4 Withholding.................................. 53
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments................................... 54
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties
of Property Trustee.......................... 58
SECTION 13.2 Representations and Warranties
of Delaware Trustee.......................... 58
iii
<PAGE>
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices...................................... 59
SECTION 14.2 Governing Law................................ 60
SECTION 14.3 Intention of the Parties..................... 60
SECTION 14.4 Headings..................................... 61
SECTION 14.5 Successors and Assigns....................... 61
SECTION 14.6 Partial Enforceability....................... 61
SECTION 14.7 Counterparts................................. 61
ANNEX I ...............................................................I-1
EXHIBIT A-1............................................................A1-1
EXHIBIT A-2............................................................A2-1
EXHIBIT B...............................................................B-1
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
WACHOVIA CAPITAL TRUST II
[ ], 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of [ ], 1997, by the Trustees (as defined herein), the
Sponsor (as defined herein) and the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Delaware Trustee (as defined herein), the
Administrative Trustees (as defined herein) and the Sponsor established Wachovia
Capital Trust II (the "Trust"), a trust formed under the Business Trust Act (as
defined herein) pursuant to a Declaration of Trust dated as of January 6, 1997
(the "Original Declaration"), and the Certificate of Trust for the Trust (the
"Certificate of Trust") filed with the Secretary of State of the State of
Delaware on January 6, 1997;
WHEREAS, prior to the date hereof, no Securities (as
defined herein) in the Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act (as
defined herein) and that this Declaration constitute the governing instrument of
such business trust, the Trustees declare that all assets contributed to the
Trust will be held in trust for the benefit of the holders, from time to time,
of the securities representing undivided beneficial interests in the assets of
the Trust issued hereunder, subject to the provisions of this Declaration.
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ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined
in the preamble above or elsewhere herein have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration has
the same meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration (including Appendix I hereto and Exhibit A
hereto) as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and
Sections of and Annexes and Exhibits to this Declaration
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or the context otherwise requires; and
(f) a term defined in the Indenture (as defined herein) has
the same meaning when used in this Declaration unless otherwise defined
in this Declaration or the context otherwise requires; and
(g) a reference to the singular includes the plural
and vice versa.
"Administrative Trustee" means each of Robert S. McCoy, Jr.,
John J. Milani and Alice Washington Grogan solely in such Person's capacity as
Administrative Trustee of the Trust created and continued hereunder and not in
such Person's individual capacity, or such Administrative Trustee successor in
such capacity, or any successor appointed as herein provided.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Registrar.
"Authorized Officer" of a Person means any other Person that
is authorized to legally bind such former Person.
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"Book Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or its nominee,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.3.
"Business Day" means any day other than a Saturday or a Sunday
or a day on which banking institutions in The City of New York, New York or
Winston-Salem, North Carolina are authorized or required by law or executive
order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq., as it may be amended from time to
time or any successor legislation.
"Capital Security Beneficial Owner" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Capital Securities" has the meaning specified in
Section 7.1(a).
"Capital Securities Guarantee" means the guarantee agreement
dated as of [ ], 1997 of the Sponsor in respect of the Capital Securities.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Capital Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Capital
Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Time" means [ ], 1997 or such other time as shall be
agreed by the Representatives and the Offerors as such terms are defined in the
Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the United States Securities and
Exchange Commission as from time to time constituted, or if any
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time after the execution of this Declaration such Commission is not existing and
performing the duties now assigned to it under applicable Federal securities
laws, then the body performing such duties at such time.
"Common Securities" has the meaning specified in
Section 7.1(a).
"Common Securities Guarantee" means the guarantee agreement
dated as of [ ], 1997 of the Sponsor in respect of the Common Securities.
"Company Indemnified Person" means (a) any Administrative
Trustee; (b) any Affiliate of any Administrative Trustee; (c) any officers,
directors, shareholders, members, partners, employees, representatives or agents
of any Administrative Trustee; or (d) any officer, employee or agent of the
Trust or its Affiliates.
"Corporate Trust Office" means the office of the Property
Trustee at which the corporate trust business of the Property Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Agreement is located at One First National Plaza, Suite 0126,
Chicago, Illinois 60670-0126.
"Covered Person" means: (a) any officer, director,
trustee, shareholder, partner, member, representative, employee
or agent of (i) the Trust or (ii) the Trust's Affiliates; and (b)
any Holders of the securities.
"Debenture Issuer" means Wachovia Corporation, a North
Carolina corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debenture Trustee" means The First National Bank of Chicago,
a national banking corporation, as trustee under the Indenture until a successor
is appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the [ ]% Junior Subordinated Deferrable
Interest Debentures due [ ], [ ] of the Debenture Issuer issued pursuant to the
Indenture.
"Default" means an event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.
"Definitive Capital Securities" has the meaning set
forth in Section 7.3(c).
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"Delaware Trustee" has the meaning set forth in
Section 5.2.
"Direct Action" has the meaning set forth in Section
3.8(e).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Federal Reserve Board" means the Board of Governors of
the Federal Reserve System.
"Fiduciary Indemnified Person" has the meaning set
forth in Section 10.4(b).
"Global Capital Securities" has the meaning set forth
in Section 7.3(a).
"Holder" means a Person in whose name a Security is
registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means a Company Indemnified Person
or a Fiduciary Indemnified Person.
"Indenture" means the Indenture, dated as of
[ ], 1997, among the Debenture Issuer and the Debenture
Trustee, as amended from time to time.
"Investment Company" means an investment company as
defined in the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in
Section 3.6(g).
"Liquidation Amount" with respect to any Security means the
amount designated as such with respect thereto in Annex I hereto.
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"Majority in Liquidation Amount" means, with respect to the
Trust Securities, except as provided in the terms of the Capital Securities or
by the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Capital Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate Liquidation Amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two of the following: the Chairman, a Vice Chairman, the
President, a Vice President, the Treasurer, an Assistant Treasurer, the
Controller, the Secretary or an Assistant Secretary of such Person. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Declaration shall include:
(a) a statement that each officer signing the
Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of the Sponsor, and who shall be acceptable to the Property
Trustee.
"Paying Agent" has the meaning specified in
Section 7.4.
"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
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political subdivision thereof, or any other entity of whatever
nature.
"Property Trustee" has the meaning set forth in
Section 5.3(a).
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Quorum" means a majority of the Administrative Trustees or,
if there are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property
Trustee, any officer within the Corporate Trust Office of the Property Trustee,
including any vice president, any assistant vice president, any Managing
Director, any secretary, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Corporate Trust Office of the Property Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act,
or any successor rule or regulation.
"Securities" or "Trust Securities" means the Common
Securities and the Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities
Guarantee and the Capital Securities Guarantee.
"Special Event" has the meaning set forth in Annex I
hereto.
"Sponsor" means Wachovia Corporation, a North Carolina
corporation, or any successor entity resulting from any merger, consolidation,
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
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"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"10% in Liquidation Amount" means, with respect to the Trust
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holders of outstanding Trust Securities voting together as
a single class or, as the context may require, Holders of outstanding Capital
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 10% or more of the aggregate Liquidation
Amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined) of all outstanding Securities
of the relevant class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee (including the Property Trustee, the Delaware Trustee
and the Administrative Trustees), so long as such Person shall continue in
office in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in accordance
with the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees
hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Trust Property" means (a) the Debentures, (b) any cash on
deposit in, or owing to, the Property Trustee Account and (c) 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 Declaration.
"Underwriting Agreement" means the Underwriting Agreement for
the initial offering and sale of Capital Securities in the form of Exhibit B.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable to such an indenture, 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 and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by ss.ss. 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide the Property Trustee, unless the Property
Trustee is Registrar for the Securities (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Administrative Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Property Trustee by
the Sponsor and the Administrative Trustees on behalf of the Trust and written
notice of such fact is provided by an Administrative Trustee to the Property
Trustee, and (ii) at any other time, within 30 days of receipt by the Trust 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 Property Trustee. The Property Trustee
shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it receives in
the capacity as Paying Agent (if acting in such capacity), provided that the
Property Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
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SECTION 2.3 Reports by the Property Trustee.
Within 60 days after [May 15] of each year, commencing [May
15, 1997], the Property Trustee shall provide to the Holders of the Capital
Securities such reports as are required by ss. 313 of the Trust Indenture Act,
if any, in the form and in the manner provided by ss. 313 of the Trust Indenture
Act. The Property Trustee shall also comply with the requirements of ss. 313(d)
of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Administrative Trustees on behalf
of the Trust shall provide to the Property Trustee such documents, reports and
information as are required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss. 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrative Trustees on behalf
of the Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in Liquidation Amount of the
Capital Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital Securities
and its consequences, provided that, if the underlying Event of Default under
the Indenture:
(i) is not waivable under the Indenture, the Event
of Default under the Declaration shall also not be waivable;
or
(ii) requires the consent or vote of greater than a
majority in aggregate principal amount of the holders of the Debentures
(a "Super Majority") to be waived under the Indenture, the Event of
Default under the Declaration may only be waived by the vote of the
Holders of at least the proportion in aggregate Liquidation Amount of
the Capital Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding.
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The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Capital Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Capital Securities of an Event of Default with respect to the Capital
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided, that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where
the Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration shall also
not be waivable; or
(ii) requires the consent or vote of a Super Majority
to be waived, except where the Holders of the Common Securities are
deemed to have waived such Event of Default under the Declaration as
provided below in this Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least
the proportion in aggregate Liquidation Amount of the Common Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding;
provided further, that each Holder of the Common Securities will be deemed to
have waived any such Event of Default and all Events of Default with respect to
the Common Securities and its consequences if all Events of Default with respect
to the Capital Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or otherwise eliminated,
the Property Trustee will be deemed to be acting solely on behalf of the Holders
of the Capital Securities and only the Holders of the Capital Securities will
have the right to direct the Property Trustee in accordance with the terms
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of the Securities. The foregoing provisions of this Section 2.6(b) shall be in
lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b),
upon such waiver, any such default shall cease to exist and any Event of Default
with respect to the Common Securities arising therefrom shall be deemed to have
been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of Default with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Capital Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Property 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 Securities, notices of all defaults with respect
to the Securities actually known to a Responsible Officer of the Property
Trustee, unless such defaults have been cured before the giving of such notice
(the term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be an Event of Default as defined in the Indenture, not including any
periods of grace provided for therein and irrespective of the giving of any
notice provided therein); provided that, except for a default in the payment of
principal of or premium, if any, or interest on any of the Debentures, the
Property Trustee shall be fully protected in withholding such notice if and so
long as a Responsible Officer of the Property Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Securities.
(b) 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 Capital
Securities, the Administrative Trustees and the Sponsor, unless such Event of
Default shall have been cured or waived. The Sponsor and the Administrative
Trustees shall file annually with the Property Trustee a certification as to
whether or not they are in compliance with
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all the conditions and covenants applicable to them under this
Declaration.
(c) For purposes of this Section 2.7, the Property Trustee
shall not be deemed to have knowledge of any default or Event of Default except:
(i) a default under Sections 5.1(a) and 5.1(b) of
the Indenture; or
(ii) any default as to which the Property Trustee
shall have received written notice or of which a Responsible Officer of
the Property Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Wachovia Capital Trust II", as such name
may be modified from time to time by the Administrative Trustees following
written notice to the Holders of Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Administrative Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
Wachovia Corporation, 100 North Main Street, Winston-Salem, North Carolina
27150. On ten Business Days' written notice to the Holders of the Securities and
the Property Trustee, the Administrative Trustees may designate another
principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell the Trust Securities, (b) to use the proceeds from the sale of
the Securities to acquire the Debentures, and (c) except as otherwise limited
herein, to engage in only those other activities necessary, advisable or
incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, mortgage or pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.
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SECTION 3.4 Authority.
Except as specifically provided in this Declaration, the
Property Trustee and the Administrative Trustees shall have exclusive and
complete authority to carry out the purposes of the Trust. An action taken by a
Trustee on behalf of the Trust in accordance with its powers shall constitute
the act of and serve to bind the Trust. In dealing with the Trustees acting on
behalf of the Trust, no Person shall be required to inquire into the authority
of the Trustees to bind the Trust. Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees as set forth in
this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Debentures and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 Powers and Duties of the Administrative Trustees.
The Administrative Trustees shall have the exclusive power,
duty and authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Capital Securities and the Common
Securities in accordance with this Declaration; provided, however, that (i) the
Trust may issue no more than one series of Capital Securities and no more than
one series of Common Securities, (ii) there shall be no interests in the Trust
other than the Securities, and (iii) the issuance of Securities shall be limited
to a simultaneous issuance of both Capital Securities and Common Securities at
the Closing Time;
(b) in connection with the issue and sale of the
Capital Securities, at the direction of the Sponsor, to:
(i) prepare and file with the Commission a
registration statement prepared by the Sponsor on the
appropriate form in relation to the Capital Securities,
including any amendments thereto;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be necessary
in order to qualify or register all or part of the Capital Securities
in any State in which the Sponsor has determined to qualify or register
such Capital Securities for sale;
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(iii) at the direction of the Sponsor, execute and file
an application, prepared by the Sponsor, to the New York Stock Exchange
or any other national stock exchange or the Nasdaq Stock Market's
National Market for listing or quotation of the Capital Securities;
(iv) to execute and deliver letters, documents, or
instruments with any Clearing Agency relating to the Capital
Securities;
(v) if required, execute and file with the Commission
a registration statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor, relating to the registration of the Capital
Securities under Section 12(b) of the Exchange Act; and
(vi) execute and enter into the Underwriting
Agreement providing for the sale of the Capital Securities;
(c) to acquire the Debentures with the proceeds of the sale of
the Capital Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Capital Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Property Trustee
prompt written notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and with
respect to, for the purposes of ss. 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of the Capital Securities and the Holders of the Common
Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as
may be required of the Administrative Trustees pursuant to the
terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
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(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4)
of the Trust Indenture Act to the Property Trustee, which
certificate may be executed by any Administrative Trustee;
(k) to incur expenses that are necessary or
incidental to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar
for the Securities or to appoint a Paying Agent for the Securities as provided
in Section 7.4 except for such time as such power to appoint a Paying Agent is
vested in the Property Trustee;
(m) to give prompt written notice to the Property Trustee and
to Holders of the Securities of any notice received from the Debenture Issuer of
its election to defer payments of interest on the Debentures by extending the
interest payment period under the Indenture;
(n) to execute all documents or instruments, perform
all duties and powers, and do all things for and on behalf of the
Trust in all matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the laws
of the State of Delaware and of each other jurisdiction in which such existence
is necessary to protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(ii) causing the Trust to be classified for United
States federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure
that the Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes; and
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(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Administrative Trustees, on
behalf of the Trust.
The Administrative Trustees must exercise the powers set forth
in this Section 3.6 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Administrative Trustees
shall not take any action that is inconsistent with the purposes and functions
of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall
have none of the powers or the authority of the Property Trustee set forth in
Section 3.8.
Any expenses incurred by the Administrative Trustees pursuant
to this Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and the Trustees (including the
Property Trustee) shall cause the Trust not to, engage in any activity other
than as required or authorized by this Declaration. The Trust shall not, and the
Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this Declaration and of
the Securities;
(ii) acquire any assets other than as expressly
provided herein;
(iii) possess Trust Property for other than a Trust
purpose;
(iv) make any loans or incur any indebtedness other
than loans represented by the Debentures;
(v) possess any power or otherwise act in such a way
as to vary the Trust assets or the terms of the Securities
in any way whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the
Trust other than the Securities; or
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(vii) other than as provided in this Declaration (A)
direct the time, method and place of conducting any proceeding with
respect to any remedy available to the Debenture Trustee, or exercising
any trust or power conferred upon the Debenture Trustee with respect to
the Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable, or
(D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required unless
the Trust shall have received an opinion of a nationally recognized
independent tax counsel experienced in such matters to the effect that
such amendment, modification or termination will not cause more than an
insubstantial risk that for United States federal income tax purposes
the Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Trust and the Holders of the Securities. The right, title and interest of
the Property Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Property Trustee in accordance with Section
5.7. Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Trustee Account") in the name of
and under the exclusive control of the Property Trustee, and maintained
in the Property Trustee's trust department, on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in
respect of the Debentures held by the Property Trustee, deposit such
funds into the Property Trustee Account and make or cause the Paying
Agent to make payments to the Holders of the Capital Securities and
Holders of the Common Securities from the Property Trustee Account in
accordance with Section 6.1. Funds in the Property Trustee Account
shall be held uninvested until disbursed in accordance with this
Declaration. Unless the Property Trustee Account is held as a trust
account in the corporate trust department of the
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Property Trustee, the Property Trustee Account shall be an account that
is maintained with a banking institution the rating on whose long-term
unsecured indebtedness is at least equal to the rating assigned to the
Capital Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Capital
Securities and the Common Securities to the extent the Debentures are
prepaid or mature; and
(iii) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of certain events.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of this Declaration and the Securities.
(e) Subject to Section 3.9(a), the Property Trustee may take
any Legal Action which arises out of or in connection with an Event of Default
of which a Responsible Officer of the Property Trustee has actual knowledge or
the Property Trustee's duties and obligations under this Declaration or the
Trust Indenture Act and if such Property Trustee shall have failed to take such
Legal Action, the Holders of the Capital Securities may take such Legal Action,
to the same extent as if such Holders of Capital Securities held an aggregate
principal amount of Debentures equal to the aggregate Liquidation Amount of such
Capital Securities, without first proceeding against the Property Trustee or the
Trust; provided, however, that if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay the principal of or premium, if any, or interest on the Debentures on the
date such principal, premium, if any, or interest is otherwise payable (or in
the case of prepayment, on the prepayment date), then a Holder of Capital
Securities may directly institute a proceeding for enforcement of payment to
such Holder of the principal of or premium, if any, or interest on the
Debentures having a principal amount equal to the aggregate Liquidation Amount
of the Capital Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, the rights of the Holders of the Common Securities will be subrogated to
the rights of such Holder of Capital Securities to the extent of any payment
made by the Debenture Issuer to such
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Holder of Capital Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Capital Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
(f) The Property Trustee shall continue to serve as a
Trustee until either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of
Securities pursuant to the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed
and has accepted that appointment in accordance with Section 5.7.
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default actually known to a Responsible
Officer of the Property Trustee occurs and is continuing, the Property Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to this
Declaration and the terms of such Securities. The Property Trustee must exercise
the powers set forth in this Section 3.8 in a manner that is consistent with the
purposes and functions of the Trust set out in Section 3.3, and the Property
Trustee shall not take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 3.3.
(h) The Property Trustee shall be authorized to
undertake any actions set forth in ss. 317(a) of the Trust
Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent,
the Property Trustee may authorize one or more Persons to act as additional
Paying Agents and to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with ss. 317(b) of the Trust Indenture Act. Any such
additional Paying Agent may be removed by the Property Trustee at any time the
Property Trustee remains as Paying Agent and a successor Paying Agent or
additional Paying Agents may be (but are not required to be) appointed at any
time by the Property Trustee.
(j) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.6.
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The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Property Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) of
which a Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default
and after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Declaration and in the Securities and the Property
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Declaration and in the Securities, and no implied covenants or
obligations shall be read into this Declaration against the
Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Property Trustee and conforming to the
requirements of this Declaration; provided, however, that in
the case of any such certificates or opinions that by any
provision hereof are specifically required to be
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furnished to the Property Trustee, the Property Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any
error or judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the Property Trustee
was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require
the Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if it 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
Declaration or indemnity reasonably satisfactory to the Property
Trustee against such risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to
the custody, safe keeping and physical preservation of the Debentures
and the Property Trustee 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 Declaration and
the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor. Money held by the Property Trustee need
not be segregated from other funds held by it except in relation to the
Property Trustee Account maintained by the Property Trustee pursuant to
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Section 3.8(c)(i) and except to the extent otherwise
required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the Sponsor
with their respective duties under this Declaration, nor shall the
Property Trustee be liable for any default or misconduct of the
Administrative Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the
Administrative Trustees contemplated by this Declaration may
be sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this
Declaration, 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 Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Sponsor or
the Administrative Trustees;
(iv) 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;
(v) the Property Trustee may consult with counsel or
other experts of its selection and the advice or opinion of such
counsel and experts with respect to legal matters or advice within the
scope of such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion, such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees.
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The Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration from any
court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder, unless such
Holder shall have provided to the Property Trustee security indemnity,
reasonably satisfactory to the Property Trustee, against the costs,
expenses (including reasonable attorneys' fees and expenses and the
expenses of the Property 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 Property Trustee, provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) 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,
direction, consent, order, approval, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Property
Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) 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, custodians, nominees or attorneys
and the Property Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care
by it hereunder;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee or its agents
alone shall be sufficient and effective to perform any such action and
no third party shall be required to inquire as to the authority of the
Property Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its agent's taking
such action;
(x) whenever in the administration of this
Declaration the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
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right or taking any other action hereunder, the Property Trustee (i)
may request instructions from the Holders of the Securities which
instructions shall be given by the Holders of the same proportion in
Liquidation Amount of the Securities as would be entitled to direct the
Property Trustee under the terms of the Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received,
and (iii) shall be fully protected in conclusively relying on or acting
in or accordance with such instructions;
(xi) except as otherwise expressly provided in this
Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration; and
(xii) the Property Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Administrative Trustees, the Property Trustee or of the
Trustees generally described in this Declaration. Except as set forth in Section
5.2, the Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of ss. 3807 of the Business Trust Act and taking
such actions as are required to be taken by the Delaware Trustee under the
Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Administrative Trustees,
and except as otherwise required by the Business Trust Act, any Administrative
Trustee is authorized to execute on
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behalf of the Trust any documents that the Administrative Trustees have the
power and authority to execute pursuant to Section 3.6.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions of
Article VIII hereof, shall have existence up to [ ], [ ].
SECTION 3.15 Mergers.
(a) The Trust may not merge or convert with or into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, except as
described in Section 3.15(b) and (c).
(b) The Trust may, at the request of the Sponsor, with the
consent of the Administrative Trustees or, if there are more than two, a
majority of the Administrative Trustees and without the consent of the Holders
of the Securities, the Delaware Trustee or the Property Trustee, merge or
convert with or into, consolidate, amalgamate, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to, a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of
the Trust under the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so long as the Successor Securities
rank the same as the Securities rank with respect to
Distributions and payments upon liquidation, redemption and
otherwise;
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(ii) the Sponsor expressly appoints a trustee of the
Successor Entity that possesses the same powers and duties
as the Property Trustee as the holder of the Debentures;
(iii) the Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on
any national securities exchange or with another organization on which
the Capital Securities are then listed or quoted, if any;
(iv) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause
the Capital Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating
organization;
(v) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities) in any material
respect (other than any dilution of such Holders' interests in the new
entity);
(vi) such Successor Entity has a purpose identical to
that of the Trust;
(vii) prior to such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Sponsor
has received an opinion of an independent counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor
Securities) in any material respect (other than with respect
to any dilution of the Holders' interest in the new entity);
and
(B) following such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer
or lease, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, conversion,
consolidation, amalgamation, replacement, conveyance,
transfer, or lease, the Trust (or the Successor Entity) will
continue to be classified as a grantor trust for United States
federal income tax purposes; and
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(viii) the Sponsor or any permitted successor or
assignee owns all of the common securities of such Successor Entity and
guarantees the obligations of such Successor Entity under the Successor
Securities at least to the extent provided by the Capital Securities
Guarantee and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of all Holders of the Securities, consolidate,
amalgamate, merge or convert with or into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or 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, conversion, replacement, conveyance, transfer or lease
would cause the Trust or the Successor Entity not to be classified as a grantor
trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
At the Closing Time, the Sponsor will purchase all of the
Common Securities then issued by the Trust, in an amount at least equal to 3% of
the capital of the Trust, at the same time as the Capital Securities are issued
and sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust with the
Commission a registration statement on the appropriate form in
relation to the Capital Securities, including any amendments or
supplements thereto;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Capital Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for execution
and filing any documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable laws of any
such States;
(c) if deemed necessary or advisable by the Sponsor,
to prepare for filing and request the Administrative Trustees to
cause the filing by the Trust of an application to the New York
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Stock Exchange or any other national stock exchange or the NASDAQ National
Market for listing or quotation of the Capital Securities;
(d) if required, to prepare for filing by the Trust with the
Commission of a registration statement on Form 8-A relating to the registration
of the Capital Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Underwriting
Agreement providing for the sale of the Capital Securities.
SECTION 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of the
Capital Securities, in the event that a failure of the Trust to pay
Distributions on the Capital Securities is attributable to the failure of the
Debenture Issuer to pay interest or principal on the Debentures, to institute
Direct Actions against the Debenture Issuer for enforcement of its payment
obligations on the Debentures.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any
Securities, the Sponsor may, by written instrument, increase or
decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities; provided, however, that, the number of
Trustees shall in no event be less than two (2); provided further, that (1) one
Trustee, in the case of a natural person, shall be a person who is a resident of
the State of Delaware or that, if not a natural person, is an entity which has
its principal place of business in the State of Delaware (the "Delaware
Trustee"); (2) at least one Trustee shall be an employee or officer of, or
affiliated with the Sponsor (an "Administrative Trustee"); and (3) one Trustee
shall be the Property Trustee, and such Trustee may also serve as Delaware
Trustee if it meets the applicable requirements. Notwithstanding the above,
unless an Event of Default shall have occurred and be continuing, at any time or
times, for the purpose of meeting the requirements of the Trust Indenture Act or
of any
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jurisdiction in which any part of the Trust's property may at the time be
located, the Holders of a Majority in Liquidation Amount of the Common
Securities acting as a class at a meeting of the Holders of the Common
Securities shall have power to appoint one or more persons either to act as a
co-trustee, jointly with the Property Trustee, of all or any part of the Trust's
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 this
Declaration. In case an Event of Default has occurred and is continuing, the
Property Trustee alone shall have power to make any such appointment of a
co-trustee.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State
of Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided, that, if the Property Trustee has its principal
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Property Trustee shall also be the Delaware Trustee
and Section 3.11 shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee and which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or
Person permitted by the 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
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of this Section 5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Property Trustee and the Holder of the Common Securities (as if it were
the obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in ss. 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Administration
SECTION 5.4 Certain Qualifications of Administrative Trustees
and Delaware Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless
the Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Administrative Trustees.
(a) The initial Administrative Trustees shall be:
Robert S. McCoy, Jr.
and
Alice Washington Grogan
Wachovia Corporation
100 North Main Street
Winston-Salem, North Carolina 27150
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John J. Milani
Wachovia Bank of North Carolina, N.A.
100 North Main Street
Winston-Salem, North Carolina 27150
(b) Except where a requirement for action by a specific number
of Administrative Trustees is expressly set forth in this Declaration and except
with respect to any action the taking of which is the subject of a meeting of
the Administrative Trustees, any action required or permitted to be taken by the
Administrative Trustee may be taken by, and any power of the Administrative
Trustee may be exercised by, or with the consent of, any one such Administrative
Trustee.
(c) Unless otherwise determined by the Administrative
Trustees, and except as otherwise required by the Business Trust Act or
applicable law, any Administrative Trustee is authorized to execute on behalf of
the Trust any documents which the Administrative Trustees have the power and
authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware
Attention: Michael M. Majchrzak
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b), any Trustee may be
appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) in the case of Administrative Trustees, after the
issuance of any Securities, by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities voting as a class at a
meeting of the Holders of the Common
Securities;
(iii) in the case of the Property Trustee and the
Delaware Trustee, unless an Event of Default shall have occurred and be
continuing after the issuance of any Securities, by vote of the Holders
of a Majority in Liquidation Amount of the Common Securities voting as
a class at a meeting of the Holders of the Common Securities; and
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(iv) in the case of the Property Trustee and the
Delaware Trustee, if an Event of Default shall have occurred and be
continuing after the issuance of the Securities, by vote of Holders of
a Majority in Liquidation Amount of the Capital Securities voting as a
class at a meeting of Holders of the Capital Securities.
(b) (i) The Trustee that acts as Property Trustee shall
not be removed in accordance with Section 5.7(a) until a successor
Trustee possessing the qualifications to act as Property Trustee under
Section 5.3 (a "Successor Property Trustee") has been appointed and has
accepted such appointment by written instrument executed by such
Successor Property Trustee and delivered to the Administrative Trustees
and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall
not be removed in accordance with this Section 5.7(a) until a successor
Trustee possessing the qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Administrative Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as
the Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Property Trustee and delivered to
the Trust, the Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as
the Delaware Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment by
instrument executed by such Successor
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Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor Property
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.7 within 60 days after delivery of an instrument of resignation or
removal, the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or successor
Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Administrative
Trustees or, if there are more than two, a majority of the Administrative
Trustees, shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 5.7, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.
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SECTION 5.10 Meetings.
If there is more than one Administrative Trustee, meetings of
the Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before such meeting. Notice of
any telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
by the unanimous written consent of the Administrative Trustees. In the event
there is only one Administrative Trustee, any and all action of such
Administrative Trustee shall be evidenced by a written consent of such
Administrative Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein.
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Section 5.12 Merger, Conversion, Consolidation or Succession
to Business.
Any Person into which any Trustee (excluding any
Administrative Trustee that is 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 hereunder, provided that
such Person shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Each Holder shall receive Distributions in accordance with the
terms of such Holder's Securities. If and to the extent that the Debenture
Issuer makes a payment of interest (including Additional Interest (as defined in
the Indenture)), premium and/or principal on the Debentures held by the Property
Trustee or any other payments with respect to the Debentures held by the
Property Trustee (the amount of any such payment being a "Payment Amount"), the
Property Trustee shall and is directed, to the extent funds are available for
that purpose, to make a distribution (a "Distribution") of the Payment Amount to
Holders in accordance with the respective terms of the Securities held by them.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the Trust
issue one class of capital securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in Annex
I (the "Capital Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities"). The Trust shall issue no
securities or other interests in the assets of the Trust other than the Capital
Securities and the Common Securities.
(b) The Capital Securities rank pari passu and payment thereon
shall be made Pro Rata (as defined in Annex I hereto) with the Common Securities
except that, where an Event of Default has occurred and is continuing, the
rights of Holders of
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the Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Capital Securities.
(c) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in
this Declaration, the Securities so issued shall be deemed to be
validly issued, fully paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or a
Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
SECTION 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust by
one Administrative Trustee or more by manual or facsimile signature. In case any
Administrative Trustee of the Trust who shall have signed any of the Securities
shall cease to be such Administrative Trustee before the Securities so signed
shall be delivered by the Trust, such Securities nevertheless may be delivered
as though the person who signed such Securities had not ceased to be such
Administrative Trustee; and any Securities may be signed on behalf of the Trust
by such persons who, at the actual date of execution of such Security, shall be
the Administrative Trustees of the Trust, although at the date of the execution
and delivery of the Declaration any such person was not such an Administrative
Trustee.
(b) A Common Security shall be valid upon execution
by an Administrative Trustee without any act of the Property
Trustee. A Capital Security 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 Capital Security has been authenticated
under this Declaration.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Capital Securities for
original issue. The aggregate number of Capital Securities outstanding at any
time shall not exceed the number set forth in the Terms in Annex I hereto except
as provided in Section 7.6.
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The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Capital Securities. An authenticating
agent may authenticate Capital Securities whenever the Property Trustee may do
so. Each reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee hereunder with respect to the Sponsor or an
Affiliate.
SECTION 7.3 Form and Dating.
The Capital Securities and the Property Trustee's certificate
of authentication shall be substantially in the form of Exhibit A-1 and the
Common Securities shall be substantially in the form of Exhibit A-2, each of
which is hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by their execution thereof by one or
more of them. The Securities may have letters, CUSIP or other numbers, notations
or other marks of identification or designation and such legends or endorsements
required by law, stock exchange rule, agreements to which the Trust is subject,
if any, or usage (provided that any such notation, legend or endorsement is in a
form acceptable to the Trust). The Trust at the direction of the Sponsor shall
furnish any such legend not contained in Exhibit A-1 to the Property Trustee in
writing. Each Capital Security shall be dated the date of its authentication.
The terms and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and to the extent applicable, the Property Trustee, the Delaware
Trustee, the Administrative Trustees and the Sponsor, by their execution and
delivery of this Declaration, expressly agree to be bound thereby.
(a) Global Securities. The Capital Securities shall be issued
in the form of one or more, permanent global Securities in definitive, fully
registered form without Distribution coupons with the appropriate global legends
set forth in Exhibit A-1 hereto (a "Global Capital Security"), which shall be
deposited on behalf of the purchasers of the Capital Securities represented
thereby with the Property Trustee or the Registrar, at its New York office, as
custodian for the Clearing Agency, and registered in the name of the Clearing
Agency or a nominee of the Clearing Agency, duly executed by the Trust and
authenticated by the Property Trustee as hereinafter provided. The number of
Capital Securities represented by the Global Capital Security may from time to
time be increased or decreased by adjustments made on the records of the
Property Trustee and the Clearing Agency or its nominee as hereinafter provided.
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(b) Book-Entry Provisions. This Section 7.3(b) shall apply
only to the Global Capital Securities and such other Capital Securities in
global form as may be authorized by the Trust to be deposited with or on behalf
of the Clearing Agency.
The Trust shall execute and the Property Trustee shall, in
accordance with this Section 7.3, authenticate and make available for delivery
initially one or more Global Capital Securities that (i) shall be registered in
the name of Cede & Co. or other nominee of such Clearing Agency and (ii) shall
be delivered by the Trustee to such Clearing Agency or pursuant to such Clearing
Agency's written instructions or held by the Property Trustee or the Registrar
as custodian for the Clearing Agency.
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Declaration with respect to any
Global Capital Security held on their behalf by the Clearing Agency or by the
Property Trustee or the Registrar as the custodian of the Clearing Agency or
under such Global Capital Security, and the Clearing Agency may be treated by
the Trust, the Property Trustee and any agent of the Trust or the Property
Trustee as the absolute owner of such Global Capital Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trust, the Property Trustee or any agent of the Trust or the Property Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Clearing Agency or impair, as between the Clearing Agency and
its Participants, the operation of customary practices of such Clearing Agency
governing the exercise of the rights of a holder of a beneficial interest in any
Global Capital Security.
(c) Definitive Capital Securities. Except as
provided in Section 7.9, owners of beneficial interests in a
Global Capital Security will not be entitled to receive physical
delivery of certificated Capital Securities ("Definitive Capital
Securities").
SECTION 7.4 Registrar and Paying Agent.
The Trust shall maintain in the Borough of Manhattan, The City
of New York, (i) an office or agency where Capital Securities may be presented
for registration of transfer ("Registrar") and (ii) an office or agency where
Capital Securities may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Capital Securities and of their transfer. The Trust
may appoint the Registrar and the Paying Agent and may appoint one or more
co-Registrars and one or more additional paying agents in such other locations
as it shall determine. The term "Registrar" includes any additional registrar
and the term "Paying Agent" includes any additional
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paying agent. The Trust may change any Paying Agent, Registrar or co-Registrar
without prior notice to any Holder. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Property Trustee and
the Sponsor. The Trust shall notify the Property Trustee of the name and address
of any Agent not a party to this Declaration. If the Trust fails to appoint or
maintain another entity as Registrar or Paying Agent, the Property Trustee shall
act as such. The Trust or any of its Affiliates may act as Paying Agent or
Registrar. The Trust shall act as Paying Agent, Registrar and co-Registrar for
the Common Securities.
The Trust initially appoints the Property Trustee as Registrar
and Paying Agent for the Capital Securities.
The Registrar and Paying Agent shall be entitled to all of the
rights, protections, immunities and indemnities afforded to the Property Trustee
hereunder.
SECTION 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the
Property Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Property Trustee all money held by the Paying
Agent for the payment of Liquidation Amounts or Distributions on the Securities,
and will notify the Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property Trustee may
require a Paying Agent to pay all money held by it to the Property Trustee. The
Trust at any time may require a Paying Agent to pay all money held by it to the
Property Trustee and to account for any money disbursed by it. Upon payment over
to the Property Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the money. If the
Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.
SECTION 7.6 Replacement Securities.
If the holder of a Security claims that the Security has been
lost, destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Capital Securities to the
Property Trustee, the Trust shall issue and the Property Trustee shall
authenticate a replacement Security if the Property Trustee's and the Trust's
requirements, as the case may be, are met. An indemnity bond must be provided by
the Holder which, in the judgment of the Property Trustee, is sufficient to
protect the Trustees, the Sponsor or any authenticating agent from any loss
which any of them may suffer
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if a Security is replaced. The Trust may charge such holder for
its expenses in replacing a Security.
Every replacement Security is an additional beneficial
interest in the Trust.
SECTION 7.7 Outstanding Capital Securities.
The Capital Securities outstanding at any time are all the
Capital Securities authenticated by the Property Trustee except for those
cancelled by it, those delivered to it for cancellation, and those described in
this Section as not outstanding.
If a Capital Security is replaced, paid or purchased pursuant
to Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Capital
Security is held by a bona fide purchaser.
If Capital Securities are considered paid in accordance with
the terms of this Declaration, they cease to be outstanding and Distributions on
them shall cease to accumulate.
Except as otherwise provided herein, a Capital Security does
not cease to be outstanding because one of the Trustees, the Sponsor or an
Affiliate of the Sponsor holds the Security.
SECTION 7.8 Capital Securities in Treasury.
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Capital
Securities owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as
the case may be, shall be disregarded and deemed not to be outstanding, except
that for the purposes of determining whether the Property Trustee shall be fully
protected in relying on any such direction, waiver or consent, only Securities
which a Responsible Officer of the Property Trustee actually knows are so owned
shall be so disregarded.
SECTION 7.9 Temporary Securities.
(a) Until Definitive Securities are ready for delivery, the
Trust may prepare and, in the case of the Capital Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Trust considers appropriate for temporary Securities. Without unreasonable
delay, the Trust shall prepare and, in the case of the Capital Securities, the
Property Trustee shall authenticate Definitive Securities in exchange for
temporary Securities.
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(b) A Global Capital Security deposited with the Clearing
Agency or with the Property Trustee or the Registrar as custodian for the
Clearing Agency pursuant to Section 7.3 shall be transferred to the beneficial
owners thereof in the form of certificated Capital Securities only if (i) the
Clearing Agency notifies the Company that it is unwilling or unable to continue
as Clearing Agency for such Global Capital Security or if at any time such
Clearing Agency ceases to be a "clearing agency" registered under the Exchange
Act and a clearing agency is not appointed by the Sponsor within 90 days of such
notice, (ii) a Default or an Event of Default has occurred and is continuing or
(iii) the Trust at its sole discretion elects to cause the issuance of
certificated Capital Securities.
(c) Any Global Capital Security that is transferable to the
beneficial owners thereof in the form of certificated Capital Securities
pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to the
Property Trustee located in the Borough of Manhattan, The City of New York, to
be so transferred, in whole or from time to time in part, without charge, and
the Property Trustee shall authenticate and make available for delivery, upon
such transfer of each portion of such Global Capital Security, an equal
aggregate Liquidation Amount of Securities of authorized denominations in the
form of certificated Capital Securities. Any portion of a Global Capital
Security transferred pursuant to this Section shall be registered in such names
as the Clearing Agency shall direct.
(d) Subject to the provisions of Section 7.9(c), the Holder of
a Global Capital Security may grant proxies and otherwise authorize any person,
including Participants and persons that may hold interests through Participants,
to take any action which such Holder is entitled to take under this Declaration
or the Securities.
(e) In the event of the occurrence of any of the events
specified in Section 7.9(b), the Trust will promptly make available to the
Property Trustee or the Registrar a reasonable supply of certificated Capital
Securities in fully registered form without distribution coupons.
SECTION 7.10 Cancellation.
The Trust at any time may deliver the Securities to the
Property Trustee for cancellation. The Registrar and Paying Agent shall forward
to the Property Trustee any Securities surrendered to them for registration of
transfer, redemption, exchange or payment. The Property Trustee shall promptly
cancel all Securities surrendered for registration of transfer, redemption,
exchange, payment, replacement or cancellation and shall dispose of cancelled
Securities as the Trust directs,
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provided that the Property Trustee shall not be obligated to
destroy Capital Securities.
SECTION 7.11 CUSIP Numbers.
The Trust in issuing the Capital Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders of Capital
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Capital
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Capital
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.
(a) The Trust shall automatically be dissolved and its
affairs wound up upon the earliest to occur of the following
events:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution
or liquidation or its equivalent with respect to the Sponsor, or the
revocation of the Sponsor's charter and the expiration of 90 days after
the date of revocation without a reinstatement thereof;
(iii) following the distribution, after satisfaction of
the liabilities of the Trust to the creditors of the Trust, of a Like
Amount of the Debentures to the Holders of the Securities pursuant to
the terms thereof upon receipt of the following: (A) a written
direction from the Sponsor while the Debentures are outstanding
requiring the Trustees to dissolve the Trust and distribute a Like
Amount of the Debentures to Holders of the Securities; (B) evidence
satisfactory to the Administrative Trustees and the Property Trustee of
the prior approval of the Federal Reserve Board or an independent
opinion of counsel experienced in such matters addressed to the Trust
to the effect that no such approval is then required under the
applicable capital guidelines or policies of the Federal Reserve Board;
and (C) an independent opinion of counsel experienced in such matters
addressed to the Trust, which opinion may rely on published rulings of
the Internal Revenue Service, to the
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effect that the Holders of the Securities will not recognize any gain
or loss for United States federal income tax purposes as a result of
the dissolution of the Trust and the distribution of the Debentures;
(iv) upon the entry of a decree of judicial
dissolution of the Trust by a court of competent
jurisdiction;
(v) when all of the Securities shall have been called
for redemption and the amounts necessary for redemption thereof shall,
after satisfaction of the liabilities of the Trust to the creditors of
the Trust, have been paid to the Holders in accordance with the terms
of the Securities; or
(vi) the expiration of the term of the Trust provided
in Section 3.14.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and after satisfaction of all liabilities of the
Trust, the Administrative Trustees shall file a certificate of cancellation with
the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall
survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Capital Securities
shall be freely transferable.
(c) The Sponsor may not transfer the Common
Securities.
(d) The Trustees shall provide for the registration of
Securities and of the transfer of Securities, which will be effected without
charge but only upon payment (with such indemnity as the Trustees may require)
in respect of any tax or other governmental charges that may be imposed in
relation to it. Upon surrender for registration of transfer of any Securities,
the Trustees shall cause one or more new Securities to be issued
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in the name of the designated transferee or transferees. Every Security
surrendered for registration of transfer shall be accompanied by a written
instrument of transfer in form satisfactory to the Administrative Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Security surrendered for registration of transfer shall be canceled by the
Trustees. A transferee of a Security shall be entitled to the rights and subject
to the obligations of a Holder hereunder upon the receipt by such transferee of
a Security. By acceptance of a Security, each transferee shall be deemed to have
agreed to be bound by this Declaration.
SECTION 9.2 Deemed Security Holders.
The Trust, the Trustees, the Paying Agent and the Registrar
may treat the Person in whose name any Security shall be registered on the books
and records of the Trust as the sole owner of such Security for purposes of
receiving Distributions and for all other purposes whatsoever and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such Security on the part of any Person, whether or not the Trust, the Trustees,
the Paying Agent or the Registrar shall have actual or other notice thereof.
SECTION 9.3 Book Entry Interests.
Global Capital Securities shall initially be registered on the
books and records of the Trust in the name of Cede & Co., the nominee of the
Clearing Agency, and no Capital Security Beneficial Owner will receive a
definitive Capital Security Certificate representing such Capital Security
Beneficial Owner's interests in such Global Capital Securities, except as
provided in Section 7.9. Unless and until definitive, fully registered Capital
Securities certificates have been issued to the Capital Security Beneficial
Owners pursuant to Section 7.9:
(a) the provisions of this Section 9.3 shall be in
full force and effect;
(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Capital Securities and receiving approvals, votes
or consents hereunder) as the Holder of the Capital Securities and the sole
holder of the Global Certificates and shall have no obligation to the Capital
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.3
conflict with any other provisions of this Declaration, the provisions of this
Section 9.3 shall control; and
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(d) the rights of the Capital Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Capital Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global Certificates to
such Clearing Agency Participants; provided, that solely for the purposes of
determining whether the Holders of the requisite amount of Capital Securities
have voted on any matter provided for in this Declaration, so long as any Global
Capital Securities remain outstanding, the Trustees may conclusively rely on,
and shall be protected in relying on, any written instrument (including a proxy)
delivered to the Trustees by the Clearing Agency setting forth the Capital
Security Beneficial Owners' votes or assigning the right to vote on any matter
to any other Persons either in whole or in part.
SECTION 9.4 Notices to Clearing Agency.
Whenever a notice or other communication to the Capital
Security Holders is required under this Declaration, the Trustees shall give all
such notices and communications specified herein to be given to the Holders of
Global Capital Security to the Clearing Agency, and shall have no notice
obligations to the Capital Security Beneficial Owners.
SECTION 9.5 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities, the Administrative
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Capital Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this
Declaration, the Securities Guarantees and the terms of the
Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion
of the capital contributions (or any return thereon) of the Holders of
the Securities which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder
of Securities any deficit upon dissolution of the Trust or
otherwise.
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(b) The Sponsor shall be liable for all of the fees, expenses,
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the
Holders of the Capital Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
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(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
each Covered Person or Indemnified Person shall resolve such conflict of
interest, take such action or provide such terms, considering in each case the
relative interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating to
such interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified
Person is permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express standard
and shall not be subject to any other or different standard imposed by
this Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Trust) by reason of the fact that he is or
was an Indemnified Person against expenses (including attorneys' fees and
expenses), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in
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connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Indemnified Person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in
its favor by reason of the fact that he is or was an Indemnified Person
against expenses (including attorneys' fees and expenses) actually and
reasonably incurred by him in connection with the defense or settlement
of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the Trust and except that no such indemnification shall be made in
respect of any claim, issue or matter as to which such Indemnified
Person shall have been adjudged to be liable to the Trust unless and
only to the extent that the Court of Chancery of Delaware or the court
in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that an Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification of an Administrative Trustee
under paragraphs (i) and (ii) of this Section 10.4(a) (unless ordered
by a court) shall be made by the Sponsor only as authorized in the
specific case upon a determination that indemnification of the Company
Indemnified Person is
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proper in the circumstances because he has met the applicable standard
of conduct set forth in paragraphs (i) and (ii). Such determination
shall be made (1) by the Administrative Trustees by a majority vote of
a Quorum consisting of such Administrative Trustees who were not
parties to such action, suit or proceeding, (2) if such a Quorum is not
obtainable, or, even if obtainable, if a Quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a
written opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses)
incurred by an Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by the
Sponsor in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such
Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Sponsor as
authorized in this Section 10.4(a). Notwithstanding the foregoing, no
advance shall be made by the Sponsor if a determination is reasonably
and promptly made (i) by the Administrative Trustees by a majority vote
of a Quorum of disinterested Administrative Trustees, (ii) if such a
Quorum is not obtainable, or, even if obtainable, if a Quorum of
disinterested Administrative Trustees so directs, by independent legal
counsel in a written opinion or (iii) the Common Security Holder of the
Trust, that, based upon the facts known to the Administrative Trustees,
counsel or the Common Security Holder at the time such determination is
made, such Indemnified Person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding,
that such Indemnified Person believed or had reasonable cause to
believe his conduct was unlawful. In no event shall any advance be made
in instances where the Administrative Trustees, independent legal
counsel or Common Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or Capital
Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 10.4(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Sponsor or Capital Security Holders of the Trust or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office.
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All rights to indemnification under this Section 10.4(a) shall be
deemed to be provided by a contract between the Sponsor and each
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this
Section 10.4(a) shall not affect any rights or obligations then
existing.
(vii) The Sponsor or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Sponsor would have the power to indemnify him
against such liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references
to "the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a person
who has ceased to be an Indemnified Person and shall inure to the
benefit of the heirs, executors and administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the income
of such Fiduciary Indemnified Person) 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
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of any of its powers or duties hereunder. The obligation to indemnify as set
forth in this Section 10.4(b) shall survive the satisfaction and discharge of
this Declaration or the earlier resignation or removal of such Fiduciary
Indemnified Person.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Property Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each
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Fiscal Year of the Trust by a firm of independent certified public accountants
selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after the end of
each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss.
(c) The Administrative Trustees shall cause to be duly
prepared and delivered to each of the Holders of Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each Holder as
is required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Administrative
Trustees shall endeavor to deliver all such information statements within 30
days after the end of each Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by the Administrative Trustees on behalf of the Trust with
any state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Administrative Trustees; provided, however,
that the Property Trustee shall designate the signatories for the Property
Trustee Account.
SECTION 11.4 Withholding.
The Administrative Trustees on behalf of the Trust shall
comply with all withholding requirements under United States federal, state and
local law. The Trust shall request, and the Holders shall provide to the Trust,
such forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Administrative
Trustees on behalf
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of the Trust shall file required forms with applicable jurisdictions and, unless
an exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to Distributions or allocations to any Holder, the amount
withheld shall be deemed to be a Distribution in the amount of the withholding
to the Holder. In the event of any claimed over withholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount required
to be withheld was not withheld from actual Distributions made, the Trust may
reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument executed by the Administrative Trustees, the Property Trustee
and the Delaware
Trustee.
(b) No amendment shall be made, and any such
purported amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment,
the Property Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment is permitted
by, and conforms to, the terms of this Declaration (including the terms
of the Securities);
(ii) unless, in the case of any proposed amendment
which affects the rights, powers, duties, obligations or immunities of
the Property Trustee, the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(B) an opinion of counsel (who may be counsel to
the Sponsor or the Trust) that such amendment is permitted by,
and conforms to, the terms of this Declaration (including the
terms of the Securities),
provided, however, that the Property Trustee shall not be
required to sign any such amendment; or
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(iii) to the extent the result of such amendment would
be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers
of the Property Trustee in contravention of the Trust
Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under the
Investment Company Act.
(c) After the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities.
(d) Section 10.1(c) and this Section 12.1 shall not
be amended without the consent of all of the Holders of the
Securities.
(e) Article IV shall not be amended without the
consent of the Holders of a Majority in Liquidation Amount of the
Common Securities.
(f) The rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove Trustees
shall not be amended without the consent of the Holders of a Majority in
Liquidation Amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Declaration
may be amended without the consent of the Holders of the
Securities to:
(i) cure any ambiguity, correct or supplement any
provision in this Declaration that may be inconsistent with any other
provision of this Declaration or to make any other provisions with
respect to matters or questions arising under this Declaration which
shall not be inconsistent with the other provisions of the Declaration;
and
(ii) to modify, eliminate or add to any provisions of
the Declaration 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 Securities are outstanding or
to ensure that the
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Trust will not be required to register as an Investment
Company under the Investment Company Act,
provided, however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interests of the Holders of the
Securities, and any amendments of this Declaration shall become effective when
notice thereof is given to the Holders of the Securities.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration, the
terms of the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading. The Administrative Trustees shall
call a meeting of the Holders of such class if directed to do so by the Holders
of at least 10% in Liquidation Amount of such class of Securities. Such
direction shall be given by delivering to the Administrative Trustees one or
more notice in a writing stating that the signing Holders of Securities wish to
call a meeting and indicating the general or specific purpose for which the
meeting is to be called. Any Holders of Securities calling a meeting shall
specify in writing the Security Certificates held by the Holders of Securities
exercising the right to call a meeting and only those Securities specified shall
be counted for purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the
terms of the Securities, the following provisions shall apply to
meetings of Holders of Securities:
(i) notice of any such meeting shall be given to all
the Holders of Securities having a right to vote thereat at least seven
days and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any stock
exchange on which the Capital Securities are listed or admitted for
trading, such vote, consent or approval may be given at a meeting of
the Holders of Securities. Any action that may be taken at a meeting of
the Holders of Securities may be taken without a meeting if a consent
in writing setting forth the action so taken is signed by the Holders
of Securities owning not less than the minimum amount of Securities in
Liquidation Amount that would be necessary to authorize or take such
action at a meeting at which all Holders of Securities
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having a right to vote thereon were present and voting. Prompt notice
of the taking of action without a meeting shall be given to the Holders
of Securities entitled to vote who have not consented in writing. The
Administrative Trustees may specify that any written ballot submitted
to the Security Holder for the purpose of taking any action without a
meeting shall be returned to the Trust within the time specified by the
Administrative Trustees;
(ii) each Holder of a Security may authorize any
Person to act for it by proxy on all matters in which a Holder of
Securities is entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting. No proxy shall be
valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the
pleasure of the Holder of Securities executing it. Except as otherwise
provided herein, all matters relating to the giving, voting or validity
of proxies shall be governed by the General Corporation Law of the
State of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders
of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities
shall be conducted by the Administrative Trustees or by such
other Person that the Administrative Trustees may designate;
and
(iv) unless the Business Trust Act, this Declaration,
the terms of the Securities, the Trust Indenture Act or the listing
rules of any stock exchange on which the Capital Securities are at the
time listed or trading, otherwise provides, the Administrative
Trustees, in their sole discretion, shall establish all other
provisions relating to meetings of Holders of Securities, including
notice of the time, place or purpose of any meeting at which any matter
is to be voted on by any Holders of Securities, waiver of any such
notice, action by consent without a meeting, the establishment of a
record date, Quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
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ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a national banking association
with trust powers and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been duly
executed and delivered by the Property Trustee and constitutes a legal, valid
and binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Property Trustee; and
(d) No consent, approval or authorization of, or registration
with or notice to, any federal banking authority is required for the execution,
delivery or performance by the Property Trustee of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware
Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
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(a) The Delaware Trustee is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with power and authority to execute and deliver, and to carry out and perform
its obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the Delaware
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. This Declaration has been duly
executed and delivered by the Delaware Trustee and constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration
with or notice to, any Delaware banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Declaration; and
(d) The Delaware Trustee is 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.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Administrative
Trustees at the Trust's mailing address set forth below (or such other address
as the Trust may give notice of to the Holders of the Securities):
Wachovia Capital Trust II
c\o Wachovia Corporation
100 North Main Street
Winston-Salem, North Carolina 27150
Attention: Chief Financial Officer
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(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give notice of to
the Holders of the Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
Attention: Michael J. Majchrzak
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the Property
Trustee may give notice of to the Holders of the Securities):
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670
Attention: Corporate Trust Administration
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
Wachovia Corporation
100 North Main Street
Winston-Salem, North Carolina 27150
Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
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SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
____________________________
Name:
Administrative Trustee
____________________________
Name:
Administrative Trustee
____________________________
Name:
Administrative Trustee
First Chicago Delaware Inc.,
not in its individual capacity but
solely as Delaware Trustee
By:_________________________
Name:
The First National Bank of Chicago,
as Property Trustee
By:_________________________
Name:
Wachovia Corporation,
as Sponsor
By:_________________________
Name:
Title:
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ANNEX I
TERMS OF
[ ]% CAPITAL SECURITIES
[ ]% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of [ ], 1997 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities and the Common
Securities (collectively, the "Securities") are set out below (each capitalized
term used but not defined herein has the meaning set forth in the Declaration
or, if not defined in such Declaration, as defined in the Indenture):
1. Designation and Number.
(a) Capital Securities. [ ] Capital Securities of the Trust,
with an aggregate Liquidation Amount with respect to the assets of the Trust of
[ ] million dollars ($[ ]), and with a Liquidation Amount with respect to the
assets of the Trust of $25 per Security, are hereby designated for the purposes
of identification only as "[ ]% Capital Securities" (the "Capital Securities").
The certificates evidencing the Capital Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice
or to conform to the rules of any stock exchange or quotation system on which
the Capital Securities are listed or quoted.
(b) Common Securities. [ ] Common Securities of the Trust with
an aggregate Liquidation Amount with respect to the assets of the Trust of [ ]
($[ ]) and a Liquidation Amount with respect to the assets of the Trust of $25
per Security, are hereby designated for the purposes of identification only as
"[ ]% Common Securities" (the "Common Securities"). The certificates evidencing
the Common Securities shall be substantially in the form of Exhibit A-2 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a
rate per annum of [ ]% (the "Coupon Rate") of the Liquidation Amount of $25 per
Security (the "Liquidation Amount"), such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one semi-annual period will bear additional
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distributions thereon compounded semi-annually at the Coupon Rate (to the extent
permitted by applicable law). The term "Distributions", as used herein, includes
any such additional distributions unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds on
hand legally available therefor.
(b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from [ ], 1997, and will be payable
semi-annually in arrears on [ ] and [ ] of each year, commencing on [ ], 1997,
except as otherwise described below. The amount of Distributions 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 on the basis
of the actual number of days elapsed in such month. If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distribution payable on such date shall be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay), with the same force and effect as if made on the date such
payment was originally payable (each date on which Distributions are payable in
accordance with the foregoing, a "Distribution Date"). So long as no Event of
Default (as defined in the Indenture) has occurred and is continuing, the
Debenture Issuer has the right under the Indenture to defer the payment of
interest on the Debentures at any time and from time to time for a period not
exceeding 10 consecutive semi-annual periods, including the first such
semi-annual period during such period (each an "Extension Period"), provided
that no Extension Period shall extend beyond the Maturity Date of the
Debentures. Distributions will be deferred during any Extension Period.
Notwithstanding such deferral, Distributions to which holders of Securities are
entitled shall continue to accumulate additional Distributions thereon (to the
extent permitted by applicable law but not at a rate greater than the rate at
which interest is then accruing on the Debentures) at the Coupon Rate compounded
semi-annually from the relevant Distribution Dates during any Extension Period.
Prior to the expiration of any Extension Period, the Debenture Issuer may
further defer payments of interest by further extending such Extension Period;
provided that such Extension Period, together with all previous and further
extensions, if any, within such Extension Period, may not exceed 10 consecutive
semi-annual periods, including the first semi-annual period during such
Extension Period, or extend beyond the Maturity Date of the Debentures. Upon the
expiration of any Extension Period and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period, subject to the above
requirements. The Debenture Issuer must give the Property Trustee, the
Administrative Trustees and the Debenture
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Trustee (as defined in the Offering Circular) notice of its election of any
Extension Period or any extension thereof at least five Business Days prior to
the earlier of (i) the date the Distributions on the Capital Securities would
have been payable except for the election to begin or extend such Extension
Period and (ii) the date the Administrative Trustees are required to give notice
to any securities exchange or to Holders of the Capital Securities of the record
date or the date such Distributions are payable, but in any event not less than
five Business Days prior to such record date. There is no limitation on the
number of times that the Debenture Issuer may elect to begin an Extension
Period.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
record dates, which shall be the first day of the month in which the relevant
Distribution Date occurs. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Capital
Securities will be made as follows: (i) if the Capital Securities are held in
global form by a Clearing Agency (or its nominee), in accordance with the
procedures of the Clearing Agency; and (ii) if the Capital Securities are held
in definitive form, by check mailed to the address of the Holder thereof as
reflected in the records of the Registrar unless otherwise agreed by the Trust.
The relevant record dates for the Common Securities shall be the same as the
record dates for the Capital Securities. Distributions payable on any Securities
that are not punctually paid on any Distribution Date will cease to be payable
to the Holder on the relevant record date, and such defaulted Distribution will
instead be payable to the Person in whose name such Securities are registered on
the special record date or other specified date determined in accordance with
the Indenture.
(d) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such property
shall be distributed Pro Rata (as defined herein) pursuant to Section 8 among
the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any dissolution of the Trust or the Sponsor
otherwise gives notice of its election to liquidate the Trust pursuant to
Section 8.1(a)(iii) of the Declaration, the Trust shall be liquidated by the
Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders of the
Securities a Like Amount (as defined below) of the Debentures, unless such
Distribution is determined by the
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Property Trustee not to be practicable, in which event such Holders will be
entitled to receive out of the assets of the Trust legally available for
Distribution to Holders, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, an amount equal to the aggregate of the
Liquidation Amount of $25 per Security plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution").
"Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal amount
of Debentures to be paid in accordance with their terms and (ii) with respect to
a distribution of Debentures upon the liquidation of the Trust, Debentures
having a principal amount equal to the Liquidation Amount of the Securities of
the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets on hand
legally available to pay in full the aggregate Liquidation Distribution, then
the amounts payable directly by the Trust on the Securities shall be paid on a
Pro Rata basis as set forth in Section 8.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures on the Maturity Date
thereof or redemption thereof (in whole or in part) prior thereto in accordance
with the terms thereof, the proceeds from such repayment or prepayment shall be
simultaneously applied by the Property Trustee (subject to the Property Trustee
having received notice no later than 45 days prior to such repayment or
prepayment) to redeem a Like Amount of the Securities at a redemption price
equal to (i) in the case of the repayment of the Debentures on the Maturity
Date, the Maturity Redemption Price (as defined below), (ii) in the case of the
optional redemption of the Debentures prior to [ ], [ ] upon the occurrence and
continuation of a Special Event, the Special Event Redemption Price (as defined
below) and (iii) in the case of the optional redemption of the Debentures other
than as contemplated in clause (ii) above, the Optional Redemption Price (as
defined below). The Maturity Redemption Price, the Special Event Redemption
Price and the Optional Redemption Price are referred to collectively as the
"Redemption Price."
(b) (i) The "Maturity Redemption Price" shall mean a price
equal to 100% of the Liquidation Amount of the Securities to be redeemed plus
accumulated and unpaid Distributions thereon, if any, to the date of redemption.
(ii) "Optional Redemption Price" shall mean a
price equal to the percentage of the Liquidation Amount of
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Securities to be redeemed plus accumulated and unpaid Distributions thereon, if
any, to the date of such redemption if redeemed during the 12 month period
beginning [ ] of the years indicated below:
Year Percentage
%
and thereafter
(iii) "Special Event Redemption Price" shall mean a
price equal to the greater of (i) 100% of the Liquidation Amount of Securities
to be redeemed or (ii) the sum, as determined by a Quotation Agent, of the
present values of [ ]% of such Liquidation Amount and the remaining scheduled
payments of interest thereon from the redemption date to [ ], [ ], in each case
discounted to the redemption date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus, in
either case, accumulated and unpaid Distributions thereon, if any, to the date
of such redemption.
(c) On and from the date fixed by the Administrative Trustees
for any distribution of Debentures and liquidation of the Trust: (i) the
Securities will no longer be deemed to be outstanding; (ii) each Holder of
Securities will receive a registered certificate or certificates representing
the Debentures to be delivered upon such distribution; and (iii) Securities will
be deemed to represent beneficial interests in a Like Amount of Debentures, and
bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on such Securities, until such Securities are presented to
the Registrar or its agent for cancellation and such Debentures are transferred
to the Holders of such Securities.
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(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been paid on all
Securities for all semi-annual Distribution periods that expire on or before the
date of redemption.
(e) The procedure with respect to redemptions or
distributions of Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution Notice")
will be given by the Trust by mail to each Holder of Securities to be redeemed
or exchanged not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
date fixed for repayment or redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on which notices
are given pursuant to this Section 4(e)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of Securities
at the address of each such Holder appearing in the books and records of the
Trust. No defect in the Redemption/Distribution Notice or in the mailing of
either thereof with respect to any Holder shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be redeemed
Pro Rata from each Holder of Securities, it being understood that, in respect
of Capital Securities registered in the name of and held of record by a
Clearing Agency or its nominee, the distribution of the proceeds of such
redemption will be made to the Clearing Agency or its nominee and disbursed by
such Clearing Agency in accordance with the procedures applied by such agency
or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, such notice shall be irrevocable and (A) with
respect to Capital Securities registered in the name of or held of record by a
Clearing Agency or its nominee, by 12:00 noon, New York City time, on the
redemption date, provided that the Debenture Issuer has paid the Property
Trustee a sufficient amount of cash in connection with the related maturity or
prepayment of the Debentures by 10:00 a.m., New York City time, on the Maturity
Date or the date of prepayment, as the case may be, the Property Trustee or the
Paying Agent will pay to the Clearing Agency or its nominee funds sufficient to
pay the applicable Redemption Price with respect to such Capital Securities, and
(B) with respect to Capital
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Securities issued in certificated form and Common Securities, provided that the
Debenture Issuer has paid the Property Trustee a sufficient amount of cash in
connection with the related maturity or prepayment of the Debentures, the
Property Trustee or the Paying Agent will pay the relevant Redemption Price to
the Holders of such Securities against presentation to the Registrar of the
certificates therefor. If a Redemption/Distribution Notice shall have been given
and funds deposited with the Property Trustee to pay the Redemption Price
(including all unpaid Distributions) with respect to the Securities called for
redemption, then immediately prior to the close of business on the redemption
date, Distributions will cease to accumulate on the Securities so called for
redemption and all rights of Holders of such Securities so called for redemption
will cease, except the right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption Price, and such
Securities shall cease to be outstanding.
(iv) Payment of accumulated and unpaid Distributions on the
redemption date of any Securities will be subject to the rights of Holders of
such Securities on the close of business on a regular record date in respect of
a Distribution Date occurring on or prior to such Redemption Date.
(v) Neither the Administrative Trustees nor the Trust shall be
required to register or cause to be registered the transfer of (A) any
Securities beginning on the opening of business 15 days before the day of
mailing of a Redemption/Distribution Notice or (B) any Securities selected for
redemption (except the unredeemed portion of any Security being redeemed). If
any date fixed for redemption of Securities is not a Business Day, then payment
of the Redemption Price payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay) with the same force and effect as if made on such date fixed
for redemption. If payment of the Redemption Price in respect of any Securities
is improperly withheld or refused and not paid either by the Property Trustee or
the Paying Agent or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, on the date fixed for redemption, (A) Distributions on
such Securities will continue to accumulate from such redemption date to the
actual date of payment, and (B) the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption Price.
(vi) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws and banking laws), provided
the acquiror is not the Holder of the Common Securities or the obligor under the
Indenture, the Sponsor or any of its Affiliates may at any time and from time to
time purchase outstanding Capital Securities by tender, in the
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open market or by private agreement; provided further, that such Capital
Securities are thereupon submitted to the Property Trustee for cancellation.
5. Voting Rights - Capital Securities.
(a) Except as provided under Sections 5(b) and 7 and
as otherwise required by law and the Declaration, the Holders of
the Capital Securities will have no voting rights.
(b) So long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on such Debenture Trustee with respect to
the Debentures, (ii) waive any past default that is waivable under Section 5.13
of the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures 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 a Majority in Liquidation Amount
of all outstanding Capital Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Capital Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Capital Securities except by subsequent vote of such Holders. The
Property Trustee shall notify each Holder of Capital Securities of any notice of
default with respect to the Debentures. In addition to obtaining the foregoing
approvals of such Holders of the Capital Securities, prior to taking any of the
foregoing actions, the Trustees shall obtain an Opinion of Counsel experienced
in such matters to the effect that the Trust will not be classified as an
association taxable as a corporation for United States federal income tax
purposes on account of such action.
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or premium, if any, or interest on the Debentures on
any due date (including any Interest Payment Date or prepayment date or the
Maturity Date), then a Holder of Capital Securities may directly institute a
proceeding for enforcement of payment to such Holder of the principal of or
premium, if any, or interest on a Like Amount of Debentures (a "Direct Action")
on or after the respective due date specified in the Debentures. In connection
with such Direct Action, the rights of the Common Securities Holders will be
subrogated to the rights of the Holders of Capital Securities to the extent of
any payment made by the Debenture Issuer to the
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Holders of Capital Securities in such Direct Action. Except as provided in the
second preceding sentence, the Holders of Capital Securities will not be able to
exercise directly any other remedy available to the Holders of the Debentures.
Any approval or direction of Holders of Capital Securities may
be given at a separate meeting of Holders of Capital Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which Holders of Capital Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Capital Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought, and (iii) instructions for the
delivery of proxies or consent.
No vote or consent of the Holders of the Capital Securities
will be required for the Trust to redeem and cancel Capital Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Capital Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Capital Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), 6(c), and 7 or as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Unless an Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by the Holder of the Common
Securities. If an Event of Default has occurred and is continuing, the Property
Trustee and the Delaware Trustee may be removed at such time by the Holders of a
Majority in Liquidation Amount of the outstanding Capital Securities. In no
event will the Holders of the Capital Securities have the right to vote to
appoint, remove or replace the Administrative Trustees, which voting rights are
vested exclusively in the Sponsor 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
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successor trustee in accordance with the provisions of the
Declaration.
(c) So long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on such Debenture Trustee with respect to
the Debentures, (ii) waive any past default that is waivable under Section 5.13
of the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures 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 a Majority in Liquidation Amount
of all outstanding Common Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Common Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Common Securities except by subsequent vote of such Holders. The Property
Trustee shall notify each Holder of Common Securities of any notice of default
with respect to the Debentures. In addition to obtaining the foregoing approvals
of such Holders of the Common Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an Opinion of Counsel experienced in such
matters to the effect that the Trust will not be classified as an association
taxable as a corporation for United States federal income tax purposes on
account of such action.
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or premium, if any, or interest on the Debentures on
the due date (including any Interest Payment Date or prepayment date or the
Maturity Date), then a Holder of Common Securities may institute a Direct Action
for enforcement of payment to such Holder of the principal of or premium, if
any, or interest on a Like Amount of Debentures on or after the respective due
date specified in the Debentures. In connection with any Direct Action, the
rights of the Common Securities Holders will be subrogated to the rights of the
Holders of Capital Securities to the extent of any payment made by the Debenture
Issuer to Holders of Capital Securities in such Direct Action. Except as
provided in the second preceding sentence, the Holders of Common Securities will
not be able to exercise directly any other remedy available to the holders of
the Debentures.
Any approval or direction of Holders of Common
Securities may be given at a separate meeting of Holders of
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Common Securities convened for such purpose, at a meeting of all of the Holders
of Securities in the Trust or pursuant to written consent. The Administrative
Trustees will cause a notice of any meeting at which Holders of Common
Securities are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder of record of
Common Securities. Each such notice will include a statement setting forth (i)
the date of such meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration and Indenture.
In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended from time to time by an instrument
executed by the Property Trustee, the Delaware Trustee and the Administrative
Trustees, without the consent of the Holders of the Securities (i) to cure any
ambiguity, correct or supplement any provisions in the Declaration that may be
inconsistent with any other provisions, or to make any other provisions with
respect to matters or questions arising under the Declaration which shall not be
inconsistent with the other provisions of the Declaration, or (ii) to modify,
eliminate or add to any provisions of the Declaration 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 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 (i), such action shall not adversely affect in any
material respect the interests of any Holder of Securities. Any amendments of
the Declaration pursuant to the foregoing shall become effective when notice
thereof is given to the holders of the Securities. The Declaration also may be
amended by the Trustees and the Sponsor with (i) the consent of Holders
representing a Majority in Liquidation Amount of all outstanding 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 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, provided that,
without the consent of each Holder of Securities, the
I-11
<PAGE>
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities as of a specified
date or (ii) restrict the right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such date.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate Liquidation Amount of the Securities
held by the relevant Holder in relation to the aggregate Liquidation Amount of
all Securities outstanding unless, in relation to any payment, an Event of
Default under the Declaration has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Capital Securities pro rata according to the aggregate Liquidation Amount of
Capital Securities held by the relevant Holder relative to the aggregate
Liquidation Amount of all Capital Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Capital Securities, to
each Holder of Common Securities pro rata according to the aggregate Liquidation
Amount of Common Securities held by the relevant Holder relative to the
aggregate Liquidation Amount of all Common Securities outstanding.
9. Ranking.
The Capital Securities rank pari passu with the Common
Securities and payment thereon shall be made Pro Rata with the Common
Securities, except that, if an Event of Default under the Declaration occurs and
is continuing, no payments in respect of Distributions on, or payments upon
liquidation, redemption or otherwise with respect to, the Common Securities
shall be made until the Holders of the Capital Securities shall be paid in full
the Distributions, Redemption Price, Liquidation Distribution and other payments
to which they are entitled at such time.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Capital Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
I-12
<PAGE>
12. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture (including any supplemental indenture) to a
Holder without charge on written request to the Sponsor at its principal place
of business.
I-13
<PAGE>
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS SECURITY IS A GLOBAL CAPITAL SECURITY, INSERT: THIS
CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS
CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY
THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.]
Certificate Number Number of Capital Securities
CUSIP NO.
Certificate Evidencing Capital Securities
of
Wachovia Capital Trust II
[ ]% Capital Securities
(Liquidation Amount $25 per Capital Security)
Wachovia Capital Trust II, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
(the "Holder") is the registered owner of securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the [ ]%
Capital Securities (Liquidation Amount $25 per Capital Security) (the "Capital
Securities"). The Capital Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Capital Securities represented hereby are set forth herein, on the reverse
hereof and in the Amended and Restated Declaration of Trust of the Trust dated
as of [ ], 1997, as the same may be amended from time to time (the
"Declaration"), and shall in all respects be subject to the provisions thereof,
including the designation of the terms of the Capital Securities as set forth in
Annex I to the Declaration. Each capitalized term used but
A1-1
<PAGE>
not defined herein or in any legend, form or certificate hereon shall have the
meaning given to it in the Declaration. The Sponsor will provide a copy of the
Declaration, the Capital Securities Guarantee and the Indenture to any Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Capital Securities Guarantee to the extent provided therein.
By its acceptance hereof, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Capital Securities as evidence of indirect beneficial ownership in the
Debentures.
IN WITNESS WHEREOF, the Trust has executed this
certificate this day of .
Wachovia Capital Trust II
By: _________________________________
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
Dated:
THE FIRST NATIONAL BANK
OF CHICAGO,
as Property Trustee
By: _____________________
Authorized Signatory
A1-2
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security
will be fixed at a rate per annum of [ ]% (the "Coupon Rate") of the Liquidation
Amount of $25 per Capital Security, such rate being the rate of interest payable
on the Debentures to be held by the Property Trustee. Distributions in arrears
for more than one semi-annual period will bear interest thereon compounded
semi-annually at the Coupon Rate (to the extent permitted by applicable law).
The term "Distributions", as used herein, includes such cash distributions and
any such interest payable unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held by
the Property Trustee and to the extent the Property Trustee has funds on hand
legally available therefor.
Distributions on the Capital Securities will be cumulative,
will accumulate from the most recent date to which Distributions have been paid
or, if no Distributions have been paid, from [ ], [ ] and will be payable
semi-annually in arrears on [ ] and [ ] of each year, commencing on [ ], [ ],
except as otherwise described below and in the Declaration. Distributions 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. As long as no Event of Default (as defined in the
Indenture) has occurred and is continuing, the Debenture Issuer has the right
under the Indenture to defer the payment of interest on the Debenture at any
time and from time to time for a period not exceeding 10 consecutive calendar
semi-annual periods, including the first such semi-annual period during such
extension period (each, an "Extension Period"), provided that no Extension
Period shall extend beyond the Maturity Date of the Debentures. Distributions
will be deferred during any Extension Period. Notwithstanding such deferral,
semi-annual Distributions will continue to accumulate with interest thereon (to
the extent permitted by applicable law, but not at a rate exceeding the rate of
interest then accruing on the Debentures) at the Coupon Rate compounded
semi-annually during any Extension Period. Prior to the termination of any
Extension Period, the Debenture Issuer may further defer payments of interest by
further extending such Extension Period; provided that such Extension Period,
together with all previous and further extensions, if any, within such Extension
Period, may not exceed 10 consecutive semi-annual periods, including the first
semi-annual period during such Extension Period, or extend beyond the Maturity
Date of the Debentures. Payments of Distributions that have accumulated but not
been paid during any Extension Period will be payable to Holders as they appear
on the books and records of the Trust on the record date for the first scheduled
Distribution payment date following the expiration of such Extension Period.
Upon the expiration of any Extension Period
A1-3
<PAGE>
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Subject to the prior approval of the Federal Reserve Board if
such approval is then required under applicable law or capital guidelines or
policies of the Federal Reserve Board and to certain other conditions set forth
in the Declaration and the Indenture, the Property Trustee shall, at the
direction of the Sponsor, at any time liquidate the Trust and cause the
Debentures to be distributed to the holders of the Securities in liquidation of
the Trust or, simultaneously with any redemption of the Debentures, cause a Like
Amount of the Securities to be redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the
Declaration.
A1-4
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Capital Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent
to transfer this Capital Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this
Capital Security Certificate)
Signature Guarantee:
* Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities and Exchange Act of 1934, as amended.
A1-5
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS COMMON SECURITY, PRIOR TO THE
DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH WACHOVIA
CORPORATION (THE "CORPORATION") OR ANY AFFILIATE OF THE CORPORATION WAS THE
OWNER OF THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY)
ONLY (A) TO THE CORPORATION, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS COMMON
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF THE TRUST AND THE CORPORATION PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (D) or (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
Wachovia Capital Trust II
[ ]% Common Securities
(Liquidation Amount $25 per Common Security)
A2-1
<PAGE>
Wachovia Capital Trust II, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Wachovia Corporation (the "Holder") is the registered owner of common securities
of the Trust representing undivided beneficial interests in the assets of the
Trust designated the [ ]% Common Securities (Liquidation Amount $25 per Common
Security) (the "Common Securities"). The Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities represented hereby are set
forth herein, on the reverse hereof and in the Amended and Restated Declaration
of Trust of the Trust dated as of [ ], 1997, as the same may be amended from
time to time (the "Declaration"), and shall in all respects be subject to the
provisions thereof, including the designation of the terms of the Common
Securities as set forth in Annex I to the Declaration. Each capitalized term
used but not defined herein or in any legend, form or certificate hereon shall
have the meaning given to it in the Declaration. The Sponsor will provide a copy
of the Declaration, the Common Securities Guarantee and the Indenture (including
any supplemental indenture) to any Holder without charge upon written request to
the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Common Securities Guarantee to the extent provided therein.
By its acceptance hereof, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Common Securities as evidence of indirect beneficial ownership in the
Debentures.
A2-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this
certificate this day of , .
WACHOVIA CAPITAL TRUST II
By:_________________________________
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the
within-mentioned Declaration.
Dated:_________________________
THE FIRST NATIONAL BANK
OF CHICAGO,
as Property Trustee
By:____________________________
Authorized Signatory
A2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at
a rate per annum of [ ]% (the "Coupon Rate") of the Liquidation Amount of $25
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one semi-annual period will bear interest thereon compounded semiannually
at the Coupon Rate (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the Property
Trustee and to the extent the Property Trustee has funds available therefor.
Distributions on the Common Securities will be cumulative,
will accrue from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from [ ], [ ] and will be payable
semi-annually in arrears on [ ] and [ ] of each year, commencing on [ ], [ ],
except as otherwise described below and in the Declaration. Distributions 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. As long as no Event of Default (as defined in the
Indenture) has occurred and is continuing, the Debenture Issuer has the right
under the Indenture to defer the payment of interest on the Debenture at any
time and from time for a period not exceeding 10 consecutive calendar
semi-annual periods, including the first such semi-annual period during such
extension period (each an "Extension Period"), provided, that no Extension
Period shall extend beyond the Maturity Date of the Debentures. Distributions
will be deferred during any Extension Period. Notwithstanding such deferral,
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Debentures) at the Coupon Rate compounded semi-annually
during any Extension Period. Prior to the termination of any Extension Period,
the Debenture Issuer may further defer payments of interest by further extending
such Extension Period; provided, that such Extension Period, together with all
previous and further extensions, if any, within such Extension Period, may not
exceed 10 consecutive semi-annual periods, including the first semi-annual
period during such Extension Period, or extend beyond the Maturity Date of the
Debentures. Payments of Distributions that have accumulated but not been paid
during any Extension Period will be payable to Holders as they appear on the
books and records of the Trust on the record date for the first Distribution
Date following the expiration of such Extension Period. Upon the expiration of
any Extension Period and the payment of all amounts then due, the
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<PAGE>
Debenture Issuer may commence a new Extension Period, subject to the above
requirements.
Subject to the prior approval of the Federal Reserve Board, if
such approval is then required under applicable law or capital guidelines or
policies of the Federal Reserve Board, and to certain other conditions set forth
in the Declaration and the Indenture, the Property Trustee shall, at the
direction of the Sponsor, at any time liquidate the Trust and cause the
Debentures to be distributed to the holders to the Securities in liquidation of
the Trust or, simultaneous with any redemption of the Debentures, cause a Like
Amount of the Securities to be redeemed by the Trust.
The Common Securities shall be redeemable as provided in the
Declaration.
A2-5
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Common
Security Certificate on the books of the Trust. The agent may substitute another
to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this
Common Security Certificate)
Signature Guarantee*:
* Signature must be guaranteed by an "eligible guarantor
institution" that is a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition
to, or in substitution for, STAMP, all in accordance with
the Securities and Exchange Act of 1934, as amended.
A2-6
<PAGE>
[Include the following if the Common Security bears a Restricted
Common Securities Legend -
In connection with any transfer of any of the Common Securities evidenced by
this certificate, the undersigned confirms that such Common Securities are
being:
CHECK ONE BOX BELOW
(1) [ ] exchanged for the undersigned's own account
without transfer; or
(2) [ ] transferred pursuant to and in compliance with
Rule 144A under the Securities Act of 1933, as
amended; or
(3) [ ] transferred pursuant to and in compliance with
Regulation S under the Securities Act of 1933, as
amended; or
(4) [ ] transferred pursuant to another available
exemption from the registration requirements of
the Securities Act of 1933, as amended; or
(5) [ ] transferred pursuant to an effective registration
statement
Unless one of the boxes is checked, the Registrar will refuse to register any of
the Common Securities evidenced by this certificate in the name of any person
other than the registered Holder thereof; provided, however, that if box (3) or
(4) is checked, the Registrar may require, prior to registering any such
transfer of the Common Securities such legal opinions, certifications and other
information as the Trust has reasonably requested to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act of 1933, as amended, such as
the exemption provided by Rule 144 under such Act; provided, further, that (i)
if box 2 is checked, the transferee must also certify that it is a qualified
institutional buyer as defined in Rule 144A or (ii) if box 4 is checked, the
transferee must also provide a Transferee Representation Letter in the form
attached to the Offering Circular of the Trust, dated December 5, 1996.
Date:
Signature:
(Sign exactly as your name appears on the other side of this
Common Security Certificate)
A2-7
<PAGE>
EXHIBIT B
FORM OF UNDERWRITING AGREEMENT
[SEE EXHIBIT 1]
B-1
<PAGE>
EXHIBIT 4(c)
- --------------------------------------------------------------------------------
WACHOVIA CORPORATION
TO
THE FIRST NATIONAL BANK OF CHICAGO
TRUSTEE
-----------------------------------------------------------------------
JUNIOR SUBORDINATED INDENTURE
DATED AS OF , 1997
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
WACHOVIA CORPORATION
Reconciliation and tie between the Trust Indenture Act of 1939 (including
cross-references to provisions of Sections 310 to and including 317 which,
pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended by the
Trust Reform Act of 1990, are a part of and govern the Indenture whether or not
physically contained therein) and the Junior Subordinated Indenture, dated as of
, 1997.
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
Section 310 (a)(1), (2) and (5)............................... 6.9
(a)(3).............................................Not Applicable
(a)(4).............................................Not Applicable
(b)............................................... 6.8, 6.10
(c)................................................Not Applicable
Section 311 (a)................................................6.13
(b)................................................6.13
(c)................................................Not Applicable
Section 312 (a)................................................7.1, 7.2(a)
(b)................................................7.2(b)
(c)................................................7.2(c)
Section 313 (a)................................................7.3(a)
(b)................................................7.3(b)
(c)................................................7.3(a), 7.3(b)
(d)................................................7.3(c)
Section 314 (a)(1), (2) and (3)................................7.4
(a)(4)............................................10.4
(b)................................................Not Applicable
(c)(1).............................................1.2
(c)(2).............................................1.2
(c)(3).............................................Not Applicable
(d)................................................Not Applicable
(e)................................................1.2
(f)................................................Not Applicable
Section 315 (a)................................................6.1(a)
(b)................................................6.2
(c)................................................6.1(b)
<PAGE>
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
(d)...............................................6.1(c)
(d)(1)............................................6.1(a)(1)
(d)(2)............................................6.1(c)(2)
(d)(3)............................................6.1(c)(3)
(e)...............................................5.14
Section 316 (a)...............................................1.1
(a)(1)(A).........................................5.12
(a)(1)(B).........................................5.13
(a)(2)............................................Not Applicable
(b)...............................................5.8
(c)...............................................1.4(f)
Section 317 (a)(1)............................................5.3
(a)(2)............................................5.4
(b)..............................................10.3
Section 318 (a)...............................................1.7
Note: This reconciliation and tie shall not, for any purpose,
be deemed to be a part of the Junior Subordinated
Indenture.
<PAGE>
Table of Contents
Page
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions...................................... 1
SECTION 1.2. Compliance Certificate and Opinions.............. 11
SECTION 1.3. Forms of Documents Delivered to Trustee.......... 12
SECTION 1.4. Acts of Holders.................................. 12
SECTION 1.5. Notices, Etc to Trustee and Company.............. 15
SECTION 1.6. Notice to Holders; Waiver........................ 15
SECTION 1.7. Conflict with Trust Indenture Act................ 16
SECTION 1.8. Effect of Headings and Table of
Contents.................................... 16
SECTION 1.9. Successors and Assigns........................... 16
SECTION 1.10. Separability Clause.............................. 16
SECTION 1.11. Benefits of Indenture............................ 16
SECTION 1.12. Governing Law.................................... 17
SECTION 1.13. Non-Business Days................................ 17
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.................................. 17
SECTION 2.2. Form of Face of Security......................... 18
SECTION 2.3. Form of Reverse of Security...................... 20
SECTION 2.4. Additional Provisions Required in Global
Security...................................... 25
SECTION 2.5. Form of Trustee's Certificate of
Authentication................................ 25
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms.................................. 26
SECTION 3.2. Denominations.................................... 29
SECTION 3.3. Execution, Authentication, Delivery and
Dating....................................... 29
SECTION 3.4. Temporary Securities............................. 30
SECTION 3.5. Registration, Transfer and Exchange.............. 31
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen
Securities................................... 33
SECTION 3.7. Payment of Interest; Interest Rights
Preserved.................................... 34
SECTION 3.8. Persons Deemed Owners............................ 36
SECTION 3.9. Cancellation..................................... 36
SECTION 3.10. Computation of Interest.......................... 36
i
<PAGE>
SECTION 3.11. Deferrals of Interest Payment Dates.............. 36
SECTION 3.12. Right of Set-Off................................. 38
SECTION 3.13. Agreed Tax Treatment............................. 38
SECTION 3.14. Shortening or Extension of Stated
Maturity...................................... 38
SECTION 3.15. CUSIP Numbers.................................... 39
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.......... 39
SECTION 4.2. Application of Trust Money....................... 41
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default................................ 41
SECTION 5.2. Acceleration of Maturity; Rescission and
Annulment..................................... 42
SECTION 5.3. Collection of Indebtedness and Suits for
Enforcement by Trustee........................ 43
SECTION 5.4. Trustee May File Proofs of Claim................. 44
SECTION 5.5. Trustee May Enforce Claim Without
Possession of Securities...................... 45
SECTION 5.6. Application of Money Collected................... 45
SECTION 5.7. Limitation on Suits.............................. 46
SECTION 5.8. Unconditional Right of Holders to
Receive Principal, Premium and Interest;
Direct Action by Holders of Preferred
Securities..................................... 46
SECTION 5.9. Restoration of Rights and Remedies............... 47
SECTION 5.10. Rights and Remedies Cumulative................... 47
SECTION 5.11. Delay or Omission Not Waiver..................... 47
SECTION 5.12. Control by Holders............................... 48
SECTION 5.13. Waiver of Past Defaults.......................... 48
SECTION 5.14. Undertaking for Costs............................ 49
SECTION 5.15. Waiver of Usury, Stay or Extension Laws.......... 49
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.............. 49
SECTION 6.2. Notice of Defaults............................... 51
SECTION 6.3. Certain Rights of Trustee........................ 51
SECTION 6.4. Not Responsible for Recitals or Issuance
of Securities................................... 52
SECTION 6.5. May Hold Securities.............................. 52
SECTION 6.6. Money Held in Trust.............................. 53
SECTION 6.7. Compensation and Reimbursement................... 53
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SECTION 6.8. Disqualification; Conflicting Interests.......... 54
SECTION 6.9. Corporate Trustee Required; Eligibility.......... 54
SECTION 6.10. Resignation and Removal; Appointment of
Successor...................................... 54
SECTION 6.11. Acceptance of Appointment by Successor........... 56
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business......................... 57
SECTION 6.13. Preferential Collection of Claims
Against Company................................ 58
SECTION 6.14. Appointment of Authenticating Agent.............. 58
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and
Addresses of Holders........................... 60
SECTION 7.2. Preservation of Information,
Communications to Holders...................... 60
SECTION 7.3. Reports by Trustee............................... 61
SECTION 7.4. Reports by Company............................... 61
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., on
Certain Terms.................................. 61
SECTION 8.2. Successor Corporation to be Substituted
for Company.................................... 62
SECTION 8.3. Opinion of Counsel to be Given to
Trustee.......................................... 63
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures without Consent
of Holders..................................... 63
SECTION 9.2. Supplemental Indentures with Consent of
Holders........................................ 64
SECTION 9.3. Execution of Supplemental Indentures............. 66
SECTION 9.4. Effect of Supplemental Indentures................ 66
SECTION 9.5. Conformity with Trust Indenture Act.............. 66
SECTION 9.6. Reference in Securities to Supplemental
Indentures..................................... 66
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ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and
Interest....................................... 67
SECTION 10.2. Maintenance of Office or Agency.................. 67
SECTION 10.3. Money for Security Payments to be Held
in Trust........................................67
SECTION 10.4. Statement as to Compliance........................69
SECTION 10.5. Waiver of Certain Covenants.......................69
SECTION 10.6. Additional Sums...................................70
SECTION 10.7. Additional Covenants..............................70
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of This Article.....................71
SECTION 11.2. Election to Redeem; Notice to Trustee.............72
SECTION 11.3. Selection of Securities to be Redeemed............72
SECTION 11.4. Notice of Redemption..............................73
SECTION 11.5. Deposit of Optional Prepayment Price..............74
SECTION 11.6. Payment of Securities Called for
Redemption......................................74
SECTION 11.7. Right of Redemption of Securities
Initially Issued to a Trust.....................75
ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article..........................75
SECTION 12.2. Satisfaction of Sinking Fund Payments
with Securities.................................75
SECTION 12.3. Redemption of Securities for Sinking
Fund............................................76
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. Agreement to Subordinate .........................78
SECTION 13.2. Default on Senior Indebtedness ...................78
SECTION 13.3. Liquidation; Dissolution; Bankruptcy..............79
SECTION 13.4. Subrogation ......................................81
SECTION 13.5. Trustee to Effectuate Subordination ..............82
SECTION 13.6. Notice by the Company.............................82
SECTION 13.7. Rights of the Trustee; Holders of
Senior Indebtedness ............................83
SECTION 13.8. Subordination May Not Be Impaired ................84
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JUNIOR SUBORDINATED INDENTURE, dated as of __________, 1997, between
WACHOVIA CORPORATION, a North Carolina corporation (hereinafter called the
"Company"), and THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association duly organized and existing under the laws of the United States, as
Trustee (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured junior
subordinated debt securities in series (hereinafter called the "Securities") of
substantially the tenor hereinafter provided, including, without limitation,
Securities issued to evidence loans made to the Company of the proceeds from the
issuance from time to time by one or more business trusts (each a "Trust," and,
collectively, the "Trusts") of preferred trust interests in such Trusts (the
"Preferred Securities") and common interests in such Trusts (the "Common
Securities" and, collectively with the Preferred Securities, the "Trust
Securities"), and to provide the terms and conditions upon which the Securities
are to be authenticated, issued and delivered.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of
the premises and the purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of any series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well
as the singular;
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(2) All other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles which are generally accepted at the date or time of such computation;
provided, that when two or more principles are so generally accepted, it shall
mean that set of principles consistent with those in use by the Company; and
(4) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.4.
"Additional Interest" means the interest, if any, that shall accrue on
any interest on the Securities of any series the payment of which has not been
made on the applicable Interest Payment Date and which shall accrue at the rate
per annum specified or determined as specified in such Security.
"Additional Sums" has the meaning specified in Section 10.6.
"Additional Taxes" means the sum of any additional taxes, duties and
other governmental charges to which a Trust has become subject from time to time
as a result of a Tax Event.
"Administrative Trustee" means, in respect of any Trust, each Person
identified as an "Administrative Trustee" in the related Declaration of Trust,
solely in such Person's capacity as Administrative Trustee of such Trust under
such Declaration of Trust and not in such Person's individual capacity, or any
successor administrative trustee appointed as therein provided.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding the power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person, (d) a partnership in which the specified Person is a
general partner, (e) any officer or director of the specified Person, and (f) if
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the specified Person is an individual, any entity of which the specified Person
is an officer, director or general partner.
"Allocable Amounts," when used with respect to any Senior Indebtedness,
means all amounts due or to become due on such Senior Indebtedness less, if
applicable, any amount which would have been paid to, and retained by, the
holders of such Senior Indebtedness (whether as a result of the receipt of
payments by the holders of such Senior Indebtedness from the Company or any
other obligor thereon or from any holders of, or trustee in respect of, other
indebtedness that is subordinate and junior in right of payment to such Senior
Indebtedness pursuant to any provision of such indebtedness for the payment over
of amounts received on account of such indebtedness to the holders of such
Senior Indebtedness or otherwise) but for the fact that such Senior Indebtedness
is subordinate or junior in right of payment to (or subject to a requirement
that amounts received on such Senior Indebtedness be paid over to obligees on)
trade accounts payable or accrued liabilities arising in the ordinary course of
business.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the Company
or any committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of the Company to which authority to act on behalf of the Board of Directors has
been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" shall mean, with respect to any series of Securities,
any day other than a Saturday or a Sunday or a day on which banking institutions
in The City of New York or Winston-Salem, North Carolina are authorized or
required by law or executive order to close.
"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.
"Common Securities" has the meaning specified in the first
recital of this Indenture.
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"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" shall mean a written request or
order signed in the name of the Company by the Chairman, the Chief Executive
Officer, the President, a Vice Chairman, a Vice President, the Comptroller, the
Group Director Asset/Liability Management, the Clerk or an Assistant Clerk of
the Company, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of execution of this Indenture is located at One First
National Plaza, Suite 0126, Chicago, Illinois, 60670-0126.
"Corporation" includes a corporation, association, company,
joint-stock company or business trust.
"Declaration of Trust" means the Declaration of Trust substantially in
the form attached hereto as Annex A, as amended by the form of Amended and
Restated Declaration of Trust substantially in the form attached hereto as Annex
B, or substantially in such form as may be specified as contemplated by Section
3.1 with respect to the Securities of any series, in each case as amended from
time to time.
"Defaulted Interest" has the meaning specified in
Section 3.7.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 3.1 with respect to such series (or any successor thereto).
"Discount Security" means any security which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 5.2.
"Distributions," with respect to the Trust Securities issued by any
Trust, means amounts payable in respect of such Trust Securities as provided in
the related Declaration of Trust and referred to therein as "Distributions."
"Dollar" means the currency of the United States of America that, as at
the time of payment, is legal tender for the payment of public and private
debts.
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"Event of Default" unless otherwise specified in the supplemental
indenture creating a series of Securities has the meaning specified in Article
V.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
"Extension Period" has the meaning specified in
Section 3.11.
"Global Security" means a Security in the form prescribed in Section
2.4 evidencing all or part of a series of Securities, issued to the Depository
or its nominee for such series, and registered in the name of such Depository or
its nominee.
"Guarantee" means any guarantee by the Company of distributions on the
Preferred Securities of a Trust to the extent provided in the Guarantee
Agreement.
"Guarantee Agreement" means the Guarantee Agreement substantially in
the form attached hereto as Annex C, or substantially in such form as may be
specified as contemplated by Section 3.1 with respect to the Preferred
Securities of any series, in each case as amended from time to time.
"Holder" means a Person in whose name a Security is
registered in the Securities Register.
"Indebtedness" shall mean (i) any obligation of, or any obligation
guaranteed by, the Company for the repayment of borrowed money, whether or not
evidenced by bonds, debentures, notes or other written instruments and any
deferred obligation for the payment of the purchase price of property or assets
acquired other than in the ordinary course of business and (ii) all indebtedness
of the Company for claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar arrangements,
whether outstanding on the date of execution of this Indenture or thereafter
created, assumed or incurred. For purposes of this definition "claim" shall have
the meaning assigned in Section 101(5) of the Bankruptcy Code of 1978, as
amended and in effect on the date of the execution of this Indenture.
"Indebtedness Ranking Junior to the Securities" shall mean any
Indebtedness whether outstanding on the date of execution of this Indenture or
thereafter created, assumed or incurred, which specifically by its terms ranks
junior to and not equally with or prior to the Securities (and any other
Indebtedness Ranking on a Parity with the Securities) in right of payment upon
the happening of any dissolution or winding up or liquidation or reorganization
of the Company. The securing of any Indebtedness
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of the Company, otherwise constituting Indebtedness Ranking on a Parity with the
Securities or Indebtedness Ranking Junior to the Securities, as the case may be,
shall not be deemed to prevent such Indebtedness from constituting Indebtedness
Ranking on a Parity with the Securities or Indebtedness Ranking Junior to the
Securities, as the case may be.
"Indebtedness Ranking on a Parity with the Securities" shall mean (i)
all Indebtedness, whether outstanding on the date of execution of this Indenture
or thereafter created, assumed or incurred, which specifically by its terms
ranks equally with and not prior to the Securities in the right of payment upon
the happening of the dissolution or winding-up or liquidation or reorganization
of the Company and (ii) the 7.64% Junior Subordinated Deferrable Interest
Debentures Due January 15, 2027 of the Company.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of each particular series of Securities established
as contemplated by Section 3.1.
"Interest Payment Date" means as to each series of Securities the
Stated Maturity of an installment of interest on such Securities.
"Junior Subordinated Payment" has the meaning specified in
Section 13.2.
"Maturity" when used with respect to any Security means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc.
"Notice of Default" means a written notice of the kind
specified in Section 5.1(3).
"Officers" shall mean any of the Chairman, a Vice Chairman, the Chief
Executive Officer, the President, a Vice President, the Comptroller, the Clerk
or an Assistant Clerk of the Company.
"Officers' Certificate" shall mean a certificate signed by
two Officers and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of the Company, and who shall be acceptable to the Trustee.
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"Optional Prepayment Date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Optional Prepayment Price," when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Original Issue Date" means the date of issuance specified as such in
each Security.
"Other Debentures" means (i) the 7.64% Junior Subordinated Deferrable
Interest Debentures Due January 15, 2027 of the Company and (ii) all other
Junior Subordinated Debentures issued by the Company from time to time and sold
to Trusts or trusts to be established by the Company (if any), similar to the
Trusts.
"Outstanding" means, when used in reference to any Securities, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent in trust for
the Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other
Securities have been authenticated and delivered or which have been paid
pursuant to Section 3.6, unless proof satisfactory to the Trustee is presented
that any such Securities are held by Holders in whose hands such Securities are
valid, binding and legal obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor. Upon the written request
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of the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Securities, if any, known by the Company
to be owned or held by or for the account of the Company, or any other obligor
on the Securities or any Affiliate of the Company or such obligor, and, subject
to the provisions of Section 6.1, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Securities not listed therein are Outstanding for the
purpose of any such determination.
"Paying Agent" means the Trustee or any Person authorized by the
Company to pay the principal of or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means, with respect to the Securities of any series,
the place or places where the principal of (and premium, if any) and interest on
the Securities of such series are payable pursuant to Sections 3.1 and 3.11.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any security
authenticated and delivered under Section 3.6 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Preferred Securities" has the meaning specified in the
first recital of this Indenture.
"Proceeding" has the meaning specified in Section 13.2.
"Property Trustee" means, in respect of any Trust, the commercial bank
or trust company identified as the "Property Trustee" in the related Declaration
of Trust, solely in its capacity as Property Trustee of such Trust under such
Declaration of Trust and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as
therein provided.
"Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of a series, (i) in the case
of Securities of a series represented by one or more Global Securities, the
Business Day next preceding such Interest Payment Date and (ii) in the case of
Securities of a series not represented by one
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or more Global Securities, the date which is fifteen days next preceding such
Interest Payment Date (whether or not a Business Day).
"Regulatory Capital Event" means that the Company shall have received
an opinion of independent bank regulatory counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any rules, guidelines or policies of the Federal Reserve or
(b) any official administrative pronouncement or judicial decision interpreting
or applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the date of original
issuance of the applicable series of Securities under this Indenture, the
Preferred Securities of such Trust do not constitute, or within 90 days of the
date thereof, will not constitute, Tier I Capital (or its then equivalent);
provided, however, that the distribution of such series of Securities in
connection with the liquidation of such Trust by the Company, as sponsor, shall
not in and of itself constitute a Regulatory Capital Event unless such
liquidation shall have occurred in connection with a Tax Event.
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee assigned by the Trustee from time to time to administer
its corporate trust matters.
"S&P" means Standard & Poor's Ratings Services.
"Securities" or "Security" means any debt securities or debt security,
as the case may be, authenticated and delivered under this Indenture.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5.
"Senior Indebtedness" shall mean all Indebtedness, whether outstanding
on the date of execution of this Indenture or thereafter created, assumed or
incurred, except Indebtedness Ranking on a Parity with the Securities or
Indebtedness Ranking Junior to the Securities, and any deferrals, renewals or
extensions of such Senior Indebtedness.
"Special Event" means either a Regulatory Capital Event or a
Tax Event.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
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"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified
pursuant to the terms of such Security as the date on which the principal of
such Security or such installment of interest is due and payable, in the case of
such principal, as such date may be shortened or extended as provided pursuant
to the terms of such Security and this Indenture.
"Subsidiary" shall mean with respect to any Person, (i) any corporation
at least a majority of whose outstanding voting stock of which is 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. For the purposes of this
definition, "voting stock" 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.
"Tax Event" means the receipt by a Trust and the Company 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 proposed 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 Preferred Securities of such Trust, there is more than an insubstantial risk
that (i) such Trust is, or will be within 90 days of the date of such opinion of
counsel, subject to United States Federal income tax with respect to income
received or accrued on the corresponding series of Securities issued by the
Company to such Trust, (ii) interest payable by the Company on such
corresponding series of Securities is not, or within 90 days of the date of such
opinion of counsel, will not be, deductible by the Company, in whole or in part,
for United States Federal income tax purposes or (iii) such Trust is, or will be
within 90 days of the date of such opinion of counsel, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
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"Trust" has the meaning specified in the first recital of
this Indenture.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder and,
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
and as in effect on the date as of this Indenture, except as provided in Section
9.5.
"Trust Securities" has the meaning specified in the first
recital of this Indenture.
"Vice President" when used with respect to the Company, means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
SECTION 1.2. Compliance Certificate and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent
(including covenants, compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent (including covenants, compliance with
which constitutes a condition precedent), if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.5) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
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(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.3. Forms of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing;
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and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments is or are delivered to the
Trustee, and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a Person acting in other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the
Securities Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
(f) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be
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entitled to take the relevant action, whether or not such Holders remain Holders
after such record date, provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite principal amount of Outstanding Securities of such series on
such record date. Nothing in this paragraph shall be construed to prevent the
Company from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Company,
at its own expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the Trustee in
writing and to each Holder of Securities of the relevant series in the manner
set forth in Section 1.6.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2) or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date, provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 1.6.
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With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day, provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 10.6, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
(g) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 1.5. Notices, Etc to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, any holder of Preferred Securities or
the Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
office, or
(2) the Company by the Trustee, any Holder or any holder of Preferred
Securities shall be sufficient for every purpose (except as otherwise provided
in Section 5.1) hereunder if in writing and mailed, first class, postage
prepaid, to the Company addressed to it at 100 North Main Street, Winston-Salem,
North Carolina 27101, Attention: Chief Financial Officer or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to each Holder affected
by such event, at the
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address of such Holder as it appears in the Securities Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 1.7. Conflict with Trust Indenture Act.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by any of Sections 310 to 317, inclusive, of the Trust
Indenture Act through operation of Section 318(c) thereof, such imposed duties
shall control.
SECTION 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Indebtedness, the Holders of the Securities and,
to the extent expressly provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.1 and
9.2, the holders of Preferred Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
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SECTION 1.12. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York, and for all purposes shall be
governed by and construed in accordance with the laws of such State, without
regard to the conflicts of laws principles thereof.
SECTION 1.13. Non-Business Days.
In any case where any Interest Payment Date, Optional Prepayment Date
or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or the Securities)
payment of interest or principal (and premium, if any) need not be made on such
date, but may be made on the next succeeding Business Day (and no interest shall
accrue for the period from and after such Interest Payment Date, Optional
Prepayment Date or Stated Maturity, as the case may be, until such next
succeeding Business Day (with the same force and effect as if made on the
Interest Payment Date or Optional Prepayment Date or at the Stated Maturity).
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with applicable tax laws or the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 3.3 with respect to the authentication and
delivery of such Securities.
The Trustee's certificates of authentication shall be substantially in
the form set forth in this Article.
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The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such securities.
SECTION 2.2. Form of Face of Security.
WACHOVIA CORPORATION
[ ]% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE [ ]
Wachovia Corporation, a North Carolina corporation (the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to [ ] or
registered assigns, the principal sum of $[ ] Dollars on [ ] (the "Maturity"),
unless previously redeemed, and to pay interest on the outstanding principal
amount hereof from [ ], or from the most recent interest payment date (each
such date, an "Interest Payment Date") to which interest has been paid or
duly provided for, semi-annually (subject to deferral as set forth herein) in
arrears on [ ] and [ ] of each year, commencing [ ], at the rate of [ ]% per
annum until the principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the same rate per annum compounded
semi-annually. The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day months and, for any
period less than a full calendar month, the number of days elapsed in such
month. In the event that any date on which the principal of (or premium, if any)
or interest on this Security is payable is not a Business Day, then payment
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.
The interest installment so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities, as defined in said Indenture) is registered at the close
of business on the Regular Record Date for such interest installment, which
shall be, unless otherwise provided pursuant to Section 3.1 of the Indenture (as
defined herein), with respect to the Securities of a series (i) in the case of
Securities of a series represented by
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one or more Global Securities, the Business Day next preceding such Interest
Payment Date and (ii) in the case of Securities of a series not represented by
one or more Global Securities, the date which is fifteen days next preceding
such Interest Payment Date (whether or not a Business Day). Any such interest
installment not punctually paid or duly provided for shall forthwith cease to be
payable to the Holders on such Regular Record Date and may be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date to be fixed by the
Trustee for the payment of such Defaulted Interest, notice whereof shall be
given to the Holders of Securities not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.
The principal of (and premium, if any) and interest on this
Security shall be payable at the office or agency of the Trustee maintained for
that purpose in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that, payment of interest may be made at the option of the
Company by (i) check mailed to the Holder at such address as shall appear in the
Security Register or (ii) by transfer to an account maintained by the Person
entitled thereto, provided that proper written transfer instructions have been
received by the Regular Record Date. Notwithstanding the foregoing, so long as
the Holder of this Security is the Property Trustee, the payment of the
principal of (and premium, if any) and interest on this Security will be made at
such place and to such account as may be designated by the Property Trustee.
The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Allocable Amounts in respect of Senior
Indebtedness, and this Security is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Security, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination so provided and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, hereby waives all
notice of the acceptance of the subordination provisions contained herein and in
the Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
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This Security 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 Security are continued on the reverse
side hereof and such 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.
WACHOVIA CORPORATION
By:__________________________
Name:
Title:
Attest:
By:_________________________
Name:
Title:
SECTION 2.3. Form of Reverse of Security.
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Company (herein sometimes
referred to as the "Securities"), specified in the Indenture, all issued or to
be issued in one or more series under and pursuant to an Indenture, dated as of
[ ] (the "Indenture"), duly executed and delivered between the Company and The
First National Bank of Chicago, 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 Securities. This Security is one of the series designated on
the face hereof.
Upon the occurrence and continuation of a Special Event, the Company
shall have the right prior to [ ] (the "Initial Optional Prepayment Date") to
redeem this Security in whole (but not in part) at the Special Event Prepayment
Price. "Special Event Prepayment Price" shall mean, with respect to any
redemption of the Securities of this series prior to the Initial Optional
Prepayment Date following a Special Event, an amount in cash equal to the
greater of (i) 100% of the principal amount to be redeemed or (ii) the sum, as
determined by a [ ], of the present values of the principal amount and premium
payable as part of the Optional Prepayment Price with respect to an
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optional redemption of such Securities on [ ] together with scheduled payments
of interest from the redemption date to the Initial Optional Prepayment Date, in
each case discounted to the redemption date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at [ ], plus, in either case,
any accrued and unpaid interest thereon, including Additional Amounts, if any,
to the date of such prepayment.
In addition, the Company shall have the right to redeem this Security,
in whole or in part, at any time on or after [ ] (an "Optional Prepayment"), at
the Optional Prepayment Price as set forth below (expressed as percentages of
principal to be redeemed) plus accrued and unpaid interest thereon (including
Additional Amounts, if any) to the applicable date of redemption if redeemed
during the 12-month period beginning [ ] of the years indicated below.
Year Percentage
The Optional Prepayment Price or the Special Event Prepayment Price, as
the case requires, shall be paid prior to 12:00 noon, New York time, on the date
of such redemption or at such earlier time as the Company determines, provided,
that the Company shall deposit with the Trustee an amount sufficient to pay the
applicable Prepayment Price by 10:00 a.m., New York City time, on the date such
Prepayment Price is to be paid. Any redemption pursuant to this paragraph will
be made upon not less than 30 days nor more than 60 days notice. If the
Securities of this series are only partially redeemed by the Company pursuant to
an Optional Prepayment, the Securities will be redeemed pro rata or by lot or by
any other method utilized by the Trustee; provided that if, at the time of
redemption, the Securities are registered as a Global Security, the Depositary
shall determine the particular Securities to be redeemed in accordance with its
procedures.
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In the event of redemption of this Security in part only, a new
Security or Securities for the unprepaid portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
Notwithstanding the foregoing, any redemption of Securities by the
Company shall be subject to the prior approval of the Board of Governors of the
Federal Reserve System (the "Federal Reserve"), if such approval is then
required under capital guidelines or policies of the Federal Reserve.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Securities of this
series 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 permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of each series to be affected by such supplemental indenture. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Security at the time and place and at the rate and in the money
herein prescribed.
So long as no Event of Default (as defined in the Indenture) has
occurred and is continuing, the Company shall have the right, at any time and
from time to time during the term of the Securities of this series, to defer
payments of interest by extending the interest payment period of such Securities
for a period not exceeding 10 consecutive semi-annual periods, including the
first such semi-annual period during such extension
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period, and not to extend beyond the Maturity of the Securities (an
"Extension Period" ), at the end of which period the Company shall pay all
interest then accrued and unpaid together with interest thereon at the rate
specified for the Securities compounded semi-annually (to the extent that
payment of such interest is enforceable under applicable law). Before the
termination of any such Extension Period, the Company may further defer payments
of interest by further extending such Extension Period, provided that such
Extension Period, together with all such previous and further extensions within
such Extension Period, shall not exceed 10 consecutive semi-annual periods,
including the first semi-annual period during such Extension Period, or extend
beyond the Maturity of the Securities of this series. Upon the
termination of any such Extension Period and the payment of all accrued and
unpaid interest and any additional amounts then due, the Company may commence a
new Extension Period, subject to the foregoing requirements.
The Company has agreed that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) or (ii) make any payment of principal,
interest or premium, if any, on or repay or repurchase or redeem any debt
securities of the Company (including Other Debentures) that rank pari passu with
or junior in right of payment to the Securities or make any guarantee payments
with respect to any guarantee by the Company of the debt securities or any
Subsidiary of the Company if such guarantee ranks pari passu or junior in right
of payment to this Security (other than (a) dividends or distributions in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
common stock of the Company, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under any Guarantee, (d) as a result of a
reclassification of the Company's capital stock or the exchange or the
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (e) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the exchange or
conversion of such capital stock or the security being exchanged or converted,
and (f) purchases of common stock related to the issuance of common stock or
rights under any of the Company's benefit plans for its directors, officers or
employees or any of the Company's dividend reinvestment plans) if at such time
(i) there shall have occurred any event of which the Company has actual
knowledge that (a) is, or with the giving of notice or the lapse of time, or
both, would be, an Event of Default and (b) in respect of which the Company
shall not have taken reasonable steps to cure, (ii) if this
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Security is held by [ ] (the "Trust"), the Company shall be in default with
respect to its payment of any obligations under the Guarantee of the Preferred
Securities of such Trust or (iii) the Company shall have given notice of its
election of the exercise of its right to extend the interest payment period and
any such extension shall be continuing.
Subject to the prior approval of the Federal Reserve if such approval
is then required under capital guidelines or policies of the Federal Reserve,
the Company will have the right at any time to liquidate the Trust and cause the
Securities of this series to be distributed to the holders of the Trust
Securities in liquidation of the Trust. As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Security is
registrable in the Securities Register, upon surrender of this Security for
registration of transfer at the office or agency of the Company maintained under
Section 10.2 of the Indenture duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Securities
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of authorized
denominations and of the same aggregate principal amount, will be issued to the
designated transferee or transferees. No service charge shall be made for any
such registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Securities of this series are issuable only in registered form
without coupons in denominations of $25.00 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder, or and any Person that acquires a beneficial
interest in, this Security agree that for United States Federal, state and local
tax purposes it is intended that this Security constitute indebtedness.
No recourse shall be had for the payment of the principal of
or premium, if any, or interest on this Security, or for any
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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
Person, whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issuance
hereof, expressly waived and released.
All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PROVISIONS THEREOF.
SECTION 2.4. Additional Provisions Required in Global
Security.
Any Global Security issued hereunder shall, in addition to the
provisions contained in Sections 2.2 and 2.3, bear a legend in substantially the
following form:
"This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Security is exchangeable for Securities registered
in the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Indenture and may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary."
SECTION 2.5. Form of Trustee's Certificate of
Authentication.
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:
--------------------------------
as Trustee
By:
--------------------------------
Authorized officer
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ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of a series:
(1) the title of the securities of such series, which shall
distinguish the Securities of the series from all other
Securities;
(2) the limit, if any, upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.6 and except for any
Securities which, pursuant to Section 3.3, are deemed never to have been
authenticated and delivered hereunder); provided, however, that the authorized
aggregate principal amount of such series may be increased above such amount by
a Board Resolution to such effect;
(3) the Maturity or Maturities on which the principal of
the Securities of such series is payable or the method of
determination thereof;
(4) the rate or rates, if any, at which the Securities of such series
shall bear interest, if any, the rate or rates and extent to which Additional
Sums, if any, shall be payable in respect of any Securities of such series, the
Interest Payment Dates on which such interest shall be payable, the right,
pursuant to Section 3.11 or as otherwise set forth therein, of the Company to
defer or extend an Interest Payment Date, and the Regular Record Date for the
interest payable on any Interest Payment Date or the method by which any of the
foregoing shall be determined;
(5) the place or places where the principal of (and premium, if any)
and interest on the Securities of such series shall be payable, the place or
places where the Securities of such series may be presented for registration of
transfer or exchange, and the place or places where notices and demands to or
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upon the Company in respect of the Securities of such series may
be made;
(6) the period or periods within or the date or dates on which, if any,
the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the option of
the Company;
(7) the obligation or the right, if any, of the Company to redeem,
repay or purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions, or at the option of a Holder thereof, and
the period or periods within which, the price or prices at which, the currency
or currencies (including currency unit or units) in which and the other terms
and conditions upon which Securities of the series shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
(8) the denominations in which any Securities of such
series shall be issuable, if other than denominations of $25 and
any integral multiple thereof;
(9) if other than Dollars, the currency or currencies (including
currency unit or units) in which the principal of (and premium, if any) and
interest, if any, on the Securities of the series shall be payable, or in which
the Securities of the series shall be denominated;
(10) the additions, modifications or deletions, if any, in
the Events of Default or covenants of the Company set forth
herein with respect to the Securities of such series;
(11) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
(12) the additions or changes, if any, to this Indenture with respect
to the Securities of such series as shall be necessary to permit or facilitate
the issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;
(13) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the manner
in which such amounts will be determined;
(14) whether the Securities of the series, or any portion thereof,
shall initially be issuable in the form of a temporary Global Security
representing all or such portion of the Securities of such series and provisions
for the exchange of such
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temporary Global Security for definitive Securities of such
series;
(15) if applicable, that any Securities of the series shall be issuable
in whole or in part in the form of one or more Global Securities and, in such
case, the respective Depositaries for such Global Securities, the form of any
legend or legends which shall be borne by any such Global Security in addition
to or in lieu of that set forth in Section 2.4 and any circumstances in addition
to or in lieu of those set forth in Section 3.5 in which any such Global
Security may be exchanged in whole or in part for Securities registered, and any
transfer of such Global Security in whole or in part may be registered, in the
name or names of Persons other than the Depositary for such Global Security or a
nominee thereof;
(16) the appointment of any Paying Agent or Agents for the
Securities of such series;
(17) the terms of any right to convert or exchange Securities of such
series into any other securities or property of the Company, and the additions
or changes, if any, to this Indenture with respect to the Securities of such
series to permit or facilitate such conversion or exchange;
(18) the form or forms of the Declaration of Trust, Amended and
Restated Declaration of Trust and Guarantee Agreement, if different from the
forms attached hereto as Annexes A, B and C, respectively;
(19) the relative degree, if any, to which the Securities of the series
shall be senior to or be subordinated to other series of Securities in right of
payment, whether such other series of Securities are Outstanding or not; and
(20) any other terms of the Securities of such series (which terms
shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth in such Officers' Certificate
or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
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The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XIII.
SECTION 3.2. Denominations.
The Securities of each series shall be in registered form without
coupons and shall be issuable in denominations of $25 and any integral multiple
thereof, unless otherwise specified as contemplated by Section 3.1.
SECTION 3.3. Execution, Authentication, Delivery and
Dating.
The Securities shall be executed on behalf of the Company by its
President or one of its Vice Presidents and attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver
Securities of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established by or pursuant to one or more
Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an Opinion of
Counsel stating:
(1) if the form of such Securities has been established by or pursuant
to a Board Resolution as permitted by Section 2.1, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to a Board Resolution as permitted by Section 3.1, that such terms have
been established in conformity with the provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel,
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will constitute valid and legally binding obligations of the Company enforceable
in accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the 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
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder. Notwithstanding the foregoing, if any Security shall have
been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.9, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any denomination, substantially of the
tenor of the definitive Securities of such series in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers
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executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary Securities
shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for that purpose
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more definitive Securities
of the same series, of any authorized denominations having the same Original
Issue Date and Stated Maturity and having the same terms as such temporary
Securities. Until so exchanged, the temporary Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.
SECTION 3.5. Registration, Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and of
transfers of Securities. Such register is herein sometimes referred to as the
"Securities Register." The Trustee is hereby appointed "Securities Registrar"
for the purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated for that purpose, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of the same
series of any authorized denominations, of a like aggregate principal amount, of
the same Original Issue Date and Stated Maturity and having the same terms.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated Maturity
and having the same terms, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any transfer or exchange of
Securities shall be the valid obligations of the Company,
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evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall
(if so required by the Company or the Securities Registrar) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Securities.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global Security or
a nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor, and each such Global Security shall constitute a single
Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (A) such Depositary (i) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (ii)
has ceased to be a clearing agency registered under the Exchange Act at a time
when the Depositary is required to be so registered to act as depositary, in
each case unless the Company has approved a successor Depositary within 90 days,
(B) there shall have occurred and be continuing an Event of Default with respect
to such Global Security, (C) the Company in its sole discretion determines that
such Global Security will be so exchangeable or transferable or (D) there shall
exist such circumstances, if any, in addition to or in lieu of the foregoing as
have been specified for this purpose as contemplated by Section 3.1.
(3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities issued in
exchange for a Global Security or any portion thereof shall be registered in
such names as the Depositary for such Global Security shall direct.
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(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Section, Section 3.4, 3.6, 9.6 or 11.6 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (a) to issue, transfer or exchange any Security of
any series during a period beginning at the opening of business 15 days before
the day of selection for redemption of Securities pursuant to Article XI and
ending at the close of business on the day of mailing of notice of redemption or
(b) to transfer or exchange any Security so selected for redemption in whole or
in part, except, in the case of any Security to be redeemed in part, any portion
thereof not to be redeemed.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen
Securities.
If any mutilated Security is surrendered to the Trustee together with
such security or indemnity as may be required by the Company or the Trustee to
save each of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same issue
and series of like tenor and principal amount, having the same Original Issue
Date and Stated Maturity, and bearing a number not contemporaneously
outstanding.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same issue and series of like tenor and principal amount, having the same
Original Issue Date and Stated Maturity as such destroyed, lost or stolen
Security, and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
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Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7. Payment of Interest; Interest Rights
Preserved.
Interest on any Security of any series which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date, shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest in respect of Securities of such series, except that, unless
otherwise provided in the Securities of such series, interest payable on the
Stated Maturity of the principal of a Security shall be paid to the Person to
whom principal is paid. The initial payment of interest on any Security of any
series which is issued between a Regular Record Date and the related Interest
Payment Date shall be payable as provided in such Security or in the Board
Resolution pursuant to Section 3.1 with respect to the related series of
Securities.
Any interest on any Security which is payable, but is not timely paid
or duly provided for, on any Interest Payment Date for Securities of such series
(herein called "Defaulted Interest"), shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series in respect of which
interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner.
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The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to
the date of the proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name and
at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be mailed,
first class, postage prepaid, to each Holder of a Security of such series at
the address of such Holder as it appears in the Securities Register not less
than 10 days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in a newspaper, customarily
published in the English language on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, but such
publication shall not be a condition precedent to the establishment of such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered on such Special Record Date and shall no longer be payable pursuant
to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of the series in respect of which interest is in default
may be listed and, upon such notice as may be required by such exchange (or by
the Trustee if the Securities are not listed), if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause, such
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
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SECTION 3.8. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Security is registered as the owner of
such Security for the purpose of receiving payment of principal of (and premium,
if any) and (subject to Section 3.7) any interest on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption, transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities and Securities surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled
Securities shall be destroyed by the Trustee and the Trustee shall deliver to
the Company a certificate of such destruction.
SECTION 3.10. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series for any
period shall be computed on the basis of a 360- day year of twelve 30-day months
and, for any period less than a full calendar month, the number of days elapsed
in such month.
SECTION 3.11. Deferrals of Interest Payment Dates.
If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular series, so long as no Event of Default has
occurred and is continuing, the Company shall have the right, at any time during
the term of such Securities, from time to time to defer the payment of interest
on such Securities for such period or periods as may be specified as
contemplated by Section 3.1 (each, an "Extension Period") during which Extension
Periods no interest shall be due and payable. At the end of any such Extension
Period, the Company shall pay all interest then accrued and unpaid on the
Securities (together with Additional Interest thereon, if any, at the rate
specified for the Securities of such series to the extent permitted by
applicable law); provided, however, that no Extension Period
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shall extend beyond the Stated Maturity of the principal of the Securities of
such series; provided, further, that during any such Extension Period, the
Company shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock (which includes common and preferred stock) or (ii)
make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Company (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Securities or (iii) make any guarantee payments with respect to any guarantee by
the Company of the debt securities of any Subsidiary of the Company if such
guarantee ranks pari passu or junior in right of payment to the Securities
(other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, common stock of the Company, (b)
any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under any Guarantee and (d) as a result of a reclassification of the
Company's capital stock or the exchange or the conversion of one class or series
of the Company's capital stock for another class or series of the Company's
capital stock; (e) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the exchange or conversion provisions of
such capital stock or the security being exchanged or converted; and (f)
purchases of common stock related to the issuance of common stock or rights
under any of the Company's benefit plans for its directors, officers or
employees or any of the Company's dividend reinvestment plans). Before the
termination of any such Extension Period, the Company may further defer payments
of interest by further extending such period, provided that no Extension Period
shall exceed the period or periods specified in such Securities or extend beyond
the Stated Maturity of the principal of such Securities. Upon termination of any
Extension Period and upon the payment of all accrued and unpaid interest and any
Additional Interest and additional 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. If the Property Trustee of a Trust is the
only registered holder of such Securities at the time the Company selects an
Extension Period, the Company shall give written notice to the Administrative
Trustees of such Trust, the Property Trustee of such Trust and the Trustee of
its selection of such Extension Period (or an extension thereof) at least five
Business Days before the earlier of (i) the date on which distributions on the
Trust Securities issued by such Trust would have been payable except for the
election to begin or extend such Extension Period, or (ii) the date the
Administrative Trustees are required to give notice of
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the record date, or the date such Distributions are payable, to any national
securities exchange or to holders of the Preferred Securities issued by the
Trust, but in any event at least five Business Days before such record date. If
the Property Trustee is not the only Holder of the Securities at the time the
Company selects an Extension Period, the Company shall give the Holders of the
Securities and the Trustee written notice of its selection of such Extension
Period at least 10 Business Days before the earlier of (i) the next succeeding
Interest Payment Date, or (ii) the date the Company is required to give notice
of the record or payment date of such interest payment to any national
securities exchange. There is no limitation on the number of times that the
Company may elect to begin an Extension Period.
The Trustee shall promptly give notice of the Company's election to
begin any such Extension Period to the Holders of the Outstanding Securities of
such series.
SECTION 3.12. Right of Set-Off.
With respect to the Securities of a series issued to a Trust,
notwithstanding anything to the contrary in the Indenture, the Company shall
have the right to set-off any payment it is otherwise required to make
thereunder in respect of any such Security to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the Guarantee relating to such Security or under Section 5.8 of
this Indenture.
SECTION 3.13. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the Company and, by
its acceptance of a Security or a beneficial interest therein, the Holder of,
and any Person that acquires a beneficial interest in, such Security agree that
for United States Federal, state and local tax purposes it is intended that such
Security constitute indebtedness.
SECTION 3.14. Shortening or Extension of Stated Maturity.
If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular series, the Company shall have the right to
(i) shorten the Stated Maturity of the principal of the Securities of such
series at any time to any date not earlier than the first date on which the
Company has the right to redeem the Securities of such series, and (ii) extend
the Stated Maturity of the principal of the Securities of such series at any
time at its election for one or more periods, but in no event to a date later
than the 49th anniversary of the first Interest Payment Date following the
Original Issue Date of the Securities of such series; provided that, if the
Company elects to exercise its right to extend the Stated Maturity of the
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principal of the Securities of such series pursuant to clause (ii), above, at
the time such election is made and at the time of extension (A) the Company is
not in bankruptcy, otherwise insolvent or in liquidation, (B) the Company is not
in default in the payment of any interest or principal on such Securities, (C)
in the case of any series of Securities issued to a Trust, such Trust is not in
arrears on payments of Distributions on the Preferred Securities issued by such
Trust and no deferred Distributions are accumulated and (D) such Securities are
rated not less than BBB- by S&P or Baa3 by Moody's or the equivalent by any
other nationally recognized statistical rating organization. In the event the
Company elects to shorten or extend the Stated Maturity of the principal of a
particular series of Securities, it shall give notice to the Trustee, and the
Trustee shall give notice of such shortening or extension to the Holders, no
less than 30 and no more than 60 days prior to the effectiveness thereof.
SECTION 3.15. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Company Request, cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for and as otherwise provided
in this Section 4.1) and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.6 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held in
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trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 10.3) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Maturity within one year of the date of deposit,
or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company,
and the Company, has deposited or caused to be deposited with
the Trustee as trust funds in trust for such purpose an amount in the currency
or currencies in which the Securities of such series are payable sufficient to
pay and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and premium, if any)
and interest (including any Additional Interest) to the date of such deposit (in
the case of Securities which have become due and payable) or to the
Maturity or Optional Prepayment Date, as the case may be;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by the Trustee, in
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accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and interest for the
payment of which such money or obligations have been deposited with or received
by the Trustee.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein with respect to the Securities
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of any interest upon any Security of that
series or any Other Debentures when it becomes 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 hereof or, in the case of any Other Debentures, the indenture related
thereto, shall not constitute a default in the payment of interest for this
purpose; or
(2) default in the payment of all or any part of the principal of (or
premium, if any, on) any Security of that series or any Other Debentures as and
when the same shall become due and payable either at maturity, upon prepayment,
by declaration of acceleration of maturity or otherwise; or
(3) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities of that series 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
(4) a court having jurisdiction in the premises shall enter
a decree or order for relief in respect of the Company in an
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involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Company or for any
substantial part of its property, or ordering the winding-up or liquidation of
its affairs and such decree or order shall remain unstayed and in effect for a
period of 90 consecutive days; or
(5) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Company or of any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due; or
(6) any other Event of Default provided with respect to
Securities of that series.
SECTION 5.2. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon such
declaration the same shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal of the Securities of any series shall have
been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, (i) the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay (A) all matured installments of interest upon all the
Securities of that series and the principal of and premium, if any, on any and
all Securities of that series which shall have become due otherwise than by
acceleration (with interest upon such principal and premium, if any, and, to the
extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest, at the same rate as the rate of interest
specified in the Securities of that series to the date of such payment or
deposit) and (B) such
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amount as shall be sufficient to cover reasonable compensation to the Trustee
and each predecessor Trustee, their respective agents, attorneys and counsel,
and all other expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence or bad
faith, and (ii) any and all Events of Default with respect to Securities of that
series under the Indenture shall have been cured, waived or otherwise remedied
as provided herein, then, in every such case, the Holders of a majority in
aggregate principal amount of the Securities of that series then Outstanding, by
written notice to the Company and to the Trustee, may rescind and annul such
declaration and its consequences, but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
In case the Trustee shall have proceeded to enforce any right 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, the Trustee and the Holders of the Securities of the applicable series
shall be restored respectively to their several positions and rights hereunder,
and all rights, remedies and powers of the Company, the Trustee and the Holders
of the Securities of that series shall continue as though no such proceeding had
been taken.
SECTION 5.3. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any installment of interest on
any Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (and premium, if
any, on) any Security at the Maturity thereof, the Company will, upon demand of
the Trustee, pay to the Trustee, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for
principal, including any sinking fund payment or analogous obligations (and
premium, if any) and interest; and, in addition thereto, all amounts owing the
Trustee under Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided
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by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors,
(1) the Trustee (irrespective of whether the principal of the
Securities of any series shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal (and
premium, if any) or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,
(A) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect to the Securities and to file such other papers or documents as
may be necessary or advisable and to take any and all actions as are
authorized under the Trust Indenture Act in order to have the claims of
the Holders and any predecessor to the Trustee under Section 6.7
allowed in any such judicial proceedings; and
(B) in particular, the Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same in accordance with Section 5.6;
and
(2) any custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee for
distribution in accordance with Section 5.6, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it and any predecessor Trustee under Section 6.7.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 5.5. Trustee May Enforce Claim Without Possession
of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of all the amounts owing the Trustee and any
predecessor Trustee under Section 6.7, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee and
any predecessor Trustee under Section 6.7;
SECOND: To the payment of all Senior Indebtedness of the
Company if and to the extent required by Article XIII;
THIRD: In case the principal of the outstanding Securities in respect
of which moneys have been collected shall not have become due and be unpaid, to
the payment of the amounts then due and unpaid upon Securities for principal of
(and premium, if any) and interest on the Securities, in respect of which or for
the benefit of which money has been collected, ratably, without preference or
priority of any kind, according to the amounts due on such Securities for
principal (and premium, if any) and interest, respectively; and
FOURTH: To the Company.
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SECTION 5.7. Limitation on Suits.
No Holder of any Securities of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture
or for the appointment of a receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 5.8. Unconditional Right of Holders to Receive
Principal, Premium and Interest; Direct
Action by Holders of Preferred Securities.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right which is absolute and unconditional to receive
payment of the principal of (and premium, if any) and (subject to Section 3.7)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Optional Prepayment Date) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder. In the case of Securities of a
series
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issued to a Trust, any holder of the corresponding series of Preferred
Securities issued by such Trust shall have the right, upon the occurrence of an
Event of Default described in Section 5.1(1) or 5.1(2), to institute a suit
directly against the Company for enforcement of payment to such holder of
principal of (premium, if any) and (subject to Section 3.7) interest on the
Securities having a principal amount equal to the aggregate Liquidation Amount
(as defined in the Declaration of Trust under which such Trust is formed) of
such Preferred Securities of the corresponding series held by such holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee, any Holder or any holder of Preferred Securities has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee, such Holder or such holder of
Preferred Securities, then and in every such case the Company, the Trustee, the
Holders and such holder of Preferred Securities shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee, the Holders and the holders of Preferred Securities shall continue as
though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of Section 3.6, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee, any Holder of any Security or any
holder of any Preferred Security to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee
or to the Holders and the right and remedy given to the holders of Preferred
Securities by Section 5.8 may be exercised from time to time, and as often as
may be deemed
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expedient, by the Trustee, the Holders or the holders of
Preferred Securities, as the case may be.
SECTION 5.12. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule
of law or with this Indenture,
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow such direction if a Responsible Officer or
Officers of the Trustee shall, in good faith, determine that the proceeding so
directed would be unjustly prejudicial to the Holders not joining in any such
direction or would involve the Trustee in personal liability.
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may waive any past default hereunder and
its consequences with respect to such series except a default:
(1) in the payment of the principal of (or premium, if any)
or interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article IX
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Any such waiver shall be deemed to be on behalf of the Holders of all
the Securities of such series.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
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SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest on any Security on
or after the respective Stated Maturities expressed in such Security.
SECTION 5.15. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
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correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of
Holders pursuant to Section 5.12 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture with respect
to the Securities of such series.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
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SECTION 6.2. Notice of Defaults.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest on any Security of such
series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of
Securities of such series; and provided, further, that, in the case of any
default of the character specified in Section 5.1(3), no such notice to Holders
of Securities of such series shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Securities of such series.
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(1) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, Security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
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(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
SECTION 6.4. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of the Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Securities
Registrar or such other agent.
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SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder in such amounts as the Company and the
Trustee shall agree from time to time (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);
(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense (including the reasonable compensation and the
expenses and disbursements of its agents and counsel) incurred without
negligence or bad faith, arising out of or in connection with the acceptance or
administration of this trust or the performance of its duties hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. This indemnification shall survive the termination of this
Indenture.
To secure the Company's payment obligations in this Section, the
Company and the Holders agree that the Trustee shall have a lien prior to the
Securities on all money or property held or collected by the Trustee. Such lien
shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or any successor statute.
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SECTION 6.8. Disqualification; Conflicting Interests.
The Trustee for the Securities of any series issued hereunder shall be
subject to the provisions of Section 310(b) of the Trust Indenture Act. Nothing
herein shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of said Section 310(b).
SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall
be
(1) a corporation organized and doing business under the laws of the
United States of America or of any State or Territory or the District of
Columbia, authorized under such laws to exercise corporate trust powers and
subject to supervision or examination by Federal, State, Territorial or District
of Columbia authority, or
(2) a corporation or other Person organized and doing business under
the laws of a foreign government that is permitted to act as Trustee pursuant to
a rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees, in either case having a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
Federal or State authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then, for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article. Neither
the Company nor any Person directly or indirectly controlling, controlled by or
under common control with the Company shall serve as Trustee for the Securities
of any series issued hereunder.
SECTION 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
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(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Company or by any Holder who has been a bona fide Holder
of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (i) the Company, acting pursuant to the
authority of a Board Resolution, may remove the Trustee with respect to all
Securities, or (ii) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of that or those series. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment, become
the successor Trustee with respect to the
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Securities of such series and supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Security for at least six months may, subject to Section 5.14,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Securities Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (i) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (ii)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall
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be deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series as to which the retiring Trustee is not retiring shall continue to
be vested in the retiring Trustee, and (iii) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts, and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and
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deliver the Securities so authenticated, and in case any Securities shall not
have been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor Trustee or in the name of such
successor Trustee, and in all cases the certificate of authentication shall have
the full force which it is provided anywhere in the Securities or in this
Indenture that the certificate of the Trustee shall have.
SECTION 6.13. Preferential Collection of Claims Against
Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, or of any State or Territory or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
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Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provision of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.7.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:
________________________
As Trustee
By:_______________________
As Authenticating Agent
By:_______________________
Authorized Officer
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ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and
Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(1) semi-annually, not more than 15 days after [ ] and [ ] in each
year, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such [ ] and [ ], and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished, excluding from any such list names and addresses received by the
Trustee in its capacity as Securities Registrar.
SECTION 7.2. Preservation of Information, Communications
to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.3. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as
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may be required pursuant to the Trust Indenture Act, at the times and in the
manner provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than [ ] in each calendar
year, commencing with the first [ ] after the first issuance of Securities under
this Indenture.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed and also with the Commission. The Company will notify the
Trustee when any Securities are listed on any stock exchange.
SECTION 7.4. Reports by Company.
The Company shall file with the Trustee and with the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided in the Trust Indenture Act; provided that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act shall be filed with
the Trustee within 15 days after the same is required to be filed with the
Commission. The Company also shall comply with the other provisions of Trust
Indenture Act Section 314(a).
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., on Certain
Terms.
Nothing contained in this Indenture or in the Securities of any series
shall prevent any consolidation or merger of the Company with or into any other
Person (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 lease 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 Person (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, that (a) the Company is the surviving Person or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, conveyance, transfer or lease of property is
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made is a Person organized and existing under the laws of the United States or
any State thereof or the District of Columbia, and (b) upon any such
consolidation, merger, sale, conveyance, transfer or lease, the due and punctual
payment of the principal of (and premium, if any) and interest on the Securities
of each series according to their tenor 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 shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, and executed and delivered to the Trustee
by the Person formed by such consolidation, or into which the Company, as the
case may be, shall have been merged, or by the Person which shall have acquired
such property, and (c) after giving effect to such consolidation, merger, sale,
conveyance, transfer or lease, no Event of Default, and no event which, after
notice or lapse of time, or both, would become an Event of Default shall have
occurred and be continuing.
SECTION 8.2. Successor Corporation to be Substituted for
Company.
In case of any such consolidation, merger, conveyance or transfer and
upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the due and punctual payment of the principal of and premium, if any, and
interest on all of the Securities and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Company, such successor Person shall succeed to and
be substituted for the Company, with the same effect as if it had been named
herein as the party of the first part, and the Company thereupon shall be
relieved of any further liability or obligation hereunder or upon the
Securities. Such successor Person thereupon may cause to be signed, and may
issue either in its own name or in the name of Wachovia Corporation, any or all
of the Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee or the Authenticating Agent;
and, upon the order of such successor Person instead of the Company and subject
to all the terms, conditions and limitations in this Indenture prescribed, the
Trustee or the Authenticating Agent shall authenticate and deliver (i) any
Securities which previously shall have been signed and delivered by the officers
of the Company to the Trustee or the Authenticating Agent for authentication and
(ii) any Securities which such successor corporation thereafter shall cause to
be signed and delivered to the Trustee or the Authenticating Agent for that
purpose. All the Securities so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Indentures had been issued at the date of the execution hereof.
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SECTION 8.3. Opinion of Counsel to be Given to Trustee.
The Trustee, subject to the provisions of Section 6.1 and 6.2,
may receive an Opinion of Counsel as conclusive evidence that any consolidation,
merger, sale, conveyance, transfer or lease, and any assumption, permitted or
required by the terms of this Article VIII, complies with the provisions of this
Article VIII.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures without Consent of
Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the
covenants of the Company herein and in the Securities contained;
or
(2) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee or to surrender any right or
power herein conferred upon the Company; or
(3) to establish the form or terms of Securities of any
series as permitted by Sections 2.1 or 3.1; or
(4) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(5) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events of
Default are to be for the benefit of less than all series of Securities, stating
that such additional Events of Default are expressly being included solely for
the benefit of such series); or
(6) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of
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any series created prior to the execution of such supplemental
indenture which is entitled to the benefit of such provision; or
(7) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture, provided that such action pursuant to this clause (7)
shall not adversely affect the interest of the Holders of Securities of any
series in any material respect; or
(8) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Securities of one or more series and
to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
6.11(b); or
(9) to comply with the requirements of the Commission in
order to effect or maintain the qualification of this Indenture
under the Trust Indenture Act.
SECTION 9.2. Supplemental Indentures with Consent of
Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) except to the extent permitted by Section 3.11 or as otherwise
specified as contemplated by Section 2.1 or Section 3.1 with respect to the
deferral of the payment of interest on the Securities of any series, change the
Stated Maturity of the principal of, or any installment of interest on, any
Security, or reduce the principal amount thereof or the rate of interest thereon
or extend the time of payment of interest thereon or reduce any premium payable
upon the redemption thereof, or reduce the amount of principal of a Discount
Security that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 5.2, or change the place of payment where,
or the coin or currency in which, any Security or interest thereon is payable,
or impair the right to institute suit for the
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enforcement of any such payment on or after the Stated Maturity thereof (or, in
the case of redemption, on or after the Optional Prepayment Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 5.13 or
Section 10.5, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Security affected thereby; or
(4) modify the provisions in Article XIII of this Indenture with
respect to the subordination of Outstanding Securities of any series in a manner
adverse to the Holders thereof; provided, further, that, in the case of the
Securities of a series issued to a Trust, so long as any of the corresponding
series of Preferred Securities issued by such Trust remains outstanding, (i) no
such amendment shall be made that adversely affects the holders of such
Preferred Securities in any material respect, without the prior consent of the
holders of at least a majority of the aggregate liquidation preference of such
Preferred Securities then outstanding unless and until the principal (and
premium, if any) of the Securities of such series and all accrued and, subject
to Section 3.7, unpaid interest thereon have been paid in full and (ii) no
amendment shall be made to Section 5.8 of this Indenture that would impair the
rights of the holders of Preferred Securities provided therein without the prior
consent of the holders of each Preferred Security then outstanding unless and
until the principal (and premium, if any) of the Securities of such series and
all accrued and (subject to Section 3.7) unpaid interest thereon have been paid
in full.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities or Preferred
Securities, or which modifies the rights of the Holders of Securities or holders
of Preferred Securities of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities or holders of Preferred Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed
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supplemental indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
SECTION 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture, and
that all conditions precedent have been complied with. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Securities to Supplemental
Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.
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ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of such Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities, an office or agency where Securities of that series may be presented
or surrendered for payment and an office or agency where Securities of that
series may be surrendered for transfer or exchange and where notices and demands
to or upon the Company in respect of the Securities of that series and this
Indenture may be served. The Company initially appoints the Trustee, acting
through its Corporate Trust Office, as its agent for said purposes. The Company
will give prompt written notice to the Trustee of any change in the location of
any such office or agency. If at any time the Company shall fail to maintain
such office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all of such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for Securities of any series for such purposes. The Company
will give prompt written notice to the Trustee of any such designation and any
change in the location of any such office or agency.
SECTION 10.3. Money for Security Payments to be Held in
Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or
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interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to 10:00 a.m. New York City time on each due date of the principal of or
interest on any Securities, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal and
premium (if any) or interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal (and
premium, if any) or interest;
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(4) comply with the provisions of the Trust Indenture Act applicable to
it as a Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall (unless otherwise required by mandatory provision of applicable
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escheat or abandoned or unclaimed property law) be paid on Company Request to
the Company, or (if then held by the Company) shall (unless otherwise required
by mandatory provision of applicable escheat or abandoned or unclaimed property
law) be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 10.4. Statement as to Compliance.
The Company shall deliver to the Trustee, within 120 days after the end
of each calendar year of the Company ending after the date hereof, an Officers'
Certificate covering the preceding calendar year, stating whether or not to the
best knowledge of the signers thereof the Company is in default in the
performance, observance or fulfillment of or compliance with any of the terms,
provisions, covenants and conditions of this Indenture, and if the Company shall
be in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge. For the purpose of this Section 10.4, compliance
shall be determined without regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture.
SECTION 10.5. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition provided pursuant to Section 3.1, 9.1(3) or 9.1(4) with
respect to the Securities of any series, if before or after the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company in respect of any
such covenant or condition shall remain in full force and effect.
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SECTION 10.6. Additional Sums.
In the case of the Securities of a series issued to a Trust, and except
as otherwise specified as contemplated by Section 2.1 or Section 3.1, in the
event that (i) a Trust is the Holder of all of the Outstanding Securities of
such series, (ii) a Tax Event in respect of such Trust shall have occurred and
be continuing and (iii) the Company shall not have (A) redeemed the Securities
of such series pursuant to Section 11.7(b) or (B) terminated such Trust pursuant
to Section 9.2(b) of the related Declaration of Trust, the Company shall pay to
such Trust (and its permitted successors or assigns under the related
Declaration of Trust) for so long as such Trust (or its permitted successor or
assignee) is the registered holder of any Securities of such series, such
additional amounts as may be necessary in order that the amount of Distributions
(including any Additional Amounts (as defined in such Declaration of Trust))
then due and payable by such Trust on the related Preferred Securities and
Common Securities that at any time remain outstanding in accordance with the
terms thereof shall not be reduced as a result of any Additional Taxes (the
"Additional Sums"). Whenever in this Indenture or the Securities there is a
reference in any context to the payment of principal of or interest on the
Securities, such mention shall be deemed to include mention of the payments of
the Additional Sums provided for in this paragraph to the extent that, in such
context, Additional Sums are, were or would be payable in respect thereof
pursuant to the provisions of this paragraph and express mention of the payment
of Additional Sums (if applicable) in any provisions hereof shall not be
construed as excluding Additional Sums in those provisions hereof where such
express mention is not made.
SECTION 10.7. Additional Covenants.
The Company covenants and agrees with each Holder of Securities of each
series that it shall not (i) declare or pay any dividends or distributions on,
or redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Company's capital stock (which includes common and preferred stock) or
(ii) make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Company (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Securities or (iii) make any guarantee payments with respect to any guarantee by
the Company of the debt securities of any Subsidiary of the Company if such
guarantee ranks pari passu or junior in right of payment to the Securities
(other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, common stock of the Company, (b)
any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the
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redemption or repurchase of any such rights pursuant thereto, (c) payments under
any Guarantee and (d) as a result of a reclassification of the Company's capital
stock or the exchange or the conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock; (e)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged; and (f) purchases of common stock related
to the issuance of common stock or rights under any of the Company's benefit
plans for its directors, officers or employees or any of the Company's dividend
reinvestment plans) if at such time (i) there shall have occurred any event of
which the Company has actual knowledge that (A) with the giving of notice or the
lapse of time or both, would constitute an Event of Default with respect to the
Securities of such series and (B) in respect of which the Company shall not have
taken reasonable steps to cure, (ii) if the Securities of such series are held
by a Trust, the Company shall be in default with respect to its payment of any
obligations under the Guarantee relating to the Preferred Securities issued by
such Trust or (iii) the Company shall have given notice of its election to begin
an Extension Period with respect to the Securities of such series as provided
herein and such Extension Period shall be continuing.
The Company also covenants with each Holder of Securities of a series
issued to a Trust (i) to maintain directly or indirectly 100% ownership of the
Common Securities of such Trust; provided, however, that any permitted successor
of the Company hereunder may succeed to the Company's ownership of such Common
Securities, (ii) use its reasonable efforts to cause such Trust (a) to remain a
business trust, except in connection with a distribution of Securities of such
Series to the holders of Trust Securities in a liquidation of such Trust, the
redemption of all of the Trust Securities of such Trust or certain mergers,
consolidations or amalgamations, each as permitted by the related Declaration of
Trust, and (b) to otherwise continue not to be classified as a grantor trust and
not an association taxable as a corporation or a partnership for United States
federal income tax purposes and (iii) to use its reasonable efforts to cause
each holder of Trust Securities to be treated as owning an individual beneficial
interest in the Securities of such series.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of This Article.
Redemption of Securities of any series (whether by operation
of a sinking fund or otherwise) as permitted or required by any
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form of Security issued pursuant to this Indenture shall be made in accordance
with such form of Security and this Article; provided, however, that if any
provision of any such form of Security shall conflict with any provision of this
Article, the provision of such form of Security shall govern. Except as
otherwise set forth in the form of Security for such series, each Security of
such series shall be subject to partial redemption only in the amount of $25 or
integral multiples thereof.
SECTION 11.2. Election to Redeem; Notice to Trustee.
In case of any redemption at the election of the Company of less than
all of the Securities of any particular series and having the same terms, the
Company shall, not less than 30 nor more than 60 days prior to the Optional
Prepayment Date (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such date and of the principal amount of Securities of
that series to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities, the Company shall furnish the Trustee with an Officers'
Certificate and an Opinion of Counsel evidencing compliance with such
restriction.
SECTION 11.3. Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Optional Prepayment Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of a portion of the principal amount of any Security of
such series, provided that the unredeemed portion of the principal amount of any
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security. If less than all the
Securities of such series and of a specified tenor are to be redeemed (unless
such redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Optional
Prepayment Date by the Trustee, from the Outstanding Securities of such series
and specified tenor not previously called for redemption in accordance with the
preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to
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the portion of the principal amount of such Security which has been or is to be
redeemed. If the Company shall so direct, Securities registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Securities selected for redemption.
SECTION 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not later than the thirtieth day, and not earlier than the
sixtieth day, prior to the Optional Prepayment Date, to each Holder of
Securities to be redeemed, at the address of such Holder as it appears in the
Securities Register.
With respect to Securities of each series to be redeemed, each notice
of redemption shall state:
(1) the Optional Prepayment Date;
(2) the Optional Prepayment Price;
(3) if less than all Outstanding Securities of such particular series
and having the same terms are to be redeemed, the identification (and, in the
case of partial redemption, the respective principal amounts) of the particular
Securities to be redeemed;
(4) that on the Optional Prepayment Date, the Optional Prepayment Price
will become due and payable upon each such Security or portion thereof, and that
interest thereon, if any, shall cease to accrue on and after said date;
(5) the place or places where such Securities are to be
surrendered for payment of the Optional Prepayment Price; and
(6) that the redemption is for a sinking fund, if such is
the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall not be
irrevocable. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or any
defect in the notice to the Holder of any Security designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.
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SECTION 11.5. Deposit of Optional Prepayment Price.
Prior to 10:00 a.m. New York City time on the Optional Prepayment Date
specified in the notice of redemption given as provided in Section 11.4, the
Company will deposit with the Trustee or with one or more Paying Agents (or if
the Company is acting as its own Paying Agent, the Company will segregate and
hold in trust as provided in Section 10.3) an amount of money sufficient to pay
the Optional Prepayment Price of, and any accrued interest on, all the
Securities which are to be redeemed on that date.
SECTION 11.6. Payment of Securities Called for Redemption.
If any notice of redemption has been given as provided in Section 11.4,
the Securities or portion of Securities with respect to which such notice has
been given shall become due and payable on the date and at the place or places
stated in such notice at the applicable Optional Prepayment Price. On
presentation and surrender of such Securities at a Place of Payment in said
notice specified, the said securities or the specified portions thereof shall be
paid and redeemed by the Company at the applicable Optional Prepayment Price,
together with accrued interest to the Optional Prepayment Date; provided,
however, that, unless otherwise specified as contemplated by Section 3.1,
installments of interest whose Stated Maturity is on or prior to the Optional
Prepayment Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
3.7.
Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder
thereof, at the expense of the Company, a new Security or Securities of the same
series, of authorized denominations, in aggregate principal amount equal to the
unredeemed portion of the Security so presented and having the same Original
Issue Date, Stated Maturity and terms. If a Global Security is so surrendered,
such new Security will also be a new Global Security.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of and premium, if any, on such
Security shall, until paid, bear interest from the Optional Prepayment Date at
the rate prescribed therefor in the Security.
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SECTION 11.7. Right of Redemption of Securities Initially
Issued to a Trust.
In the case of the Securities of a series initially issued to a Trust,
except as otherwise specified as contemplated by Section 3.1, the Company, at
its option, may redeem such Securities (i) on or after the date ten years after
the Original Issue Date of such Securities, in whole at any time or in part from
time to time, or (ii) prior to the date ten years after the Original Issue Date
of such Securities, upon the occurrence and during the continuation of a Special
Event, at any time within 90 days following the occurrence of such Special Event
in respect of such Trust, in whole (but not in part), in each case at a Optional
Prepayment Price set forth in the form of Security for such series.
ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any sinking fund payment in excess of such minimum
amount which is permitted to be made by the terms of such Securities of any
series is herein referred to as an "optional sinking fund payment". If provided
for by the terms of any Securities of any series, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section 12.2. Each
sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of such Securities.
SECTION 12.2. Satisfaction of Sinking Fund Payments with
Securities.
In lieu of making all or any part of a mandatory sinking fund payment
with respect to any Securities of a series in cash, the Company may at its
option, at any time no more than 16 months and no less than 30 days prior to the
date on which such sinking fund payment is due, deliver to the Trustee
Securities of such series (together with the unmatured coupons, if any,
appertaining thereto) theretofore purchased or otherwise acquired by the
Company, except Securities of such series that have been redeemed through the
application of mandatory or optional sinking fund
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payments pursuant to the terms of the Securities of such series, accompanied by
a Company Order instructing the Trustee to credit such obligations and stating
that the Securities of such series were originally issued by the Company by way
of bona fide sale or other negotiation for value; provided that the Securities
to be so credited have not been previously so credited. The Securities to be so
credited shall be received and credited for such purpose by the Trustee at the
redemption price for such Securities, as specified in the Securities so to be
redeemed, for redemption through operation of the sinking fund and the amount of
such sinking fund payment shall be reduced accordingly.
SECTION 12.3. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash in the currency in which the
Securities of such series are payable (except as provided pursuant to Section
3.1) and the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities pursuant to Section 12.2 and will also deliver to the
Trustee any Securities to be so delivered. Such Officers' Certificate shall be
irrevocable and upon its delivery the Company shall be obligated to make the
cash payment or payments therein referred to, if any, on or before the
succeeding sinking fund payment date. In the case of the failure of the Company
to deliver such Officers' Certificate (or, as required by this Indenture, the
Securities and coupons, if any, specified in such Officers' Certificate), the
sinking fund payment due on the succeeding sinking fund payment date for such
series shall be paid entirely in cash and shall be sufficient to redeem the
principal amount of the Securities of such series subject to a mandatory sinking
fund payment without the right to deliver or credit securities as provided in
Section 12.2 and without the right to make the optional sinking fund payment
with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made with
respect to the Securities of any particular series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent) on
the sinking fund payment date on which such payment is made (or, if such payment
is made before a sinking fund payment date, on the sinking fund payment date
immediately following the date of such payment) to the redemption of Securities
of such series at the Optional Prepayment Price specified in such Securities
with respect to the sinking fund. Any sinking fund moneys not so applied or
allocated by the Trustee (or, if the Company is acting
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as its own Paying Agent, segregated and held in trust by the Company as provided
in Section 10.3) for such series and together with such payment (or such amount
so segregated) shall be applied in accordance with the provisions of this
Section 12.3. Any and all sinking fund moneys with respect to the Securities of
any particular series held by the Trustee (or if the Company is acting as its
own Paying Agent, segregated and held in trust as provided in Section 10.3) on
the last sinking fund payment date with respect to Securities of such series and
not held for the payment or redemption of particular Securities of such series
shall be applied by the Trustee (or by the Company if the Company is acting as
its own Paying Agent), together with other moneys, if necessary, to be deposited
(or segregated) sufficient for the purpose, to the payment of the principal of
the Securities of such series at Maturity. The Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 11.3 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 11.4. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Section
11.6. On or before each sinking fund payment date, the Company shall pay to the
Trustee (or, if the Company is acting as its own Paying Agent, the Company shall
segregate and hold in trust as provided in Section 10.3) in cash a sum in the
currency in which Securities of such series are payable (except as provided
pursuant to Section 3.1) equal to the principal and any interest accrued to the
Optional Prepayment Date for Securities or portions thereof to be redeemed on
such sinking fund payment date pursuant to this Section 12.3.
Neither the Trustee nor the Company shall redeem any Securities of a
series with sinking fund moneys or mail any notice of redemption of Securities
of such series by operation of the sinking fund for such series during the
continuance of a default in payment of interest, if any, on any Securities of
such series or of any Event of Default (other than an Event of Default occurring
as a consequence of this paragraph) with respect to the Securities of such
series, except that if the notice of redemption shall have been provided in
accordance with the provisions hereof, the Trustee (or the Company, if the
Company is then acting as its own Paying Agent) shall redeem such Securities if
cash sufficient for that purpose shall be deposited with the Trustee (or
segregated by the Company) for that purpose in accordance with the terms of this
Article XII. Except as aforesaid, any moneys in the sinking fund for such series
at the time when any such default or Event of Default shall occur and any moneys
thereafter paid into such sinking fund shall, during the continuance of such
default or Event of Default, be held as security for the payment of the
Securities and coupons, if any, of such series; provided, however, that in case
such default or Event of Default shall have been cured or waived herein, such
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moneys shall thereafter be applied on the next sinking fund payment date for the
Securities of such series on which such moneys may be applied pursuant to the
provisions of this Section 12.3.
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. Agreement to Subordinate.
The Company covenants and agrees, and each Holder of Securities issued
hereunder likewise covenants and agrees, that the Securities shall be issued
subject to the provisions of this Article XIII; and each holder of a Security,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment by the Company of the principal of and premium, if any, and
interest on all Securities issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
the prior payment in full of all Allocable Amounts with respect to Senior
Indebtedness, whether outstanding at the date of this Indenture or thereafter
incurred.
No provision of this Article XIII shall prevent the occurrence of any
Event of Default, or any event, act or condition that with notice or lapse of
time, or both would constitute an Event of Default hereunder.
SECTION 13.2. Default on Senior Indebtedness.
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 Indebtedness, or in the event that the maturity of any Senior
Indebtedness 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 payments) of or premium, if any, or interest on the Securities.
In the event of the acceleration of the maturity of the Securities,
then no payment shall be made by the Company with respect to the principal
(including prepayment payments) of or premium, if any, or interest on the
Securities until the holders of all Senior Indebtedness outstanding at the time
of such acceleration shall receive payment in full of all Allocable Amounts due
in respect of such Senior Indebtedness (including any amounts due upon
acceleration).
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In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 13.2, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent of
the Allocable Amounts in respect of such Senior Indebtedness and 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 Allocable Amounts then due and owing on such Senior
Indebtedness and only the Allocable Amounts specified in such notice to the
Trustee shall be paid to the holders of such Senior Indebtedness.
SECTION 13.3. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all Allocable 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 Securities; and upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Securityholders or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XIII, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Securityholders or
by the Trustee under the Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on the
basis of the respective Allocable 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 all
Allocable Amounts in respect of 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 the Securities or to the Trustee.
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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 Allocable Amounts in respect of Senior Indebtedness 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 remaining unpaid to the extent necessary to pay all Allocable
Amounts in respect of 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.
For purposes of this Article XIII, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XIII with
respect to the Securities to the payment of Senior Indebtedness 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 Person or the liquidation or dissolution of the Company
following the sale, conveyance, transfer or lease of its property as an
entirety, or substantially as an entirety, to another Person upon the terms and
conditions provided for in Article VIII of this Indenture shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 13.3 if such other Person shall, as a part of such consolidation,
merger, sale, conveyance, transfer or lease, comply with the conditions stated
in Article VIII of this Indenture. Nothing in Section 13.2 or 13.3 in this
Section 13.3 shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 6.7 of this Indenture.
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SECTION 13.4. Subrogation.
Subject to the payment in full of all Allocable Amounts in respect of
Senior Indebtedness, the rights of the Holders of Securities 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 Securities shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of
such Senior Indebtedness of any cash, property or securities to which the
Holders of Securities or the Trustee would be entitled except for the provisions
of this Article XIII, and no payment over pursuant to the provisions of this
Article XIII, to or for the benefit of the holders of such Senior Indebtedness
by Holders of Securities or the Trustee, shall, as between the Company, its
creditors other than holders of Senior Indebtedness of the Company, and the
holders of the Securities, be deemed to be a payment by the Company to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article XIII are and are intended solely for the purposes of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of such Senior Indebtedness on the other hand.
Nothing contained in this Article XIII or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between the Company, its
creditor other than the holders of Senior Indebtedness of the Company, and the
Holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of (and
premium, if any) and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities 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 Security from exercising all
remedies otherwise permitted by applicable law upon default under the Indenture,
subject to the rights, if any, under this Article XIII of the holders of such
Senior Indebtedness in respect of cash, property or securities of the Company,
as the case may be, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article XIII, the Trustee, subject to the provisions of Article VI of
this Indenture, and the Holders of Securities 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,
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trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Securityholders, for
the purposes of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, 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 XIII.
SECTION 13.5. Trustee to Effectuate Subordination.
Each Holders of Securities 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 XIII and appoints the Trustee such Holders's attorney-in-fact for
any and all such purposes.
SECTION 13.6. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Securities
pursuant to the provisions of this Article XIII. Notwithstanding the provisions
of this Article XIII or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts that would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article XIII, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof
from the Company or a holder or holders of Senior Indebtedness or from any
trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Article VI of this Indenture, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section 13.6 at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest on
any Security), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purposes for which they were received, and shall not be
affected by any notice to the contrary that may be received by it within two
Business Days prior to such date.
The Trustee, subject to the provisions of Article VI of this 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
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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 Article XIII, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of such
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article XIII, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Upon any payment or distribution of assets of the Company referred to
in this Article XIII, the Trustee and the Holders of Securities shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to the
Holders of Securities, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XIII.
SECTION 13.7. Rights of the Trustee; Holders of Senior
Indebtedness.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XIII in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XIII, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to
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the provisions of Article VI of this Indenture, the Trustee shall not be liable
to any holder of such Senior Indebtedness if it shall pay over or deliver to
Holders of Securities, the Company or any other Person money or assets to which
any holder of such Senior Indebtedness shall be entitled by virtue of this
Article XIII or otherwise.
Nothing in this Article XIII shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.7.
SECTION 13.8. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior Indebtedness of
the Company to enforce subordination as herein provided shall 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.
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
Securities, without incurring responsibility to the Holders of Securities and
without impairing or releasing the subordination provided in this Article XIII
or the obligations hereunder of the Holders of the Securities to the holders of
such Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any manner
for the collection of such Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Company, as the case may be, and any
other Person.
* * * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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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.
WACHOVIA CORPORATION
By:____________________________
Attest:
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:____________________________
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EXHIBIT 4(g)
FORM OF CAPITAL SECURITIES GUARANTEE AGREEMENT
CAPITAL SECURITIES GUARANTEE AGREEMENT
Wachovia Corporation
Dated as of January __, 1997
<PAGE>
<TABLE>
<CAPTION>
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
<S> <C>
310(a).....................................................4.1(a)
310(b)............................................... 4.1(c), 2.8
310(c) ..............................................Inapplicable
311(a) ....................................................2.2(b)
311(b) ................................................... 2.2(b)
311(c) ............................................. Inapplicable
312(a) ....................................................2.2(a)
312(b) ....................................................2.2(b)
313 ..........................................................2.3
314(a) .......................................................2.4
314(b) ............................................. Inapplicable
314(c) .......................................................2.5
314(d) ............................................. Inapplicable
314(e) .............................................1.1, 2.5, 3.2
314(f) ..................................................2.1, 3.2
315(a) ................................................... 3.1(d)
315(b) .......................................................2.7
315(c) .......................................................3.1
315(d) ....................................................3.1(d)
316(a) .............................................1.1, 2.6, 5.4
316(b) .......................................................5.3
316(c) .......................................................8.2
317(a) ............................................. Inapplicable
317(b) ............................................. Inapplicable
318(a) ................................................... 2.1(b)
318(b) .......................................................2.1
318(c) ......................................................1(a)
</TABLE>
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
<S> <C> <C>
SECTION 1.1 Definitions and Interpretation................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application................. 6
SECTION 2.2 Lists of Holders of Capital Securities........... 6
SECTION 2.3 Reports by the Capital Securities
Guarantee Trustee.............................. 6
SECTION 2.4 Periodic Reports to Capital Securities
Guarantee Trustee............................... 7
SECTION 2.5 Evidence of Compliance with Conditions
Precedent....................................... 7
SECTION 2.6 Events of Default; Waiver......................... 7
SECTION 2.7 Event of Default; Notice.......................... 7
SECTION 2.8 Conflicting Interests............................. 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital
Securities Guarantee Trustee................ 8
SECTION 3.2 Certain Rights of Capital Securities
Guarantee Trustee.......................... 10
SECTION 3.3 Not Responsible for Recitals or Issuance
of Capital Securities Guarantee............ 13
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee;
Eligibility................................ 13
SECTION 4.2 Appointment, Removal and Resignation of
Capital Securities Guarantee Trustee....... 14
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee........................................ 15
SECTION 5.2 Waiver of Notice and Demand...................... 15
i
<PAGE>
<CAPTION>
<S> <C> <C>
SECTION 5.3 Obligations Not Affected.........................15
SECTION 5.4 Rights of Holders................................16
SECTION 5.5 Guarantee of Payment.............................17
SECTION 5.6 Subrogation......................................17
SECTION 5.7 Independent Obligations..........................17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.......................18
SECTION 6.2 Ranking..........................................19
ARTICLE VII
TERMINATION
SECTION 7.1 Termination......................................19
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation......................................19
SECTION 8.2 Indemnification..................................20
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns...........................20
SECTION 9.2 Amendments.......................................21
SECTION 9.3 Notices..........................................21
SECTION 9.4 Benefit..........................................22
SECTION 9.5 Governing Law....................................22
</TABLE>
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This GUARANTEE AGREEMENT (the "Capital Securities Guarantee"),
dated as of January __, 1997, is executed and delivered by Wachovia Corporation,
a North Carolina corporation (the "Guarantor"), and The First National Bank of
Chicago, a national banking corporation, as trustee (the "Capital Securities
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Capital Securities (as defined herein) of Wachovia Capital
Trust [ ], a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of January __, 1997, among the trustees of
the Issuer, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof [ ] capital securities, having an aggregate
liquidation amount of [$ ], such capital securities being designated the ____%
Capital Securities (the "Capital Securities").
WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Capital Securities Guarantee, to pay to the Holders
of the Capital Securities the Guarantee Payments (as defined below). The
Guarantor agrees to make certain other payments on the terms and conditions set
forth herein.
WHEREAS, the Guarantor is executing and delivering a guarantee
agreement (the "Common Securities Guarantee"), with substantially identical
terms to this Capital Securities Guarantee, for the benefit of the holders of
the Common Securities (as defined herein), except that if an Event of Default
(as defined in the Declaration) has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated, to the extent and in the manner set forth
in the Common Securities Guarantee, to the rights of holders of Capital
Securities to receive Guarantee Payments under this Capital Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Capital Securities, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers this Capital
Securities Guarantee for the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Capital Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Capital Securities
Guarantee but not defined in the preamble above have
the respective meanings assigned to them in this
Section 1.1;
(b) Terms defined in the Declaration as at the date of
execution of this Capital Securities Guarantee have
the same meaning when used in this Capital Securities
Guarantee unless otherwise defined in this Capital
Securities Guarantee;
(c) a term defined anywhere in this Capital Securities
Guarantee has the same meaning throughout;
(d) all references to "the Capital Securities Guarantee"
or "this Capital Securities Guarantee" are to this
Capital Securities Guarantee as modified,
supplemented or amended from time to time;
(e) all references in this Capital Securities
Guarantee to Articles and Sections are to Articles
and Sections of this Capital Securities Guarantee,
unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the
same meaning when used in this Capital Securities
Guarantee, unless otherwise defined in this Capital
Securities Guarantee or unless the context otherwise
requires; and
(g) a reference to the singular includes the plural
and vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New York or
Winston-Salem, North Carolina are authorized or required by law or executive
order to close.
2
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"Capital Securities Guarantee Trustee" means The First
National Bank of Chicago, a national banking corporation, until a Successor
Capital Securities Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Capital Securities Guarantee and
thereafter means each such Successor Capital Securities Guarantee Trustee.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Capital
Securities Guarantee Trustee at which the corporate trust business of the
Capital Securities Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this
Agreement is located at One First National Plaza, Suite 0126, Chicago, Illinois
60670-0126.
"Covered Person" means any Holder or beneficial owner
of Capital Securities.
"Debentures" means the series of subordinated debt securities
of the Guarantor designated the ____% Junior Subordinated Deferrable Interest
Debentures due [ ] held by the Property Trustee (as defined in the Declaration)
of the Issuer.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Capital Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital Securities, to
the extent not paid or made by the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Capital Securities to the extent the Issuer has funds on hand legally
available therefor, (ii) the redemption price, including all accumulated and
unpaid Distributions to the date of redemption (the "Redemption Price") to the
extent the Issuer has funds on hand legally available therefor, with respect to
any Capital Securities called for redemption by the Issuer, or (iii) upon a
voluntary or involuntary termination and liquidation of the Issuer (other than
in connection with the distribution of Debentures to the Holders in exchange for
Capital Securities as provided in the Declaration), the lesser of (a) the
Liquidation Distribution, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders of Capital Securities. If an Event of
Default has occurred and is continuing, no Guarantee Payments under the Common
Securities
3
<PAGE>
Guarantee with respect to the Common Securities shall be made until the Holders
of Capital Securities shall be paid in full the Guarantee Payments to which they
are entitled under this Capital Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Capital Securities Guarantee
Trustee, any Affiliate of the Capital Securities Guarantee Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Capital Securities
Guarantee Trustee.
"Indenture" means the Indenture dated as of January __, 1997,
among the Guarantor (the "Debenture Issuer") and The First National Bank of
Chicago, as trustee, pursuant to which the Debentures are to be issued to the
Property Trustee of the Issuer.
"Majority in Liquidation Amount of the Capital Securities"
means, except as provided by the Trust Indenture Act, a vote by Holder(s) of
Capital Securities, voting separately as a class, of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all Capital
Securities.
"Officers' Certificate" means, with respect to any person, a
certificate signed by the Chairman, any Vice Chairman, the Chief Executive
Officer, the President or any Vice President of the Guarantor, the Comptroller,
the Clerk or an Assistant Clerk, the Secretary or an Assistant Secretary of the
Guarantor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Capital Securities Guarantee shall
include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and
the definitions relating thereto;
(b) 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
4
<PAGE>
opinion as to whether or not such covenant or condition has
been complied with; and
(c) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Other Common Securities Guarantees" shall have the
same meaning as "Other Guarantees" in the Common Securities
Guarantee.
"Other Debentures" means all junior subordinated debentures
issued by the Guarantor from time to time and sold to trusts to be established
by the Guarantor (if any), in each case similar to the Issuer.
"Other Guarantees" means (i) all guarantees issued by the
Guarantor with respect to capital securities (if any) similar to the Capital
Securities issued by other trusts to be established by the Guarantor (if any),
in each case similar to the Issuer and (ii) the Guarantee by the Guarantor of
the 7.64% Capital Securities of the Wachovia Capital Trust I issued pursuant to
the Capital Securities Guarantee Agreement, dated December 16, 1996, between the
Guarantor and The First National Bank of Chicago as Capital Securities Guarantee
Trustee.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Capital
Securities Guarantee Trustee, any officer within the Corporate Trust Office of
the Capital Securities 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 Office of the Capital
Securities Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Capital Securities Guarantee Trustee" means
a successor Capital Securities Guarantee Trustee possessing the
qualifications to act as Capital Securities Guarantee Trustee
under Section 4.1.
5
<PAGE>
"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended.
"Trust Securities" means the Common Securities and the
Capital Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Capital Securities Guarantee and shall, to the extent applicable, be governed by
such provisions.
(b) If and to the extent that any provision of this Capital
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.
SECTION 2.2 Lists of Holders of Capital Securities
(a) The Guarantor shall provide the Capital Securities
Guarantee Trustee (unless the Capital Securities Guarantee Trustee is otherwise
the registrar of the Capital Securities) with a list, in such form as the
Capital Securities Guarantee Trustee may reasonably require, of the names and
addresses of the Holders of the Capital Securities ("List of Holders") as of
such date, (i) within one Business Day after [January 1] and [July 1] 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 Capital Securities Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Capital Securities Guarantee Trustee by the
Guarantor. The Capital Securities Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Capital Securities Guarantee Trustee shall comply with
its obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Capital Securities Guarantee
Trustee
Within 60 days after [January 15] of each year, commencing
__________, [ ], the Capital Securities Guarantee
6
<PAGE>
Trustee shall provide to the Holders of the Capital Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Capital
Securities Guarantee Trustee shall also comply with the requirements of Section
313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Capital Securities Guarantee
Trustee
The Guarantor shall provide to the Capital Securities
Guarantee Trustee, the Securities and Exchange Commission and the Holders such
documents, reports and information, if any, as required by Section 314 of the
Trust Indenture Act and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Capital Securities
Guarantee Trustee such evidence of compliance with such conditions precedent, if
any, provided for in this Capital Securities Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in Liquidation Amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Capital Securities Guarantee, but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Capital Securities Guarantee Trustee shall, within 90
days after the occurrence of a default with respect to this Capital Securities
Guarantee, mail by first class postage prepaid, to all Holders of the Capital
Securities, notices of all defaults actually known to a Responsible Officer of
the Capital Securities Guarantee Trustee, unless such defaults have been cured
before the giving of such notice, provided, that, except in the case of default
in the payment of any Guarantee Payment, the
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Capital Securities Guarantee Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or Responsible Officers of the Capital
Securities Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Capital Securities.
(b) The Capital Securities Guarantee Trustee shall not be
deemed to have knowledge of any Event of Default unless the Capital Securities
Guarantee Trustee shall have received written notice, or a Responsible Officer
of the Capital Securities Guarantee Trustee charged with the administration of
this Capital Securities Guarantee shall have obtained actual knowledge, of such
Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described
in this Capital Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities
Guarantee Trustee
(a) This Capital Securities Guarantee shall be held by the
Capital Securities Guarantee Trustee for the benefit of the Holders of the
Capital Securities, and the Capital Securities Guarantee Trustee shall not
transfer this Capital Securities Guarantee to any Person except a Holder of
Capital Securities exercising his or her rights pursuant to Section 5.4(b) or to
a Successor Capital Securities Guarantee Trustee on acceptance by such Successor
Capital Securities Guarantee Trustee of its appointment to act as Successor
Capital Securities Guarantee Trustee. The right, title and interest of the
Capital Securities Guarantee Trustee shall automatically vest in any Successor
Capital Securities Guarantee Trustee, and such vesting and succession of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Capital Securities
Guarantee Trustee.
(b) If an Event of Default actually known to a
Responsible Officer of the Capital Securities Guarantee Trustee
has occurred and is continuing, the Capital Securities Guarantee
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Trustee shall enforce this Capital Securities Guarantee for the benefit of the
Holders of the Capital Securities.
(c) The Capital Securities Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Capital Securities Guarantee, and no implied
covenants shall be read into this Capital Securities Guarantee against the
Capital Securities Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) and is actually
known to a Responsible Officer of the Capital Securities Guarantee Trustee, the
Capital Securities Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Capital Securities Guarantee, and use the same
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Capital Securities Guarantee shall be
construed to relieve the Capital Securities Guarantee Trustee from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default
and after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Capital
Securities Guarantee Trustee shall be determined solely by the
express provisions of this Capital Securities Guarantee, and
the Capital Securities Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Capital Securities
Guarantee, and no implied covenants or obligations shall be
read into this Capital Securities Guarantee against the
Capital Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Capital Securities Guarantee Trustee, the Capital Securities
Guarantee Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Capital Securities Guarantee Trustee and conforming to the
requirements of this Capital Securities Guarantee; but in the
case of any such certificates or opinions that by any
provision hereof or of the Trust Indenture Act are
specifically
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required to be furnished to the Capital Securities Guarantee
Trustee, the Capital Securities Guarantee Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Capital Securities
Guarantee;
(ii) the Capital Securities Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a Responsible
Officer of the Capital Securities Guarantee Trustee, unless it shall be
proved that the Capital Securities Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Capital Securities 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 a
Majority in Liquidation Amount of the Capital Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Capital Securities Guarantee Trustee, or exercising
any trust or power conferred upon the Capital Securities Guarantee
Trustee under this Capital Securities Guarantee; and
(iv) no provision of this Capital Securities Guarantee shall
require the Capital Securities Guarantee Trustee to expend or risk its
own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers, if the Capital Securities Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Capital Securities Guarantee or indemnity, reasonably satisfactory to
the Capital Securities Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Securities Guarantee
Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Capital Securities Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from acting,
upon any resolution, certificate, statement instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been signed, sent
or presented by the proper party or parties.
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(ii) Any direction or act of the Guarantor contemplated
by this Capital Securities Guarantee shall be sufficiently
evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Capital
Securities Guarantee, the Capital Securities Guarantee Trustee shall
deem it desirable that a matter be proved or established before taking,
suffering or omitting to take any action hereunder, the Capital
Securities Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Capital Securities Guarantee Trustee shall have no
duty to see to any recording, filing or registration of any instrument
(or any rerecording, refiling or registration thereof).
(v) The Capital Securities Guarantee Trustee may consult with
legal counsel of its selection, and the written advice or opinion of
such legal counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in good faith and in
accordance with such advice or opinion. Such legal counsel may be legal
counsel to the Guarantor or any of its Affiliates and may include any
of its employees. The Capital Securities Guarantee Trustee shall have
the right at any time to seek instructions concerning the
administration of this Capital Securities Guarantee from any court of
competent jurisdiction.
(vi) The Capital Securities Guarantee Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by
this Capital Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Capital
Securities Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Capital Securities Guarantee Trustee, against the
costs, expenses (including attorneys' fees and expenses and the
expenses of the Capital Securities Guarantee Trustee's agents, nominees
or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Capital Securities Guarantee
Trustee; provided that, nothing contained in this Section 3.2(a)(vi)
shall be taken to relieve the Capital Securities Guarantee Trustee,
upon the occurrence of an Event of Default, of its
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obligation to exercise the rights and powers vested in it by
this Capital Securities Guarantee.
(vii) The Capital Securities Guarantee Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Capital Securities Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit.
(viii) The Capital Securities Guarantee Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees, custodians or
attorneys, and the Capital Securities Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Capital Securities Guarantee
Trustee or its agents hereunder shall bind the Holders of the Capital
Securities, and the signature of the Capital Securities Guarantee
Trustee or its agents alone shall be sufficient and effective to
perform any such action. No third party shall be required to inquire as
to the authority of the Capital Securities Guarantee Trustee to so act
or as to its compliance with any of the terms and provisions of this
Capital Securities Guarantee, both of which shall be conclusively
evidenced by the Capital Securities Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this Capital Securities
Guarantee the Capital Securities Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Capital Securities
Guarantee Trustee (i) may request instructions from the Holders of a
Majority in Liquidation Amount of the Capital Securities, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(xi) The Capital Securities Guarantee Trustee shall not be
liable for any action taken, suffered, or omitted to be taken by it in
good faith, without negligence, and reasonably believed by it to be
authorized or within the
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discretion or rights or powers conferred upon it by this
Capital Securities Guarantee.
(b) No provision of this Capital Securities Guarantee shall be
deemed to impose any duty or obligation on the Capital Securities Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Capital Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Capital Securities Guarantee
Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of
Capital Securities Guarantee
The recitals contained in this Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Capital Securities
Guarantee Trustee does not assume any responsibility for their correctness. The
Capital Securities Guarantee Trustee makes no representation as to the validity
or sufficiency of this Capital Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Capital Securities
Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least fifty million U.S. dollars ($50,000,000), and subject to
supervision or examination by federal, state, territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for the
purposes of this Section 4.1(a)(ii), the combined capital and surplus
of such
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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 Capital Securities Guarantee Trustee
shall cease to be eligible to so act under Section 4.1(a), the Capital
Securities Guarantee Trustee shall immediately resign in the manner and with the
effect set out in
Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Capital Securities Guarantee Trustee and Guarantor
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Capital
Securities Guarantee Trustee
(a) Subject to Section 4.2(b), the Capital Securities
Guarantee Trustee may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default.
(b) The Capital Securities Guarantee Trustee shall not be
removed in accordance with Section 4.2(a) until a Successor Capital Securities
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Capital Securities Guarantee
Trustee and delivered to the Guarantor.
(c) The Capital Securities Guarantee Trustee shall hold office
until a Successor Capital Securities Guarantee Trustee shall have been appointed
or until its removal or resignation. The Capital Securities Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Capital Securities Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guarantor and the
resigning Capital Securities Guarantee Trustee.
(d) If no Successor Capital Securities Guarantee Trustee shall
have been appointed and accepted appointment as provided in this Section 4.2
within 60 days after delivery of an instrument of removal or resignation, the
Capital Securities Guarantee Trustee resigning or being removed may petition any
court of competent jurisdiction for appointment of a Successor
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Capital Securities Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Capital Securities Guarantee Trustee.
(e) No Capital Securities Guarantee Trustee shall be liable
for the acts or omissions to act of any Successor Capital securities Guarantee
Trustee.
(f) Upon termination of this Capital Securities Guarantee or
removal or resignation of the Capital Securities Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Capital Securities Guarantee
Trustee all amounts due to the Capital Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Issuer), as and when due, regardless of
any defense, right of set-off or counterclaim that the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
Capital Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Capital Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition
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relating to the Capital Securities to be performed or observed by
the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Capital Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Capital Securities (other than an extension of
time for payment of Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any interest payment period
on the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Capital
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Capital Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor with
respect to the Guarantee Payments shall be absolute and unconditional under any
and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in Liquidation Amount of the
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available
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to the Capital Securities Guarantee Trustee in respect of this Capital
Securities Guarantee or exercising any trust or power conferred upon the Capital
Securities Guarantee Trustee under this Capital Securities Guarantee.
(b) If the Capital Securities Guarantee Trustee fails to
enforce such Capital Securities Guarantee, any Holder of Capital Securities may
institute a legal proceeding directly against the Guarantor to enforce the
Capital Securities Guarantee Trustee's rights under this Capital Securities
Guarantee, without first instituting a legal proceeding against the Issuer, the
Capital Securities Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action be brought first
against the Issuer or any other person or entity before proceeding directly
against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Capital Securities Guarantee creates a guarantee of
payment and not of collection. This Capital Securities Guarantee will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer) or upon distribution of
Debentures to Holders as provided in the Declaration.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Capital Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Capital Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Capital
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Capital Securities Guarantee. If any amount shall be paid
to the Guarantor in violation of the preceding sentence, the Guarantor agrees to
hold such amount in trust for the Holders and to pay over such amount to the
Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Capital
Securities
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Guarantee notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Capital Securities remain outstanding, the
Guarantor shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Guarantor's capital stock (which includes common and preferred stock) or
(ii) make any payment of principal, interest or premium, if any, on, or repay or
repurchase or redeem any debt securities of the Guarantor (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Debentures or (iii) make any guarantee payments with respect to any guarantee by
the Guarantor of the debt securities of any subsidiary of the Guarantor if such
guarantee ranks pari passu or junior in right of payment to the Debentures
(other than (a) dividends or distributions in shares of, or options, warrants,
rights to subscribe for or purchase shares of, common stock of the Guarantor,
(b) any declaration of a dividend in connection with the implementation of a
stockholder's 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 Capital Securities Guarantee, (d) as a result of a
reclassification of the Guarantor's capital stock or the exchange or the
conversion of one class or series of the Guarantor's capital stock for another
class or series of the Guarantor's capital stock, (e) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, and (f) purchases of common stock related to the issuance of common
stock or rights under any of the Guarantor's benefit plans for its directors,
officers or employees or any of the Guarantor's dividend reinvestment plans), if
at such time (i) there shall have occurred any event of which the Guarantor has
actual knowledge that (a) is, or with the giving of notice or the lapse of time,
or both, would be an Event of Default and (b) in respect of which the Guarantor
shall not have taken reasonable steps to cure, (ii) if the Debentures are held
by the Property Trustee, the Guarantor shall be in default with respect to its
payment of any obligations under this Capital Securities Guarantee or (iii) the
Guarantor shall have given notice of its election of the exercise of its right
to extend the interest payment period pursuant to Section 3.11 of the Indenture
and any such extension shall be continuing.
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SECTION 6.2 Ranking
This Capital Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to Senior Indebtedness (as defined in the Indenture), to the same extent
and in the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture, it being understood that the terms of
Article XIII of the Indenture shall apply to the obligations of the Guarantor
under this Capital Securities Guarantee as if (x) such Article XIII were set
forth herein in full and (y) such obligations were substituted for the term
"Securities" appearing in such Article XIII, (ii) pari passu with the
Guarantor's 7.64% Junior Subordinated Deferrable Interest Debentures Due January
15, 2027 and the Guarantee by the Guarantor of the Capital Securities of the
Wachovia Capital Trust I issued pursuant to the Capital Securities Guarantee
Agreement, dated December 16, 1996, between the Guarantor and The First National
Bank of Chicago as Capital Securities Guarantee Trustee, and (iii) pari passu
with the Debentures and with any Other Guarantee (as defined herein) issued by
the Guarantor after [ ].
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Capital Securities Guarantee shall terminate and be of no
further force and effect (i) upon full payment of the Redemption Price (as
defined in the Declaration) of all Capital Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the Capital Securities,
or (iii) upon full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Capital Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Capital Securities
must restore payment of any sums paid under the Capital Securities or under this
Capital Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified
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Person in good faith in accordance with this Capital Securities Guarantee and in
a manner that such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Capital Securities
Guarantee or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Capital Securities might
properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Capital Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Capital
Securities Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Capital Securities then outstanding.
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SECTION 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 Holders will
be required), this Capital Securities Guarantee may only be amended with the
prior approval of the Holders of a Majority in Liquidation Amount of the
Securities (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). The provisions of Section 12.2 of
the Declaration with respect to meetings of Holders of the Capital Securities
apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Capital Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative
Trustee at the Issuer's mailing address set forth below (or such other address
as the Issuer may give notice of to the holders of the Common Securities):
Wachovia Capital Trust [ ]
c/o Wachovia Corporation
100 North Main Street
Winston-Salem, North Carolina 27150
Attention: Chief Financial Officer
Telecopy: (910) 732-2641
(b) If given to the Capital Securities Guarantee Trustee, at the
Capital Securities Guarantee Trustee's mailing address set forth below (or such
other address as the Capital Securities Guarantee Trustee may give notice of to
the Holders of the Capital Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
Telecopy: (312) 407-1708
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(c) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders of the Capital Securities):
Wachovia Corporation
100 North Main Street
Winston-Salem, North Carolina 27150
Attention: Chief Financial Officer
Telecopy: (910) 732-2641
(d) If given to any Holder of Capital Securities, at
the address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Capital Securities Guarantee is solely for the benefit of
the Holders of the Capital Securities and, subject to Section 3.1(a), is not
separately transferable from the Capital Securities.
SECTION 9.5 Governing Law
THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
22
<PAGE>
THIS CAPITAL SECURITIES GUARANTEE is executed as of the day
and year first above written.
WACHOVIA CORPORATION,
as Guarantor
By:
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Capital Securities Guarantee
Trustee
By:
Name:
Title:
<PAGE>
Exhibit 5(a)
January 21, 1997
Wachovia Capital Trust II
Wachovia Capital Trust III
Wachovia Capital Trust IV
c/o Wachovia Corporation
100 North Main Street
Winston-Salem, North Carolina 27101
Re: Wachovia Capital Trust II, Wachovia Capital Trust
III and Wachovia Capital Trust IV
Ladies and Gentlemen:
We have acted as special Delaware counsel for Wachovia
Corporation, a North Carolina corporation (the "Company"), Wachovia Capital
Trust II, a Delaware business trust ("Trust II"), Wachovia Capital Trust III, a
Delaware business trust ("Trust III"), and Wachovia Capital Trust IV, a Delaware
business trust ("Trust IV") (Trust II, Trust III and Trust IV are hereinafter
collectively referred to as the "Trusts" and sometimes hereinafter individually
referred to as a "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 Trust II, dated January 6,
1997 as filed with the office of the Secretary of State of the State of Delaware
(the "Secretary of State") on January 6, 1997;
<PAGE>
Wachovia Capital Trust II
Wachovia Capital Trust III
Wachovia Capital Trust IV
January 21, 1997
Page 2
(b) The Certificate of Trust of Trust III, dated
January 6, 1997, as filed with the Secretary of State on
January 6, 1997;
(c) The Certificate of Trust of Trust IV, dated
January 6, 1997, as filed with the Secretary of State of
January 6, 1997;
(d) The Declaration of Trust of Trust II, dated as of
January 6, 1997 among the Company and the trustees of Trust II
named therein;
(e) The Declaration of Trust of Trust III, dated as of
January 6, 1997 among the Company and the trustees of Trust III
named therein;
(f) The Declaration of Trust of Trust IV, dated as of
January 6, 1997 among the Company and the trustees of Trust IV
named therein;
(g) The Registration Statement (the "Registration Statement")
on Form S-3, including a preliminary prospectus and prospectus supplement with
respect to the Trusts (the "Prospectus"), relating to the Preferred Securities
of the Trusts representing preferred beneficial interests in the assets of the
Trusts (each, a "Preferred Security" and collectively, the "Preferred
Securities"), filed by the Company and the Trusts with the Securities and
Exchange Commission on January 7, 1997;
(h) A form of Amended and Restated Declaration of Trust for
each of the Trusts, to be entered into between the Company, the trustees of the
Trust named therein, and the holders, from time to time, of the undivided
beneficial interests in the assets of such Trust (including the exhibits and
Annex I thereto)(collectively, the "Declarations" and individually, a
"Declaration"), attached as an exhibit to the Registration Statement; and
(i) A Certificate of Good Standing for each of the Trusts,
dated January 20, 1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Declarations.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (i) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (i) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the
2
<PAGE>
Wachovia Capital Trust II
Wachovia Capital Trust III
Wachovia Capital Trust IV
January 21, 1997
Page 3
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 each of
the Declarations constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the applicable Trust, and that the Declarations and
the Certificates of Trust are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the 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 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 Trusts (collectively, the "Preferred Security
Holders") of a Preferred Security Certificate for such Preferred Security and
the payment for such Preferred Security, in accordance with the Declarations and
the Registration Statement, and (vii) that the Preferred Securities are issued
and sold to the Preferred Security Holders in accordance with the Declarations
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 which are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we
3
<PAGE>
Wachovia Capital Trust II
Wachovia Capital Trust III
Wachovia Capital Trust IV
January 21, 1997
Page 4
have considered necessary or appropriate, and subject to the
assumptions, qualifications, limitations and exceptions set forth
herein, we are of the opinion that:
1. Each of the Trusts has been duly created and is
validly existing in good standing as a business trust under the
Business Trust Act.
2. The Preferred Securities of each Trust 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 applicable
Trust.
3. The Preferred Security Holders, as beneficial owners of the
applicable 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
Declaration.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Validity of Securities" 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,
/s/ Richards, Layton & Finger
Richards, Layton & Finger
4
<PAGE>
Exhibit 5(b)
January 21, 1997
Wachovia Corporation
100 North Main Street
Winston-Salem, North Carolina 27150
Ladies and Gentlemen:
This opinion is delivered in connection with the Registration Statement
on Form S-3 (the "Registration Statement"), filed with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), by the Wachovia Corporation, a North Carolina corporation
("Wachovia"), and Wachovia Capital Trust II, Wachovia Capital Trust III and
Wachovia Capital Trust IV, each a Delaware business trust (the "Trusts", and
together with Wachovia, the "Registrants"), which Registration Statement relates
to (i) preferred securities representing beneficial ownership interests in such
Trusts (the "Preferred Securities"), (ii) junior subordinated deferrable
interest debentures (the "Debentures") to be issued by Wachovia and (iii) the
unconditional and irrevocable guarantee (the "Guarantee") of the obligations of
the Trusts under the Preferred Securities that may be issued by Wachovia. The
Registration Statement relates to the Registrant's registration statement on
Form S-3 (File No. 333-19365).
I have examined an executed copy of the Registration Statement and all
exhibits thereto. I have also examined (i) the form of Junior Subordinated
Indenture (the "Indenture") between Wachovia and The First National Bank of
Chicago, as Debenture Trustee (the "Debenture Trustee"), as filed as an exhibit
to the Registration Statement, pursuant to which the Debentures are to be issued
and (ii) the form of Guarantee Agreement (the "Guarantee Agreement") to be
executed by Wachovia and The First National Bank of Chicago, as Guarantee
Trustee (the "Guarantee Trustee"), as filed as an exhibit to the Registration
Statement. In addition, I have examined, and have relied as to matters of fact
upon, originals or copies, certified or otherwise identified to my satisfaction,
of such corporate records, agreements, documents and other instruments and such
certificates or comparable documents of public officials and of officers and
representatives of Wachovia, and have made such other and further
investigations, as I have deemed relevant and necessary as a basis for the
opinions hereinafter set forth.
In such examination, I have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to my as originals, the conformity to original documents of all
documents submitted to me as certified or
<PAGE>
Wachovia Corporation -2- January 21, 1997
photostatic copies, and the authenticity of the originals of such latter
documents. I have also assumed that the Registration Statement, and any
applicable amendments thereto (including post-effective amendments), will
have become effective under the Act at the time of issuance, offering and
sale of any such Preferred Securities, Debentures or Guarantees.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, I am of the opinion that:
1. With respect to the Debentures to be issued under the
Indenture, when (i) such Indenture has been duly authorized and validly
executed and delivered by Wachovia and by the Debenture Trustee, and
(ii) such Debentures have been duly executed, authenticated, issued and
delivered in accordance with the provisions of such Indenture upon
payment of the consideration therefor as contemplated by the
Registration Statement, such Debentures will constitute valid and
legally binding obligations of Wachovia, enforceable against Wachovia
in accordance with their terms.
2. With respect to the Guarantee to be issued under each
Guarantee Agreement, when (i) such Guarantee Agreement has been duly
authorized and validly executed and delivered by Wachovia and by the
Guarantee Trustee, and (ii) such Guarantee, has been duly executed,
authenticated, issued and delivered in accordance with the provisions
of such Guarantee Agreement, such Guarantee will constitute a valid and
legally binding obligation of Wachovia, enforceable against Wachovia in
accordance with its terms.
My opinions set forth in paragraphs 1 and 2 above are subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
I am a member of the Bar of the State of North Carolina and do not
express any opinion herein concerning any law other than the laws of the State
of North Carolina and the federal laws of the United States.
This opinion is rendered to you and for your benefit solely in
connection with the registration of the Securities. This opinion may not be
relied on by you for any other purpose and may not be relied upon by, nor may
copies thereof be provided to, any other
<PAGE>
Wachovia Corporation -3- January 21, 1997
person, firm, corporation or entity for any purposes whatsoever without our
prior written consent.
I hereby consent to the filing of this opinion letter as an exhibit to
the Registration Statement and to the reference to me under the caption
"Validity of Securities" in the Prospectus and Prospectus Supplement forming a
part of the Initial Registration Statement.
Very truly yours,
/s/ Kenneth W. McAllister
Kenneth W. McAllister
<PAGE>
EXHIBIT 8
January 21, 1997
Wachovia Corporation
100 North Main Street
Winston-Salem, North Carolina 27150
Wachovia Capital Trust II,
Wachovia Capital Trust III and
Wachovia Capital Trust IV
c/o Wachovia Corporation
100 North Main Street
Winston-Salem, North Carolina 27150
Re: Registration Statement on Form S-3
Registration No. 333-19365
Ladies and Gentlemen:
We have acted as counsel to Wachovia Corporation, a North Carolina
corporation (the "Company), and each of Wachovia Capital Trust II, Wachovia
Capital Trust III and Wachovia Capital Trust IV, statutory business trusts
formed under the laws of the State of Delaware (the "Trusts"), in connection
with the above-captioned registration statement on Form S-3 (the "Registration
Statement") filed with the Securities and Exchange Commission (the "Commission")
for the purpose of registering (i) Capital Securities representing undivided
beneficial interests in the assets of the Trust and (ii) Junior Subordinated
Deferrable Interest Debentures (the "Junior Subordinated Debentures) issued by
the Company to the Trust, in connection with the sale of the Capital Securities.
All capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the form of Prospectus Supplement for an offering of
Capital Securities filed as an exhibit to the Registration Statement (the
"Prospectus Supplement").
We hereby confirm that, although the discussion set forth under the
heading "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" in the Prospectus Supplement
does not purport to discuss all possible United States federal income tax
consequences of the purchase, ownership and disposition of Capital 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 Capital Securities, based upon current
law. It is possible that
<PAGE>
contrary positions may be taken by the Internal Revenue Service and that a court
may agree with such contrary positions.
This opinion is furnished to you solely for your benefit in connection
with the filing of the Registration Statement and, except as set forth below, is
not to be used, circulated, quoted or otherwise referred to for any other
purpose or relied upon by any other person for any purpose without our prior
written consent. We hereby consent to the use of our name under the heading
"Validity of Securities" in the Prospectus and Prospectus Supplement and the
filing of this opinion with the Commission as Exhibit 8 to the Registration
Statement. In giving this consent, we do not thereby admit that we are 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
Commission promulgated thereunder. This opinion is expressed as of the date
hereof unless otherwise expressly stated and applies only to the disclosure
under the heading "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" set forth in the
Prospectus Supplement filed as of the date hereof. We disclaim any undertaking
to advise you of any subsequent changes of the facts stated or assumed herein or
any subsequent changes in applicable law.
Very truly yours,
/s/ Brown & Wood LLP
Brown & Wood LLP
2
<PAGE>
Exhibit 23(a)
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Wachovia Corporation
for the registration of $300 million of Junior Subordinated Deferrable Interest
Debentures and $300 million of preferred equity securities of Wachovia Capital
Trust II, Trust III, and Trust IV and related Guarantees of the preferred equity
securities, and to the incorporation by reference therein of our report dated
January 11, 1996 with respect to the consolidated financial statements of
Wachovia Corporation incorporated by reference in its Annual Report (Form 10-K)
for the year ended December 31, 1995, filed with the Securities and Exchange
Commission.
/S/ ERNST & YOUNG LLP
Ernst & Young LLP
Winston-Salem, North Carolina
January 20, 1997
<PAGE>
WACHOVIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Wachovia Corporation (the "Corporation") does hereby make, constitute and
appoint Kenneth W. McAllister and Alice Washington Grogan, and each of them or
any one of them, his true and lawful attorney-in-fact (with full power of
substitution and resubstitution) to act for him and in his name, place and stead
in his capacity as a director of Wachovia Corporation, to file a Registration
Statement on Form S-3 or other applicable form, relating to an offering of up to
an aggregate of $300,000,000 of preferred securities by one or more Delaware
business trust subsidiaries of the Corporation, a like amount of junior
subordinated debentures of the Corporation, and guarantees by the Corporation of
the above-referenced preferred securities with the Securities and Exchange
Commission, and to sign any and all amendments (including post-effective
amendments) to the Registration Statement, and to file the same, with any
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
In WITNESS WHEREOF, I the undersigned have executed this Power of
Attorney this 2nd day of January, 1997.
/S/ JOHN L. CLENDENIN
---------------------------
Signature
JOHN L. CLENDENIN
----------------------------
Print Name
<PAGE>
WACHOVIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Wachovia Corporation (the "Corporation") does hereby make, constitute and
appoint Kenneth W. McAllister and Alice Washington Grogan, and each of them or
any one of them, his true and lawful attorney-in-fact (with full power of
substitution and resubstitution) to act for him and in his name, place and stead
in his capacity as a director of Wachovia Corporation, to file a Registration
Statement on Form S-3 or other applicable form, relating to an offering of up to
an aggregate of $300,000,000 of preferred securities by one or more Delaware
business trust subsidiaries of the Corporation, a like amount of junior
subordinated debentures of the Corporation, and guarantees by the Corporation of
the above-referenced preferred securities with the Securities and Exchange
Commission, and to sign any and all amendments (including post-effective
amendments) to the Registration Statement, and to file the same, with any
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
In WITNESS WHEREOF, I the undersigned have executed this Power of
Attorney this 6th day of January, 1997.
/S/ ROBERT M. HOLDER, JR.
-----------------------------
Signature
ROBERT M. HOLDER, JR.
------------------------------
Print Name
<PAGE>
WACHOVIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Wachovia Corporation (the "Corporation") does hereby make, constitute and
appoint Kenneth W. McAllister and Alice Washington Grogan, and each of them or
any one of them, his true and lawful attorney-in-fact (with full power of
substitution and resubstitution) to act for him and in his name, place and stead
in his capacity as a director of Wachovia Corporation, to file a Registration
Statement on Form S-3 or other applicable form, relating to an offering of up to
an aggregate of $300,000,000 of preferred securities by one or more Delaware
business trust subsidiaries of the Corporation, a like amount of junior
subordinated debentures of the Corporation, and guarantees by the Corporation of
the above-referenced preferred securities with the Securities and Exchange
Commission, and to sign any and all amendments (including post-effective
amendments) to the Registration Statement, and to file the same, with any
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
In WITNESS WHEREOF, I the undersigned have executed this Power of
Attorney this 3rd day of January, 1997.
/S/ WYNDHAM ROBERTSON
------------------------
Signature
WYNDHAM ROBERTSON
------------------------
Print Name
<PAGE>
WACHOVIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Wachovia Corporation (the "Corporation") does hereby make, constitute and
appoint Kenneth W. McAllister and Alice Washington Grogan, and each of them or
any one of them, his true and lawful attorney-in-fact (with full power of
substitution and resubstitution) to act for him and in his name, place and stead
in his capacity as a director of Wachovia Corporation, to file a Registration
Statement on Form S-3 or other applicable form, relating to an offering of up to
an aggregate of $300,000,000 of preferred securities by one or more Delaware
business trust subsidiaries of the Corporation, a like amount of junior
subordinated debentures of the Corporation, and guarantees by the Corporation of
the above-referenced preferred securities with the Securities and Exchange
Commission, and to sign any and all amendments (including post-effective
amendments) to the Registration Statement, and to file the same, with any
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
In WITNESS WHEREOF, I the undersigned have executed this Power of
Attorney this 14th day of January, 1997.
/S/ CHARLES MCKENZIE TAYLOR
---------------------------
Signature
CHARLES MCKENZIE TAYLOR
----------------------------
Print Name
<PAGE>
