<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 3, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form S-3
Registration Statement under
The Securities Act of 1933
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<TABLE>
<S> <C> <C>
NEWELL CO. DELAWARE 36-3514169
NEWELL FINANCIAL TRUST I DELAWARE 36-7213787
(Exact name of registrant (State or other jurisdiction of (I.R.S. employer
as specified in its charter) incorporation or organization) identification no.)
</TABLE>
NEWELL CENTER
29 EAST STEPHENSON STREET
FREEPORT, ILLINOIS 61032
(815) 235-4171
(Address, including zip code, and telephone number, including area code, of
principal executive offices)
DALE L. MATSCHULLAT
VICE PRESIDENT-GENERAL COUNSEL
4000 AUBURN STREET
ROCKFORD, ILLINOIS 61101
(Name and address of agent for service)
(815) 969-6101
(Telephone number, including area code, of agent for service)
WITH A COPY TO:
Stuart L. Goodman
Schiff Hardin & Waite
7200 Sears Tower
Chicago, Illinois 60606
(312) 258-5711
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Approximate date of commencement of the proposed sale of the securities to
the public: As soon as practicable after the effective date of this Registration
Statement.
If the securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If the 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 on the earlier
effective registration statement for the same offering. [ ]
--------------------
If the form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
----------------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE
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<S> <C> <C> <C>
Convertible Quarterly Income Preferred
Securities of Newell Financial Trust I....... 10,000,000 $50.00(1)(2) $500,000,000(1)(2)
Convertible Subordinated Debentures due 2027 of
Newell Co.................................... 10,000,000(3)(4) $50.00(1)(2) $500,000,000(3)
Common Stock, par value $1.00 per share, of
Newell Co. (including Preferred Stock
Purchase Rights)(5).......................... 9,865,000 --(4) --(4)
Preferred Securities Guarantee of Newell
Co.(6)....................................... -- -- --
Total.......................................... -- -- $500,000,000
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<CAPTION>
TITLE OF EACH CLASS OF AMOUNT OF
SECURITIES TO BE REGISTERED REGISTRATION FEE
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<S> <C>
Convertible Quarterly Income Preferred
Securities of Newell Financial Trust I....... $147,500
Convertible Subordinated Debentures due 2027 of
Newell Co.................................... --
Common Stock, par value $1.00 per share, of
Newell Co. (including Preferred Stock
Purchase Rights)(5).......................... --
Preferred Securities Guarantee of Newell
Co.(6)....................................... --
Total.......................................... $147,500
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</TABLE>
(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457 of the Securities Act.
(2) Exclusive of accrued interest and distributions, if any.
(3) $515,465,000 in aggregate principal amount of 5 1/4% Convertible
Subordinated Debentures due 2027 (the "Debentures") issued by Newell Co., a
Delaware corporation ("Newell"), were issued and sold to Newell Financial
Trust I, a Delaware statutory business trust (the "Issuer"), in connection
with the issuance by the Issuer of 10,000,000 of its 5 1/4% Convertible
Quarterly Income Preferred Securities (the "Preferred Securities").
Debentures may be distributed, under certain circumstances, to the holders
of Preferred Securities for no additional consideration.
(4) The Preferred Securities may be exchanged for Debentures, which are
convertible into common stock, $1.00 par value per share, of Newell ("Common
Stock"). Each Preferred Security is initially convertible into 0.9865 shares
of Common Stock, subject to adjustment under certain circumstances. Shares
of Common Stock issued upon conversion of the Preferred Securities will be
issued without the payment of additional consideration.
(5) Includes such additional Common Stock as may be issuable upon conversion as
a result of the anti-dilution provisions of the Indenture (as defined
herein). The value attributable to the Preferred Stock Purchase Rights, if
any, is reflected in the value of the Common Stock.
(6) Includes the obligations of Newell under the Guarantee (as defined herein)
and certain back-up undertakings under (i) the Indenture (as defined herein)
pursuant to which the Debentures were issued, (ii) the Debentures and (iii)
the Amended and Restated Declaration of Trust of the Issuer (the "Trust
Agreement"), including Newell's obligations under such Indenture and Trust
Agreement to pay costs, expenses, debts and liabilities of the Issuer (other
than with respect to the Preferred Securities and the Common Securities of
the Issuer), which in the aggregate provide a full and unconditional
guarantee of amounts due on the Preferred Securities. No separate
consideration will be received for the Guarantee and such back-up
undertakings.
------------------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
SUBJECT TO COMPLETION DATED MARCH 3, 1998
10,000,000 PREFERRED SECURITIES
NEWELL LOGO NEWELL FINANCIAL TRUST I
5 1/4% CONVERTIBLE QUARTERLY INCOME PREFERRED SECURITIES
(CONVERTIBLE QUIPS(SM)* SECURITIES)
(LIQUIDATION PREFERENCE $50 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY, AND CONVERTIBLE INTO COMMON STOCK
OF,
NEWELL CO.
------------------------
This Prospectus relates to the 5 1/4% Convertible Quarterly Income Preferred
Securities (the "Preferred Securities") which represent preferred undivided
beneficial interests in the assets of Newell Financial Trust I, a statutory
business trust created under the laws of the State of Delaware (the "Issuer"),
and the shares of common stock, $1.00 par value per share (the "Company Common
Stock"), of Newell Co., a Delaware corporation (the "Company"), issuable upon
conversion of the Preferred Securities. The Preferred Securities were issued and
sold (the "Original Offering") on December 12, 1997 (the "Original Offering
Date") to the Initial Purchasers (as defined herein) and were simultaneously
sold by the Initial Purchasers in transactions exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
in the United States to persons reasonably believed to be qualified
institutional buyers ("QIBs") as defined in Rule 144A under the Securities Act,
and outside the United States to non-U.S. persons in offshore transactions in
reliance on Regulation S under the Securities Act. The Company owns all of the
beneficial interests in the assets of the Issuer represented by the common
securities of the Issuer (the "Common Securities", and, together with the
Preferred Securities, the "Trust Securities"). The Issuer exists for the sole
purpose of issuing the Preferred Securities and the Common Securities and
investing the proceeds thereof in 5 1/4% Convertible Subordinated Debentures due
December 1, 2027 (the "Debentures"), issued by the Company. The Preferred
Securities have a preference under certain circumstances with respect to cash
distributions and amounts payable on liquidation, redemption or otherwise over
the Common Securities. See "Description of the Preferred
Securities--Subordination of Common Securities".
The Preferred Securities and the Company Common Stock issuable upon
conversion of the Preferred Securities (collectively the "Offered Securities")
may be offered and sold from time to time by the holders named herein or by
their transferees, pledgees, donees or their successors (collectively, the
"Selling Holders") pursuant to this Prospectus. The Offered Securities may be
sold by the Selling Holders from time to time directly to purchasers or through
agents, underwriters or dealers. See "Selling Holders" and "Plan of
Distribution." If required, the names of any such agents or underwriters
involved in the sale of the Offered Securities and the applicable agent's
commission, dealer's purchase price or underwriter's discount, if any, will be
set forth in an accompanying supplement to this Prospectus (the "Prospectus
Supplement"). The Selling Holders will receive all of the net proceeds from the
sale of the Offered Securities and will pay all underwriting discounts, selling
commissions and transfer taxes, if any, applicable to any such sale. The Company
is responsible for payment of all other expenses incident to the registration of
the Offered Securities. The Selling Holders and any broker-dealers, agents or
underwriters that participate in the distribution of the Offered Securities may
be deemed to be "underwriters" within the meaning of the Securities Act, and any
commission received by them and any profit on the resale of the Offered
Securities purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. See "Plan of Distribution" for a description
of certain indemnification arrangements.
Each Preferred Security is convertible at any time in the manner described
herein at the option of the holder into shares of Company Common Stock at the
rate of 0.9865 shares of Company Common Stock for each Preferred Security
(equivalent to a conversion price of $50.685 per share of Company Common Stock),
subject to adjustment in certain circumstances. See "Description of the
Preferred Securities--Conversion Rights" and "Description of the Company's
Capital Stock". The last reported sale price of Company Common Stock, which is
listed under the symbol "NWL" on the New York Stock Exchange ("NYSE"), on March
2, 1998 was $45 1/4 per share.
Holders of the Preferred Securities are entitled to receive preferential
cumulative cash distributions from the Issuer at an annual rate of 5 1/4% of the
liquidation preference of $50 per Preferred Security accruing from the date of
original issuance and payable, unless deferred, quarterly in arrears on March 1,
June 1, September 1 and December 1 of each year, commencing March 1, 1998
("Distributions"). The distribution rate and the distribution and other payment
dates for the Preferred Securities will correspond to the interest rate and
interest and other payment dates in the Debentures, which are the sole assets of
the Issuer. As a result, if principal or interest is not paid on the Debentures,
no amounts will be paid with respect to the Preferred Securities.
(Continued on page 2)
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS
TO BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE OFFERED SECURITIES.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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- ---------------------
* QUIPS is a servicemark of Goldman, Sachs & Co.
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The date of this Prospectus is , 1998.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with
the Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This Prospectus shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall there be
any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
<PAGE> 3
The Company has the right to defer payment of interest on the Debentures at
any time or from time to time for a period not exceeding 20 consecutive quarters
with respect to each deferral period (each, an "Extension Period"), provided
that no Extension Period may extend beyond the stated maturity of the
Debentures. Upon the termination of any such Extension Period and the payment of
all amounts then due on any Interest Payment Date (as defined herein), the
Company may elect to begin a new Extension Period subject to the requirements
described herein. If interest payments on the Debentures are so deferred,
Distributions on the Preferred Securities will also be deferred and the Company
will not be permitted, subject to certain exceptions described herein, to
declare or pay any cash distributions with respect to the Company's capital
stock or debt securities that rank pari passu with or junior to the Debentures.
During an Extension Period, interest on the Debentures will continue to
accrue (and the amount of Distributions to which holders of the Preferred
Securities are entitled will accumulate at 5 1/4% per annum, compounded
quarterly) and holders of Preferred Securities will be required to recognize
interest income for United States Federal income tax purposes. See "Description
of the Debentures--Option to Extend Interest Payment Period" and "Certain
Federal Income Tax Consequences--Interest Income and Original Issue Discount".
Except as provided below, the Preferred Securities may not be redeemed by
the Issuer prior to December 1, 2001. The Preferred Securities are subject to
redemption, in whole or in part, on or after such date, at the redemption prices
set forth herein, upon any redemption by the Company of Debentures. See
"Description of the Preferred Securities--Optional Redemption". In addition, the
Preferred Securities are subject to mandatory redemption upon the repayment at
maturity or as a result of acceleration of the Debentures. See "Description of
the Preferred Securities--Mandatory Redemption".
Following the occurrence of a Special Event (as herein defined), the
Preferred Securities are also subject to (i) exchange, in the manner described
herein, for Debentures (see "Description of the Preferred Securities--Special
Event Exchange or Redemption") and (ii) redemption, in whole or in part, on or
after December 1, 2001, at 100% of the liquidation preference thereof, plus
accrued and unpaid Distributions thereon, if such Special Event constitutes a
Tax Event (as defined herein). See "Description of Preferred Securities--Special
Event Exchange or Redemption". At any time, the Company has the right to
dissolve the Issuer and, after satisfaction of the liabilities of creditors of
the Issuer as provided by applicable law, cause the Debentures to be distributed
to the holders of the Preferred Securities in dissolution of the Issuer. See
"Description of the Preferred Securities--Distribution of Debentures".
The Company has, through the Guarantee, the Trust Agreement, the Indenture
(each, as defined herein) and the Debentures, taken together, fully, irrevocably
and unconditionally guaranteed all of the Issuer's obligations under the
Preferred Securities. See "Description of the Guarantee", "Newell Financial
Trust I" and "Description of the Debentures", respectively. The Guarantee of the
Company guarantees the payment of Distributions and payments on liquidation or
redemption of the Preferred Securities, but only in each case to the extent of
funds held by the Issuer, as described herein (the "Guarantee"). See
"Description of the Guarantee". If the Company does not make interest payments
on the Debentures held by the Issuer as a result of the Company's election to
defer payment of interest during an Extension Period, or otherwise, the Issuer
will have insufficient funds to pay Distributions on the Preferred Securities.
The Guarantee does not cover payment of Distributions when the Issuer does not
have sufficient funds to pay such Distributions. The obligations of the Company
under the Guarantee are subordinate and junior in right of payment to all other
liabilities of the Company and will rank pari passu with the most senior
preferred stock, if any, issued from time to time by the Company and any
guarantee now or hereafter entered into by the Company in respect of any
preferred or preference stock of any affiliate of the Company. See "Description
of the Debentures--Subordination".
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<PAGE> 4
The Debentures are subordinate and junior in right of payment to all Senior
Debt (as defined herein) of the Company. The terms of the Debentures place no
limitation on the amount of Senior Debt that may be incurred by the Company or
the amount of indebtedness that may be incurred by its subsidiaries. As of
September 30, 1997, the Company had aggregate indebtedness of approximately
$1.45 billion, all of which comprised Senior Debt of the Company. The Company's
obligations under the Debentures will also be effectively subordinated to all
existing and future obligations of the Company's subsidiaries.
In the event of the dissolution of the Issuer, after satisfaction of the
creditors of the Issuer as provided by applicable law, the holders of the
Preferred Securities will be entitled to receive a liquidation preference of $50
per Preferred Security plus accumulated and unpaid Distributions thereon to the
date of payment, which may be in the form of a distribution of such amount in
Debentures, subject to certain exceptions. See "Description of the Preferred
Securities--Liquidation Distribution upon Dissolution".
Whenever the Company issues shares of Company Common Stock upon conversion
of Debentures, the Company will, subject to certain conditions, issue, together
with each share of Company Common Stock, such number (which number may be a
fraction) of Rights (as defined herein) as shall at that time be issuable with a
share of Company Common Stock pursuant to the Rights Agreement (as defined
herein).
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<PAGE> 5
DOCUMENTS INCORPORATED BY REFERENCE
The documents listed below filed by the Company with the Securities and
Exchange Commission (the "Commission") are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997;
(c) The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1997;
(d) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997;
(e) The Company's Current Report on Form 8-K dated June 6, 1997;
(f) The Company's Current Report on Form 8-K/A dated June 6, 1997;
(g) The Company's Current Report on Form 8-K dated December 12, 1997;
(h) The description of the Common Stock, contained in the Company's
Registration Statement on Form 8-B dated June 30, 1987; and
(i) The description of the Rights, contained in the Company's Registration
Statement on Form 8-A dated October 25, 1988.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities and Exchange Act of 1934, as amended (the "Exchange
Act") subsequent to the date of this Prospectus and prior to the termination of
the offering of the Offered Securities made hereby, shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated by reference or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of the
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 statements
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF
THIS PROSPECTUS HAS BEEN DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS WHICH ARE INCORPORATED HEREIN BY
REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS). REQUESTS FOR SUCH
COPIES SHOULD BE DIRECTED TO: RICHARD H. WOLFF, SECRETARY, NEWELL CO., 4000
AUBURN STREET, ROCKFORD, ILLINOIS 61125 (TELEPHONE: (815) 969-6111).
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Commission. The reports, proxy statements and other
information filed by the Company may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
located at 7 World Trade Center, New York, New York 10048, and Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. The Company Common Stock is listed on the NYSE and the Chicago Stock
Exchange ("CSE"), and reports and other information concerning the Company can
also be inspected at the office of the NYSE, 20 Broad Street, New York, New York
10005, and at the offices of the CSE, One Financial Place, 440 South LaSalle
Street, Chicago, Illinois 60605-1070. Such material may also be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov.
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<PAGE> 6
The Company and the Issuer have filed with the Commission a Registration
Statement (which term encompasses any amendments thereto) on Form S-3 under the
Securities Act with respect to the securities offered by this Prospectus (the
"Registration Statement"). This Prospectus, which constitutes part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, certain items of which are contained in exhibits to the
Registration Statement as permitted by the rules and regulations of the
Commission. For further information with respect to the Company and the
securities offered by this Prospectus, reference is made to the Registration
Statement, including the exhibits thereto, and the financial statements and
notes thereto filed or incorporated by reference as a part thereof, which are on
file at the offices of the Commission and may be obtained upon payment of the
fee prescribed by the Commission, or may be examined without charge at the
offices of the Commission. Statements made in this Prospectus concerning the
contents of any document referred to herein are not necessarily complete, and,
in each such instance, are qualified in all respects by reference to the
applicable documents filed with the Commission.
No separate financial statements of the Issuer have been included herein.
The Issuer and the Company do not consider that such financial statements would
be material to potential investors because the Issuer is a newly organized
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 Debentures and issuing the Preferred Securities and
Common Securities and the Company has fully and unconditionally guaranteed all
of the Issuer's obligations under the Preferred Securities. See "Newell
Financial Trust I", "Description of the Preferred Securities", "Description of
the Guarantee" and "Description of the Debentures".
The terms the "Company" and "Newell Co." refer collectively to Newell Co.
and its subsidiaries and divisions (referred to herein as "divisions", even if
separately incorporated), unless the context otherwise requires.
FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this Prospectus or in the accompanying
Prospectus Supplement and in the documents incorporated by reference herein or
therein may constitute forward-looking statements as defined by the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"). Such
forward-looking statements may relate to, but are not limited to, such matters
as sales, income, earnings per share, return on equity, capital expenditures,
dividends, capital structure, free cash flow, debt to capitalization ratios,
internal growth rates, future economic performance, management's plans, goals
and objectives for future operations and growth or the assumptions relating to
any of the forward-looking information. Such statements generally are
accompanied by words such as "intend", "anticipate", "believe", "estimate",
"project", "expect", "should" or similar statements. The Company cautions that
forward-looking statements are not guarantees since there are inherent
difficulties in predicting future results, and that actual results could differ
materially from those expressed or implied in the forward-looking statements.
Factors that could cause actual results to differ include, but are not limited
to, those discussed below and the matters set forth in this Prospectus or in the
accompanying Prospectus Supplement and the documents incorporated by reference
herein or therein. This section is included pursuant to the Reform Act and with
the intention of obtaining the benefits of the so-called "safe harbor"
provisions of the Reform Act.
RETAIL ECONOMY
The Company's business depends on the strength of the retail economies in
various parts of the world, primarily in the U.S. and to a lesser extent in Asia
(including Australia and New Zealand), Canada, Europe (including the Middle East
and Africa) and Latin America (including Mexico, Central America and South
America), which are affected by such factors as consumer
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<PAGE> 7
demand, the condition of the consumer products retail industry and weather
conditions. In recent years, the consumer products retail industry has been
characterized by intense competition and consolidation among both product
suppliers and retailers.
NATURE OF THE MARKETPLACE
The Company competes with numerous other manufacturers and distributors of
consumer products, many of which are large and well established. In addition,
the Company's principal customers are volume purchasers, many of which are much
larger than the Company and have strong bargaining power with suppliers. The
rapid growth of large mass merchandisers, such as discount stores, warehouse
clubs, home centers and office superstores, together with changes in consumer
shopping patterns, have contributed to a significant consolidation of the retail
industry and the formation of dominant multi-category retailers. Other trends
among retailers are to require manufacturers to maintain or reduce product
prices or deliver products with shorter lead times, or for the retailer to
import generic products directly from foreign sources. The combination of these
market influences has created an intensely competitive environment in which the
Company's principal customers continuously evaluate which product suppliers to
use, resulting in pricing pressures and the need for ongoing improvements in
customer service.
GROWTH BY ACQUISITION
The acquisition of companies that sell branded, staple consumer product
lines to volume purchasers is one of the foundations of the Company's growth
strategy. The Company's ability to continue to make sufficient strategic
acquisitions at reasonable prices and to integrate the acquired businesses
within a reasonable period of time are important factors in the Company's future
earnings growth.
FOREIGN OPERATIONS
Foreign operations, which include manufacturing in Canada, Mexico,
Colombia, Venezuela and many countries in Europe and importing products from the
Far East, increasingly are becoming important to the Company's business. Foreign
operations can be affected by factors such as currency devaluation and other
currency fluctuations, tariffs, nationalization, exchange controls, limitations
on foreign investment in local businesses and other political, economic and
regulatory risks.
RISK FACTORS
Prospective purchasers of the Offered Securities should carefully review
the information contained elsewhere in this Prospectus and in the accompanying
Prospectus Supplement or incorporated by reference herein and therein and should
particularly consider the following matters.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE DEBENTURES
The obligations of the Company under the Guarantee issued by the Company
for the benefit of the holders of Preferred Securities are unsecured and rank
subordinate and junior in right of payment to all other liabilities of the
Company and pari passu with the most senior preferred stock, if any, issued from
time to time by the Company and any guarantee now or hereafter entered into by
the Company in respect of any preferred or preference stock of any affiliate of
the Company. The obligations of the Company under the Debentures are subordinate
and junior in right of payment to all present and future Senior Debt (as defined
herein) of the Company. As of September 30, 1997, the Company had indebtedness
of approximately $1.45 billion, all of which comprised Senior Debt of the
Company. The ability of the Issuer to pay amounts due on the Preferred
Securities is solely dependent upon the Company making payments on the
Debentures as and when required. Neither the Indenture, the Guarantee nor the
Trust Agreement places any limitation on the amount of
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<PAGE> 8
secured or unsecured debt, including Senior Debt, that may be incurred by the
Company and its subsidiaries. See "Description of the Guarantee--Status of the
Guarantee" and "Description of the Debentures--Subordination".
STRUCTURAL SUBORDINATION
The Debentures are obligations of the Company exclusively. Since
substantially all of the Company's operations are conducted through
subsidiaries, substantially all of the Company's cash flow and, consequently,
its ability to service debt, including the Debentures, is dependent upon the
earnings of its subsidiaries and the transfer of funds by those subsidiaries to
the Company in the form of dividends or other transfers, supplemented with
borrowings.
In addition, creditors of the Company's subsidiaries would be entitled to a
claim on the assets of such subsidiaries prior to any claims by the Company.
Consequently, in the event of a dissolution, liquidation or reorganization of
any subsidiary, creditors of such subsidiary are likely to be paid in full
before any distribution is made to the Company, except to the extent that the
Company itself is recognized as a creditor of such subsidiary, in which case the
claims of the Company would still be subordinate to any security interest in the
assets of such subsidiary and any indebtedness of such subsidiary senior to that
held by the Company. As of September 30, 1997, the aggregate indebtedness
(excluding accounts payable and accrued expenses, deferred income taxes and
other liabilities) of the consolidated subsidiaries of the Company was
approximately $97 million. See "Description of the Preferred
Securities--Distributions" and "Description of the Debentures--Option to Extend
Interest Payment Period".
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
The Company has the right under the Indenture (as defined herein) to defer
the payment of interest on the Debentures at any time or from time to time for a
period not exceeding 20 consecutive quarters with respect to each Extension
Period, provided that no Extension Period may extend beyond the stated maturity
of the Debentures. Upon the termination of any Extension Period and the payment
of all amounts then due, the Company may select a new Extension Period and
terminate the payments of all amounts then due, subject to the requirements
described herein. As a consequence of any such deferral, quarterly Distributions
on the Preferred Securities by the Issuer will be deferred (and the amount of
Distributions to which holders of the Preferred Securities are entitled will
accumulate additional Distributions) during any such Extension Period.
Should an Extension Period occur, a holder of Preferred Securities will
continue to accrue income (in the form of original issue discount ("OID")) in
respect of its pro rata share of the deferred interest allocable to the
Debentures held by the Issuer for United States Federal income tax purposes. As
a result, a holder of Preferred Securities will include such income in gross
income for United States Federal income tax purposes in advance of the receipt
of cash, and will not receive the cash related to such income from the Issuer if
the holder disposes of the Preferred Securities prior to the record date for the
payment of Distributions. See "Certain Federal Income Tax Consequences--Interest
Income and Original Issue Discount". Moreover, if a holder of Preferred
Securities converts its Preferred Securities into Company Common Stock during an
Extension Period, the holder will not receive any cash related to the deferred
distribution. Additionally, during the pendency of any Extension Period, the
Company will not be permitted, subject to certain exceptions set forth herein,
to declare or pay any cash distribution with respect to the Company capital
stock or debt securities (including guarantees of indebtedness for money
borrowed) that rank pari passu with or junior to the Debentures. See
"Description of the Preferred Securities--Distributions".
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Debentures.
However, should the Company elect to exercise such right in the future, the
market price of the Preferred Securities is likely to be affected.
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<PAGE> 9
A holder that disposes of its Preferred Securities during an Extension Period,
therefore, might not receive the same return on its investment as a holder that
continues to hold its Preferred Securities. In addition, as a result of the
existence of the Company's right to defer interest payments, the market price of
the Preferred Securities (which represent preferred undivided beneficial
interests in the Debentures) may be more volatile than the market prices of
other securities on which original issue discount accrues that are not subject
to such deferrals.
SPECIAL EVENT EXCHANGE OR REDEMPTION; DISTRIBUTION OF DEBENTURES
Upon certain circumstances following the occurrence and continuation of a
Special Event (as defined herein), the Preferred Securities are also subject to
(i) exchange in whole or, in the case of a Tax Event (as defined herein) that
has occurred and is continuing, in whole or in part, in the manner described
herein, for the Debentures or (ii) redemption, in whole or in part, on or after
December 1, 2001, at the liquidation preference thereof plus accrued and unpaid
distributions, in the case of a Tax Event. See "Description of the Preferred
Securities--Special Event Exchange or Redemption".
There can be no assurance as to the market prices for Preferred Securities
or Debentures that may be distributed in exchange for Preferred Securities if a
dissolution of the Issuer occurs or if the Preferred Securities are exchanged
for Debentures in connection with a Special Event. Accordingly, the Preferred
Securities that an investor may purchase, whether pursuant to this Prospectus or
in the secondary market, or the Debentures that a holder of Preferred Securities
may receive on dissolution of the Issuer, may trade at a discount to the price
that the investor paid to purchase the Preferred Securities. Because holders of
Preferred Securities may receive Debentures on dissolution of the Issuer or if
the Preferred Securities are exchanged for Debentures in connection with a
Special Event, prospective purchasers of Preferred Securities are also making an
investment decision with regard to the Debentures and should carefully review
all the information regarding the Debentures contained herein. See "Description
of the Preferred Securities--Special Event Exchange or Redemption" and
"Description of the Debentures--General".
RIGHTS UNDER THE GUARANTEE
The Guarantee guarantees to the holders of the Preferred Securities on a
subordinated basis the following payments, to the extent not paid by the Issuer:
(i) any accumulated and unpaid Distributions required to be paid on the
Preferred Securities, to the extent that the Issuer has funds on hand available
therefor at such time, (ii) the redemption price with respect to any Preferred
Securities called for redemption, to the extent that the Issuer has funds on
hand available therefor at such time, and (iii) upon a voluntary or involuntary
dissolution of the Issuer (unless the Debentures are distributed to holders of
the Preferred Securities), the lesser of (a) the aggregate of the liquidation
preference and all accrued and unpaid Distributions to the date of payment to
the extent that the Issuer has funds on hand available therefor at such time and
(b) the amount of assets of the Issuer remaining available for distribution to
holders of the Preferred Securities in dissolution of the Issuer.
As part of the Guarantee, the Company agrees that it will honor all
obligations provided therein relating to the conversion or exchange of the
Preferred Securities into or for Company Common Stock or Debentures.
The holders of not less than a majority in aggregate liquidation preference
of the Preferred Securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Guarantee Trustee
(as defined herein) 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 Preferred Securities may institute a proceeding directly against the Company
to enforce its rights under the Guarantee without first instituting a proceeding
against the Issuer, the Guarantee Trustee or any other person or entity. If the
Company were to default on its obligation to pay amounts payable under the
Debentures, the Issuer would lack funds for the payment of
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<PAGE> 10
Distributions or amounts payable on redemption of the Preferred Securities or
otherwise, and, in such event, holders of the Preferred Securities would not be
able to rely upon the Guarantee for payment of such amounts. Instead, in the
event a Debenture Event of Default shall have occurred and be continuing, a
holder of Preferred Securities would be required to rely on the enforcement by
the Property Trustee (as defined herein) of its rights as registered holder of
the Debentures against the Company pursuant to the terms of the Debenture. If,
however, such event is attributable to the failure of the Company to pay
interest or premium on or principal of the Debentures on the payment date on
which such payment is due and payable (or, in the case of a redemption, on the
date fixed for redemption), then a holder of Preferred Securities may directly
institute a proceeding against the Company for enforcement of payment to such
holder of the interest or premium on or principal of such Debentures having a
principal amount equal to the aggregate liquidation preference of the Preferred
Securities of such holder (a "Direct Action"). In connection with such Direct
Action, the Company will be subrogated to the rights of such holder of Preferred
Securities under the Trust Agreement to the extent of any payment made by the
Company to such holder of Preferred Securities in such Direct Action. Except as
set forth herein, holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of Debentures or assert
directly any other rights in respect of the Debentures. See "Newell Financial
Trust I", "Description of the Preferred Securities--Enforcement of Certain
Rights by Holders of Preferred Securities", "Description of the Guarantee" and
"Description of the Debentures--Debenture Events of Default". The Trust
Agreement provides that each holder of Preferred Securities by acceptance
thereof agrees to the provisions of the Guarantee and the Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Declaration Event of Default occurs and is continuing, the holders of
Preferred Securities will rely on the enforcement by the Property Trustee of its
rights as the holder of the Debentures against the Company. An event of default
under the Indenture (a "Debenture Event of Default") constitutes an event of
default under the Trust Agreement with respect to the Preferred Securities and
the Common Securities (a "Declaration Event of Default"). In addition, the
holders of a majority in aggregate liquidation preference of the Preferred
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property Trustee
under the Trust Agreement, including the right to direct the Property Trustee to
exercise the remedies available to it as a holder of the Debentures. If the
Property Trustee fails to enforce its rights as holder of the Debentures after a
request therefor by a holder of Preferred Securities, such holder may, to the
fullest extent permitted by law, proceed to enforce such rights directly against
the Company. Notwithstanding the foregoing, if a Declaration Event of Default
occurs that results from the failure of the Company to pay principal of or
interest or premium on the Debentures when due (or in the case of a redemption,
on the redemption date), during the continuance of such an event of default a
holder of Preferred Securities may institute a legal proceeding directly against
the Company to obtain payment to such holder of such principal, interest or
premium on Debentures having a principal amount equal to the aggregate
liquidation preference of the Preferred Securities owned of record by such
holder. See "Description of the Preferred Securities--Declaration Events of
Default; Notice" and "--Voting Rights; Amendment of the Trust Agreement".
LIMITED VOTING RIGHTS
Holders of Preferred Securities generally have limited voting rights in
connection with modifying the Preferred Securities and directing the activities
of the Property Trustee as the holder of the Debentures. Holders of Preferred
Securities are not entitled to vote to appoint, remove or replace the Issuer
Trustees (as defined herein), which voting rights are vested exclusively in the
holder of the Common Securities. The Issuer Trustees and the Company may amend
the Trust Agreement without the consent of holders of Preferred Securities to
ensure that the Issuer will be classified for United States Federal income tax
purposes as a grantor trust even if such action adversely affects
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<PAGE> 11
the interests of such holders. See "Newell Financial Trust I" and "Description
of the Preferred Securities--Voting Rights; Amendment of the Trust Agreement".
POSSIBLE TAX LEGISLATION
Prospective investors should be aware that legislation has been introduced
in the United States Congress in the past that would, if enacted, deny an
interest deduction to issuers of instruments such as the Debentures. No such
legislation has been enacted. There can be no assurance, however, that similar
legislation will not ultimately be enacted into law, or that other developments
will not occur after the date hereof that would adversely affect the tax
treatment of the Debentures and could result in the exchange of the Debentures
for Preferred Securities or, in certain limited circumstances, the redemption of
the Debentures by the Company and the distribution of the resulting cash in
redemption of the Preferred Securities. See "Description of the Preferred
Securities -- Special Event Exchange or Redemption".
POTENTIAL REDUCTION OF PAYMENTS TO NON-UNITED STATES HOLDERS FOR UNITED STATES
TAX WITHHOLDING REQUIREMENTS
In the event that any United States taxes, duties or other governmental
charges are required to be deducted or withheld from any payments by the Company
to holders of Preferred Securities that are not United States persons, neither
the Company nor the Issuer would be required to pay any additional amounts to
such holders and, therefore, any such taxes, duties or charges would reduce the
amounts received by such holders. See "Certain Federal Income Tax
Consequences -- United States Alien Holders".
ABSENCE OF PUBLIC MARKET FOR THE PREFERRED SECURITIES
There can be no assurance that any market for the Preferred Securities will
develop or, if one does develop, that it will be maintained. If an active market
for the Preferred Securities fails to develop or be sustained, the trading price
of the Preferred Securities could be adversely affected. The Preferred
Securities could trade at prices that may be higher or lower than the price of
any Preferred Securities purchased hereunder depending on many factors,
including prevailing interest rates, the price of the Company Common Stock, the
Company's operating results, any election by the Company to extend interest
payment periods and the market for similar securities.
TRADING PRICE OF PREFERRED SECURITIES
The Preferred Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying
Debentures. A holder disposing of Preferred Securities between record dates for
payments of distributions thereon will be required for United States Federal
income tax purposes to include in gross income the OID on the Debentures through
the date of disposition, and to add such amount to the adjusted basis on its pro
rata share of the underlying Debentures deemed disposed of. To the extent the
selling price is less than the holder's adjusted tax basis (so determined), 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 Consequences--Sales
of Preferred Securities".
NEWELL FINANCIAL TRUST I
Newell Financial Trust I (the "Issuer") is a statutory business trust
created under Delaware law pursuant to (i) a trust agreement executed by the
Company (as Depositor), the Delaware Trustee and one of the Administrative
Trustees (each as defined herein) and (ii) the filing of a certificate of trust
with the Delaware Secretary of State on November 24, 1997. In connection with
the Original Offering such trust agreement was amended and restated in its
entirety (as so amended and
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<PAGE> 12
restated, the "Trust Agreement"). The Issuer exists for the sole purposes of (i)
issuing and selling the Preferred Securities and Common Securities, (ii) using
the proceeds from the sale of the Preferred Securities and Common Securities to
acquire the Debentures issued by the Company and (iii) engaging in only those
other activities necessary or incidental thereto. Accordingly, the Debentures
are the sole assets of the Issuer, and payments under the Debentures will be the
sole revenue of the Issuer. The Issuer has a term of 45 years, but may dissolve
earlier as provided in the Trust Agreement.
All of the Common Securities are owned by the Company. The Common
Securities rank pari passu, and payments will be made thereon pro rata, with the
Preferred Securities, except that upon the occurrence and continuance of a
Declaration Event of Default (as defined herein) resulting from an Event of
Default under the Indenture, the rights of the Company as holder of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption or otherwise will be subordinated to the rights of the holders of the
Preferred Securities. See "Description of the Preferred
Securities--Subordination of Common Securities". The Company owns Common
Securities in an aggregate liquidation amount equal to approximately 3% of the
total capitalization of the Issuer.
The Issuer's business and affairs are conducted by its trustees, which were
appointed by the Company as holder of the Common Securities. Pursuant to the
Trust Agreement, the number of trustees initially is five. Three of the trustees
(the "Administrative Trustees") are persons who are employees or officers of, or
affiliated with, the Company. A fourth trustee is a financial institution
unaffiliated with the Company that serves as property trustee (the "Property
Trustee") under the Trust Agreement. The Chase Manhattan Bank is acting as the
Property Trustee until removed or replaced by the holder of the Common
Securities. See "Description of the Preferred Securities". The fifth trustee is
a financial institution or an affiliate thereof which maintains a principal
place of business or residence in the State of Delaware (the "Delaware
Trustee"). Chase Manhattan Bank Delaware is acting as Delaware Trustee until
removed or replaced by the holder of the Common Securities. The Administrative
Trustees, the Property Trustee and the Delaware Trustee are referred to herein
as the "Issuer Trustees". The Chase Manhattan Bank is also acting as indenture
trustee under the Guarantee (the "Guarantee Trustee") and as the indenture
trustee under the indenture relating to the Debentures. See "Description of the
Guarantee" and "Description of the Debentures".
The Property Trustee holds the title to the Debentures for the benefit of
the Issuer and holders of the Preferred Securities and the Common Securities and
has the power to exercise all of the rights, powers and privileges as the holder
of the Debentures. In addition, the Property Trustee maintains exclusive control
of a segregated non-interest bearing bank account (the "Property Account") to
hold all payments made in respect of the Debentures for the benefit of the
Issuer and holders of the Preferred Securities and the Common Securities. The
Property Trustee will make payments of Distributions and payments on
liquidation, redemption and otherwise to the holders of the Preferred Securities
and the Common Securities out of funds from the Property Account. The Guarantee
Trustee holds the Guarantee for the benefit of the holders of the Preferred
Securities. The Company, as the holder of all the Common Securities, has the
right to appoint, remove or replace any Issuer Trustee and to increase or
decrease the number of Issuer Trustees, provided that the number of Issuer
Trustees shall be at least three, a majority of which will be Administrative
Trustees. The duties and obligations of the Issuer Trustees are governed by the
Trust Agreement. The rights of the holders of the Preferred Securities,
including economic rights, right to information and voting rights, are as set
forth in the Trust Agreement and the Delaware Business Trust Act, as amended
(the "Trust Act").
The Company will pay, directly or indirectly, all ongoing costs and
expenses of the Issuer. See "Description of the Debentures--Expenses of Issuer".
The principal corporate offices of the Issuer are located at the Newell Center,
29 East Stephenson Street, Freeport, Illinois 61032, and its telephone number is
(815) 235-4171.
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<PAGE> 13
THE COMPANY
The Company is a manufacturer and full-service marketer of staple consumer
products sold to high-volume purchasers, including discount stores and warehouse
clubs, home centers and hardware stores, and office superstores and contract
stationers. The Company's basic business strategy is to merchandise a
multi-product offering of brand name consumer products, which are concentrated
in product categories with relatively steady demand not dependent on changes in
fashion, technology or season, and to differentiate itself by emphasizing
superior customer service. The Company's multi-product offering consists of
staple consumer products in three major product groups: Hardware and Home
Furnishings, Office Products, and Housewares.
The Company's growth strategy emphasizes acquisitions and internal growth.
The Company has grown both domestically and internationally by acquiring
businesses with brand name product lines and improving the profitability of such
businesses through an integration process called "Newellization". The Company
supplements acquisition growth with internal growth, principally by introducing
new products, entering new domestic and international markets, adding new
customers, cross-selling existing product lines to current customers and
supporting its U.S.-based customers' international expansion.
The Company's principal corporate offices are located at the Newell Center,
29 East Stephenson Street, Freeport, Illinois 61032, and its telephone number is
(815) 235-4171.
USE OF PROCEEDS
The Selling Holders will receive all of the proceeds from any sale of the
Offered Securities. Neither the Company nor the Issuer will receive any proceeds
from the sale of the Offered Securities.
ACCOUNTING TREATMENT
The financial statements of the Issuer are consolidated with the
Consolidated Financial Statements of the Company, with the Preferred Securities
shown on such Consolidated Financial Statements as Company-obligated mandatorily
redeemable convertible preferred securities of a subsidiary trust. The sole
assets of the Issuer are the Debentures.
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<PAGE> 14
RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
The following table sets forth the Company's ratio of earnings to fixed
charges on a historical basis for each of the five fiscal years in the period
ended December 31, 1996 and for the nine months ended September 30, 1997 and
September 30, 1996.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- ----------------------------------
1997 1996 1996 1995 1994 1993 1992
----- ----- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to Fixed
Charges(1)........................... 5.9x 6.2x 6.8x 6.8x 9.0x 10.8x 11.3x
</TABLE>
- -------------------------
(1) The ratio of earnings to fixed charges is computed by dividing (i) income
before income taxes, interest expense and the portion of rent determined to
be interest by (ii) total fixed charges, which includes interest expense and
the portion of rent expense determined to be interest. The portion of rent
expense determined to be interest is 40% of gross rent expense for the nine
month period ended September 30, 1997. Prior thereto, 33% was used.
DESCRIPTION OF THE PREFERRED SECURITIES
This summary of certain provisions of the Preferred Securities and the
Trust Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the Trust
Agreement (a copy of which is available for inspection at the corporate trust
office of the Property Trustee in New York, New York) and the Trust Act. The
Preferred Securities were issued in the Original Offering pursuant to the terms
of the Trust Agreement. Wherever particular defined terms of the Trust Agreement
are referred to herein, such defined terms are incorporated herein by reference.
GENERAL
Pursuant to the terms of the Trust Agreement, the Issuer Trustees, on
behalf of the Issuer, issued the Common Securities and the Preferred Securities
in the Original Offering in fully registered form without interest coupons.
Bearer Preferred Securities were not issued. The Preferred Securities represent
preferred, undivided beneficial interests in the assets of the Issuer, and the
Common Securities represent common, undivided beneficial interests in the assets
of the Issuer. All of the Common Securities are owned by the Company. The
Preferred Securities rank pari passu, and payments are made thereon pro rata,
with the Common Securities except as described under "--Subordination of Common
Securities". Legal title to the Debentures is held by the Property Trustee in
trust for the benefit of the holders of the Preferred Securities and Common
Securities. The Trust Agreement does not permit the issuance by the Issuer of
any securities other than the Preferred Securities and the Common Securities or
the incurrence of any indebtedness by the Issuer. The payment of Distributions
out of money held by the Issuer, and payments upon redemption of the Preferred
Securities or dissolution of the Issuer, are guaranteed by the Company to the
extent described under "Description of the Guarantee". The Guarantee is held by
the Guarantee Trustee for the benefit of the holders of the Preferred
Securities. The Guarantee does not cover payment of Distributions when the
Issuer does not have sufficient available funds to pay such Distributions. The
remedy of a holder of Preferred Securities in such an event is as described
herein in "--Enforcement of Certain Rights by Holders of Preferred Securities"
and "--Voting Rights; Amendment of the Trust Agreement".
DISTRIBUTIONS
Distributions on each Preferred Security are payable at the annual rate of
5 1/4% of the liquidation preference of $50 per Preferred Security.
Distributions accumulate from the date of original issuance and are payable,
unless deferred, quarterly in arrears on March 1, June 1, September 1
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<PAGE> 15
and December 1 of each year, commencing March 1, 1998, when, as and if available
for payment by the Property Trustee, except as otherwise described below. The
amount of Distributions payable for any period are computed on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
Distributions are payable on the Preferred Securities is not a Business Day (as
defined below), 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
additional Distributions or other payment in respect of any such delay (each
date on which Distributions are payable in accordance with the foregoing, a
"Distribution Date"). A "Business Day" shall mean any day other than a Saturday
or a Sunday, or a day on which banking institutions in The City of New York are
authorized or required by law or executive order to remain closed or a day on
which the corporate trust office of the Property Trustee or the Debenture
Trustee is closed for business.
So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture to defer the payment of interest
(including any Liquidated Damages) on the Debentures at any time or from time to
time for a period not exceeding 20 consecutive quarters with respect to each
deferral period (each an "Extension Period"), provided that no Extension Period
may extend beyond the stated maturity of the Debentures. As a consequence of any
such election, quarterly Distributions on the Preferred Securities will be
deferred by the Issuer during any such Extension Period. Distributions to which
holders of the Preferred Securities are entitled will accumulate additional
Distributions thereon at the rate per annum set forth herein, compounded
quarterly from the relevant payment date for such Distributions. The term
"Distributions" as used herein shall include any such additional Distributions.
During any such Extension Period, the Company may not, and may not cause any of
its subsidiaries to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock, or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of the Company that
rank pari passu with or junior to the Debentures (other than (a) any dividend,
redemption, liquidation, interest, principal or guarantee payment by the Company
where the payment is made by way of securities (including capital stock) that
rank pari passu with or junior to the securities on which such dividend,
redemption, interest, principal or guarantee payment is being made, (b)
redemptions or purchases of any Rights pursuant to the Company's Rights
Agreement, or any successor to such Rights Agreement, and the declaration of a
dividend of such Rights or the issuance of preferred stock under such plans in
the future, (c) payments under the Guarantee, (d) purchases of Company Common
Stock related to the issuance of Company Common Stock under any of the Company's
benefit plans for its directors, officers or employees, (e) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
one series or class of the Company's capital stock for another series or class
of the Company's capital stock, and (f) 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).
Prior to the termination of any such Extension Period, the Company may further
extend the interest payment period, provided that no Extension Period may exceed
20 consecutive quarters or extend beyond the stated maturity of the Debentures.
Upon the termination of any such Extension Period and the payment of all amounts
then due on any Interest Payment Date, the Company may elect to begin a new
Extension Period. See "Description of the Debenture--Option to Extend Interest
Payment Period" and "Certain Federal Income Tax Consequence--Interest Income and
Original Issue Discount".
The Company has no current intention to exercise its right to defer
payments of interest by extending the interest payment period on the Debentures.
Distributions with respect to the Preferred Securities must be paid on the
dates payable to the extent that the Issuer has funds available for the payment
of such Distributions in the Property Account. The funds of the Issuer available
for distribution to holders of the Preferred Securities are limited to payments
under the Debentures. See "Description of the Debentures". If the Company does
not make interest payments on such Debentures, the Property Trustee will not
have funds
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<PAGE> 16
available to pay Distributions on the Preferred Securities. The payment of
Distributions (if and to the extent the Issuer has funds on hand available for
the payment of such Distributions and cash sufficient to make such payments) is
guaranteed by the Company on a limited basis as set forth herein under
"Description Of the Guarantee".
Distributions on the Preferred Securities are payable to the holders
thereof as they appear on the register of the Issuer on the relevant record
dates, which shall be the fifteenth day (whether or not a Business Day) next
preceding the relevant distribution date. As long as the Preferred Securities
remain in book-entry form, subject to any applicable laws and regulations and
the provisions of the Trust Agreement, each such payment will be made as
described under "--Certain Book-Entry Procedures for Global Certificates".
CONVERSION RIGHTS
GENERAL
The Preferred Securities are convertible at any time through the close of
business on the maturity date of the Debentures (or, in the case of Preferred
Securities called for redemption, through the close of business on the
Redemption Date), at the option of the holder thereof and in the manner
described below, into shares of Company Common Stock at an initial conversion
rate of 0.9865 shares of Company Common Stock for each Preferred Security
(equivalent to a purchase price of $50.685 per share of Company Common Stock),
subject to adjustment as described under "--Conversion Price Adjustments" below.
Whenever the Company issues shares of Company Common Stock upon conversion of
Preferred Securities and the Company has in effect at such time a stock purchase
rights agreement under which holders of Company Common Stock are issued rights
entitling the holders under certain circumstances to purchase an additional
share or shares of Company Common Stock or other capital stock of the Company,
the Company will issue, together with each such share of Company Common Stock,
an appropriate number of rights. For a description of the Company's existing
stockholder rights agreement, see "Description of the Company's Capital Stock".
A holder of Preferred Securities wishing to exercise its conversion right
shall surrender such Preferred Securities, together with an irrevocable
conversion notice, to the Property Trustee, as conversion agent or to such other
agent appointed for such purpose (the "Conversion Agent"), which shall, on
behalf of such holder, exchange the Preferred Securities for a portion of the
Debentures and immediately convert such Debentures into Company Common Stock. So
long as a book-entry system for the Preferred Securities is in effect, however,
the procedures for converting the Preferred Stock that are in the form of Global
Certificates into shares of Company Common Stock will be as described under
"--Certain Book-Entry Procedures for Global Certificates". The Company's
delivery upon conversion of the fixed number of shares of Company Common Stock
into which the Debentures are convertible (together with the cash payment, if
any, in lieu of any fractional share) shall be deemed to satisfy the Company's
obligation to pay the principal amount at maturity of the portion of the
Debentures so converted and any unpaid interest accrued on such Debentures at
the time of such conversion. For a discussion of the taxation of such an
exchange to holders, see "Certain Federal Income Tax Consequences--Conversion of
Preferred Securities into Company Common Stock". Holders may obtain copies of
the required form of the conversion notice from the Conversion Agent.
Accrued Distributions will not be paid on Preferred Securities that are
converted, provided that holders of Preferred Securities at the close of
business on a Distribution payment record date will be entitled to receive the
Distribution payable on such Preferred Securities on the corresponding
Distribution Date notwithstanding the conversion of such Preferred Securities on
or subsequent to such Distribution record date but prior to such Distribution
Date. Except as provided in the immediately preceding sentence, the Issuer will
make no payment or allowance for accumulated and unpaid Distributions, whether
or not in arrears, on converted Preferred Securities. The Company will make no
payment or allowance for dividends on the shares of Company Common Stock issued
15
<PAGE> 17
upon such conversion. Each conversion will be deemed to have been effected
immediately prior to the close of business on the day on which proper notice was
received by the Conversion Agent.
Shares of Company Common Stock issued upon conversion of Preferred
Securities will be validly issued, fully paid and non-assessable. No fractional
shares of Company Common Stock will be issued as a result of conversion, but in
lieu thereof such fractional interest will be paid in cash.
CONVERSION PRICE ADJUSTMENTS
GENERAL. The conversion price is subject to adjustment in certain events
including, without duplication: (i) the payment of dividends (and other
distributions) payable exclusively in Company Common Stock on Company Common
Stock; (ii) the issuance to all holders of Company Common Stock of rights or
warrants entitling holders of such rights or warrants (for a period not
exceeding 45 days) to subscribe for or purchase Company Common Stock at less
than the then Current Market Price (as defined below); (iii) subdivisions and
combinations of Company Common Stock; (iv) the payment of dividends (and other
distributions) to all holders of Company Common Stock consisting of evidences of
indebtedness of the Company, securities or capital stock, cash, or assets
(including securities, but excluding those rights or warrants referred to above
in clause (ii) and dividends and distributions paid exclusively in cash); (v)
the payment of dividends (and other distributions) on Company Common Stock paid
exclusively in cash, excluding (A) cash dividends that do not exceed the per
share amount of the immediately preceding regular cash dividend (as adjusted to
reflect any of the events referred to in clauses (i) through (vi) of this
sentence), and (B) cash dividends if the annualized per share amount thereof
does not exceed 12.5% of the last sale price of Company Common Stock, as
reported on the NYSE Consolidated Transactions Tape, on the trading day
immediately preceding the date of declaration of such dividend (such adjustment
being limited to the amount in excess of 12.5% of such Current Market Price);
and (vi) payment in respect of a tender or exchange offer (other than an odd-lot
offer) by the Company or any subsidiary of the Company for Company Common Stock
in excess of 110% of the Current Market Price of Company Common Stock on the
trading day next succeeding the last date tenders or exchanges may be made
pursuant to such tender or exchange offer.
If the distribution date for the Rights of the Company provided in the
Rights Agreement, as presently constituted or under any similar plan (see
"Description of the Company's Capital Stock--Stock Purchase Rights"), occurs
prior to the date a Preferred Security is converted and holders of the Preferred
Securities who convert such Preferred Securities after the distribution date are
not entitled to receive the Rights that would otherwise be attached (but for the
date of conversion) to the shares of Company Common Stock received upon such
conversion, an adjustment of the conversion price shall be made under clause
(ii) of the preceding paragraph as if the Rights were being distributed to the
common stockholders of the Company immediately prior to such conversion. If such
an adjustment is made and the Rights are later redeemed, invalidated or
terminated, then a corresponding reversing adjustment shall be made to the
conversion price, on an equitable basis, to take account of such event.
The Company from time to time may reduce the conversion price of the
Debentures (and thus the conversion price of the Preferred Securities) by any
amount selected by the Company for any period of at least 30 days, in which case
the Company shall give at least 15 days' notice of such reduction. The Company
may, at its option, make such reductions in the conversion price, in addition to
those set forth above, as the Board of Directors of the Company deems advisable
to avoid or diminish any income tax to holders of Company Common Stock resulting
from any dividend or distribution of stock (or rights to acquire stock) or from
any event treated as such for income tax purposes. See "Certain Federal Income
Tax Consequences--Adjustment of Conversion Price".
There will be no adjustment of the conversion price in case of the issuance
of any Company Common Stock (or securities convertible into or exchangeable for
Company Common Stock), except as specifically described above. For example, no
adjustment of the conversion price will be made upon the issuance of any shares
of Company Common Stock pursuant to any present or
16
<PAGE> 18
future plan providing for the reinvestment of dividends or interest payable on
securities of the Company and the investment of additional optional amounts in
shares of Company Common Stock under any such plan, or the issuance of any
shares of Company Common Stock or options or rights to purchase such shares
pursuant to any present or future employee benefit plan or program of the
Company or pursuant to any option, warrant, right, or exercisable, exchangeable
or convertible security which does not constitute an issuance to all holders of
Company Common Stock of rights or warrants entitling holders of such rights or
warrants to subscribe for or purchase Company Common Stock at less than the
Current Market Price. If any action would require adjustment of the conversion
price pursuant to more than one of the anti-dilution provisions, only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value to holders of the Preferred Securities. No
adjustment in the conversion price will be required unless such adjustment would
require an increase or decrease of at least 1% of the conversion price, but any
adjustment that would otherwise be required to be made shall be carried forward
and taken into account in a subsequent adjustment.
The term "Current Market Price" of Company Common Stock for any day means
the last reported sale price, regular way, on such day, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the NYSE Consolidated
Transactions Tape, or, if Company Common Stock is not listed or admitted to
trading on the NYSE on such day, on the principal national securities exchange
on which Company Common Stock is listed or admitted to trading, if Company
Common Stock is listed on a national securities exchange, or the Nasdaq National
Market, or, if Company Common Stock is not quoted or admitted to trading on such
quotation system, on the principal quotation system on which Company Common
Stock may be listed or admitted to trading or quoted, or, if not listed or
admitted to trading or quoted on any national securities exchange or quotation
system, the average of the closing bid and asked prices of Company Common Stock
in the over-the-counter market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or, if not so available in such manner, as furnished by any
NYSE member firm selected from time to time by the Board of Directors of the
Company for that purpose or, if not so available in such manner, as otherwise
determined in good faith by the Board of Directors of the Company.
MERGER, CONSOLIDATION OR SALE OF ASSETS OF THE COMPANY. In the event that
the Company is party to any transaction (including, without limitation, a merger
other than a merger that does not result in a reclassification, conversion,
exchange or cancellation of Company Common Stock), consolidation, sale of all or
substantially all of the assets of the Company, recapitalization or
reclassification of Company Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value or as a result
of a subdivision or combination of Company Common Stock) or any compulsory share
exchange (each of the foregoing being referred to as a "Transaction"), in each
case, as a result of which shares of Company Common Stock shall be converted
into the right to receive, or shall be exchanged for, (i) in the case of any
Transaction other than a Transaction involving a Common Stock Fundamental Change
(as defined below) (and subject to funds being legally available for such
purpose under applicable law at the time of such conversion), securities, cash
or other property, each Preferred Security shall thereafter be convertible into
the kind and, in the case of a Transaction which does not involve a Fundamental
Change (as defined below), amount of securities, cash and other property
receivable upon the consummation of such Transaction by a holder of that number
of shares of Company Common Stock into which a Preferred Security was
convertible immediately prior to such Transaction, or (ii) in the case of a
Transaction involving a Common Stock Fundamental Change, common stock, each
Preferred Security shall thereafter be convertible (in the manner described
therein) into common stock of the kind received by holders of Company Common
Stock (but in each case after giving effect to any adjustment discussed below
relating to a Fundamental Change if such Transaction constitutes a Fundamental
Change). The holders of Preferred Securities will have no voting rights with
respect to any Transaction.
17
<PAGE> 19
If any Fundamental Change occurs, then the conversion price in effect will
be adjusted immediately after such Fundamental Change as described below. In
addition, in the event of a Common Stock Fundamental Change, each Preferred
Security shall be convertible solely into common stock of the kind received by
holders of Company Common Stock as a result of such Common Stock Fundamental
Change.
The conversion price in the case of any Transaction involving a Fundamental
Change will be adjusted immediately after such Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change (as defined below),
the conversion price of the Preferred Securities will thereupon become the
lower of (A) the conversion price in effect immediately prior to such
Non-Stock Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to the preceding paragraphs, and (B) the
result obtained by multiplying the greater of the Applicable Price (as
defined below) or the then applicable Reference Market Price (as defined
below) by a fraction, the numerator of which is $50 and the denominator of
which is (x) the amount of the redemption price for one Preferred Security
if the redemption date were the date of such Non-Stock Fundamental Change
(or, for the period commencing on the first date of original issuance of
the Preferred Securities and through December 1, 1998, and the twelve-month
periods commencing December 1, 1998, December 1, 1999 and December 1, 2000,
the product of 105.250%, 104.725%, 104.200% and 103.675%, respectively,
multiplied by $50) plus (y) any then-accrued and unpaid distributions on
one Preferred Security; and
(ii) in the case of a Common Stock Fundamental Change, the conversion
price of the Preferred Securities in effect immediately prior to such
Common Stock Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to the preceding paragraphs, will thereupon
be adjusted by multiplying such conversion price by a fraction of which the
numerator will be the Purchaser Stock Price (as defined below) and the
denominator will be the Applicable Price; provided, however, that in the
event of a Common Stock Fundamental Change in which (A) 100% of the value
of the consideration received by a holder of Company Common Stock is common
stock of the successor, acquirer, or other third party (and cash, if any,
is paid only with respect to any fractional interests in such common stock
resulting from such Common Stock Fundamental Change) and (B) all Company
Common Stock will have been exchanged for, converted into, or acquired for
common stock (and cash with respect to fractional interests) of the
successor, acquirer, or other third party, the conversion price of the
Preferred Securities in effect immediately prior to such Common Stock
Fundamental Change will thereupon be adjusted by multiplying such
conversion price by a fraction of which the numerator will be one and the
denominator will be the number of shares of common stock of the successor,
acquirer, or other third party received by a holder of one share of Company
Common Stock as a result of such Common Stock Fundamental Change.
The foregoing conversion price adjustments are designed, in certain
circumstances, to reduce the conversion price that would be applicable in
"Fundamental Change" Transactions where all or substantially all the Company
Common Stock is converted into securities, cash, or property and not more than
50% of the value received by the holders of Company Common Stock consists of
stock listed or admitted for listing subject to notice of issuance on the NYSE
or a national securities exchange or quoted on the Nasdaq National Market (a
Non-Stock Fundamental Change, as defined below). Such reduction would result in
an increase in the amount of the securities, cash, or property into which each
Preferred Security is convertible over that which would have been obtained in
the absence of such conversion price adjustments.
In a Non-Stock Fundamental Change Transaction where the initial value
received per share of Company Common Stock (measured as described in the
definition of Applicable Price below) is lower than the then applicable
conversion price of a Preferred Security but greater than or equal to the
Reference Market Price (as defined below), the conversion price will be adjusted
as described above with the effect that each Preferred Security will be
convertible into securities, cash or property of the same type received by the
holders of Company Common Stock in the Transaction but in an amount
18
<PAGE> 20
per Preferred Security that would at the time of the Transaction have had a
value equal to the then applicable redemption price per Preferred Security set
forth below under "--Optional Redemption".
In a Non-Stock Fundamental Change Transaction where the initial value
received per share of Company Common Stock (measured as described in the
definition of Applicable Price) is lower than both the conversion price of a
Preferred Security in effect prior to any adjustment described above and the
Reference Market Price, the conversion price will be adjusted as described above
but calculated as though such initial value had been the Reference Market Price.
In a Fundamental Change Transaction where all or substantially all the
Company Common Stock is converted into securities, cash, or property and more
than 50% of the value received by the holders of Company Common Stock consists
of listed or Nasdaq National Market traded common stock (a Common Stock
Fundamental Change, as defined below), the foregoing adjustments are designed to
provide in effect that (a) where Company Common Stock is converted partly into
such common stock and partly into other securities, cash, or property, each
Preferred Security will be convertible solely into a number of shares of such
common stock determined so that the initial value of such shares (measured as
described in the definition of "Purchaser Stock Price" below) equals the value
of the shares of Company Common Stock into which such Preferred Security was
convertible immediately before the Transaction (measured as aforesaid) and (b)
where Company Common Stock is converted solely into such common stock, each
Preferred Security will be convertible into the same number of shares of such
common stock receivable by a holder of the number of shares of Company Common
Stock into which such Preferred Security was convertible immediately before such
Transaction.
The term "Applicable Price" means (i) in the case of a Non-Stock
Fundamental Change in which the holders of the Company Common Stock receive only
cash, the amount of cash received by the holder of one share of Company Common
Stock and (ii) in the event of any other Non-Stock Fundamental Change or any
Common Stock Fundamental Change, the average of the Closing Prices (as defined
below) for the Company Common Stock during the ten trading days prior to the
record date for the determination of the holders of Company Common Stock
entitled to receive such securities, cash, or other property in connection with
such Non-Stock Fundamental Change or Common Stock Fundamental Change or, if
there is no such record date, the date upon which the holders of the Company
Common Stock shall have the right to receive such securities, cash, or other
property (such record date or distribution date being hereinafter referred to as
the "Entitlement Date"), in each case as adjusted in good faith by the Company
to appropriately reflect any of the events referred to in clauses (i) through
(vi) of the first paragraph under "--Conversion Price Adjustments--General".
The term "Closing Price" means on any day the reported last sale price on
such day or in case no sale takes place on such day, the average of the reported
closing bid and asked prices in each case on the NYSE Consolidated Transactions
Tape or, if the stock is not listed or admitted to trading on the NYSE, on the
principal national securities exchange on which such stock is listed or admitted
to trading or, if not listed or admitted to trading on any national securities
exchange, the average of the closing bid and asked prices as furnished by any
NYSE member firm, selected by the Debenture Trustee for that purpose.
The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Company
Common Stock consists of common stock that for each of the ten consecutive
trading days prior to the Entitlement Date has been admitted for listing or
admitted for listing subject to notice of issuance on a national securities
exchange or quoted on the Nasdaq National Market; provided, however, that a
Fundamental Change shall not be a Common Stock Fundamental Change unless either
(i) the Company continues to exist after the occurrence of such Fundamental
Change and the outstanding Preferred Securities continue to exist as outstanding
Preferred Securities or (ii) not later than the occurrence of such Fundamental
Change, the outstanding Preferred Securities are converted into or exchanged for
shares of
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<PAGE> 21
convertible preferred stock of an entity succeeding to the business of the
Company or a subsidiary thereof, which convertible preferred stock has powers,
preferences, and relative, participating, optional, or other rights, and
qualifications, limitations, and restrictions, substantially similar to those of
the Preferred Securities.
The term "Fundamental Change" means the occurrence of any Transaction or
event in connection with a plan pursuant to which all or substantially all of
the Company Common Stock shall be exchanged for, converted into, acquired for,
or constitute solely the right to receive securities, cash, or other property
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization, or
otherwise), provided, that, in the case of a plan involving more than one such
Transaction or event, for purposes of adjustment of the conversion price, such
Fundamental Change shall be deemed to have occurred when substantially all of
the Company Common Stock shall be exchanged for, converted into, or acquired for
or constitute solely the right to receive securities, cash, or other property,
but the adjustment shall be based upon the consideration that a holder of
Company Common Stock received in such Transaction or event as a result of which
more than 50% of the Company Common Stock shall have been exchanged for,
converted into, or acquired for or constitute solely the right to receive
securities, cash, or other property. The term "Non-Stock Fundamental Change"
means any Fundamental Change other than a Common Stock Fundamental Change.
The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Common Stock Fundamental Change for the ten consecutive trading
days prior to and including the Entitlement Date, as adjusted in good faith by
the Company to appropriately reflect any of the events referred to in clauses
(i) through (vi) of the first paragraph under "--Conversion Price
Adjustments-General".
The term "Reference Market Price" shall initially mean $27.25 (which is an
amount equal to 66 2/3% of the reported last sales price for Company Common
Stock on the NYSE Consolidated Transactions Tape on December 8, 1997) and in the
event of any adjustment of the conversion price other than as a result of a
Non-Stock Fundamental Change, the Reference Market Price shall also be adjusted
so that the ratio of the Reference Market Price to the conversion price after
giving effect to any such adjustment shall always be the same as the ratio of
the initial Reference Market Price to the initial conversion price of the
Preferred Securities.
SPECIAL EVENT EXCHANGE OR REDEMPTION
At any time following the occurrence and the continuation of a Tax Event
(as defined below) or an Investment Company Event (as defined below), the
Property Trustee shall direct the Conversion Agent to exchange all outstanding
Preferred Securities for Debentures, provided that, in the case of a Tax Event
that shall occur and be continuing, the Company shall have the right to (a)
direct that less than all, or none, of the Preferred Securities be so exchanged
if and for so long as the Company shall have elected to pay any Additional Sums
(as defined below) such that the net amounts received by the holders of
Preferred Securities not so exchanged in respect of Distributions and other
distributions are not reduced as a result of such Tax Event, and shall not have
revoked any such election or failed to make such payments or (b) redeem the
Preferred Securities in the manner set forth below.
If a Tax Event shall occur or be continuing, the Company shall have the
right, upon not less than 30 nor more than 60 days' notice, to redeem the
Debentures at the principal amount thereof plus accrued and unpaid interest, in
whole or in part, for cash upon the later of (i) 90 days following the
occurrence of such Tax Event or (ii) December 1, 2001. Promptly following such
redemption, Preferred Securities and Common Securities with an aggregate
liquidation preference equal to the aggregate principal amount of the Debentures
so redeemed will be redeemed by the Issuer at the liquidation preference thereof
plus accrued and unpaid Distributions thereon to the redemption date on a pro
rata basis. The Common Securities will be redeemed on a pro rata basis with the
Preferred Securities, except that if a Declaration Event of Default has occurred
and is continuing, the Preferred Securities will have a priority over the Common
Securities with respect to the Redemption Price.
20
<PAGE> 22
A "Special Event" means a Tax Event or an Investment Company Event. A "Tax
Event" means the receipt by the Property Trustee, on behalf of the Issuer, of an
opinion of counsel, rendered by a law firm having a national tax and securities
practice (which opinion shall not have been rescinded by such law firm), 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
affecting taxation, 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 Preferred Securities under the Trust
Agreement and does not pertain to the use of the proceeds of the issuance of the
Debentures, there is more than an insubstantial risk in each case after the date
hereof that (i) the Issuer is, or will be within 90 days of the date thereof,
subject to United States Federal income tax with respect to income received or
accrued on the Debentures; (ii) interest payable by the Company on such
Debentures is not, or within 90 days of the date thereof will not be, deductible
by the Company, in whole or in part, for United States Federal income tax
purposes; or (iii) the Issuer is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges. "Investment Company Event" means the receipt by the
Property Trustee, on behalf of the Issuer, of an opinion of counsel, rendered by
a law firm having a national tax and securities practice (which opinion shall
not have been rescinded by such law firm), to the effect that, as a result of
the occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law"), there is more than
an insubstantial risk that the Issuer is or will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended (the "Investment Company Act"), which Change in 1940 Act Law
becomes effective on or after the date of original issuance of the Preferred
Securities.
Legislation has been introduced in the United States Congress in the past
that would, if enacted, deny an interest deduction to issuers of instruments
such as the Debentures. No such legislation has been enacted. There can be no
assurance, however, that similar legislation will not ultimately be enacted into
law, or that other developments will not occur after the date hereof that would
adversely affect the tax treatment of the Debentures and constitute a Tax Event,
which would permit the Issuer to exchange the Preferred Securities, in whole or
in part, for the Debentures or redeem, in whole or in part, the Preferred
Securities and corresponding Debentures.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by the Issuer on the
outstanding Preferred Securities and Common Securities of the Issuer shall not
be reduced as a result of any additional taxes, duties and other governmental
charges to which the Issuer has become subject as a result of a Tax Event that
has occurred and is continuing.
Holders of Preferred Securities, by purchasing such Preferred Securities,
will be deemed to have agreed to be bound by these exchange provisions in regard
to the exchange of such Preferred Securities for Debentures on the terms
described above.
DISTRIBUTION OF DEBENTURES
At any time, the Company has the right to dissolve the Issuer and, after
satisfaction of the liabilities of creditors of the Issuer as provided by
applicable law, cause the Debentures to be distributed to the holders of the
Preferred Securities in dissolution of the Issuer. Under current United States
Federal income tax law and interpretations and assuming, as expected, the Issuer
is treated as a grantor trust, a distribution of the Debentures should not be a
taxable event to the Issuer and holders of the Preferred Securities. Should
there be a change in law, a change in legal interpretation, a Special Event or
other circumstances, however, the distribution could be a taxable event to
holders of the Preferred Securities. See "Certain Federal Income Tax
Consequences--Redemption of Preferred Securities for Debentures or Cash upon
Dissolution of the Issuer".
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<PAGE> 23
After the liquidation date fixed for any distribution of Debentures for
Preferred Securities (i) such Preferred Securities will no longer be deemed to
be outstanding, (ii) DTC (as defined below) or its nominee, as the record holder
of such Preferred Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution
and (iii) any certificates representing such Preferred Securities not held by
DTC or its nominee will be deemed to represent the Debentures having a principal
amount equal to the liquidation amount of such Preferred Securities, and bearing
accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on such Preferred Securities until such certificates are presented
to the Property Trustee for transfer or reissuance.
OPTIONAL REDEMPTION
Except as provided under "--Mandatory Redemption" below, the Preferred
Securities may not be redeemed by the Issuer prior to December 1, 2001.
On and after such date, upon any redemption by the Company of Debentures,
the Preferred Securities are subject to redemption, in whole or in part, at the
following percentages of the liquidation preference thereof plus accrued and
unpaid Distributions, if any, to the date fixed for redemption if redeemed
during the twelve-month period commencing December 1 in each of the following
years indicated:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2001............................. 103.150%
2002............................. 102.625%
2003............................. 102.100%
2004............................. 101.575%
</TABLE>
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2005............................. 101.050%
2006............................. 100.525%
2007 and thereafter.............. 100.000%
</TABLE>
The aggregate liquidation preference of the Preferred Securities and Common
Securities so redeemed will equal the aggregate principal amount of Debentures
redeemed by the Company. The Issuer may not redeem the Preferred Securities in
part unless all accrued and unpaid Distributions have been paid in full on all
outstanding Preferred Securities. If fewer than all the outstanding Preferred
Securities are to be redeemed, the Preferred Securities to be so redeemed will
be selected as described under "--Certain Book-Entry Procedures for Global
Certificates".
In the event the Company redeems the Debentures in certain circumstances
upon the occurrence and continuation of a Tax Event as described under
"--Special Event Exchange or Redemption", the appropriate amount of the
Preferred Securities will be redeemed at 100% of the liquidation preference
thereof together with accrued and unpaid Distributions to the redemption date.
MANDATORY REDEMPTION
Upon repayment at maturity or as a result of the acceleration of the
Debentures upon the occurrence of a Debenture Event of Default described under
"Description of the Debentures--Debenture Events of Default", the Debentures
shall be subject to mandatory redemption, in whole but not in part, by the
Company, and the proceeds from such repayment will be applied to redeem
Preferred Securities and Common Securities having an aggregate liquidation
preference equal to the aggregate principal amount of Debentures so repaid or
redeemed at a redemption price equal to the respective liquidation preference of
the Preferred Securities and Common Securities or, in the case of a redemption
of the Debentures, at the redemption price paid with respect to the Debentures,
as described below, together with accrued and unpaid distributions on the
Preferred Securities and Common Securities to the date of redemption. Upon
acceleration of the Debentures, the Preferred Securities will be redeemed only
when repayment of the Debentures has actually been received by the Issuer. In
addition, as described above under "--Special Event Exchange or Redemption",
upon the occurrence of a Special Event, Preferred Securities shall be exchanged
for Debentures unless, in the case of a Tax Event that has occurred and is
continuing, the Company shall have elected to (a) pay any Additional Sums such
that the net amounts of Distributions
22
<PAGE> 24
received by the holders of any Preferred Securities not so exchanged are not
reduced as a result of such Tax Event and shall not have revoked any such
election or failed to make such payments or (b) redeem the Preferred Securities
as further set forth in "--Special Event Exchange or Redemption".
REDEMPTION PROCEDURES
Preferred Securities redeemed on the date fixed for redemption shall be
redeemed at the redemption price with the applicable proceeds from the
contemporaneous redemption of the Debentures. Redemptions of the Preferred
Securities shall be made and the redemption price shall be payable on the
redemption date only to the extent that the Issuer has funds on hand available
for the payment of such redemption price. See also "--Subordination of Common
Securities".
Notice of any redemption (optional or mandatory) of Preferred Securities
(which notice will be irrevocable) will be given by the Property Trustee to each
record holder of Preferred Securities that are being redeemed not fewer than 30
nor more than 60 days prior to the redemption date. If the Property Trustee
gives a notice of redemption in respect of the 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 deposit irrevocably with DTC or the
Conversion Agent, as the case may be, funds sufficient to pay the applicable
redemption price and will give DTC or the Conversion Agent, as the case may be,
irrevocable instructions and authority to pay the redemption price to the
holders of such Preferred Securities. See "--Certain Book-Entry Procedures for
Global Certificates". 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 funds sufficient to pay the applicable redemption
price and will give the Paying Agent irrevocable instructions and authority to
pay the redemption price to the holders thereof upon surrender of their
certificates evidencing such Preferred Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the redemption date for any
Preferred Securities called for redemption shall be payable to the holders of
such Preferred Securities as of the relevant record dates for the related
distribution dates. Subject to the preceding sentence, 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 (i) the right of the holders of such Preferred
Securities to receive the redemption price, but without interest on such
redemption price, and (ii) the right to convert such Preferred Securities into
Company Common Stock in the manner described herein through the close of
business on the Redemption Date, 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 on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day. In the event that payment of the
redemption price in respect of Preferred Securities called for redemption is
improperly withheld or refused and not paid either by the Issuer or by the
Company pursuant to the Guarantee as described under "Description of the
Guarantee", Distributions on such Preferred Securities will continue to accrue
at the then applicable rate, from the redemption date originally established by
the Issuer to the date such redemption price is actually paid, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the redemption price.
Subject to applicable law (including, without limitation, United States
Federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
Payment of the redemption price on the Preferred Securities and any
distribution or exchange of Debentures to holders of Preferred Securities shall
be made to the applicable record holders thereof as they appear on the register
for such Preferred Securities on the relevant record date, which shall be the
fifteenth day (whether or not a Business Day) prior to the redemption date or
liquidation date, as applicable.
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If less than all of the Preferred Securities and Common Securities issued
by the Issuer are to be redeemed on a redemption date, then the aggregate
liquidation preference of such Preferred Securities and Common Securities to be
redeemed shall be allocated pro rata among the Preferred Securities and the
Common Securities. The particular Preferred Securities to be redeemed shall be
selected not more than 60 days prior to the redemption date by the Property
Trustee from the outstanding Preferred Securities not previously called for
redemption, by lot or 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 $50 or an integral multiple of $50 in excess thereof) of the
liquidation preference of the Preferred Securities. The Property Trustee shall
promptly notify the Conversion Agent in writing of the Preferred Securities
selected for redemption and, in the case of any Preferred Securities selected
for partial redemption, the liquidation preference thereof to be redeemed; it
being understood that, in the case of Preferred Securities held by DTC (or any
successor) or its nominee, the distribution of the proceeds of such redemption
will be made in accordance with the procedures of DTC or its nominee. For all
purposes of the Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Preferred Securities shall relate, in
the case of any Preferred Securities redeemed or to be redeemed only in part, to
the portion of the aggregate liquidation preference of Preferred Securities
which has been or is to be redeemed.
Notice of any redemption of Debentures will be mailed at least 30 days but
not more than 60 days before the redemption date to each holder of Debentures to
be redeemed at its registered address. Unless the Company defaults in payment of
the redemption price, on and after the redemption date interest shall cease to
accrue on such Debentures or portions thereof called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the redemption price of, the Preferred
Securities and Common Securities, as applicable, shall be made pro rata based on
the liquidation preference of such Preferred Securities and Common Securities;
provided, however, that if on any distribution date or redemption date a
Declaration Event of Default shall have occurred and be continuing, no payment
of any Distribution on, or redemption price of, any of the Common Securities,
and no other payment on account of the redemption, liquidation or other
acquisition of such Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions on all of the outstanding
Preferred Securities for all Distribution periods terminating on or prior
thereto, or in the case of payment of the redemption price the full amount of
such redemption price on all of the outstanding Preferred Securities then called
for redemption, shall have been made or provided for, and all funds available to
the Property Trustee shall first be applied to the payment in full in cash of
all Distributions on, or redemption price of, the Preferred Securities then due
and payable.
In the case of any Declaration Event of Default, the Company as holder of
the Common Securities will be deemed to have waived any right to act with
respect to any such Declaration Event of Default until all such Declaration
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated. Until all such Declaration Events of Default
with respect to the Preferred Securities have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the holders of
the Preferred Securities and not on behalf of the Company as holder of the
Common Securities, and only the holders of the Preferred Securities will have
the right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary dissolution of the Issuer
(each, a "Liquidation"), the holders of the Preferred Securities at that time
will be entitled to receive out of the assets of the Issuer, after satisfaction
of liabilities to creditors, distributions in an amount equal to the aggregate
of the stated liquidation preference of $50 per Preferred Security plus accrued
and unpaid Distributions thereon to the date of payment (the "Liquidation
Distribution"), unless, in connection
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with such Liquidation, Debentures in an aggregate principal amount equal to the
aggregate stated liquidation preference of, with an interest rate identical to
the distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid Distributions on, the Preferred Securities, have been distributed on a
pro rata basis to the holders of Preferred Securities in exchange for such
Preferred Securities. See "--Distribution of Debentures".
If such Liquidation Distribution can be paid only in part because the
Issuer has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Issuer on the
Preferred Securities shall be paid on a pro rata basis. The holder of the Common
Securities will be entitled to receive Liquidation Distributions upon any such
liquidation pro rata with the holders of the Preferred Securities, except that
if a Debenture Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities.
Pursuant to the Trust Agreement, the Issuer shall automatically dissolve
upon expiration of its term and shall dissolve on the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Company; (ii)
the distribution of Debentures to the holders of the Preferred Securities and
Common Securities, if the Company, as Depositor, has given written direction to
the Property Trustee to dissolve the Issuer (which direction is optional and
wholly within the discretion of the Company, as Depositor); (iii) the
redemption, conversion, or exchange of all of the Preferred Securities and
Common Securities; (iv) the entry by a court of competent jurisdiction of an
order for the dissolution of the Issuer; and (v) the occurrence of a Special
Event, except in the case of a Tax Event that has occurred and is continuing
following which the Company has elected to pay any Additional Sums such that the
net amount received by holders of Preferred Securities in respect of
Distributions is not reduced as a result of such Tax Event and the Company has
not revoked any such election or failed to make such payment.
DECLARATION EVENTS OF DEFAULT; NOTICE
An event of default under the Indenture (a "Debenture Event of Default")
constitutes an event of default under the Trust Agreement with respect to the
Preferred Securities and the Common Securities (a "Declaration Event of
Default"), 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 or any order, rule or
regulation of any administrative or governmental body.
Within ten days after the occurrence of any Declaration Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Declaration Event of Default to the holders of the Preferred
Securities, the Administrative Trustees and the Company, as Depositor, unless
such Declaration Event of Default shall have been cured or waived. The Company,
as Depositor, and the Administrative Trustees, on behalf of the Issuer, are
required to file annually with the Property Trustee a certificate as to whether
or not they are in compliance with all the conditions and covenants applicable
to them under the Trust Agreement.
If a Declaration Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities upon
dissolution of the Issuer as described above. See "--Liquidation Distribution
upon Dissolution". The existence of a Declaration Event of Default does not
entitle the holders of Preferred Securities to accelerate the maturity thereof.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Declaration Event of Default has occurred and is continuing, then the
holders of Preferred Securities will rely on the enforcement by the Property
Trustee of its rights as a holder of the Debentures against the Company. In
addition, the holders of a majority in aggregate liquidation preference of the
Preferred Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property Trustee
under the Trust Agreement, including the
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right to direct the Property Trustee to exercise the remedies available to it as
a holder of the Debentures. If the Property Trustee fails to enforce its rights
as the holder of the Debentures after a request therefor by a holder of
Preferred Securities, such holder may, to the fullest extent permitted by law,
proceed to enforce such rights directly against the Company. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of the Company to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), then a holder of
Preferred Securities may directly institute a Direct Action against the Company
for enforcement of payment to such holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation
preference of the Preferred Securities of such holder on or after the respective
due date specified in the Debentures. In connection with such Direct Action, the
Company will be subrogated to the rights of such holder of Preferred Securities
under the Trust Agreement to the extent of any payment made by the Company to
such holder of Preferred Securities in such Direct Action. The holders of
Preferred Securities will not be able to exercise directly against the Company
any other remedy available to the Property Trustee unless the Property Trustee
first fails to do so.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any entity 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 entity resulting from any merger,
conversion or consolidation to which such Issuer Trustee shall be a party, or
any entity succeeding to all or substantially all the corporate trust business
of such Issuer Trustee, shall be the successor of such Issuer Trustee under the
Trust Agreement, provided such corporation shall be otherwise qualified and
eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATION OR REPLACEMENTS OF THE ISSUER
The Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person (as defined
below), except as described below or as described in "--Liquidation Distribution
upon Dissolution". The Issuer may, at the request of the Company, with the
consent of the Administrative Trustees and without the consent of the Property
Trustee, the Delaware Trustee or the holders of the Preferred Securities, merge
with or into, consolidate, amalgamate, be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any State; provided that (i) such successor
entity either (a) expressly assumes all of the obligations of the Issuer with
respect to the Preferred Securities or (b) substitutes for the Preferred
Securities other securities having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the Successor Securities rank
the same as the Preferred Securities rank in priority with respect to
Distributions and payments upon liquidation, redemption and otherwise, (ii) the
Company expressly appoints a trustee of such successor entity possessing the
same powers and duties as the Property Trustee 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
other organization on which the Preferred Securities are then listed, if any,
(iv) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose substantially identical to that of the Issuer, (vii) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Company has received an opinion from independent counsel to the Issuer
experienced in such matters to the effect that (a) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Preferred
Securities
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(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, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the Issuer nor such successor entity will be required
to register as an investment company under the Investment Company Act, and
(viii) the Company or any permitted successor or assignee owns all of the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, the Issuer shall not, except
with the consent of holders of 100% in aggregate liquidation preference of the
Preferred Securities, consolidate, amalgamate, merge with or into, be replaced
by or convey, transfer or lease its properties and assets substantially as an
entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Issuer or the successor entity to be classified as other than a grantor trust
for United States Federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT
Except as provided below and under "Description of the
Guarantee--Amendments and Assignment" and as otherwise required by law and the
Trust Agreement, the holders of the Preferred Securities have no voting rights.
The Trust Agreement may be amended from time to time by the Company and the
Issuer Trustees, without the consent of the holders of the Preferred Securities
(i) to cure any ambiguity, correct or supplement any provisions in the Trust
Agreement that may be inconsistent with any other provision, or to make any
other provisions with respect to matters or questions arising under the Trust
Agreement that shall not be inconsistent with the other provisions of the Trust
Agreement, (ii) to modify, eliminate or add to any provision of the Trust
Agreement to such extent as shall be necessary to ensure that the Issuer will be
classified for United States Federal income tax purposes as a grantor trust at
all times that any Preferred Securities and Common Securities are outstanding or
to ensure that the Issuer will not be required to register as an "investment
company" under the Investment Company Act or be classified as other than a
grantor trust for United States Federal income tax purposes or (iii) to qualify
or maintain the qualification of the Trust Agreement under the Trust Indenture
Act; provided, however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interests of any holder of
Preferred Securities or Common Securities, and any such amendments of the Trust
Agreement shall become effective when notice thereof is given to the holders of
Preferred Securities and Common Securities. The Trust Agreement may be amended
by the Issuer Trustees and the Company with (i) the consent of holders
representing not less than a majority (based upon liquidation preference) of the
outstanding Preferred Securities and Common Securities, acting as a single
class, and (ii) 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 amendment will not affect the Issuer's status
as a grantor trust for United States Federal income tax purposes or the Issuer's
exemption from the status of an "investment company" under the Investment
Company Act; provided further that (a) without the consent of each holder of
Preferred Securities and Common Securities, the Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on the Preferred
Securities and Common Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Preferred Securities and
Common Securities as of a specified date or (ii) restrict the right of a holder
of Preferred Securities and Common Securities to institute suit for the
enforcement of any such payment on or after such date.
If any proposed amendment of the Trust Agreement provides for, or the
Issuer Trustees otherwise propose to effect, the dissolution of the Issuer,
other than pursuant to the terms of the Trust Agreement, then the holders of the
then outstanding Preferred Securities, as a class, will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be
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effective except with the approval of the holders of the majority in aggregate
liquidation preference of the Preferred Securities.
During the period commencing on the date of occurrence of a Declaration
Event of Default and ending upon the cure of such Declaration Event of Default,
and in other limited circumstances, the holders of a majority in aggregate
liquidation preference of Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Property Trustee or to direct the exercise of any trust or power conferred
upon the Property Trustee under the Trust Agreement, including the right to
direct the Property Trustee to exercise the remedies available to it as the
holder of the Debentures. So long as any Debentures are held by the Property
Trustee, the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee or
executing any trust or power conferred on the Debenture Trustee with respect to
such 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
that the principal of all the Debentures shall be due and payable, or (iv)
consent to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required, without in each case obtaining
the prior approval of the holders of a majority in aggregate liquidation
preference of all outstanding Preferred Securities (except in the case of clause
(iv), which consent, in the event that no Declaration Event of Default shall
occur and be continuing, shall be of the holders of Preferred Securities and
Common Securities voting together as a single class); provided, however, that
where a consent under the Indenture would require the consent of each holder of
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each holder of the 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 record of the Preferred Securities
of any notice of default with respect to the Debentures.
A waiver of a Debenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities may
be given at a separate meeting of holders of Preferred Securities convened for
such purpose, at a meeting of all of the holders of the Preferred Securities and
the Common Securities or pursuant to written consent. The Property Trustee will
cause a notice of any meeting at which holders of Preferred Securities are
entitled to vote, or of any matter upon which action by written consent of such
holders is to be taken, to be given to each holder of record of Preferred
Securities in the manner set forth in the Trust Agreement.
No vote or consent of the holders of Preferred Securities is required for
the Issuer to redeem and cancel the Preferred Securities in accordance with the
Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned at such time by the Company, the Issuer Trustees or
any affiliate of any Issuer Trustee shall, for purposes of such vote or consent,
be treated as if such Preferred Securities were not outstanding.
The procedures by which holders of Preferred Securities may exercise their
voting rights are described below. See "--Certain Book-Entry Procedures for
Global Certificates".
Holders of the Preferred Securities have no rights to appoint or remove the
Issuer Trustees, who may be appointed, removed or replaced solely by the
Company, as the direct or indirect holder of all the Common Securities.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to The
Depository Trust Company ("DTC"), which shall credit the relevant accounts at
DTC on the applicable distribution
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dates or, if the Preferred Securities are not held by DTC, such payments shall
be made by check mailed to the address of the holder entitled thereto as such
address shall appear on the Securities Register. The paying agent (the "Paying
Agent") shall initially be the Property Trustee and any co-paying agent chosen
by the Property Trustee and acceptable to the Administrative Trustees and the
Company. The Paying Agent is permitted to resign as Paying Agent upon 30 days'
written notice to the Property Trustee and the Company. In the event that the
Property Trustee shall no longer be the Paying Agent, the Administrative
Trustees shall appoint a successor (which shall be a bank or trust company
acceptable to the Administrative Trustees and the Company) to act as Paying
Agent.
CERTAIN BOOK-ENTRY PROCEDURES FOR GLOBAL CERTIFICATES
The description of book-entry procedures in this Prospectus includes
summaries of certain rules and operating procedures of DTC that affect transfers
of interests in the global certificate or certificates issued in connection with
sales of Preferred Securities made pursuant to this Prospectus. The Preferred
Securities were issued as fully registered securities registered in the name of
Cede & Co. (as nominee for DTC). Fully registered global Preferred Securities
certificates (the "Global Certificates") were issued, representing such
Preferred Securities and were deposited with DTC. The Global Certificates
comprise the certificates representing Preferred Securities initially sold to
QIBs in reliance on Rule 144A under the Securities Act ("Restricted Global
Certificates") and the Preferred Securities initially sold in offshore
transactions in reliance on Regulation S (the "Regulation S Global
Certificates"). One or more unrestricted Global Certificates will be issued,
representing, in the aggregate, Preferred Securities sold pursuant to this
Prospectus, and will be deposited with DTC.
The descriptions of the operations and procedures of DTC, Euroclear and
CEDEL that follow are provided solely as a matter of convenience. These
operations and procedures are solely within the control of the respective
settlement systems and are subject to changes by them from time to time. The
Issuer and the Company take no responsibility for these operations and
procedures and urge investors to contact the system or their participants
directly to discuss these matters.
DTC has advised the Issuer and the Company as follows: DTC is a limited
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "Clearing Agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for its participants ("participants") and facilitate the
clearance and settlement of securities transactions between participants through
electronic book-entry changes in accounts of its participants, thereby
eliminating the need for physical transfer and delivery of certificates.
Participants include securities brokers and dealers, banks, trust companies and
clearing corporations and may include certain other organizations. Indirect
access to the DTC system is available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly ("indirect
participants").
DTC has advised the Issuer and the Company that its current practice is to
credit, on its internal system, the respective liquidation preference or number
of securities of the individual beneficial interests represented by the
Restricted Global Certificates and the Regulation S Global Certificates to the
accounts with DTC of the participants through which such interests are to be
held. Ownership of beneficial interests in the Global Certificates will be shown
on, and the transfer of that ownership will be effected only through, records
maintained by DTC or its nominees (with respect to interests of participants)
and the records of participants and indirect participants (with respect to
interests of persons other than participants).
As long as DTC, or its nominee, is the registered holder of a Global
Certificate, DTC or such nominee, as the case may be, will be considered the
sole owner and holder of the Preferred Securities represented by such Global
Certificate for all purposes under the Trust Agreement and the Preferred
Securities.
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Except in the limited circumstances described below under "--Exchanges of
Book-Entry Certificates for Certificated Preferred Securities", owners of
beneficial interests in a Global Certificate will not be entitled to have any
portions of such Global Certificate registered in their names, will not receive
or be entitled to receive physical delivery of Preferred Securities in
definitive form and will not be considered the owners or holders of the Global
Certificate (or any Preferred Securities represented thereby) under the Trust
Agreement or the Preferred Securities.
Investors may hold their interests in the Restricted Global Certificate
directly through DTC, if they are participants in such system, or indirectly
through organizations (including Euroclear and CEDEL) which are participants in
such system. Investors may hold their interests in the Regulation S Global
Certificate through CEDEL or Euroclear, if they are participants in such
systems, or indirectly through organizations which are participants in such
systems. After the expiration of the Restricted Period (but not earlier),
investors may also hold their interests in the Regulation S Global Certificate
through organizations other than CEDEL and Euroclear that are participants in
the DTC system. CEDEL and Euroclear hold interests in the Regulation S Global
Certificate on behalf of their participants through customers' securities
accounts in their respective names on the books of their respective
depositories. The depositories, in turn, hold such interests in the Regulation S
Global Certificate in customers' securities accounts in the depositories' names
on the books of DTC. All interests in a Global Certificate, including those held
through Euroclear or CEDEL, will be subject to the procedures and requirements
of DTC. Those interests held through Euroclear and CEDEL are subject to the
procedures and requirements of such system. Beneficial interests in the
Restricted Global Certificate may be exchanged for beneficial interests in the
Regulation S Global Certificate and vice versa only in connection with a
transfer of such interest and subject to compliance with certain certification
requirements. "Restricted Period" means, with respect to the Preferred
Securities, the one-year period, and with respect to the Debentures, the Company
Common Stock issuable on conversion thereof or of the Preferred Securities, and
the Guarantee, the 40-day period, in each case following the later of the
commencement of the Original Offering and the last original issue date of the
Preferred Securities (including any Preferred Securities issued to cover
over-allotments).
The laws of some states require that certain persons take physical delivery
in definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in a Global Certificate to such persons may be
limited to that extent. Because DTC can act only on behalf of its participants,
which in turn act on behalf of indirect participants and certain banks, the
ability of a person having beneficial interests in a Global Certificate to
pledge such interest to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of such interests, may be affected
by the lack of a physical certificate evidencing such interests.
Payments of Distributions on Global Certificates will be made to DTC or its
nominee as the registered owner thereof. Neither the Issuer, the Company, the
Property Trustee nor any of their respective agents has any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the Global Certificates or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Issuer and the Company expect that DTC or its nominee, upon receipt of
any payment of Distributions in respect of a Global Certificate representing any
Preferred Securities held by it or its nominee, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the liquidation preference or number of
securities represented by such Global Certificate for such Preferred Securities
as shown on the records of DTC or its nominee. The Issuer and the Company also
expect that payments by participants to owners of beneficial interests in such
Global Certificate 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 registered in "street name". Such payments will be
the responsibility of such participants.
Except for trades involving only Euroclear and CEDEL participants,
interests in the Global Certificates will trade in DTC's Same-Day Funds
Settlement System and secondary market trading activity in such interests will
therefore settle in immediately available funds, subject in all cases to
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the rules and procedures of DTC and its participants. Transfers between
participants in DTC will be effected in accordance with DTC's procedures, and
will be settled in same-day funds. Transfers between participants in Euroclear
and CEDEL will be effected in the ordinary way in accordance with their
respective rules and operating procedures.
Subject to compliance with the transfer and exchange restrictions
applicable to the Preferred Securities described elsewhere herein, cross-market
transfers between DTC participants, on the one hand, and Euroclear or CEDEL
participants, on the other hand, will be effected by DTC in accordance with
DTC's rules on behalf of Euroclear or CEDEL, as the case may be, by its
respective depositary; however, such cross-market transactions will require
delivery of instructions to Euroclear or CEDEL, as the case may be, by the
counterparts in such system in accordance with the rules and procedures and
within the established deadlines (Brussels time) of such system. Euroclear or
CEDEL, as the case may be, will, if the transaction meets its settlement
requirements, deliver instructions to its respective depositary to take action
to effect final settlement on its behalf by delivering or receiving interests in
the relevant Global Certificate in DTC, and making or receiving payment in
accordance with normal procedures for same-day funds settlement applicable to
DTC. Euroclear participants and CEDEL participants may not deliver instructions
directly to the depositories for Euroclear or CEDEL.
Because of time zone differences, the securities account of a Euroclear or
CEDEL participant purchasing an interest in a Global Certificate from a DTC
participant will be credited, and any such crediting will be reported to the
relevant Euroclear or CEDEL participant, during the securities settlement
processing day (which must be a business day for Euroclear and CEDEL)
immediately following the DTC settlement date. Cash received in Euroclear or
CEDEL as a result of sales of interests in a Global Certificate by or through a
Euroclear or CEDEL participant to a DTC participant will be received with value
on the DTC settlement date but will be available in the relevant Euroclear or
CEDEL cash account of the business day for Euroclear or CEDEL following the DTC
settlement date.
DTC has advised the Issuer and the Company that it will take any action
permitted to be taken by a holder of certificates for Preferred Securities
(including the presentation of Preferred Securities for exchange as described
below and the conversion of Preferred Securities) only at the direction of one
or more participants to whose account with DTC interests in the Global
Certificates are credited and only in respect of such portion of the aggregate
liquidation preference of the Preferred Securities as to which such participant
or participants has or have given such direction. However, if there is a
Declaration Event of Default, DTC reserves the right to exchange the Global
Certificates for legended Preferred Securities in certificated form, and to
distribute such Preferred Securities to its participants.
Although DTC, Euroclear and CEDEL have agreed to the foregoing procedures
in order to facilitate transfers of beneficial ownership interests in the Global
Certificates among participants of DTC, Euroclear and CEDEL, they are under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. None of the Issuer, the Company, the
Initial Purchasers, the Property Trustee nor any of their respective agents has
any responsibility for the performance by DTC, Euroclear and CEDEL, their
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations, including maintaining,
supervising or reviewing the records relating to, or payments made on account
of, beneficial ownership interests in Global Certificates.
Redemption notices shall be sent to Cede & Co. as the registered holder of
the Preferred Securities. If less than all of the Preferred Securities are being
redeemed, DTC will determine the amount of interest of each Participant to be
redeemed in accordance with its procedures.
Although voting with respect to the Preferred Securities is limited to the
holders of record of the Preferred Securities, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to Preferred Securities. Under its usual procedures, DTC would mail an
omnibus proxy (the "Omnibus Proxy") to the Property Trustee as soon as possible
after
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the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting
rights to those direct participants to whose accounts such Preferred Securities
are credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Conveyance of notices and other communications by DTC to participants, by
participants to indirect participants, and by participants and indirect
participants to beneficial owners of the Preferred Securities and the voting
rights of participants, indirect participants and beneficial owners of Preferred
Securities will be governed by arrangements among them, subject to any statutory
or regulatory requirements as may be in effect from time to time.
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
the Property Trustee and the Company. In the event that a successor securities
depositary is not obtained, definitive Preferred Securities certificates
representing such Preferred Securities are required to be printed and delivered.
The Company, at its option, may decide to discontinue use of the system of
book-entry transfers through DTC (or a successor depositary). After a Debenture
Event of Default, the holders of a majority in liquidation preference of
Preferred Securities may determine to discontinue the system of book-entry
transfers through DTC. In any such event, definitive certificates for the
Preferred Securities will be printed and delivered.
EXCHANGES OF BOOK-ENTRY CERTIFICATES FOR CERTIFICATED PREFERRED SECURITIES
A beneficial interest in a Global Certificate may not be exchanged for
certificated Preferred Securities unless (i) DTC (x) notifies the Issuer and the
Company that it is unwilling or unable to continue as depositary for the Global
Certificate or (y) has ceased to be a clearing agency registered under the
Exchange Act and in either case the Issuer and the Company thereupon fails to
appoint a successor depositary, (ii) the Issuer and the Company, at their
option, notify the Property Trustee in writing that they elect to cause the
issuance of the Preferred Securities in certificated form or (iii) there shall
have occurred and be continuing a Declaration Event of Default or any event
which after notice or lapse of time or both would be a Declaration Event of
Default. In all cases, certificated Preferred Securities delivered in exchange
for any Global Certificate or beneficial interests therein will be registered in
the names, and issued in any approved denominations, requested by or on behalf
of DTC (in accordance with its customary procedures). Any exchange of a
beneficial interest in the Regulation S Global Certificate for a beneficial
interest in the Restricted Global Certificate or vice versa will be effected in
DTC by means of an instruction originated by the Property Trustee through the
DTC Deposit/Withdraw at Custodian ("DWAC") system. Any certificated Preferred
Securities issued in exchange for an interest in a Global Certificate will bear
any legend restricting transfers that is borne by such Global Certificate. Any
such exchange will be effected through the DWAC system and an appropriate
adjustment will be made in the records of the security registrar to reflect a
decrease in the liquidation preference or number of securities of the relevant
Global Certificate.
TRANSFER AGENT, REGISTRAR AND PAYING, CONVERSION AND EXCHANGE AGENT
The Property Trustee acts as transfer agent, registrar and paying,
conversion and exchange agent for the Preferred Securities.
Registration of transfers or exchanges of Preferred Securities will be
effected without charge by or on behalf of the Issuer, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The Issuer will not be required to register or cause to be
registered the transfer of the Preferred Securities after such Preferred
Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Company and certain of its subsidiaries maintain deposit accounts and
conduct other banking and corporate securities transactions and relationships
with the Property Trustee in the ordinary course of their businesses. The
Property Trustee, other than during the occurrence and
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continuance of a Declaration Event of Default, undertakes to perform only such
duties as are specifically set forth in the Trust Agreement and, after such
Declaration Event of Default, must exercise the same degree of care and skill as
a prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the Trust Agreement at the request of
any holder of Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby. If
no Declaration Event of Default has occurred and is continuing and the Property
Trustee is required to decide between alternative causes of action, construe
ambiguous provisions in the Trust Agreement or is unsure of the application of
any provision of the Trust Agreement, and the matter is not one on which holders
of Preferred Securities are entitled under the Trust Agreement to vote, then the
Property Trustee shall take such action as is directed by the Company and, if
not so directed, shall take such action as it deems advisable and in the best
interests of the holders of the Preferred Securities and the Common Securities
and will have no liability except for its own bad faith, negligence or willful
misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuer in such a way that the Issuer will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a corporation
for United States Federal income tax purposes and so that the Debentures will be
treated as indebtedness of the Company for United States Federal income tax
purposes. In this connection, the Company and the Administrative Trustees are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust of the Issuer or the Trust Agreement, that the Company and
the Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
The Issuer may not borrow money or issue debt or mortgage or pledge any of
its assets.
GOVERNING LAW
The Trust Agreement and the Preferred Securities are governed by, and
construed in accordance with, the laws of the State of Delaware.
REGISTRATION RIGHTS
In connection with the Original Offering, the Company and the Issuer
entered into a registration rights agreement with the Initial Purchasers, dated
December 12, 1997 (the "Registration Rights Agreement") pursuant to which the
Issuer and the Company agreed, at the expense of the Company, for the benefit of
the holders of the Preferred Securities, the Debentures issuable in respect of
the Preferred Securities, the Company Common Stock issuable upon conversion of
the Preferred Securities and the Debentures, and the Guarantee (together, the
"Registrable Securities") to file with the Commission on or prior to the date 90
days after the Original Offering Date a shelf registration statement (the "Shelf
Registration Statement") on such form as the Company deems appropriate covering
resales by holders of the Registrable Securities. The Company has agreed to use
its best efforts (i) to cause the Shelf Registration Statement to be declared
effective as promptly as practicable and in no event later than 180 days after
the Original Offering Date and (ii) to keep effective the Shelf Registration
Statement until two years after the latest date of original issuance of
Preferred Securities (or such earlier date as the holders (other than
"affiliates" of the Company) of Registrable Securities are able to sell all
Registrable Securities immediately without restriction, whether pursuant to Rule
144(k) under the Securities Act or any successor rule thereto or otherwise)
(such period, the "Effectiveness Period"). The Issuer and the Company are
permitted to suspend the use of the prospectus (which is a part of the Shelf
Registration Statement) in connection with sales of Registrable Securities by
holders during certain periods of
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time under certain circumstances relating to pending corporate developments
relating to the Company and public filings with the Commission and similar
events. A holder who wishes to sell Registrable Securities pursuant to the Shelf
Registration Statement is required to provide certain advance notification of
such proposed sales to the Company, and generally is required to be named as a
selling holder in the related prospectus, deliver a prospectus to purchasers and
be bound by those provisions of the Registration Rights Agreement that are
applicable to such holder (including indemnification provisions). Pursuant to
the Registration Rights Agreement, the Issuer and the Company agreed to provide
to each registered holder copies of such prospectus, notify each registered
holder when the Shelf Registration Statement has become effective, and take
certain other actions as are required to permit unrestricted sales of the
Registrable Securities.
In the Registration Rights Agreement, the Issuer and the Company agreed to
indemnify the holders of Registrable Securities against certain liabilities,
including liabilities under the Securities Act, subject to certain customary
limitations, and each holder of Registrable Securities included in the Shelf
Registration Statement will be obligated to indemnify the Issuer, its directors,
trustees, agents and officers who sign any Shelf Registration Statement and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, against any liability
with respect to information furnished by such holder in writing to the Issuer or
the Company (including the information in a Selling Security Holder's
Questionnaire) expressly for use in the Shelf Registration Statement.
If (i) on or prior to the date 90 days after the Original Offering Date a
Shelf Registration Statement has not been filed with the Commission or (ii) on
or prior to the date 180 days after the Original Offering Date such Shelf
Registration Statement has not been declared effective (each such event, a
"Registration Default"), additional interest ("Liquidated Damages") will accrue
on the Debentures, and, accordingly, additional distributions will accrue on the
Preferred Securities, from and including the day following such Registration
Default until such date as the Shelf Registration Statement is filed or declared
effective, as the case may be. Liquidated Damages will be paid quarterly in
arrears (subject to the Company's right to defer the payment of Liquidated
Damages during any Extension Period), with the first quarterly payment due on
the first interest or distribution payment date, as applicable, following the
date on which such Liquidated Damages begin to accrue, and will accrue at a rate
per annum equal to an additional one-quarter of one percent (0.25%) of the
principal amount or liquidation preference, as applicable, to and including the
90th day following such Registration Default and one-half of one percent (0.50%)
thereof from and after the 91st day following such Registration Default. In the
event that the Shelf Registration Statement ceases to be effective during the
Effectiveness Period for more than 90 days, whether or not consecutive, during
any 12-month period, then the interest rate borne by the Debentures and the
distribution rate borne by the Preferred Securities will each increase by an
additional one-half of one percent (0.50%) per annum from the 91st day of the
applicable 12-month period such Shelf Registration Statement ceases to be
effective until such time as the earlier to occur of the Shelf Registration
Statement again becoming effective and the end of the Effectiveness Period.
This summary of certain provisions of the Registration Rights Agreement
does not purport to be complete and is subject to, and qualified in its entirety
by reference to, all the provisions of the Registration Rights Agreement, a copy
of the form of which is incorporated by reference herein as an exhibit to the
Registration Statement.
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DESCRIPTION OF THE GUARANTEE
The Guarantee was executed and delivered by the Company concurrently with
the issuance by the Issuer of the Preferred Securities for the benefit of the
holders from time to time of such Preferred Securities. The Chase Manhattan Bank
is the Guarantee Trustee under the Guarantee. 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 (a copy of which is available at the corporate trust offices of the
Guarantee Trustee in New York, New York). The Guarantee Trustee holds the
Guarantee for the benefit of the holders of the Preferred Securities.
GENERAL
Pursuant to and to the extent set forth in the Guarantee, the Company
irrevocably agreed to pay in full on a subordinated basis, the Guarantee
Payments (as defined below) to the holders of the Preferred Securities, as and
when due, regardless of any defense, right of set off or counterclaim that the
Issuer may have or assert other than the defense of payment. The following
payments with respect to the Preferred Securities, to the extent not paid by or
on behalf of the Issuer (the "Guarantee Payments"), are subject to the
Guarantee: (i) any accumulated and unpaid Distributions required to be paid on
the Preferred Securities, to the extent that the Issuer has funds on hand
available therefor at such time, (ii) the redemption price with respect to any
Preferred Securities called for redemption to the extent that the Issuer has
funds on hand available therefor at such time, or (iii) upon a voluntary or
involuntary dissolution of the Issuer (unless the Debentures are distributed to
holders of the Preferred Securities), the lesser of (a) the Liquidation
Distribution, to the extent that the Issuer has funds on hand available therefor
at such time, and (b) the amount of assets of the Issuer remaining available for
distribution to holders of Preferred Securities. The Company's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Company to the holders of the Preferred Securities or by causing
the Issuer to pay such amounts to such holders.
The Guarantee is an irrevocable guarantee on a subordinated basis of the
Issuer's obligations under the Preferred Securities, but it applies only to the
extent that the Issuer has funds sufficient to make such payments, and is not a
guarantee of collection. If the Company does not make interest payments on the
Debentures held by the Issuer, the Issuer will not be able to pay Distributions
on the Preferred Securities and will not have funds legally available therefor.
The Company has, through the Guarantee, the Trust Agreement, the Debentures
and the Indenture, taken together, fully, irrevocably and unconditionally
guaranteed all of the Issuer's obligations under the Preferred Securities. No
single document standing alone or operating in conjunction with fewer than all
of the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Issuer's obligations under the
Preferred Securities. See "Relationship Among the Preferred Securities, the
Debentures and the Guarantee".
The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Issuer with respect to the Common Securities to
the same extent as the Guarantee, except that upon the occurrence and during the
continuation of a Declaration Event of Default, holders of Preferred Securities
shall have priority over holders of Common Securities with respect to
distributions and payments on liquidation, redemption or otherwise.
STATUS OF THE GUARANTEE
The Guarantee constitutes an unsecured obligation of the Company and ranks
subordinate and junior in right of payment to all other liabilities of the
Company and ranks pari passu with the most senior preferred stock, if any, now
or hereafter issued by the Company and with any guarantee now or hereafter
entered into by the Company in respect of any preferred or preference stock of
any affiliate of the Company.
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The Guarantee constitutes a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Company to enforce its rights under the Guarantee without first instituting
a legal proceeding against any other person or entity). The Guarantee is held
for the benefit of the holders of the Preferred Securities. The Guarantee will
not be discharged except by payment of the Guarantee Payments in full to the
extent not paid by the Issuer or upon distribution of the Debentures to the
holders of the Preferred Securities. The Guarantee does not place a limitation
on the amount of additional indebtedness that may be incurred by the Company or
any of its subsidiaries.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Preferred Securities (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of not less than a majority in aggregate liquidation preference of such
outstanding Preferred Securities. The manner of obtaining any such approval will
be as set forth under "Description of the Preferred Securities-Voting Rights;
Amendment of the Trust Agreement". All guarantees and agreements contained in
the Guarantee bind the successors, assigns, receivers, trustees and
representatives of the Company and inure to the benefit of the holders of the
Preferred Securities then outstanding.
CERTAIN COVENANTS OF THE COMPANY
The Company covenanted in the Guarantee that if and so long as (i) the
Issuer is the holder of all the Debentures, (ii) a Tax Event in respect of the
Issuer has occurred and is continuing and (iii) the Company has elected, and has
not revoked such election, to pay Additional Sums in respect of the Preferred
Securities and Common Securities, the Company will pay to the Issuer such
Additional Sums. The Company also covenanted that it will not, and it will not
cause any of its subsidiaries to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock or (ii) make any payment of
principal, interest or premium, if any, on or repay or repurchase or redeem any
debt securities (including guarantees of indebtedness for money borrowed) of the
Company that rank pari passu with or junior to the Debentures (other than (a)
any dividend, redemption, liquidation, interest, principal or guarantee payment
by the Company where the payment is made by way of securities (including capital
stock) that rank pari passu with or junior to the securities on which such
dividend, redemption, interest, principal or guarantee payment is being made,
(b) redemptions or purchases of any Rights pursuant to the Company's Rights
Agreement, or any successor to such Rights Agreement and the declaration of a
dividend of such Rights or the issuance of preferred stock under such plans in
the future, (c) payments under the Guarantee, (d) purchases of Company Common
Stock related to the issuance of Company Common Stock under any of the Company's
benefit plans for its directors, officers or employees, (e) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
one series or class of the Company's capital stock for another series or class
of the Company's capital stock and (f) 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)
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 a Debenture Event of Default and (b) in respect of which
the Company shall not have taken reasonable steps to cure, (ii) the Company
shall be in default with respect to its payment of any obligations under the
Guarantee or (iii) the Company shall have given notice of its selection of an
Extension Period as provided in the Indenture with respect to the Debentures and
shall not have rescinded such notice, or such Extension Period, or any extension
thereof, shall be continuing. The Company also covenanted (i) for so long as
Preferred Securities are outstanding, not to convert Debentures except pursuant
to a notice of conversion delivered to the Conversion Agent by a holder of
Preferred Securities, (ii) to maintain directly or indirectly 100% ownership of
the Common Securities, provided that certain successors which are permitted
pursuant to the Indenture may succeed to
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the Company's ownership of the Common Securities, (iii) not to voluntarily
dissolve the Issuer, except (a) in connection with a distribution of the
Debentures to the holders of the Preferred Securities in dissolution of the
Issuer or (b) in connection with certain mergers, consolidations or
amalgamations permitted by the Trust Agreement, (iv) to maintain the reservation
for issuance of the number of shares of Company Common Stock that would be
required from time to time upon the conversion of all the Debentures then
outstanding, (v) to use its reasonable efforts, consistent with the terms and
provisions of the Trust Agreement, to cause the Issuer to remain classified as a
grantor trust and not as an association taxable as a corporation for United
States Federal income tax purposes and (vi) to deliver shares of Company Common
Stock upon an election by the holders of the Preferred Securities to convert
such Preferred Securities into Company Common Stock.
As part of the Guarantee, the Company agreed that it will honor all
obligations described therein relating to the conversion or exchange of the
Preferred Securities into or for Company Common Stock or Debentures.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of a majority in aggregate liquidation preference of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the Guarantee.
If the Guarantee Trustee fails to enforce the Guarantee, any holder of the
Preferred Securities may institute a legal proceeding directly against the
Company to enforce its rights under the Guarantee without first instituting a
legal proceeding against the Issuer, the Guarantee Trustee or any other person
or entity. In addition, any record holder of Preferred Securities shall have the
right, which is absolute and unconditional, to proceed directly against the
Company to obtain Guarantee Payments, without first waiting to determine if the
Guarantee Trustee has enforced the Guarantee or instituting a legal proceeding
against the Issuer, the Guarantee Trustee or any other person or entity. The
Company has waived any right or remedy to require that any action be brought
just against the Issuer, or any other person or entity, before proceeding
directly against the Company.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, must exercise the same degree of care and
skill as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs. Subject to this provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by the
Guarantee at the request of any holder of Preferred Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the redemption price of the Preferred Securities, upon full
payment of the amounts payable upon dissolution of the Issuer, upon the
distribution, if any, of Company Common Stock to the holders of Preferred
Securities in respect of the conversion of all such holders' Preferred
Securities into Company Common Stock or upon distribution of Debentures to the
holders of the Preferred Securities in exchange for all of the Preferred
Securities. The Guarantee will continue to be effective
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or will be reinstated, as the case may be, if at any time any holder of
Preferred Securities must restore payment of any sums paid under such Preferred
Securities or the Guarantee.
GOVERNING LAW
The Guarantee is governed by and construed in accordance with the laws of
the State of New York.
DESCRIPTION OF THE DEBENTURES
Set forth below is a description of the specific terms of the Debentures in
which the Issuer invested the proceeds from the issuance and sale of the Trust
Securities. The Debentures were issued under a Junior Convertible Subordinated
Indenture (the "Indenture") between the Company and The Chase Manhattan Bank, as
trustee (the "Debenture Trustee"), copies of which are available for inspection
at the corporate trust office of the Debenture Trustee in New York, New York.
This summary of certain terms and provisions of the Debentures and the Indenture
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, the Indenture. Whenever particular defined terms of
the Indenture are referred to herein, such defined terms are incorporated herein
by reference.
GENERAL
The Debentures are unsecured and rank junior and subordinate in right of
payment to all Senior Debt of the Company. The Debentures are limited in
aggregate principal amount to $515,465,000, such amount being the sum of the
aggregate stated liquidation preference of the Preferred Securities and capital
contributed by the Company in exchange for the Common Securities. The Indenture
does not limit the incurrence or issuance of other secured or unsecured debt of
the Company, whether under the Indenture or any existing or other indenture that
the Company may enter into in the future or otherwise. See "--Subordination".
Concurrently with the issuance of the Preferred Securities, the Issuer
invested the proceeds thereof and the consideration paid by the Company for the
Common Securities in the Debentures. The Debentures are in the principal amount
equal to the aggregate stated liquidation preference of the Preferred Securities
plus the Company's concurrent investment in the Common Securities.
The Debentures are not subject to any sinking fund provision. The entire
principal amount of the Debentures will mature, and become due and payable,
together with any accrued and unpaid interest thereon, on December 1, 2027.
INTEREST
The Debentures bear interest at the annual rate of 5 1/4% per annum,
payable quarterly in arrears on March 1, June 1, September 1 and December 1 of
each year, commencing on March 1, 1998 (each, an "Interest Payment Date"), to
the person in whose name each Debenture is registered at the close of business
on the Business Day next preceding such Interest Payment Date, subject to
certain exceptions. It is anticipated that, until the dissolution, if any, of
the Issuer, each Debenture will be held in the name of the Property Trustee in
trust for the benefit of the holders of the Preferred Securities and the Common
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. In the event that any date
on which interest is payable on the 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). 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 stated rate per annum, compounded quarterly. The term
"interest" as used herein shall include quarterly interest payments, interest on
quarterly interest payments not paid on the applicable Interest Payment Date and
Additional Sums, as applicable.
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GLOBAL SECURITIES
If distributed to holders of the Preferred Securities in connection with
the involuntary or voluntary dissolution of the Issuer, including a dissolution
following the occurrence of a Special Event, the Debentures will be issued in
the same form as the Preferred Securities which such Debentures replace. Any
Global Certificate will be replaced by one or more global certificates (each a
"Global Security") registered in the name of the depository or its nominee.
Except under the limited circumstances described below, the Debentures
represented by the Global Security will not be exchangeable for, and will not
otherwise be issuable as, Debentures in definitive form. The Global Securities
described above may not be transferred except by the depository to a nominee of
the depository or by a nominee of the depository to the depository or another
nominee of the depository or to a successor depository or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in such a Global
Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Debentures in
definitive form and will not be considered the holders thereof for any purpose
under the Indenture, and no Global Security representing Debentures shall be
exchangeable, except for another Global Security of like denomination and tenor
to be registered in the name of the depository or its nominee or to a successor
depository or its nominee. Accordingly, each beneficial owner of Preferred
Securities must rely on the procedures of DTC or if such person is not a
participant, on the procedures of the participant through which such person owns
its interest to exercise any rights of a holder under the Indenture.
If Debentures are distributed to holders of Preferred Securities in
liquidation of such holders' interests in the Issuer and a Global Security is
issued, DTC will act as securities depository for the Debentures represented by
such Global Security. For a description of DTC and the specific terms of the
depository arrangements, see "Description of the Preferred Securities--Certain
Book-Entry Procedures for Global Certificates". As of the date of this Offering
Circular, the description therein of DTC's book-entry system and DTC's practices
as they relate to purchases, transfers, notices and payments with respect to the
Preferred Securities apply in all material respects to any debt obligations
represented by one or more Global Securities held by DTC. The Company may
appoint a successor to DTC or any successor depository in the event DTC or such
depository is unable or unwilling to continue as a depository for the Global
Securities.
None of the Company, the Initial Purchasers, the Debenture Trustee, any
Paying Agent or the securities registrar has any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global Security representing such Debentures or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
A Global Security shall be exchangeable for Debentures registered in the
names of persons other than DTC or its nominee only if (i) DTC notifies the
Company that it is unwilling or unable to continue as a depositary for such
Global Debenture and no successor depositary shall have been appointed by the
Company within 90 days, (ii) 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 and no successor depository shall have been
appointed by the Company within 90 days, (iii) the Company in its sole
discretion determines that such Global Security shall be so exchangeable, or
(iv) there shall have occurred and be continuing an Event of Default with
respect to such Global Security. 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 with respect to ownership of beneficial interests in such Global
Security. In the event that Debentures are issued in definitive form, such
Debentures will be in denominations of $50 and
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integral multiples thereof and may be transferred or exchanged at the offices
described in "--Payment and Paying Agents" below.
PAYMENT AND PAYING AGENTS
Payments on Debentures represented by a Global Security will be made to
DTC, as the depositary for the Debentures. In the event Debentures are issued in
definitive form, principal of and premium, if any, and any interest on
Debentures will be payable, the transfer of the Debentures will be registrable,
and the Debentures will be exchangeable for Debentures of other denominations of
a like aggregate principal amount at the corporate office of the Debenture
Trustee in the City of New York or at the office of such Paying Agent or Paying
Agents as the Company may designate, except that at the option of the Company
payment of any interest may be made (i) by check mailed to the address of the
Person entitled thereto as such address shall appear in the securities register
or (ii) by wire transfer to an account maintained by the Person entitled thereto
as specified in the securities register, provided that proper transfer
instructions have been received by the Regular Record Date. Payment of any
interest on Debentures will be made to the Person in whose name such Debentures
are registered at the close of business on the Regular Record Date for such
interest, except in the case of Defaulted Interest. The Regular Record Date for
the interest payable on any Interest Payment Date shall be the fifteenth day
(whether or not a Business Day) next preceding such Interest Payment Date. The
Company may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent.
Any monies deposited with the Debenture Trustee or any Paying Agent, or
then held by the Company in trust, for the payment of the principal of and
premium, if any, or interest on any Debentures and remaining unclaimed for two
years after such principal and premium, if any, or interest has become due and
payable shall, at the request of the Company, be repaid to the Company and the
holder of such Debentures shall thereafter look, as a general unsecured
creditor, only to the Company for payment thereof.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Event of Default under the Indenture has occurred and is
continuing, the Company has the right under the Indenture to defer the payment
of interest (including any Liquidated Damages) on the Debentures at any time or
from time to time for a period not exceeding 20 consecutive quarters with
respect to each Extension Period, provided that no Extension Period may extend
beyond the stated maturity of the Debentures. At the end of such Extension
Period, the Company must pay all interest then accrued and unpaid (together with
interest thereon at the stated annual rate, compounded quarterly, to the extent
permitted by applicable law). During an Extension Period, interest will continue
to accrue and holders of Debentures (or holders of Preferred Securities while
the Preferred Securities are outstanding) will be required to recognize interest
income for United States Federal income tax purposes. See "Certain Federal
Income Tax Consequences--Interest Income and Original Issue Discount".
During any such Extension Period, the Company may not, and may not cause
any subsidiary to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of the Company that
rank pari passu with or junior to the Debentures (other than (a) any dividend,
redemption, liquidation, interest, principal or guarantee payment by the Company
where the payment is made by way of securities (including capital stock) that
rank pari passu with or junior to the securities on which such dividend,
redemption, interest, principal or guarantee payment is being made, (b)
redemptions or purchases of any Rights pursuant to the Company's Rights
Agreement, or any successor to such Rights Agreement, and the declaration of a
dividend of such Rights or the issuance of preferred stock under such plans in
the future, (c) payments under the Guarantee, (d) purchases of Company Common
Stock related to the issuance of Company Common Stock under any of the Company's
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<PAGE> 42
benefit plans for its directors, officers or employees, (e) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
one series or class of the Company's capital stock for another series or class
of the Company's capital stock, and (f) 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).
Prior to the termination of any such Extension Period, the Company may further
extend the interest payment period, provided that no Extension Period may exceed
20 consecutive quarters or extend beyond the stated maturity of the Debentures.
Upon the termination of any such Extension Period and the payment of all amounts
then due on any Interest Payment Date, the Company may elect to begin a new
Extension Period subject to the above requirements. No interest shall be due and
payable during an Extension Period, except at the end thereof. The Company shall
give the Property Trustee, the Administrative Trustees and the Debenture Trustee
notice of its election to begin any Extension Period at least one Business Day
prior to the earlier of (i) the record date for the date Distributions on the
Preferred Securities (or, if no Preferred Securities are outstanding, for the
date interest on the Debentures) would have been payable except for the election
to begin such Extension Period and (ii) the date the Property Trustee is (or, if
no Preferred Securities are outstanding, the Debenture Trustee is) required to
give notice to the NYSE or other applicable self- regulatory organization or to
holders of such Preferred Securities (or, if no Preferred Securities are
outstanding, to the holders of such Debentures) of such record date. The
Debenture Trustee and the Property Trustee shall give notice of the Company's
election to begin an Extension Period to the holders of the Debentures and the
Preferred Securities, respectively.
MANDATORY REDEMPTION
Upon repayment at maturity or as a result of acceleration upon the
occurrence of a Debenture Event of Default, the Company will redeem the
Debentures, in whole but not in part, at a redemption price equal to 100% of the
principal amount thereof, together with any accrued and unpaid interest thereon.
Any payment pursuant to this provision shall be made prior to 12:00 noon, New
York City time, on the date of such repayment or acceleration or at such other
time on such earlier date as the parties thereto shall agree. The Debentures are
not entitled to the benefit of any sinking fund or, except as set forth above or
as a result of acceleration, any other provision for mandatory prepayment.
OPTIONAL REDEMPTION
On and after December 1, 2001, and subject to the next succeeding sentence,
the Company will have the right, at any time and from time to time, to redeem
the Debentures, in whole or in part, upon notice given as provided below, during
the twelve month periods beginning on December 1 in each of the following years
and at the indicated redemption prices (expressed as a percentage of the
principal amount of the Debentures being redeemed), together with any accrued
but unpaid interest on the portion being redeemed.
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2001............................ 103.150%
2002............................ 102.625%
2003............................ 102.100%
2004............................ 101.575%
</TABLE>
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2005............................ 101.050%
2006............................ 100.525%
2007 and thereafter............. 100.000%
</TABLE>
For so long as the Issuer is the holder of all the outstanding Debentures,
the proceeds of any such redemption will be used by the Issuer to redeem
Preferred Securities and Common Securities in accordance with their terms. The
Company may not redeem the Debentures in part unless all accrued and unpaid
interest has been paid in full on all outstanding Debentures. See "Description
of the Preferred Securities--Optional Redemption".
The Company also shall have the right to redeem the Debentures, at the
principal amount thereof plus accrued and unpaid interest, at any time after
December 1, 2001 if a Tax Event shall
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<PAGE> 43
occur and be continuing as described in "Description of the Preferred
Securities--Special Event Exchange or Redemption".
REDEMPTION PROCEDURES
Notices of any redemption of the Debentures and the procedures for such
redemption shall be as provided with respect to the Preferred Securities under
"Description of the Preferred Securities--Redemption Procedures". 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 Debentures to be redeemed at its registered
address. Unless the Company defaults in payment of the redemption price, on and
after the redemption date interest shall cease to accrue on such Debentures or
portions thereof called for redemption.
DISTRIBUTION OF DEBENTURES
At any time, the Company has the right to dissolve the Issuer and, after
satisfaction of the liabilities of creditors of the Issuer as provided by
applicable law, cause the Debentures to be distributed to the holders of the
Preferred Securities in dissolution of the Issuer. If distributed to holders of
Preferred Securities in liquidation, the Debentures will initially be issued in
the form of one or more global securities and DTC, or any successor depositary
for the Preferred Securities, will act as depositary for the Debentures. It is
anticipated that the depositary arrangements for the Debentures would be
substantially identical to those in effect for the Preferred Securities. There
can be no assurance as to the market price of any Debentures that may be
distributed to the holders of Preferred Securities. For a description of DTC and
the terms of the depositary matters, see "--Global Securities".
CONVERSION OF THE DEBENTURES
The Debentures are convertible at the option of the holders of the
Debentures into Company Common Stock, at any time prior to redemption or
maturity, initially at the rate of 0.9865 shares of Company Common Stock for
each $50 in principal amount of Debentures (equivalent to a conversion price of
$50.685 per share of Company Common Stock), subject to the conversion price
adjustments described under "Description of the Preferred Securities--Conversion
Rights". The Issuer has covenanted for so long as the Preferred Securities are
outstanding not to convert Debentures, except pursuant to a notice of conversion
delivered to the Conversion Agent by a holder of Preferred Securities. Upon
surrender of such Preferred Securities to the Conversion Agent for conversion,
the Issuer will distribute the commensurate principal amount of the Debentures
to the Conversion Agent on behalf of the holder of every Preferred Security so
converted, whereupon the Conversion Agent will convert such Debentures into
Company Common Stock on behalf of such holder. The Company's delivery to the
holders of the Debentures (through the Conversion Agent) of the fixed number of
shares of Company Common Stock into which the Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares) will be
deemed to satisfy the Company's obligation to pay the principal amount of the
Debentures, and the accrued and unpaid interest attributable to the period from
the last date to which interest has been paid or duly provided for.
MODIFICATION OF INDENTURE
From time to time, the Company and the Debenture Trustee may, without the
consent of the holders of 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 the Debentures, or the holders
of the Preferred Securities so long as they remain outstanding) and qualifying,
or maintaining the qualification of, the Indenture under the Trust Indenture
Act. The Indenture contains provisions permitting the Company and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the outstanding Debentures, to modify the Indenture in a
manner affecting the rights of the holders of the Debentures; provided that no
such modification may,
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<PAGE> 44
without the consent of the holder of each outstanding Debenture so affected, (i)
change the stated maturity of the Debentures, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon
(other than deferrals of the payments of interest as described under "--Option
to Extend Interest Payment Period") or reduce the premium payable upon the
redemption thereof, or impair any right to institute suit for the enforcement of
any such payment, or adversely affect the subordination provisions of the
Indenture or any right to convert any Debentures or (ii) reduce the percentage
of principal amount of Debentures, the holders of which are required to consent
to any such modification of the Indenture, provided that, so long as any of the
Preferred Securities remain outstanding, (a) no such modification may be made
that adversely affects the holders of such Preferred Securities in any material
respect, and no termination of the Indenture may occur, and no waiver of any
Debenture Event of Default or compliance with any covenant under the Indenture
may be effective, without the prior consent of the holders of at least a
majority in aggregate liquidation preference of the Preferred Securities then
outstanding unless and until the principal of and any premium on the Debentures
and all accrued and unpaid interest thereon has been paid in full and (b) where
a consent under the Indenture would require the consent of each holder of
Debentures, no such consent will be given by the Property Trustee without the
prior consent of each holder of the Preferred Securities.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events that has occurred and is continuing constitutes a "Debenture Event of
Default" with respect to such Debentures:
(i) failure for 30 days to pay any interest on the Debentures, when
due (subject to the deferral of any due date in the case of an Extension
Period);
(ii) failure to pay any principal or premium, if any, on the
Debentures when due whether at maturity, upon redemption by declaration or
otherwise;
(iii) failure by the Company to deliver shares of Company Common Stock
upon an appropriate election by holders of Debentures to convert such
Debentures;
(iv) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice
to the Company from the Debenture Trustee or to the Debenture Trustee and
the Company from the holders of at least 25% in aggregate outstanding
principal amount of such Debentures; or
(v) certain events in bankruptcy, insolvency or reorganization of the
Company.
The holders of a majority in aggregate outstanding principal amount of the
Debentures have the right to 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 consistent with the Indenture.
The Debenture Trustee or the holders of not less than 25% in aggregate principal
amount of the Debentures then outstanding may declare the principal due and
payable immediately upon a Debenture Event of Default, and, should the Debenture
Trustee or the holders of the Debentures fail to make such declaration, the
holders of at least 25% in aggregate liquidation preference of the Preferred
Securities then outstanding shall have such right. The holders of a majority in
aggregate outstanding principal amount of the Debentures may annul and rescind
such declaration if the default (other than the non-payment of the principal of
the Debentures which has become due solely by such acceleration) has been cured
or waived 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 and, should the holders of the Debentures fail to annul and
rescind such declaration, the holders of a majority in aggregate liquidation
preference of the Preferred Securities then outstanding shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
Debentures affected thereby may, on behalf of the holders of all the Debentures,
waive any past default, except a default
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<PAGE> 45
in the payment of principal or interest (unless such default has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Debenture and, should the holders of the Debentures fail to annul such
declaration and waive such default, the holders of a majority in aggregate
liquidation preference of the Preferred Securities shall have such right. The
Company is required to file annually with the Debenture Trustee a certificate as
to whether or not the Company is in compliance with all the conditions and
covenants applicable to it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing as to
the Debentures, the Property Trustee will have the right to declare the
principal of and the interest on the 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 the Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest or principal
on the Debentures on the date such interest or principal is otherwise payable, a
holder of Preferred Securities may institute a Direct Action for payment after
the respective due date specified in the Debentures. The Company may not amend
the Indenture to remove the foregoing right to bring a Direct Action without the
prior written consent of the holders of all of the Preferred Securities.
Notwithstanding any payment made to such holder of Preferred Securities by the
Company in connection with a Direct Action, the Company shall remain obligated
to pay the principal of or interest on the Debentures held by the Issuer or the
Property Trustee, and the Company 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 Company to such holder in
any Direct Action.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person shall consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless (i) in case the Company
consolidates with or merges into another Person or conveys, transfers or leases
its properties and assets substantially as an entirety to any Person, the
successor Person is organized under the laws of the United States or any state
or the District of Columbia, and such successor Person expressly assumes the
Company's obligations on the Debentures and 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 happened and be continuing; (iii) such transaction
is permitted under the Trust Agreement and the Guarantee and does not give rise
to any breach or violation of the Trust Agreement or the Guarantee; and (iv)
certain other conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the
Debentures protection in the event of a highly leveraged or other transaction
involving the Company that may adversely affect holders of the Debentures.
EXPENSES OF ISSUER
Pursuant to the Indenture, the Company will pay all of the costs, expenses
or liabilities of the Issuer, other than obligations of the Issuer to pay to the
holders of any Preferred Securities or Common Securities the amounts due such
holders pursuant to the terms of the Preferred Securities or Common Securities.
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<PAGE> 46
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Debentures not
previously delivered to the Debenture Trustee for cancellation (i) have become
due and payable or (ii) will become due and payable at their stated maturity
within one year or are to be properly called for redemption within one year, and
the Company deposits or causes to be deposited with the Debenture Trustee trust
funds, in trust, for the purpose and in an amount in the currency or currencies
in which the Debentures are payable sufficient to pay and discharge the entire
indebtedness on the Debentures not previously delivered to the Debenture Trustee
for cancellation, for the principal and premium, if any, and interest to the
date of the deposit or to the stated maturity, as the case may be, then the
Indenture will cease to be of further effect (except as to the Company's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and the
Company will be deemed to have satisfied and discharged the Indenture.
SUBORDINATION
In the Indenture, the Company has covenanted and agreed that any Debentures
issued thereunder will be subordinate and junior in right of payment to all
Senior Debt (as defined below) of the Company whether now existing or
hereinafter incurred. Upon any payment or distribution of assets of the Company
to creditors upon any liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any bankruptcy,
insolvency, debt restructuring or similar proceedings in connection with any
insolvency or bankruptcy proceeding of the Company, the holders of Senior Debt
will first be entitled to receive payment in full of principal of and premium,
if any, and interest, if any, on such Senior Debt before the Property Trustee,
on behalf of the holders of the Debentures, will be entitled to receive or
retain any payment in respect of the principal of and premium, if any, or
interest, if any, on the Debentures.
In the event of the acceleration of the maturity of any Debentures, the
holders of all Senior Debt outstanding at the time of such acceleration will
first be entitled to receive payment in full of all amounts due thereon
(including any amounts due upon acceleration) before the holders of Debentures
will be entitled to receive or retain any payment in respect of the principal of
or premium, if any, or interest, if any, on the Debentures.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Debentures may be made if there shall have occurred and
be continuing a default in any payment with respect to Senior Debt, or an event
of default with respect to any Senior Debt resulting in the acceleration of the
maturity thereof, or if any judicial proceeding shall be pending with respect to
any such default.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another person the payment of which, in either case, such
Person has guaranteed or for which such Person is responsible or liable,
directly or indirectly, as obligor or otherwise.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt of the
Company, whether incurred on or prior to the date of the Indenture or thereafter
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<PAGE> 47
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Debentures or be deemed to include:
(i) any Debt of the Company which, when incurred and without respect
to any election under Section 1111 (b) of the Bankruptcy Code, was without
recourse to the Company,
(ii) any Debt of the Company to any of its subsidiaries,
(iii) Debt to any employee of the Company,
(iv) any liability for taxes,
(v) Debt or other monetary obligations to trade creditors or assumed
by the Company or any of its subsidiaries in the ordinary course of
business in connection with the obtaining of goods, materials or services,
and
(vi) the Debentures.
The Indenture places no limitation on the amount of additional Senior Debt
that may be incurred by the Company.
GOVERNING LAW
The Indenture and the Debentures are governed by and construed in
accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
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 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.
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE DEBENTURES
AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent the Issuer has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Company as and to the extent
set forth under "Description of the Guarantee". Taken together, the Company's
obligations under the Debentures, the Indenture, the Trust Agreement and the
Guarantee provide, in the aggregate, a full, irrevocable and unconditional
guarantee of payments of Distributions and other amounts due on the Preferred
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Issuer's obligations under the
Preferred Securities. If and to the extent that the Company does not make
payments on the Debentures, the Issuer will not pay Distributions or other
amounts due on the Preferred Securities. The Guarantee does not cover payment of
Distributions when the Issuer does not have sufficient funds to pay such
Distributions. In such event, a holder of Preferred Securities may institute a
Direct Action directly against the Company to enforce payment of such
Distributions to such holder after the respective due dates. The obligations of
the Company under the Guarantee are subordinate and junior in right of payment
to all other liabilities of the Company and rank pari passu with the most senior
preferred stock, if any, now or hereafter issued by the Company and with any
guarantee now or hereafter entered into by the Company in respect of any
preferred or preference stock of any affiliate of the Company.
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<PAGE> 48
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Debentures, such payments will be sufficient to cover Distributions and other
payments due on the Preferred Securities, primarily because (i) the aggregate
principal amount of the Debentures is equal to the sum of the aggregate stated
liquidation preference of the Preferred Securities and Common Securities; (ii)
the interest rate and interest and other payment dates on the Debentures match
the Distribution rate and Distribution and other payment dates for the Preferred
Securities; (iii) the Company pays for all and any costs, expenses and
liabilities of the Issuer except the Issuer's obligations to holders of the
Preferred Securities under such Preferred Securities; and (iv) the Trust
Agreement further provides that the Issuer will not engage in any activity that
is not consistent with the limited purposes of the Issuer.
Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set off any payment it is otherwise required to make thereunder
with and to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a payment under the Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
or any other person or entity.
A default or event of default under any Senior Debt of the Company will not
constitute a default under the Indenture or a Debenture Event of Default.
However, in the event of payment defaults under, or acceleration of, Senior Debt
of the Company, the subordination provisions of the Indenture provide that no
payments may be made in respect of the Debentures until such Senior Debt has
been paid in full or any payment default thereunder has been cured or waived.
Failure to make required payments on the Debentures would constitute a Debenture
Event of Default.
LIMITED PURPOSE OF ISSUER
The Preferred Securities evidence a beneficial interest in the Issuer, and
the Issuer exists for the sole purpose of issuing the Preferred Securities and
Common Securities and investing the proceeds thereof in the Debentures. A
principal difference between the rights of a holder of Preferred Securities and
a holder of Debentures is that a holder of Debentures is entitled to receive
from the Company the principal amount of and interest accrued on Debentures
held, while a holder of Preferred Securities is entitled to receive
Distributions from the Issuer (or from the Company under the applicable
Guarantee) if and to the extent the Issuer has funds available for the payment
of such Distributions.
RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution of the Issuer involving the
liquidation of the Debentures, after satisfaction of the liabilities of
creditors of the Issuer as provided by applicable law, the holders of the
Preferred Securities will be entitled to receive, out of assets held by the
Issuer, the Liquidation Distribution in cash. See "Description of the Preferred
Securities--Liquidation Distribution upon Dissolution". Upon any voluntary or
involuntary liquidation or bankruptcy of the Company, the Property Trustee, as
holder of the Debentures, would be a subordinated creditor of the Company,
subordinated in right of payment to all Senior Debt, but entitled to receive
payment in full of principal and interest before any stockholders of the Company
receive payments or distributions. Since the Company is the guarantor under the
Guarantee and has agreed to pay for all costs, expenses and liabilities of the
Issuer (other than the Issuer's obligations to the holders of the Preferred
Securities), the positions of a holder of such Preferred Securities and a holder
of such Debentures relative to other creditors and to stockholders of the
Company in the event of liquidation or bankruptcy of the Company would be
substantially the same.
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<PAGE> 49
DESCRIPTION OF THE COMPANY'S CAPITAL STOCK
Under the Company's Restated Certificate of Incorporation, as amended (the
"Restated Certificate of Incorporation"), the Company is authorized to issue
400,000,000 shares of Company Common Stock, par value $1.00 per share, and
10,000,000 shares of preferred stock which is issuable in one or more series and
of which 9,990,000 shares have a par value of $1.00 per share and 10,000 shares
have no par value (collectively, "Company Preferred Stock"). As of September 30,
1997, 159,110,836 shares of Company Common Stock (excluding treasury shares)
were issued and outstanding and there were no shares of Company Preferred Stock
issued and outstanding. In addition, as of September 30, 1997, the Company had
1,889,194 shares of Company Common Stock reserved for issuance under the
Company's stock option plans, leaving 238,999,970 authorized shares of Company
Common Stock (including 21,912 shares of Company Common Stock held in the
Company's treasury) available for issuance. The number of authorized shares of
Company Preferred Stock includes 500,000 authorized shares of Junior
Participating Company Preferred Stock, Series B (the "Series B Preferred Stock")
issuable pursuant to the Rights Agreement dated as of October 20, 1988 between
the Company and First Chicago Trust Company of New York (formerly known as
Morgan Shareholders Services Trust Company) (the "Rights Agreement"), none of
which were outstanding as of September 30, 1997, leaving 9,500,000 authorized
shares of Company Preferred Stock available for issuance as of September 30,
1997. See "--Stock Purchase Rights".
COMPANY COMMON STOCK
The holders of the Company Common Stock have one vote for each share held.
Subject to the prior rights of holders of any issued and outstanding Company
Preferred Stock that may be issued in the future, holders of the Company Common
Stock are entitled to receive such dividends as may be declared from time to
time by the Company's board of directors (the "Board of Directors") out of funds
legally available therefor. In the event of a liquidation (whether voluntary or
involuntary) or reduction in the Company's capital resulting in any distribution
of assets to stockholders, the holders of the Company Common Stock are entitled
to receive, pro rata according to the number of shares held by each, all of the
assets of the Company remaining for distribution after payment to creditors and
the holders of any issued and outstanding Company Preferred Stock of the full
preferential amounts to which they are entitled.
Holders of the Company Common Stock do not have preemptive rights to
subscribe for and purchase any new or additional issue of Company Common Stock
or securities convertible into Company Common Stock. Shares of the Company
Common Stock are not subject to redemption.
The outstanding shares of Company Common Stock are listed on the NYSE and
the CSE. The transfer agent and registrar of the shares of Company Common Stock
is First Chicago Trust Company of New York.
STOCK PURCHASE RIGHTS
Each outstanding share of Company Common Stock includes one purchase right
(individually a "Right" and collectively the "Rights") provided under the Rights
Agreement. Each Right entitles the holder, until the earlier of October 31, 1998
or the redemption of the Rights, to buy one four-hundredth of a share of Series
B Preferred Stock at a price of $25 per one four-hundredth of a share (as
adjusted to reflect stock splits since the issuance of the Rights). The Series B
Preferred Stock is nonredeemable and will have 100 votes per share. The Company
has reserved 500,000 shares of Series B Preferred Stock for issuance upon
exercise of such Rights. The Rights will be exercisable only if a person or
group acquires 20% or more of voting power of the Company or announces a tender
offer following which it would hold 30% or more of the Company's voting power.
In the event that any person becomes the beneficial owner of 30% or more of
the Company's voting power, the Rights (other than Rights held by the 30%
stockholder) would become exercisable for that number of shares of the Company
Common Stock having a market value of two
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times the exercise price of the Right. Furthermore, if, following the
acquisition by a person or group of 20% or more of the Company's voting power,
the Company were acquired in a merger or other business combination or 50% or
more of its assets were sold, or in the event of certain types of self-dealing
transactions by a 20% stockholder, each Right (other than Rights held by the 20%
stockholder) would become exercisable for that number of shares of Company
Common Stock (or securities of the surviving company in a business combination)
having a market value of two times the exercise price of the Right.
The Company may redeem the Rights at one cent per Right prior to the
occurrence of an event that causes the Rights to become exercisable for Company
Common Stock. The Board of Directors may terminate the Company's right to redeem
the Rights under certain circumstances at any time after a group or person
acquires 20% or more of the Company's voting power.
One Right will be issued in respect of each share of Company Common Stock
issued before the earlier of October 31, 1998 or the redemption of the Rights.
As of the date of this Prospectus, the Rights are not exercisable, certificates
representing the Rights have not been issued and the Rights automatically trade
with the shares of Company Common Stock. The Rights will expire on October 31,
1998 unless earlier redeemed.
COMPANY PREFERRED STOCK
Under the Restated Certificate of Incorporation, shares of Company
Preferred Stock may be issued in the future in such series as may be designated
by the Board of Directors. In creating any such series, the Board of Directors
has the authority, without any further vote or action by the Company's
stockholders, to fix the dividend rights and rates, voting and conversion
rights, redemption provisions, liquidation preferences and other relative,
participating, optional or other special rights, qualifications, limitations or
restrictions of such series.
The only series of Company Preferred Stock currently authorized by the
Board of Directors for issuance is the Series B Preferred Stock issuable under
the Rights Agreement. See "--Stock Purchase Rights".
PROVISIONS WITH POSSIBLE ANTI-TAKEOVER EFFECTS
As discussed above, the Company has adopted a Rights Agreement which has
the effect of providing stockholders with rights to purchase shares of Company
Common Stock (or securities of an acquiring company) at half of the market price
under certain circumstances involving a potential change in control of the
Company that has not been approved by the Board of Directors. In addition, the
Delaware General Corporate Law provides, among other things, that any beneficial
owner of more than 15% of the Company's voting stock is prohibited, without the
prior approval of the Board of Directors, from entering into any business
combination with a company for three years from the date such 15% ownership
interest is acquired. Additionally, the "fair price provisions" of the Restated
Certificate of Incorporation require that certain proposed business combinations
between the Company and an "interested party" (a beneficial owner of 5% or more
of the voting shares of the Company) must be approved by the holders of 75% of
the voting shares, unless certain fair price and procedural requirements are met
or the business combination is approved by the directors of the Company who are
not affiliated with the interested party. A vote of the holders of 75% of the
Company's outstanding voting stock is required to amend the fair price
provisions of the Restated Certificate of Incorporation.
The Restated Certificate of Incorporation and the Company's by-laws (the
"By-Laws ") contain certain other provisions which may be viewed as having an
anti-takeover effect. The Restated Certificate of Incorporation classifies the
Board of Directors into three classes and provides that vacancies on the Board
of Directors are to be filled by a majority vote of directors and that directors
so chosen shall hold office until the end of the full term of the class in which
the vacancy occurred. A vote of the holders of 75% of the Company's outstanding
voting stock is required to amend these provisions. Under the Delaware General
Corporation Law, directors of the Company may only be removed for cause.
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The Company is not required to seek stockholder approval prior to
designating any future series of Company Preferred Stock. Such Company Preferred
Stock could be issued by the Board of Directors in one or more transactions with
terms which might make the acquisition of a controlling interest in the Company
more difficult or costly. However, the Board of Directors has a policy of
seeking stockholder approval prior to designating any future series of Company
Preferred Stock with a vote or convertible into stock having a vote in excess of
13% of the vote represented by all voting stock immediately subsequent to such
issuance, except for the purpose of (i) raising capital in the ordinary course
of business or (ii) making acquisitions, the primary purpose of which is not to
effect a change of voting power.
The Restated Certificate of Incorporation and the By-Laws also contain
provisions that may reduce surprise and disruptive tactics at stockholders'
meetings. The Restated Certificate of Incorporation provides that no action may
be taken by stockholders except at an annual meeting or special meeting, and the
By-Laws do not permit stockholders to directly call a special meeting of
stockholders. A stockholder must give written notice to the Company of an
intention to nominate a director for election at an annual meeting 90 days prior
to the anniversary date of the immediately preceding annual meeting. Each of
these provisions tends to make a change of control of the Board of Directors
more difficult and time consuming.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Following is a summary of certain of the material United States Federal
income tax consequences of the purchase, ownership, disposition and conversion
of the Preferred Securities. Unless otherwise stated, this summary deals only
with Preferred Securities held as capital assets. This summary 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, foreign taxpayers (except to the
extent discussed under the heading "--United States Alien Holders") or persons
that will hold the Preferred Securities as a position in a "straddle", as part
of a "synthetic security" or "hedge", as part of a "conversion transaction" or
other integrated investment or as other than a capital asset. This summary also
does not address the tax consequences to persons that have a functional currency
other than the United States Dollar. Further, it does not include any
description of any alternative minimum tax consequences or the tax laws of any
state or local government or of any foreign government that may be applicable to
the Preferred Securities. This summary is based on the Internal Revenue Code of
1986, as amended (the "Code"), Treasury regulations thereunder and
administrative and judicial interpretations thereof, as of the date hereof, all
of which are subject to change, possibly on a retroactive basis.
INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF PREFERRED
SECURITIES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF
ANY STATE, LOCAL, FOREIGN OR OTHER TAX LAWS AND OF POTENTIAL CHANGES IN
APPLICABLE TAX LAWS.
CLASSIFICATION OF THE DEBENTURES
The Company has taken the position that the Debentures will be classified
for United States Federal income tax purposes as indebtedness of the Company
under current law and, by acceptance of Preferred Securities, each holder
covenants to treat the Debentures as indebtedness and the Preferred Securities
as evidence of an indirect beneficial ownership interest in the Debentures. No
assurance can be given, however, that such position of the Company will not be
challenged by the Internal Revenue Service or, if challenged, that such a
challenge will not be successful. The remainder of this discussion assumes that
the Debentures will be classified as indebtedness of the Company for United
States Federal income tax purposes.
CLASSIFICATION OF THE ISSUER
In the opinion of Schiff Hardin & Waite, special United States tax counsel
to the Issuer and the Company, the Issuer will not be classified as an
association taxable as a corporation for United
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States Federal income tax purposes. Accordingly, for United States Federal
income tax purposes, each holder of Preferred Securities generally will be
considered the owner of an undivided interest in the Debentures, and each holder
will be required to include in its gross income any interest with respect to its
allocable share of those Debentures.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under the Indenture, the Company has the option to defer the payment of
interest on the Debentures at any time or from time to time for a period not
exceeding 20 consecutive quarters with respect to each Extension Period,
provided that no Extension Period may extend beyond the stated maturity of the
Debentures. The Company's option to extend the interest period will cause the
Debentures to be subject to the OID rules for United States Federal income tax
purposes. Accordingly, regardless of a holder's regular method of accounting, a
holder will recognize interest income (in the form of OID) on a daily basis
under a constant yield method over the term of the Debentures (including during
any Extension Period), regardless of the receipt of cash with respect to the
period to which such income is attributable and regardless of whether the
Company exercises its option to extend any interest payment period. The amount
of OID that will be recognized in any quarter will approximately equal the
amount of income that accrues on the Debentures in that quarter at the stated
interest rate.
As a result, holders will include interest (in the form of OID) in gross
income in advance of the receipt of cash, and any holders who dispose of
Preferred Securities or convert Preferred Securities into Company Common Stock
prior to the record date for the payment of distributions will include interest
in gross income but will not receive any cash related thereto from the Issuer.
Because income on the Debentures will constitute interest, corporate
holders will not be entitled to a dividends-received deduction with respect to
any income recognized with respect to the Debentures.
REDEMPTION OF PREFERRED SECURITIES FOR DEBENTURES OR CASH UPON DISSOLUTION OF
THE ISSUER
Under certain circumstances, the Debentures may be distributed to holders
in exchange for the Preferred Securities. Under current law, such a distribution
to holders, for United States Federal income tax purposes, would be treated as a
nontaxable event to each holder, and each holder would receive an aggregate tax
basis in the Debentures distributed equal to such holder's aggregate tax basis
in its Preferred Securities exchanged therefor. A holder's holding period in the
Debentures so received would include the period during which the Preferred
Securities were held by such holder. If, however, the exchange is caused by a
Tax Event that has occurred and is continuing, which results in the Issuer being
treated as an association taxable as a corporation, the distribution would
likely constitute a taxable event to the Issuer and holders of the Preferred
Securities.
Under certain circumstances described herein (see "Description of the
Preferred Securities--Special Event Exchange or Redemption"), the Debentures may
be redeemed for cash and the proceeds of such redemption distributed to holders
in redemption of their Preferred Securities. Under current law, such a
redemption would, for United States Federal income tax purposes, constitute a
taxable disposition of the redeemed Preferred Securities, and a holder would
recognize gain or loss in the same manner as if it sold such redeemed Preferred
Securities for cash. See "--Sales of Preferred Securities".
SALES OF PREFERRED SECURITIES
A holder that sells Preferred Securities will recognize gain or loss equal
to the difference between the amount realized on the sale of the Preferred
Securities and the holder's adjusted tax basis in such Preferred Securities. The
tax basis of a Preferred Security will be increased by the amount of any
interest (in the form of OID) that is included in income, and will be decreased
by the amount of any payment made by the Company on the Debentures. In general,
such gain or loss will be a capital gain or loss and will be a long-term capital
gain or loss if the Preferred Securities have been held for more than one year
at the time of sale. Long-term capital gain of an individual U.S.
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holder is subject to a maximum United States Federal income tax rate of 28% in
respect of capital assets held for more than one year. The maximum tax rate is
reduced to 20% for capital assets held for more than 18 months. Capital gain on
the disposition of assets held for not more than one year is taxed at the rates
applicable for ordinary income (i.e., up to 39.6%).
The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Debentures. A holder who disposes of its Preferred Securities between record
dates for payments of distributions thereon will be required to include in
income as ordinary income any accrued but unpaid interest (in the form of OID)
on the Debentures to the date of disposition and to add such amount to its
adjusted tax basis in its pro rata share of the underlying Debentures deemed
disposed of. To the extent the selling price is less than the holder's adjusted
tax basis, such 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.
CONVERSION OF PREFERRED SECURITIES INTO COMPANY COMMON STOCK
A holder of Preferred Securities generally will not recognize income, gain
or loss upon the conversion of the Preferred Securities into Company Common
Stock through the Conversion Agent. A holder of Preferred Securities will,
however, recognize gain upon the receipt of cash in lieu of a fractional share
of Company Common Stock generally equal to the amount of cash received less such
holder's tax basis in such fractional share. Such holder's tax basis in Company
Common Stock received upon conversion should generally be equal to such holder's
tax basis in the Preferred Securities delivered to the Conversion Agent for
exchange (which will include any accrued but unpaid OID) less the basis
allocated to any fractional share for which cash is received, and such holder's
holding period in the Company Common Stock received upon conversion should
generally begin on the date such holder acquired the Preferred Securities that
are subsequently delivered to the Conversion Agent for exchange.
ADJUSTMENT OF CONVERSION PRICE
Treasury Regulations promulgated under Section 305 of the Code would treat
holders of Preferred Securities as having received a constructive distribution
from the Company in the event the conversion ratio of the Debentures were
adjusted if (i) as a result of such adjustment, the proportionate interest
(measured by the quantum of Company Common Stock into or for which the
Debentures are convertible or exchangeable) of the holders of the Preferred
Securities in the assets or earnings and profits of the Company were increased
and (ii) the adjustment was not made pursuant to a bona fide, reasonable
antidilution formula. An adjustment in the conversion ratio would not be
considered made pursuant to such a formula if the adjustment was made to
compensate for certain taxable distributions with respect to the Company Common
Stock. Thus, under certain circumstances, a reduction in the conversion price
for the holders may result in deemed dividend income to holders to the extent of
the current or accumulated earnings and profits of the Company. Holders of the
Preferred Securities would be required to include their allocable share of such
deemed dividend income in gross income but would not receive any cash related
thereto.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, as to the United
States, a foreign corporation, a non-resident alien individual, a foreign
partnership, or a foreign estate or trust.
Under present United States Federal income tax law:
(a) payments by the Issuer or any of its paying agents to any holder
of a Preferred Security who or which is a United States Alien Holder will
not be subject to United States Federal withholding tax; provided, that (i)
the beneficial owner of the Preferred Security does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote, (ii) the beneficial owner
of the Preferred Security is
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not a controlled foreign corporation that is related to the Company through
stock ownership, and (iii) either (A) the beneficial owner of the Preferred
Security certifies its status as a United States Alien Holder to the Issuer
or its agent, under penalties of perjury, and provides its name and address
or (B) (x) 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 Preferred
Security in such capacity, certifies to the Issuer or its agent, under
penalties of perjury, that such statement has been received from the
beneficial owner by it or by a Financial Institution holding such security
for the beneficial owner and furnishes the Issuer or its agent with a copy
thereof; or (y) with respect to payments after December 31, 1998, a
"qualified intermediary" (which includes certain foreign financial
institutions, foreign clearing organizations or foreign branches of United
States financial institutions or clearing organizations which have entered
into withholding agreements with the Internal Revenue Service and have
received appropriate certification from the beneficial owner) provides the
Issuer or any of its paying agents with an intermediary withholding
certificate;
(b) dividends paid with respect to Company Common Stock to a United
States Alien Holder generally will be subject to withholding of United
States Federal income tax at a 30% rate (or such lower rate as may be
specified by an applicable income tax treaty), unless the dividend (i) is
effectively connected with the conduct of a trade or business of the United
States Alien Holder within the United States and certain certification
requirements are satisfied, or (ii) if an income tax treaty applies, is
attributable to a United States permanent establishment of the United
States Alien Holder;
(c) except to the extent that an applicable treaty otherwise provides,
a United States Alien Holder generally will be taxed in the same manner as
other holders with respect to interest (in the form of OID) or dividends if
the income is effectively connected with a United States trade or business
of the United States Alien Holder (effectively connected interest (in the
form of OID) or dividends received by a corporate United States Alien
Holder may also, under certain circumstances, be subject to an additional
"branch profits tax" at a 30% rate or such lower rate as may be specified
by an applicable income tax treaty);
(d) a United States Alien Holder of a Preferred Security or Company
Common Stock generally will not be subject to United States Federal income
or withholding tax on any gain (other than that attributable to accrued but
unpaid interest (in the form of OID), which is taxable in the manner
described above) realized upon the sale or other disposition of a Preferred
Security or Company Common Stock (including the receipt of cash in lieu of
fractional shares upon conversion of Preferred Securities into shares of
Company Common Stock), unless (i)(A) the gain is effectively connected with
the conduct of a trade or business of the United States Alien Holder in the
United States or (B) if a tax treaty applies, the gain is attributable to a
United States permanent establishment of the United States Alien Holder;
(ii) in the case of a United States Alien Holder who is an individual and
holds the Preferred Securities or Company Common Stock as a capital asset,
such holder is present in the United States for 183 or more days in the
taxable year of the disposition and certain other conditions are met; (iii)
the United States Alien Holder is subject to tax pursuant to the provisions
of United States Federal income tax laws applicable to certain United
States expatriates; or (iv)(A) the Company is or has been a "U.S. real
property holding corporation" for United States Federal income tax purposes
at any time during the five-year period ending on the date of disposition,
or, if shorter, the period during which the United States Alien Holder held
the Preferred Securities or Company Common Stock and (B) if the interest
sold is considered stock that is "regularly traded on an established
securities market" at any time during the year of disposition, the United
States Alien Holder meets certain minimum ownership requirements; and
(e) except to the extent that an applicable treaty otherwise provides,
a United States Alien Holder generally will be taxed in the same manner as
other holders with respect to gain on the
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sale or disposition of Preferred Securities or Company Common Stock if the
gain is effectively connected with a United States trade or business of the
United States Alien Holder (effectively connected gain realized by a
corporate United States Alien holder may also, under certain circumstances,
be subject to an additional "branch profits tax" at a 30% rate or such
lower rate as may be specified by an applicable income tax treaty).
A United States Alien Holder who sells or otherwise disposes of Preferred
Securities or Company Common Stock generally will recognize gain or loss that is
subject to United States Federal income tax if (i) the Company is or has been a
"U.S. real property holding corporation" during the period described in
(d)(iv)(A) above, and (ii) if the interest sold is considered stock that is
"regularly traded on an established securities market" at any time during the
calendar year of disposition, the United States Alien Holder meets certain
minimum ownership requirements. The Company does not believe that it is a U.S.
real property holding corporation as of the date hereof, although it has not
determined or established whether it will be a U.S. real property holding
corporation in the future.
Under current United States Treasury regulations, dividends paid to an
address in a foreign country are presumed to be paid to a resident of that
country (unless the payor has knowledge to the contrary) for purposes of the
withholding discussed above and, under the current interpretation of such
regulations, for purposes of determining the applicability of an income tax
treaty rate. Recently published final Treasury Regulations (the "1997
Withholding Regulations"), generally effective for payments after December 31,
1998, provide certain presumptions which differ from the presumption described
above. Under the 1997 Withholding Regulations, a United States Alien Holder of
Company Common Stock that wishes to claim the benefit of a treaty rate is
required to satisfy applicable certification requirements. In addition, the 1997
Withholding Regulations provide that dividend payments are generally subject to
information reporting and backup withholding unless applicable certification
requirements are satisfied. The 1997 Withholding Regulations also require, in
the case of interest or dividends with respect to Preferred Securities or
Company Common Stock held by a foreign partnership, that (x) the certification
requirements described above be provided by the partners rather than by the
foreign partnership and (y) the partnership provide certain information, which
in certain circumstances may include a United States taxpayer identification
number. A look-through rule would apply in the case of tiered partnerships.
INFORMATION REPORTING TO HOLDERS
Generally, income on the Preferred Securities will be reported to
noncorporate holders on Forms 1099, which forms will be mailed to holders of
record prior to January 31 following each calendar year.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, Preferred Securities may
be subject to a "backup" withholding tax of 31% unless the holder complies with
certain identification requirements. Any withheld amounts will generally be
allowed as a credit against the holder's United States Federal income tax,
provided the required information is timely filed with the Internal Revenue
Service.
POSSIBLE TAX LEGISLATION
Prospective investors should be aware that legislation has been introduced
in the United States Congress in the past that would, if enacted, deny an
interest deduction to issuers of instruments such as the Debentures. No such
legislation has been enacted. There can be no assurance, however, that similar
legislation will not ultimately be enacted into law, or that other developments
will not occur after the date hereof that would adversely affect the tax
treatment of the Debentures and could result in the exchange of the Debentures
for Preferred Securities or, in certain limited circumstances, the redemption of
the Debentures by the Company and the distribution of the
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resulting cash in redemption of the Preferred Securities. See "Description of
the Preferred Securities--Special Event Exchange or Redemption".
SELLING HOLDERS
The Preferred Securities were originally issued by the Issuer and sold by
Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated, Robert W. Baird & Co.
Incorporated, Bear, Stearns & Co. Inc. and Merrill Lynch & Co., or their
international affiliates, as the case may be (the "Initial Purchasers"), in
transactions exempt from the registration requirements of the Securities Act
either (i) to persons reasonably believed by the Initial Purchasers to be
"qualified institutional buyers" (as defined in Rule 144A under the Securities
Act) or (ii) upon terms and conditions set forth in Regulation S under the
Securities Act. The Selling Holders may from time to time offer and sell
pursuant to this Prospectus any or all of the Offered Securities. The term
Selling Holder includes the holders listed below and the beneficial owners of
the Preferred Securities and their transferees, pledgees, donees or their
successors.
The following table sets forth information with respect to the Selling
Holders of the Preferred Securities and the respective number of Preferred
Securities beneficially owned by each Selling Holder that may be offered
pursuant to this Prospectus.
<TABLE>
<CAPTION>
NUMBER OF
SELLING HOLDERS* PREFERRED SHARES*
---------------- -----------------
<S> <C>
</TABLE>
- ---------------
* To be filed by amendment
PLAN OF DISTRIBUTION
The Offered Securities may be sold from time to time to purchasers directly
by the Selling Holders. Alternatively, the Selling Holders may from time to time
offer the Offered Securities to or through underwriters, broker-dealers or
agents, who may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Holders or the purchasers of such
securities for whom they may act as agents. The Selling Holders and any
underwriters, broker-dealers or agents that participate in the distribution of
Offered Securities may be deemed to be "underwriters" within the meaning of the
Securities Act and any profit on the sale of such securities and any discounts,
commissions, concessions or other compensation received by any such underwriter,
broker-dealer or agent may be deemed to be underwriting discounts and
commissions under the Securities Act. The Offered Securities may be sold from
time to time in one or more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices determined at the time of sale or
at negotiated prices. The sale of the Offered Securities may be effected in
transactions (which may involve crosses or block transactions) (i) on any
national securities exchange or quotation service on which the Offered
Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such exchanges
or in the over-the-counter market or (iv) through the writing of options. At the
time a particular offering of the Offered Securities is made, a Prospectus
Supplement, if required, will be distributed which will set forth the aggregate
amount and type of Offered Securities being offered and the terms of the
offering, including the name or names of any underwriters, broker-dealers or
agents, any discounts, commissions and other terms constituting compensation
from the Selling Holders and any discounts, commissions or concessions allowed
or reallowed or paid to broker-dealers.
To comply with the securities laws of certain jurisdictions, if applicable,
the Offered Securities will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In
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addition, in certain jurisdictions the Offered Securities may not be offered or
sold unless they have been registered or qualified for sale in such
jurisdictions or any exemption from registration or qualification is available
and is complied with.
The Selling Holders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of any of the Offered Securities by the
Selling Holders. The foregoing may affect the marketability of such securities.
Pursuant to the Registration Rights Agreement, the Company and the Issuer
shall each bear all reasonable fees and expenses customarily borne by issuers in
a non-underwritten secondary offering by selling security holders or in an
underwritten offering, as the case may be, incurred in connection with the
performance of its obligations under the Registration Rights Agreement;
provided, however, that the Selling Holders will pay all underwriting discounts
and selling commissions, if any. The Selling Holders will be indemnified by the
Company and the Issuer, jointly and severally, against certain liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith. The Company and the Issuer will be
indemnified by the Selling Holders severally against certain liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith.
INDEPENDENT PUBLIC ACCOUNTANTS
The Consolidated Financial Statements of the Company incorporated by
reference herein from the Company's Annual Report on Form 10-K have been
incorporated by reference herein in reliance upon the reports of Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and upon the authority of said firm as experts in accounting and
auditing.
LEGAL OPINIONS
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon by Richards, Layton & Finger, P.A., Wilmington,
Delaware, special Delaware counsel to the Issuer and the Company. Certain legal
matters will be passed upon for the Company and the Issuer by Schiff Hardin &
Waite, Chicago, Illinois. Schiff Hardin & Waite has advised the Company that a
member of the firm participating in the representation of the Company in this
Offering owns approximately 3,800 shares of Company Common Stock.
56
<PAGE> 58
======================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THIS PROSPECTUS NOR ANY
PROSPECTUS SUPPLEMENT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE ISSUER OR THE COMPANY SINCE
THE DATE HEREOF AND THEREOF, RESPECTIVELY, OR THAT THE INFORMATION CONTAINED
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE
DATES.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Documents Incorporated by Reference....... 4
Available Information..................... 4
Forward-Looking Statements................ 5
Risk Factors.............................. 6
Newell Financial Trust I.................. 10
The Company............................... 12
Use of Proceeds........................... 12
Accounting Treatment...................... 12
Ratio of Earnings to Fixed Charges........ 13
Description of the Preferred Securities... 13
Description of the Guarantee.............. 35
Description of the Debentures............. 38
Relationship among the Preferred
Securities, the Debentures and the
Guarantee............................... 46
Description of the Company's Capital
Stock................................... 48
Certain Federal Income Tax Consequences... 50
Selling Holders........................... 55
Plan of Distribution...................... 55
Independent Public Accountants............ 56
Legal Opinions............................ 56
</TABLE>
======================================================
======================================================
10,000,000
PREFERRED SECURITIES
NEWELL FINANCIAL TRUST I
5 1/4% CONVERTIBLE QUARTERLY
INCOME PREFERRED SECURITIES
("CONVERTIBLE QUIPS")
(LIQUIDATION PREFERENCE $50 PER SHARE)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY,
AND CONVERTIBLE INTO COMMON STOCK OF,
NEWELL CO.
---------------------------
[NEWELL LOGO]
---------------------------
======================================================
<PAGE> 59
PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemized statement of all expenses in connection with
the issuance and distribution of the securities registered hereby. Except for
the SEC registration fee, all amounts provided are estimated.
<TABLE>
<S> <C>
SEC registration fee........................................ $147,500
Printing and engraving expenses............................. *
Legal fees and expenses..................................... *
Blue Sky fees and expenses (including legal fees and
expenses)................................................. *
Accounting fees and expenses................................ *
Transfer agent and trustee fees............................. *
Miscellaneous............................................... *
--------
Total.................................................. *
</TABLE>
- ---------------
* To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation and By-Laws of the Company
provide for indemnification by the Company of each of its directors and officers
to the fullest extent permitted by law for liability (including liability
arising under the Securities Act of 1933 (the "Act")) of such director or
officer arising by reason of his or her status as a director or officer of the
Company, provided that he or she met the standards established in the Restated
Certificate of Incorporation, which include requirements that he or she acted in
good faith and in a manner he or she reasonably believed to be in the Company's
best interest. The Company will also advance expenses prior to final disposition
of an action, suit or proceeding upon receipt of an undertaking by the director
or officer to repay such amount if the director or officer is not entitled to
indemnification. All rights to indemnification and advancement of expenses are
deemed to be a contract between the Company and its directors and officers. The
determination that a director or officer has met the standards established in
the Restated Certificate of Incorporation and By-Laws may be made by majority
vote of a quorum consisting of disinterested directors, an opinion of counsel
(regardless of whether such quorum is available), a majority vote of
stockholders, or a court (which may also overturn any of the preceding
determinations). The Company has purchased insurance against liabilities of
directors or officers, as permitted by the Restated Certificate of Incorporation
and By-Laws. The Company also has entered into indemnification agreements with
each of its directors and officers which provide that the directors and officers
will be entitled to their indemnification rights as they existed at the time
they entered into the agreement, regardless of subsequent changes in the
Company's indemnification policy.
Under the Trust Agreement, the Company agreed to indemnify and hold
harmless, to the fullest extent permitted by applicable law, each Trustee, any
affiliate of any Trustee, any officer, director, shareholder, employee,
representative or agent of any Trustee, and any employee or agent of the Issuer
or its affiliates (each an "Indemnified Person") from and against any loss,
damage, liability, tax, penalty, expense or claim incurred by such Indemnified
Person by reason of the creation, operation, dissolution or termination of the
Issuer or in connection with the administration of the Issuer or any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Issuer and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by the Trust
Agreement, except that no Indemnified Person is entitled to be indemnified in
respect of any loss, damage or claim incurred by such Indemnified Person by
reason of negligence or willful misconduct with respect to such acts or
omissions.
<PAGE> 60
Pursuant to the registration rights agreement among the Company, the Issuer
and the Initial Purchasers, dated December 12, 1997 (the "Registration Rights
Agreement"), the Company has agreed to indemnify the holders of Registrable
Securities against certain liabilities. Also pursuant to the Registration Rights
Agreement, under certain circumstances, the Company and certain broker-dealers,
including certain persons associated with such broker-dealers, have agreed to
indemnify each other against certain liabilities.
<PAGE> 61
ITEM 16. EXHIBITS
(a) Exhibits
<TABLE>
<C> <S>
4.1 Certificate of Trust of Newell Financial Trust I.
4.2 Amended and Restated Trust Agreement of Newell Financial
Trust I, dated as of December 12, 1997, among Newell Co., as
Depositor, The Chase Manhattan Bank, as Property Trustee,
Chase Manhattan Bank Delaware, as Delaware Trustee and C.R.
Davenport, Brett E. Gries and Ronn L. Claussen, as
Administrative Trustees.
4.3 Junior Convertible Subordinated Indenture for the 5 1/4%
Convertible Subordinated Debentures, dated as of December
12, 1997, between Newell Co. and The Chase Manhattan Bank,
as Indenture Trustee.
4.4 Form of 5 1/4% Preferred Securities (Included in Exhibit D
to Exhibit 4.2 above).
4.5 Form of 5 1/4% Junior Convertible Subordinated Debentures
(Included in Article 2 to Exhibit 4.3 above).
4.6 Preferred Securities Guarantee Agreement, dated as of
December 12, 1997, between Newell Co., as Guarantor, and The
Chase Manhattan Bank, as Guarantee Trustee.
*5.1 Opinion of Schiff Hardin & Waite, counsel to Newell Co., as
to the validity of the Convertible Subordinated Debentures,
Guarantee and the Common Stock of Newell Co. issuable upon
conversion of the Preferred Securities being registered
hereby.
*5.2 Opinion of Richards, Layton & Finger, P.A., special Delaware
counsel to Newell Financial Trust I, as to the validity of
the Preferred Securities.
*8.1 Opinion of Schiff Hardin & Waite, special United States tax
counsel to Newell Co. and Newell Financial Trust I, as to
certain tax matters.
10.1 Registration Rights Agreement, dated December 12, 1997,
among Newell Financial Trust I and Goldman, Sachs & Co.,
Morgan Stanley & Co. Incorporated, Robert W. Baird & Co.
Incorporated, Bear, Stearns & Co. Inc. and Merrill Lynch &
Co. as Initial Purchasers.
*12.1 Computation of Ratio of Earnings to Fixed Charges of Newell
Co.
23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Schiff Hardin & Waite (Included in Exhibits 5.1
and 8.1).
*23.3 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2).
24.1 Power of Attorney (set forth on signature page of the
Registration Statement).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Trustee under the 5 1/4% Junior Convertible Subordinated
Indenture.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Property Trustee under the Amended and Restated Declaration
of Trust.
25.3 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Guarantee Trustee under the Guarantee.
</TABLE>
- ---------------
* To be filed by amendment.
<PAGE> 62
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;
(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 paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrants 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 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 a
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(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 the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrants 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 of whether such indemnification by
them is against public policy as expressed in the Securities Act of 1933 and
will be governed by the final adjudication of the issue.
<PAGE> 63
(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 430A and contained
in a form of Prospectus filed by the Registrants pursuant to Rule
424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to
be part of this Registration Statement as of the time it was declared
effective; and
(2) For purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of Prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
<PAGE> 64
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Newell Co.
hereby certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Freeport, State of Illinois, on the 2nd day of March,
1998.
NEWELL CO.
By: /s/ WILLIAM T. ALLDREDGE
----------------------------------
William T. Alldredge
Vice President -- Finance
Each person whose signature appears below appoints John J. McDonough and
William T. Alldredge, and each or either of them, as such person's true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution to execute in the name of each such person, and to file, any
amendments (including post-effective amendments) to this registration statement
that either of such attorneys-in-fact and agents with full power of substitution
and resubstitution shall deem necessary or advisable to enable Newell Co. to
comply with the Securities Act of 1933, as amended, and any rules, regulations
and requirements of the Securities and Exchange Commission with respect thereto,
in connection with this registration statement, which amendments may make such
changes in such registration statement as either of the above-named
attorneys-in-fact and agents with full power of substitution and resubstitution
deems appropriate, and to comply with the undertakings of Newell Co. made in
connection with this registration statement; and each of the undersigned hereby
ratifies all that either of said attorneys-in-fact and agents with full power of
substitution and resubstitution shall do or cause to be done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JOHN J. MCDONOUGH Vice Chairman and Chief Executive March 2, 1998
- --------------------------------------------- Officer (Principal Executive Officer)
John J. McDonough and Director
/s/ WILLIAM T. ALLDREDGE Vice-President -- Finance (Principal March 2, 1998
- --------------------------------------------- Financial Officer)
William T. Alldredge
/s/ THOMAS A. FERGUSON, JR. President and Chief Operating Officer March 2, 1998
- --------------------------------------------- and Director
Thomas A. Ferguson, Jr.
/s/ DONALD L. KRAUSE Senior Vice President -- Corporate March 2, 1998
- --------------------------------------------- Controller (Principal Accounting
Donald L. Krause Officer)
/s/ WILLIAM P. SOVEY Chairman of the Board of Directors March 2, 1998
- ---------------------------------------------
William P. Sovey
</TABLE>
<PAGE> 65
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ ALTON F. DOODY Director March 2, 1998
- ---------------------------------------------
Alton F. Doody
/s/ GARY H. DRIGGS Director March 2, 1998
- ---------------------------------------------
Gary H. Driggs
/s/ DANIEL C. FERGUSON Director March 2, 1998
- ---------------------------------------------
Daniel C. Ferguson
/s/ ROBERT L. KATZ Director March 2, 1998
- ---------------------------------------------
Robert L. Katz
/s/ ELIZABETH CUTHBERT MILLET Director March 2, 1998
- ---------------------------------------------
Elizabeth Cuthbert Millet
Director
- ---------------------------------------------
Cynthia A. Montgomery
/s/ ALLAN P. NEWELL Director March 2, 1998
- ---------------------------------------------
Allan P. Newell
Director
- ---------------------------------------------
Henry B. Pearsall
</TABLE>
<PAGE> 66
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Newell
Financial Trust I hereby certifies that it has reasonable grounds to believe
that it meets all the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Freeport, State of Illinois, on the
2nd day of March, 1998.
NEWELL FINANCIAL TRUST I
By: NEWELL CO.
/s/ WILLIAM T. ALLDREDGE
--------------------------------------
William T. Alldredge
Vice President -- Finance
<PAGE> 67
EXHIBIT INDEX
<TABLE>
<C> <S> <C>
4.1 Certificate of Trust of Newell Financial Trust I............
4.2 Amended and Restated Trust Agreement of Newell Financial
Trust I, dated as of December 12, 1997, among Newell Co., as
Depositor, The Chase Manhattan Bank, as Property Trustee,
Chase Manhattan Bank Delaware, as Delaware Trustee and C.R.
Davenport, Brett E. Gries and Ronn L. Claussen, as
Administrative Trustees.....................................
4.3 Junior Convertible Subordinated Indenture for the 5 1/4%
Convertible Subordinated Debentures, dated as of December
12, 1997, between Newell Co. and The Chase Manhattan Bank,
as Indenture Trustee........................................
4.4 Form of 5 1/4% Preferred Securities (Included in Exhibit D
to Exhibit 4.2 above).......................................
4.5 Form of 5 1/4% Junior Convertible Subordinated Debentures
(Included in Article 2 to Exhibit 4.3 above)................
4.6 Preferred Securities Guarantee Agreement, dated as of
December 12, 1997, between Newell Co., as Guarantor, and The
Chase Manhattan Bank, as Guarantee Trustee..................
*5.1 Opinion of Schiff Hardin & Waite, counsel to Newell Co., as
to the validity of the Convertible Subordinated Debentures,
Guarantee and the Common Stock of Newell Co. issuable upon
conversion of the Preferred Securities being registered
hereby......................................................
*5.2 Opinion of Richards, Layton & Finger, P.A., special Delaware
counsel to Newell Financial Trust I, as to the validity of
the Preferred Securities....................................
*8.1 Opinion of Schiff Hardin & Waite, special United States tax
counsel to Newell Co. and Newell Financial Trust I, as to
certain tax matters.........................................
10.1 Registration Rights Agreement, dated December 12, 1997,
among Newell Financial Trust I and Goldman, Sachs & Co.,
Morgan Stanley & Co. Incorporated, Robert W. Baird & Co.
Incorporated, Bear, Stearns & Co. Inc. and Merrill Lynch &
Co. as Initial Purchasers...................................
*12.1 Computation of Ratio of Earnings to Fixed Charges of Newell
Co..........................................................
23.1 Consent of Arthur Andersen LLP..............................
*23.2 Consent of Schiff Hardin & Waite (Included in Exhibits 5.1
and 8.1)....................................................
*23.3 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2)................................................
24.1 Power of Attorney (set forth on signature page of the
Registration Statement).....................................
25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Trustee under the 5 1/4% Junior Convertible Subordinated
Indenture...................................................
25.2 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Property Trustee under the Amended and Restated Declaration
of Trust....................................................
25.3 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
Guarantee Trustee under the Guarantee.......................
</TABLE>
- ---------------
* To be filed by amendment.
<PAGE> 1
EXHIBIT 4.1
CERTIFICATE OF TRUST
OF
NEWELL FINANCIAL TRUST I
THIS Certificate of Trust of Newell Financial Trust I (the
"Trust"), dated as of November 24, 1997, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. C. Section 3801, et seq.).
1. Name. The name of the business trust formed hereby is Newell
Financial Trust I.
2. Delaware Trustee. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware are
Chase Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective
upon filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first-above
written.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but
solely as trustee of the Trust
By: /s/ John J. Cashin
---------------------------------------
Name: John J. Cashin
Title: Vice President
BRETT E. GRIES, not in his individual
capacity but solely as trustee of the Trust
/s/ Brett E. Gries
-----------------------------------------
<PAGE> 1
EXHIBIT 4.2
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
NEWELL CO.
AS DEPOSITOR,
THE CHASE MANHATTAN BANK
AS PROPERTY TRUSTEE,
CHASE MANHATTAN BANK DELAWARE
AS DELAWARE TRUSTEE,
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF DECEMBER 12, 1997
NEWELL FINANCIAL TRUST I
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 1
DEFINED TERMS
SECTION 1.1. Definitions ................................................ 1
ARTICLE 2
ESTABLISHMENT OF THE TRUST
SECTION 2.1. Name.......................................................14
SECTION 2.2. Office of the Delaware Trustee; Principal
Place of Business.......................................14
SECTION 2.3. Organizational Expenses....................................14
SECTION 2.4. Issuance of the Preferred Securities.......................14
SECTION 2.5. Subscription and Purchase of Debentures; Issuance of the
Common Securities.......................................15
SECTION 2.6. Declaration of Trust.......................................15
SECTION 2.7. Authorization to Enter into Certain Transactions...........15
SECTION 2.8. Assets of Trust............................................20
SECTION 2.9. Title to Trust Property....................................20
ARTICLE 3
PAYMENT ACCOUNT
SECTION 3.1. Payment Account............................................20
ARTICLE 4
DISTRIBUTIONS; REDEMPTION; EXCHANGE; CONVERSION
SECTION 4.1. Distributions..............................................21
SECTION 4.2. Redemption ................................................21
SECTION 4.3. Conversion ................................................24
SECTION 4.4. Special Event Exchange or Redemption.......................27
SECTION 4.5. Subordination of Common Securities.........................29
SECTION 4.6. Payment Procedures.........................................29
SECTION 4.7. Tax Returns and Reports....................................30
SECTION 4.8. Payment of Taxes, Duties, Etc. of the Trust................30
SECTION 4.9. Payments under Indenture...................................30
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 5
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership..........................................30
SECTION 5.2. The Trust Securities Certificates..........................30
SECTION 5.3. Delivery of Trust Securities Certificates..................31
SECTION 5.4. Registration of Transfer and Exchange of
Preferred Securities; Restrictions on Transfer..........32
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates.................................37
SECTION 5.6. Persons Deemed Securityholders.............................38
SECTION 5.7. Access to List of Securityholders' Names and
Addresses...............................................38
SECTION 5.8. Maintenance of Office or Agency............................38
SECTION 5.9. Appointment of Paying Agent................................39
SECTION 5.10. Ownership of Common Securities by Depositor................39
SECTION 5.11. Global Securities; Non-Global Securities; Common
Securities Certificate..................................40
SECTION 5.12. Notices to Clearing Agency.................................41
SECTION 5.13. Definitive Preferred Securities Certificates...............41
SECTION 5.14. Rights of Securityholders..................................42
SECTION 5.15. Restrictive Legends........................................42
ARTICLE 6
ACT OF SECURITYHOLDERS; MEETINGS; VOTING.................................43
SECTION 6.1. Limitations on Voting Rights...............................43
SECTION 6.2. Notice of Meetings.........................................45
SECTION 6.3. Meetings of Preferred Securityholders......................45
SECTION 6.4. Voting Rights..............................................46
SECTION 6.5. Proxies, Etc...............................................46
SECTION 6.6. Securityholder Action by Written Consent...................46
SECTION 6.7. Record Date for Voting and Other Purposes..................47
SECTION 6.8. Acts of Securityholders....................................47
SECTION 6.9. Inspection of Records......................................48
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property
Trustee and the Delaware Trustee........................49
SECTION 7.2. Representations and Warranties of Depositor................49
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 8
THE TRUSTEES
SECTION 8.1. Certain Duties and Responsibilities........................50
SECTION 8.2. Notice of Defaults.........................................52
SECTION 8.3. Certain Rights of Property Trustee.........................54
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities.....56
SECTION 8.5. May Hold Securities........................................57
SECTION 8.6. Compensation; Indemnity; Fees..............................57
SECTION 8.7. Property Trustee Required; Eligibility of Trustees.........58
SECTION 8.8. Conflicting Interests......................................58
SECTION 8.9. Resignation and Removal; Appointment of Successor..........58
SECTION 8.10. Acceptance of Appointment by Successor.....................60
SECTION 8.11. Merger, Conversion, Consolidation or Succession
to Business.............................................61
SECTION 8.12. Preferential Collection of Claims Against Depositor
or Trust...............................................61
SECTION 8.13. Reports by Property Trustee...............................61
SECTION 8.14. Reports to the Property Trustee...........................62
SECTION 8.15. Evidence of Compliance with Conditions Precedent..........62
SECTION 8.16. Number of Trustees........................................63
SECTION 8.17. Delegation of Power.......................................63
ARTICLE 9
DISSOLUTION, LIQUIDATION AND MERGER
SECTION 9.1. Dissolution upon Expiration Date...........................63
SECTION 9.2. Early Dissolution..........................................63
SECTION 9.3. Dissolution................................................64
SECTION 9.4. Liquidation................................................64
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of
the Trust...............................................66
ARTICLE 10
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Securityholders...................67
SECTION 10.2. Amendment ................................................67
SECTION 10.3. Separability..............................................69
SECTION 10.4. Governing Law.............................................69
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
<S> <C>
SECTION 10.5. Payments Due on Non-Business Day...........................69
SECTION 10.6. Successors.................................................69
SECTION 10.7. Headings .................................................69
SECTION 10.8. Reports, Notices and Demands...............................70
SECTION 10.9. Agreement Not to Petition..................................70
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.....70
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture...............................................71
SECTION 10.12. Counterparts..............................................71
ARTICLE 11
REGISTRATION RIGHTS
SECTION 11.1. Registration Rights........................................72
</TABLE>
EXHIBIT A -- Certificate of Trust of
Newell Financial Trust I
EXHIBIT B -- Form of Certificate
Depositary Agreement
EXHIBIT C -- Form of Common Securities of
Newell Financial Trust I
EXHIBIT D -- Form of Preferred Securities of
Newell Financial Trust I
EXHIBIT E -- Form of
Regulation S Certificate
EXHIBIT F -- Form of Restricted
Securities Certificate
EXHIBIT G -- Form of Unrestricted
Securities Certificate
EXHIBIT H -- Notice of Conversion
iv
<PAGE> 6
NEWELL FINANCIAL TRUST I*
Certain Sections of this Trust Agreement
relating to Sections 310 through 318
of the Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
TRUST INDENTURE TRUST AGREEMENT
ACT SECTION SECTION
<S> <C>
Section 310 (a)(1) ..................................................... 8.7
(a)(2) ..................................................... 8.7
(a)(3) ..................................................... Not Applicable
(a)(4) ..................................................... 2.7(a)(ii)
(b) ..................................................... 8.8
Section 311 (a) ..................................................... 8.12
(b) ..................................................... 8.12
Section 312 (a) ..................................................... 5.7
(b) ..................................................... 5.7
(c) ..................................................... 5.7
Section 313 (a) ..................................................... 8.13(a)
(c) ..................................................... 10.8
(d) ..................................................... 8.13(c)
(a)(4) ..................................................... 8.13(b)
(b) ..................................................... 8.13(b)
Section 314 (a) ..................................................... 8.14
(b) ..................................................... Not Applicable
(c)(1) ..................................................... 8.15
(c)(2) ..................................................... 8.15
(c)(3) ..................................................... Not Applicable
(d) ..................................................... Not Applicable
(e) ..................................................... 1.1, 8.15
Section 315 (a) ..................................................... 8.1(a), 8.3(a)
(b) ..................................................... 8.2, 10.8
(c) ..................................................... 8.1(a)
(d) ..................................................... 8.1, 8.3
(e) ..................................................... Not Applicable
Section 316 (a) ..................................................... Not Applicable
(a)(1)(A) ..................................................... Not Applicable
(a)(1)(B) ..................................................... Not Applicable
(a)(2) ..................................................... Not Applicable
(b) ..................................................... Not Applicable
(c) ..................................................... 6.7
Section 317 (a)(1) ..................................................... Not Applicable
(b) ..................................................... 5.9
Section 318 (a) ..................................................... 10.10
</TABLE>
- ----------
* Note: This reconciliation and tie sheet shall not, for any purpose, be
deemed to be a part of the Trust Agreement.
v
<PAGE> 7
AMENDED AND RESTATED TRUST AGREEMENT, dated as of December 12, 1997
among (i) Newell Co., a Delaware corporation (including any successors or
assigns, the "Depositor"), (ii) The Chase Manhattan Bank, a New York banking
corporation, as property trustee (in such capacity, the "Property Trustee" and,
in its personal capacity and not in its capacity as Property Trustee, the
"Bank"), (iii) Chase Manhattan Bank Delaware, a corporation duly organized and
existing under the laws of the State of Delaware, as Delaware trustee (in such
capacity, the "Delaware Trustee"), (iv) Clarence R. Davenport, an individual,
Brett E. Gries, an individual, and Ronn L. Claussen, an individual, each of
whose address is c/o Newell Co., Newell Center, 29 East Stephenson Street,
Freeport, Illinois 61032, each, an "Administrative Trustee" and, collectively,
the "Administrative Trustees" and, collectively with the Property Trustee and
Delaware Trustee, the "Trustees") and (iv) the several Holders as hereinafter
defined.
W I T N E S S E T H:
WHEREAS, the Depositor and certain of the Trustees have heretofore duly
declared and created a business trust pursuant to the Delaware Business Trust
Act by the entering into of that certain Trust Agreement, dated as of November
24, 1997 (the "Original Trust Agreement"), and by the execution and filing by
certain of the Trustees with the Secretary of State of the State of Delaware of
the Certificate of Trust, filed on November 24, 1997, attached as Exhibit A, for
the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in the Debentures (as defined herein); and
WHEREAS, the parties hereto desire to amend and restate the Original
Trust Agreement in its entirety as set forth herein to provide for, among other
things, (i) the issuance and sale of the Common Securities (as defined herein)
by the Trust to the Depositor, (ii) the issuance and sale of the Preferred
Securities by the Trust pursuant to the Purchase Agreement (each as defined
herein) and (iii) the acquisition by the Trust from the Depositor of all of the
right, title and interest in the Debentures;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Holders of the Preferred Securities, hereby amends
and restates the Original Trust Agreement in its entirety and agrees as follows:
ARTICLE 1
DEFINED TERMS
SECTION 1.1. Definitions. For all purposes of this Trust Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
<PAGE> 8
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to the Trust Securities, the
amount of Additional Interest (as defined in the Indenture) paid by the
Depositor on the Debentures.
"Additional Sums" means, with respect to the Trust Securities, the
amount of Additional Sums (as defined in the Indenture) paid by the Depositor on
the Debentures.
"Administrative Trustee" means each of Clarence R. Davenport, Brett E.
Gries and Ronn L. Claussen, each solely in his capacity as Administrative
Trustee of the Trust and not in his individual capacity, or such Administrative
Trustee's successor in interest in such capacity, or any successor in interest
in such capacity, or any successor administrative trustee appointed as herein
provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person, provided, however that an Affiliate of the
Depositor shall be deemed not to include the Trust. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Certificate or beneficial interest therein, the
rules and procedures of Euroclear and Cedel, and of the Clearing Agency for such
security, in each case to the extent applicable to such transaction and as in
effect from time to time.
2
<PAGE> 9
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises judging such Person as bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication
or composition of or in respect of such Person under any applicable Federal
or State bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of such Person or of any substantial part of its
property or ordering the winding-up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated as
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or similar official) of such Person or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due and its willingness to be adjudicated a
bankrupt, or the taking of corporate action by such Person in furtherance
of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board of Directors" means either the board of directors of the
Depositor or any committee of that board duly authorized to act hereunder.
"Book-Entry Preferred Securities Certificates" means a beneficial
interest in the Preferred Securities Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 5.11.
"Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed or a day on which the Corporate Trust
Office of the Property Trustee or the corporate trust office of the Debenture
Trustee, is closed for business.
3
<PAGE> 10
"Certificate Depository Agreement" means the agreement among the Trust,
the Depositor and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Trust Securities Certificates
substantially in the form attached as Exhibit B, as the same may be amended and
supplemented from time to time.
"Certificated Preferred Security" has the meaning specified in Section
5.2.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the first Time of Delivery (as defined in the
Purchase Agreement), which date is also the date of execution and delivery of
this Trust Agreement.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Common Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount with respect to the assets of the
Trust of $50 and having the rights provided therefor in this Trust Agreement,
including the right to receive Distributions and a Liquidation Distribution as
provided herein.
"Common Stock" means common stock, $1.00 par value per share, of the
Depositor.
"Conversion Agent" has the meaning specified in Section 4.3.
"Conversion Date" has the meaning specified in Section 4.3.
"Conversion Price" has the meaning specified in Section 4.3.
4
<PAGE> 11
"Corporate Trust Office" means the principal corporate trust office of
the Property Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date hereof is located at
450 W. 33rd Street, 15th Floor, New York, New York 10001, Attention: Corporate
Trustee Administration Department.
"Current Market Price", with respect to Common Stock, means for any day
the last reported sale price, regular way, on such day, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the New York Stock Exchange
Composite Transactions Tape, or, if Common Stock is not listed or admitted to
trading on the New York Stock Exchange on such day, on the principal national
securities exchange on which Common Stock is listed or admitted to trading, if
Common Stock is listed on a national securities exchange, or the Nasdaq National
Market, or, if Common Stock is not quoted or admitted to trading on such
quotation system, on the principal quotation system on which Common Stock may be
listed or admitted to trading or quoted, or, if not listed or admitted to
trading or quoted on any national securities exchange or quotation system, the
average of the closing bid and asked prices of Common Stock in the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similar generally accepted reporting
service, or, if not so available in such manner, as furnished by any New York
Stock Exchange member firm selected from time to time by the Board of Directors
for that purpose or, if not so available in such manner, as otherwise determined
in good faith by the Board of Directors.
"Debenture Event of Default" means an "Event of Default" as defined in
the Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption thereof under the
Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, a New York banking
corporation, as trustee under the Indenture.
"Debentures" means all of the Depositor's 5 1/4% junior convertible
subordinated debentures, $515,465,000 aggregate principal amount, issued
pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means either or both (as
the context requires) of (a) Preferred Securities Certificates issued in
certificated, fully registered form as provided in Section 5.11(a) and (b)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 5.13.
5
<PAGE> 12
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801, et. seq., as it may be amended from
time to time.
"Delaware Trustee" means the Person identified as the "Delaware
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust and not in its individual capacity, or its
successor in interest in such capacity, or any successor Delaware trustee
appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Direct Action" has the meaning specified in Section 6.8.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"Early Dissolution Event" has the meaning specified in Section 9.2.
"Event of Default" means the occurrence of a Debenture Event of
Default, 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 or any order, rule or regulation
of any administrative or governmental body.
"Exchange Notice" has the meaning specified in Section 4.4(b).
"Expiration Date" has the meaning specified in Section 9.1.
"Global Certificate" means a Preferred Security that is registered in
the Securities Register in the name of a Clearing Agency or a nominee thereof.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Depositor and The Chase Manhattan Bank, a New York banking corporation, as
guarantee trustee, contemporaneously with the execution and delivery of this
Trust Agreement, for the benefit of the Holders of the Preferred Securities, as
amended from time to time.
"Holder" means a Person in whose name a Trust Securities Certificate
representing a Trust Security is registered, such Person being a beneficial
owner within the meaning of the Delaware Business Trust Act.
6
<PAGE> 13
"Indenture" means the Junior Convertible Subordinated Indenture, dated
as of December 12, 1997 between the Depositor and the Debenture Trustee, as
amended or supplemented from time to time.
"Investment Company Event" means the receipt by the Property Trustee,
on behalf of the Trust, of an Opinion of Counsel, rendered by a law firm having
a national tax and securities practice (which Opinion of Counsel shall not have
been rescinded by such law firm), to the effect that, as a result of the
occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law"), there is more than
an insubstantial risk that the Trust is or will be considered an "investment
company" that is required to be registered under the 1940 Act, which Change in
1940 Act Law becomes effective on or after the date of original issuance of the
Preferred Securities under this Trust Agreement.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Liquidated Damages" has the meaning specified under the Indenture.
"Liquidation Amount" means an amount with respect to the assets of the
Trust equal to $50 per Trust Security.
"Liquidation Date" means each date on which Debentures or cash are to
be distributed to Holders of Trust Securities in connection with a dissolution
and liquidation of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Notice of Conversion" means the notice given by a Holder of Preferred
Securities to the Conversion Agent directing the Conversion Agent to exchange
such Preferred Security for Debentures and to convert such Debentures into
Common Stock on behalf of such holder. Such notice is substantially in the form
set forth in Exhibit H.
"Officers' Certificate" means a certificate signed by (i) the Chairman
of the Board, a Vice Chairman, the President or a Vice President, and by (ii)
the Treasurer, an Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary, of the Depositor, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 8.15 shall
be the principal
7
<PAGE> 14
executive, financial or accounting officer of the Depositor. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant of condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(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
counsel for the Trust, the Property Trustee or the Depositor, and who may be an
employee of any thereof, and who shall be acceptable to the Property Trustee.
Any Opinion of Counsel delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each individual signing the Opinion of Counsel 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 individual in rendering the Opinion of
Counsel;
(c) a statement that each individual has made such examination or
investigation as is necessary to enable such individual 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 individual,
such condition or covenant has been complied with.
"Optional Redemption Price" means with respect to the Preferred
Securities (except as set forth below with respect to redemption upon the
occurrence of a Tax Event), the following percentages of the Liquidation Amounts
thereof, plus accumulated and unpaid Distributions, if any, to the date fixed
for
8
<PAGE> 15
redemption if redeemed during the twelve-month period commencing December 1 in
each of the following years indicated:
<TABLE>
<CAPTION>
Year Redemption Price Year Redemption Price
---- ---------------- ---- ----------------
<S> <C> <C> <C>
2001 103.150% 2005 101.050%
2002 102.625% 2006 100.525%
2003 102.100% 2007 and 100.000%
thereafter
2004 101.575%
</TABLE>
In the event of a redemption of Trust Securities upon the occurrence of
a Tax Event, Trust Securities shall be redeemed at the redemption price of $50
per Trust Security and all accumulated and unpaid Distributions, if any, to the
date fixed for redemption.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding", when used with respect to Trust Securities, means, as of
the date of determination, all Trust Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Trust Securities theretofore cancelled by the Securities Registrar
or delivered to the Securities Registrar for cancellation or tendered for
conversion;
(b) Trust Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee
or any Paying Agent for the Holders of such Trust Securities; provided
that, if such Trust Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Trust Agreement;
(c) Trust Securities which have been exchanged for Debentures pursuant
to Section 4.4; and
(d) Trust Securities which have been paid or in exchange for or in lieu
of which other Trust Securities have been executed and delivered pursuant
to Section 5.5;
9
<PAGE> 16
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Trust Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Trust
Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor
or any Trustee shall be disregarded and deemed not to be Outstanding, except
that (a) in determining whether any Trustee shall be fully protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Trust Securities that a Responsible Officer of the Property Trustee
or the Delaware Trustee, or an individual Administrative Trustee, as the case
may be, actually knows to be so owned shall be so disregarded and (b) the
foregoing shall not apply at any time when all of the Outstanding Trust
Securities are owned by the Depositor, one or more of the Trustees and/or any
such Affiliate. Trust Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Securities Registrar the pledgee's right so to act with respect to such
Trust Securities and that the pledgee is not the Depositor or any Affiliate of
the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.9.
"Payment Account" means a segregated non-interest bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures will be held and from which the Property Trustee shall
make payments to the Securityholders in accordance with Section 4.1.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as Exhibit
D.
"Preferred Security" means an undivided beneficial interest in the
assets of the Trust, having a Liquidation Amount with respect to the assets of
the Trust of $50 and having the rights provided therefor in this Trust
Agreement, including the right to receive Distributions and a Liquidation
Distribution as provided herein.
10
<PAGE> 17
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust and not in its
individual capacity, or its successor in interest in such capacity, or any
successor property trustee appointed as herein provided.
"Purchase Agreement" means the Purchase Agreement, dated as of December
8, 1997 among the Trust, the Depositor and the Initial Purchasers named therein.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, each Debenture Redemption Date.
"Redemption Price" means, with respect to any Trust Security, $50 per
Trust Security, plus accumulated and unpaid Distributions (including any
Additional Sums) to the date of redemption.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated December 12, 1997, among the Depositor, the Trust, and the
Initial Purchasers named in the Purchase Agreement.
"Regulation S Certificate" means a certificate substantially in the
form set forth in Exhibit E.
"Regulation S Global Certificate" has the meaning specified in Section
5.2.
"Regulation S Legend" has the meaning specified in Section 5.15(b).
"Regulation S Preferred Security" means all Preferred Securities
required pursuant to Section 5.4(c) to bear a Regulation S Legend. Such term
includes the Regulation S Global Certificate.
"Relevant Trustee" has the meaning specified in Section 8.9.
"Responsible Officer" means any officer assigned to the Corporate Trust
Office, including any managing director, vice president, assistant vice
president, assistant treasurer, assistant secretary or any other officer of the
Property Trustee or the Delaware Trustee customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Trust Agreement, and also,
with respect to a particular matter, any other officer, to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
11
<PAGE> 18
"Restricted Global Certificate" has the meaning specified in Section
5.2.
"Restricted Period" means, with respect to the Preferred Securities,
the one-year period, and with respect to the Debentures or the Common Stock
issuable on conversion of the Preferred Securities, the 40-day period, in either
case following the last original issue date of the Preferred Securities
(including any Preferred Securities issued to cover over-allotments).
"Restricted Securities" means all Preferred Securities required
pursuant to Section 5.4 to bear any Restricted Securities Legend. Such term
includes the Restricted Global Certificate.
"Restricted Securities Certificate" means a certificate substantially
in the form set forth in Exhibit F.
"Restricted Securities Legend" has the meaning specified in Section
5.15(a).
"Rule 144A Preferred Securities" has the meaning specified in Section
5.2.
"Securities Act Legend" means a Restricted Securities Legend or a
Regulation S Legend.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Business Trust Act.
"Special Event" means a Tax Event or an Investment Company Event.
"Successor Property Trustee" has the meaning specified in Section 8.9.
"Successor Delaware Trustee" has the meaning specified in Section 8.9.
"Successor Securities" has the meaning specified in Section 9.5.
"Super Majority" has the meaning specified in Section 8.2.
12
<PAGE> 19
"Tax Event" means the receipt by the Property Trustee, on behalf of the
Trust, of an Opinion of Counsel, rendered by a law firm having a national tax
and securities practice (which Opinion of Counsel shall not have been rescinded
by such law firm), 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 affecting taxation, 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 Preferred Securities under this Trust Agreement and does not pertain to the
use of the proceeds of the issuance of the Debentures, there is more than an
insubstantial risk in each case after the date thereof that (i) the Trust is, or
will be within 90 days after the date thereof, subject to United State Federal
income tax with respect to income received or accrued on the Debentures, (ii)
interest payable by the Depositor on the Debentures is not, or will not be,
within 90 days after the date thereof, deductible, in whole or in part, for
United States Federal income tax purposes or (iii) the Trust is, or will be
within 90 days after the date thereof, subject to more than de minimus amount of
other taxes, duties, assessments or other governmental charges.
"Trust" means the Delaware business trust continued hereby and
identified on the cover page of this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Trust Agreement any such modification, amendment or supplement,
the provisions of the Trust Indenture Act that are deemed to be a part of and
govern this Trust Agreement and any such modification, amendment or supplement,
respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in,
or owing to, the Payment Account and (c) all proceeds and rights in respect of
the foregoing to be held by the Property Trustee pursuant to the terms of this
Trust Agreement for the benefit of the Securityholders.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
13
<PAGE> 20
"Trust Securities Certificate" means any one of the Common Securities
Certificates, the Global Certificates or the Certificated Preferred Securities.
"Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.
"Unrestricted Securities Certificate" means a certificate substantially
in the form set forth in Exhibit G.
ARTICLE 2
ESTABLISHMENT OF THE TRUST
SECTION 2.1. Name. The Trust continued hereby shall be known as "Newell
Financial Trust I", as such name may be modified from time to time by the
Administrative Trustees following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
SECTION 2.2. Office of the Delaware Trustee; Principal Place of
Business. The address of the Delaware Trustee in the State of Delaware is 1201
Market Street, Wilmington, Delaware 19801, Attention: Corporate Trustee
Administration Department, or such other address in the State of Delaware as the
Delaware Trustee may designate by written notice to the Securityholders and the
Depositor. The principal executive office of the Trust is Newell Center, 29 East
Stephenson Street, Freeport, Illinois 61032.
SECTION 2.3. Organizational Expenses. The Depositor shall pay
organizational expenses of the Trust as they arise or shall, upon request of any
Trustee, promptly reimburse such Trustee for any such expenses paid by such
Trustee. The Depositor shall make no claim upon the Trust Property for the
payment of such expenses.
SECTION 2.4. Issuance of the Preferred Securities. On December 8, 1997
the Depositor on behalf of the Trust executed and delivered the Purchase
Agreement. Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 5.2 and deliver to the Initial Purchasers named in the
Purchase Agreement Preferred Securities Certificates, in an aggregate amount of
10,000,000 Preferred Securities having an aggregate Liquidation Amount of
$500,000,000, against receipt of the aggregate purchase price of such Preferred
Securities of $500,000,000, which amount the Administrative Trustees shall
promptly deliver to the Property Trustee.
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SECTION 2.5. Subscription and Purchase of Debentures; Issuance of the
Common Securities. Contemporaneously with the execution and delivery of this
Trust Agreement, the Administrative Trustees, on behalf of the Trust, shall
subscribe to and purchase from the Depositor Debentures, registered in the name
of the Property Trustee (in its capacity as such) and having an aggregate
principal amount equal to $515,465,000, and, in satisfaction of the purchase
price for such Debentures, the Property Trustee, on behalf of the Trust, shall
deliver to the Depositor the sum of $515,465,000. Contemporaneously therewith,
an Administrative Trustee, on behalf of the Trust, shall execute in accordance
with Section 5.2 and deliver to the Depositor Common Securities Certificates
registered in the name of the Depositor, in an aggregate amount of 309,300
Common Securities having an aggregate Liquidation Amount of $15,465,000 against
receipt of the aggregate purchase price of such Common Securities from the
Depositor of the sum of $15,465,000.
SECTION 2.6. Declaration of Trust. The exclusive purposes and functions
of the Trust are (a) to issue and sell Trust Securities and use the proceeds
from such sale to acquire the Debentures, (b) to distribute the Trust's income
as provided in this Trust Agreement and (c) to engage in only those other
activities necessary or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, 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. The Depositor hereby appoints the Trustees as
trustees of the Trust, to have all the rights, powers and duties to the extent
set forth herein, and the Trustees hereby accept such appointment. The Property
Trustee hereby declares that it will hold the Trust Property in trust upon and
subject to the conditions set forth herein for the benefit of the Trust and the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities, of the Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act.
SECTION 2.7. Authorization to Enter into Certain Transactions. (a) The
Trustees shall conduct the affairs of the Trust in accordance with the terms of
this Trust Agreement. Subject to the limitations set forth in Section 2.6 and
paragraph (b) of this Section, and in accordance with the following provisions
(i) and (ii), the Trustees shall have the exclusive power, duty and the
authority to cause the Trust to engage in the following activities:
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(i) As among the Trustees, each Administrative Trustee shall have the
power and authority to act on behalf of the Trust with respect to the
following matters:
(A) to issue and sell the Trust Securities, provided, however,
that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and,
provided, further, that there shall be no interests in the Trust other
than the Trust Securities, and the issuance of Trust Securities shall
be limited to simultaneous issuance of both Preferred Securities and
Common Securities on the Closing Date and any other date Preferred
Securities and Common Securities are sold pursuant to the
over-allotment option granted to the Purchasers named in the Purchase
Agreement, subject to the issuance of Trust Securities pursuant to
Section 5.5 and Successor Securities pursuant to Section 9.5;
(B) to cause the Trust to enter into, and to execute, deliver
and perform on behalf of the Trust, the Registration Rights Agreement
and the Certificate Depository Agreement and such other agreements as
may be necessary or incidental to the purposes and function of the
Trust;
(C) to assist in the registration of the Preferred Securities
under the Securities Act of 1933, as amended, and under state
securities or blue sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust Indenture Act;
(D) to assist in the listing of the Preferred Securities upon
such securities exchange or exchanges, if any, as shall be determined
by the Depositor and the registration of the Preferred Securities under
the Securities Exchange Act of 1934, as amended, and the preparation
and filing of all periodic and other reports and other documents
pursuant to the foregoing (only to the extent that such listing or
registration is requested by the Depositor);
(E) to appoint a Paying Agent, a Securities Registrar and an
authenticating agent in accordance with this Trust Agreement;
(F) to the extent provided in this Trust Agreement, to wind up
the affairs of and liquidate the Trust and prepare, execute and file
the certificate of cancellation with the Secretary of State of the
State of Delaware;
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(G) unless otherwise required by the Delaware Business Trust Act
or the Trust Indenture Act, to execute on behalf of the Trust (either
acting alone or together with any other Administrative Trustees) any
documents that the Administrative Trustees have the power to execute
pursuant to this Trust Agreement; and
(H) to take any action incidental to the foregoing as the
Trustees may from time to time determine is necessary or advisable to
give effect to the terms of this Trust Agreement including, but not
limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the 1940
Act;
(ii) causing the Trust to be classified for United States
Federal income tax purposes as a grantor trust; and
(iii) cooperating with the Depositor to ensure that the
Debentures will be treated as indebtedness of the Depositor for
United States Federal income tax purposes;
provided that such action does not adversely affect in any material
respect the interests of Securityholders except as otherwise provided
in Section 10.2(a).
(ii) As among the Trustees, the Property Trustee shall have the power,
duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) the establishment of the Payment Account;
(B) the receipt of and taking title to the Debentures;
(C) the collection of interest, principal and any other payments
made in respect of the Debentures in the Payment Account;
(D) the distribution from the Trust Property of amounts owed to
the Securityholders in respect of the Trust Securities;
(E) the exercise of all of the rights, powers and privileges of
a holder of the Debentures;
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(F) the sending of notices of default, other notices and other
information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in accordance with
the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust;
(I) after an Event of Default, the taking of any action
incidental to the foregoing as the Property Trustee may from time to
time determine is necessary or advisable to give effect to the terms of
this Trust Agreement and protect and conserve the Trust Property for
the benefit of the Securityholders (without consideration of the effect
of any such action on any particular Securityholder);
(J) subject to this Section 2.7(a)(ii), the Property Trustee
shall have none of the duties, liabilities, powers or the authority of
the Administrative Trustees set forth in Section 2.7(a)(i); and
(K) to act as Paying Agent and/or Securities Registrar to the
extent appointed as such hereunder.
(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trust shall not, and the Trustees shall not and shall
cause the Trust not to (i) invest any proceeds received by the Trust from
holding the Debentures (rather, the Trustees shall distribute all such proceeds
to the Securityholders pursuant to the terms of this Trust Agreement and the
Trust Securities), acquire any investments or engage in any activities not
authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange,
mortgage, pledge, set-off or otherwise dispose of any of the Trust Property or
interests therein, including to Securityholders, except as expressly provided
herein, (iii) take any action that would cause the Trust to fail or cease to
qualify as a "grantor trust" for United States Federal income tax purposes, (iv)
make any loans or incur any indebtedness for borrowed money or issue any other
debt, (v) take or consent to any action that would result in the placement of a
Lien on any of the Trust Property, (vi) possess any power or otherwise act in
such a way as to vary the Trust assets or the terms of the Trust Securities in
any way whatsoever except as permitted by the terms of this Trust Agreement, or
(vii) issue any securities or other evidences of beneficial
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ownership of, or beneficial interest in, the Trust other than the Trust
Securities. The Administrative Trustees shall defend all claims and demands of
all Persons at any time claiming any Lien on any of the Trust Property adverse
to the interest of the Trust or the Securityholders in their capacity as
Securityholders.
(c) In connection with the issue and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following actions (and any
actions taken by the Depositor in furtherance of the following prior to the date
of this Trust Agreement are hereby ratified and confirmed in all respects):
(i) to file by the Trust with the Commission and to execute on behalf
of the Trust a registration statement on the appropriate form in relation
to the Preferred Securities, including any amendments thereto;
(ii) to determine the States and foreign jurisdictions in which to take
appropriate action to qualify or register for resale all or part of the
Preferred Securities and to do any and all such acts, other than actions
which must be taken by or on behalf of the Trust, and advise the Trustees
of actions they must take on behalf of the Trust, and prepare for execution
and filing any documents to be executed and filed by the Trust or on behalf
of the Trust, as the Depositor deems necessary or advisable in order to
comply with the applicable laws of any such States and foreign
jurisdictions;
(iii) to the extent necessary, to prepare for filing by the Trust with
the Commission and to execute on behalf of the Trust a registration
statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) or 12(g) of the Securities Exchange Act of
1934, as amended, including any amendments thereto (it being understood
that neither the Trust nor the Depositor has any obligation under the
Indenture, the Purchase Agreement or the Trust Agreement to register any
Trust Securities under the Securities Exchange Act of 1934, as amended or
to list any Trust Securities on any securities exchange);
(iv) to negotiate, and to execute and deliver, on behalf of the Trust,
the Purchase Agreement; and
(v) any other actions necessary or incidental to carry out any of the
foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust will not be deemed to be an "investment
company" required to be registered under the 1940 Act, or taxed as a
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corporation for United States Federal income tax purposes and so that the
Debentures will be treated as indebtedness of the Depositor for United States
Federal income tax purposes. In this connection, the Depositor and the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that each of
the Depositor and the Administrative Trustees determines in their discretion to
be necessary or desirable for such purposes, so long as such action does not
adversely affect in any material respect the interests of the Holders of the
Preferred Securities except as otherwise provided in Section 10.2(a).
SECTION 2.8. Assets of Trust. The assets of the Trust shall consist of
only the Trust Property.
SECTION 2.9. Title to Trust Property. Legal title to all Trust Property
shall be vested at all times in the Property Trustee (in its capacity as such)
and shall be held and administered by the Property Trustee for the benefit of
the Trust and the Securityholders in accordance with this Trust Agreement. The
Securityholders 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.
ARTICLE 3
PAYMENT ACCOUNT
SECTION 3.1. Payment Account. (a) On or prior to the Closing Date, the
Property Trustee shall establish the Payment Account. The Property Trustee and
any agent of the Property Trustee shall have exclusive control and sole right of
withdrawal with respect to the Payment Account for the purpose of making
deposits in and withdrawals from the Payment Account in accordance with this
Trust Agreement. All monies and other property deposited or held from time to
time in the Payment Account shall be held by the Property Trustee in the Payment
Account for the exclusive benefit of the Securityholders and for distribution as
herein provided, including (and subject to) any priority of payments provided
for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
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ARTICLE 4
DISTRIBUTIONS; REDEMPTION; EXCHANGE; CONVERSION
SECTION 4.1. Distributions. (a) Distributions on the Trust Securities
shall be cumulative, and shall accrue from the date of original issuance, or the
most recent Distribution Date (as defined herein) and, except in the event that
the Depositor exercises its right to defer the payment of interest on the
Debentures pursuant to the Indenture, shall be payable quarterly in arrears on
March 1, June 1, September 1 and December 1 of each year, commencing on March 1,
1998 (which dates correspond to the interest payment dates on the Debentures),
when, as and if available for payment by the Property Trustee, as further
described in paragraph (c) of this Section 4.1. If any date on which
Distributions are otherwise payable on the Trust Securities is not a Business
Day, then the payment of such Distributions shall be made on the next succeeding
day which is a Business Day (and no interest shall accrue for the period from
and after such date until the next succeeding Business Day) with the same force
and effect as if made on such date (each date on which Distributions are payable
in accordance with this Section 4.1(a), a "Distribution Date").
(b) The Trust Securities represent undivided beneficial interests in
the Trust Property, and the Distributions on the Trust Securities shall be
payable at a rate of 5 1/4% per annum of the Liquidation Amount of the Trust
Securities, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. The amount of Distributions payable for any period
shall be computed on the basis of a 360-day year of twelve 30-day months. For
periods less than a full month, Distributions shall reflect interest on
Debentures computed on the basis of the actual number of elapsed days based on a
360-day year. The amount of Distributions payable for any period shall include
the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by the Property
Trustee from the Payment Account and shall be payable on each Distribution Date
only to the extent that the Trust has funds then on hand and available in the
Payment Account for the payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date, which
shall be the date which is the fifteenth day (whether or not a Business Day)
next preceding such Distribution Date.
SECTION 4.2. Redemption. (a) Upon an optional redemption (as set forth
in the Indenture) of Debentures, the proceeds from such redemption shall be
applied to redeem Trust Securities having an aggregate Liquidation Amount equal
to the aggregate principal amount of the Debentures so redeemed by the
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Depositor, including pursuant to Section 4.4, at the Optional Redemption Price,
and upon a mandatory redemption (as set forth in the Indenture) of Debentures,
the proceeds from such redemption shall be applied to redeem Trust Securities,
having an aggregate Liquidation Amount equal to the aggregate principal amount
of the Debentures so redeemed by the Depositor, at the Redemption Price. The
Trust may not redeem fewer than all the Outstanding Trust Securities unless all
accrued and unpaid Distributions have been paid on all Trust Securities for all
quarterly Distribution periods terminating on or prior to the date of
redemption.
(b) Notice of redemption (which notice will be irrevocable) shall be
given by the Property Trustee by first-class mail, postage prepaid, mailed not
less than 30 nor more than 60 days prior to the Redemption Date to the Depositor
and each Holder of Trust Securities to be redeemed, at such Holder's address as
it appears in the Securities Register. All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price or the Optional Redemption Price, as the
case may be;
(iii) the record date for the determination of Holders entitled to
receive payment of the Redemption Price or Optional Redemption Price,
as the case may be, as provided in Section 4.2(d);
(iv) the CUSIP number;
(v) if less than all of the Outstanding Trust Securities are to be
redeemed, the identification and the aggregate Liquidation Amount of
the particular Trust Securities to be redeemed;
(vi) the Conversion Price and that a Holder of Preferred Securities
who desires to convert such Preferred Securities called for redemption
must satisfy the requirements for conversion contained in Section 4.3
below;
(vii) that on the Redemption Date the Redemption Price or the
Optional Redemption Price, as the case may be, will become due and
payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accrue on and after said date; and
(viii) the place or places where such Trust Securities are to be
surrendered for payment of the Redemption Price or the Optional
Redemption Price, as the case may be.
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(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price or the Optional Redemption Price, as the case
may be, with the proceeds from the contemporaneous redemption of Debentures.
Redemptions of the Trust Securities shall be made and the Redemption Price or
the Optional Redemption Price, as the case may be, shall be payable on each
Redemption Date only to the extent that the Trust has funds then on hand and
available in the Payment Account for the payment of such Redemption Price or the
Optional Redemption Price, as the case may be.
(d) If the Property Trustee gives a notice of redemption in respect of
any Preferred Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, so long
as and to the extent the Preferred Securities are in book-entry-only form,
irrevocably deposit with the Clearing Agency for the Preferred Securities funds
sufficient to pay the applicable Redemption Price. If the Preferred Securities
are no longer in book-entry-only form, the Property Trustee, subject to Section
4.2(c), will irrevocably deposit with the Paying Agent funds sufficient to pay
the applicable Redemption Price or Optional Redemption Price, as the case may
be, on such Preferred Securities held in certificated form and will give the
Paying Agent irrevocable instructions and authority to pay the Redemption Price
or the Optional Redemption Price, as the case may be, to the Holders thereof
upon surrender of their Preferred Securities Certificates. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the Holders of such
Trust Securities as they appear on the Securities Register for the Trust
Securities on the relevant record dates for the related Distribution Dates. If
notice of redemption shall have been given and funds deposited as required,
then, upon the date of such deposit, all rights of Securityholders holding Trust
Securities so called for redemption will cease, except (i) the right of such
Securityholders to receive the Redemption Price or the Optional Redemption
Price, as the case may be, but without interest, and (ii) the right to convert
such Preferred Securities into Common Stock in the manner provided in Section
4.3 through the close of business on the Redemption Date; and such Trust
Securities will cease to be Outstanding. In the event that any date on which any
Redemption Price or the Optional Redemption Price, as the case may be, is
payable is not a Business Day, then payment of the Redemption Price or the
Optional Redemption Price, as the case may be, payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case, with the same force and effect
as if made on such date. Payment of the Redemption Price or the Optional
Redemption Price, as the case may be, shall be made to the Holders of such Trust
Securities as they appear on the Securities Register for the Trust Securities on
the relevant record date, which shall be the date which is the fifteenth day
(whether or not a Business Day) preceding such Redemption Date.
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(e) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated on a pro rata basis (based on
Liquidation Amounts) among the Common Securities and the Preferred Securities
that are to be redeemed. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Preferred Securities not previously called
for redemption, by lot or by such other method as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $50 or an integral multiple of $50 in excess thereof) of
the Liquidation Amount of the Preferred Securities. The Property Trustee shall
promptly notify the Securities Registrar and the Conversion Agent 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; it being understood that, in the case of Preferred
Securities registered in the name of and held of record by the Clearing Agency
(or any successor) or any nominee, the distribution of the proceeds of such
redemption will be made in accordance with the procedures of the Clearing Agency
or its nominee. For all purposes of this Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred
Securities shall relate, in the case of any Preferred Securities redeemed or to
be redeemed only in part, to the portion of the Liquidation Amount of Preferred
Securities which has been or is to be redeemed. In the event of any redemption
in part, the Trust shall not be required to (i) issue, register the transfer of
or exchange of any Preferred Security during a period beginning at the opening
of business 15 days before any selection for redemption of Preferred Securities
and ending at the close of business on the earliest date in which the relevant
notice of redemption is deemed to have been given to all Holders of Preferred
Securities to be so redeemed or (ii) register the transfer of or exchange of any
Preferred Securities so selected for redemption, in whole or in part, except for
the unredeemed portion of any Preferred Securities being redeemed in part.
(f) In the event of any redemption, the Trust shall not be required to
issue, register the transfer of or register the exchange of any Preferred
Security during a period beginning at the opening of business 15 days before any
Redemption Date and ending at the close of business on such Redemption Date.
SECTION 4.3. Conversion. The Holders of Trust Securities, subject to
the limitations set forth in this Section, shall have the right, at their
option, to cause the Conversion Agent to convert Trust Securities, on behalf of
the converting Holders, into shares of Common Stock in the manner described
herein on and subject to the following terms and conditions:
(i) The Trust Securities will be convertible into fully paid and
nonassessable shares of Common Stock pursuant to the Holder's direction
to the Conversion Agent to exchange such Trust Securities
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for a portion of the Debentures having a principal amount equal to the
aggregate Liquidation Amount of such Trust Securities, and immediately
convert such amount of Debentures into fully paid and nonassessable
shares of Common Stock at an initial rate of 0.9865 shares of Common
Stock for each Trust Security (which is equivalent to a conversion
price of approximately $50.685 per $50 principal amount of Debentures),
subject to certain adjustments set forth in the Indenture (as so
adjusted, "Conversion Price").
(ii) In order to convert Trust Securities into Common Stock, the
Holder of such Trust Securities shall submit to the Conversion Agent an
irrevocable Notice of Conversion to convert Trust Securities on behalf
of such Holder, together, if the Trust Securities are in certificated
form, with such certificates. The Notice of Conversion shall (i) set
forth the number of Trust Securities to be converted and the name or
names, if other than the Holder, in which the shares of Common Stock
should be issued and (ii) direct the Conversion Agent (a) to exchange
such Trust Securities for a portion of the Debentures held by the
Property Trustee (at the rate of exchange specified in the preceding
paragraph) and (b) to immediately convert such Debentures, on behalf of
such Holder, into Common Stock (at the conversion rate specified in the
preceding paragraph). The Conversion Agent shall notify the Property
Trustee in writing of the Holder's election to exchange Trust
Securities for a portion of the Debentures held by the Property Trustee
and the Property Trustee shall, upon receipt of such written notice,
deliver to the Conversion Agent the appropriate principal amount of
Debentures for exchange in accordance with this Section. The Conversion
Agent shall thereupon notify the Depositor of the Holder's election to
convert such Debentures into shares of Common Stock. Holders of Trust
Securities at the close of business on a Distribution payment record
date will be entitled to receive the Distribution paid on such Trust
Securities on the corresponding Distribution Date notwithstanding the
conversion of such Trust Securities on or following such record date
but prior to such Distribution Date. Except as provided above, neither
the Trust nor the Depositor will make, or be required to make, any
payment, allowance or adjustment upon any conversion on account of any
accumulated and unpaid Distributions whether or not in arrears accrued
on the Trust Securities surrendered for conversion, or on account of
any accumulated and unpaid dividends on the shares of Common Stock
issued upon such conversion. Trust Securities submitted for conversion
prior to the expiration of conversion rights as provided in Section
4.3(iii) shall be deemed to have been converted immediately prior to
the close of business on the day on which an irrevocable Notice of
Conversion relating to such Trust Securities is
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received by the Conversion Agent in accordance with the foregoing
provision (the "Conversion Date"). The Person or Persons entitled to
receive the Common Stock issuable upon conversion of the Debentures
shall be treated for all purposes as the record holder or holders of
such Common Stock on the date of conversion. As promptly as practicable
on or after the Conversion Date, the Depositor shall issue and deliver
at the office of the Conversion Agent a certificate or certificates for
the number of full shares of Common Stock issuable upon such
conversion, together with the cash payment, if any, in lieu of any
fraction of any share to the Person or Persons entitled to receive the
same, unless otherwise directed by the Holder in the notice of
conversion and the Conversion Agent shall distribute such certificate
or certificates to such Person or Persons.
(iii) The conversion rights of holders of the Debentures and the
corresponding conversion rights of Holders of Trust Securities shall
expire at the close of business on the date set for redemption of the
Trust Securities upon the mandatory or optional redemption of the
Debentures.
(iv) Each Holder of a Trust Security by its acceptance thereof
initially appoints The Chase Manhattan Bank not in its individual
capacity but solely as conversion agent (the "Conversion Agent") for
the purpose of effecting the conversion of Trust Securities in
accordance with this Section. In effecting the conversion and
transactions described in this Section, the Conversion Agent shall be
acting as agent of the Holders of Trust Securities directing it to
effect such conversion transactions. The Conversion Agent is hereby
authorized (i) to exchange Trust Securities from time to time for
Debentures held by the Trust in connection with the conversion of such
Trust Securities in accordance with this Section and (ii) to convert
all or a portion of the Debentures into Common Stock and thereupon to
deliver such shares of Common Stock in accordance with the provisions
of this Section and to deliver to the Property Trustee any new
Debenture or Debentures for any resulting unconverted principal amount
delivered to the Conversion Agent by the Debenture Trustee.
(v) No fractional shares of Common Stock will be issued as a result
of conversion, but, in lieu thereof, such fractional interest will be
paid in cash by the Depositor to the Conversion Agent in an amount
equal to the Current Market Price of the fractional share of the Common
Stock, and the Conversion Agent will in turn make such payment to the
Holder or Holders of Trust Securities so converted.
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(vi) Nothing in this Section 4.3 shall limit the requirement of the
Trust to withhold taxes pursuant to the terms of the Trust Securities
or as set forth in this Trust Agreement or otherwise required of the
Property Trustee or the Trust to pay any amounts on account of such
withholdings.
SECTION 4.4. Special Event Exchange or Redemption. (a) If a Special
Event shall occur and be continuing, the Property Trustee shall direct the
Conversion Agent to exchange all Outstanding Trust Securities for Debentures
having a principal amount equal to the aggregate Liquidation Amount of the Trust
Securities to be exchanged and with accrued interest in an amount equal to any
unpaid Distribution (including any Additional Amounts) on the Trust Securities;
provided, however, that, in the case of a Tax Event, the Depositor shall have
the right to (i) direct that less than all, or none, as appropriate, of the
Trust Securities be so exchanged if and for so long as the Depositor shall have
elected to pay any Additional Sums (as defined in the Indenture) such that the
amount received by Holders of Trust Securities not so exchanged in respect of
Distributions and other distributions are not reduced as a result of such Tax
Event, and shall not have revoked any such election or failed to make such
payments or (ii) cause the Trust Securities to be redeemed in the manner set
forth below. If a Tax Event shall occur or be continuing, the Depositor shall
have the right, upon not less than 30 nor more than 60 days' notice, to redeem
the Debentures, in whole or in part, for cash upon the later of (i) 90 days
following the occurrence of such Tax Event or (ii) December 1, 2001. Promptly
following such redemption, Trust Securities with an aggregate Liquidation Amount
equal to the aggregate principal amount of the Debentures so redeemed will be
redeemed by the Trust at the Optional Redemption Price applicable in the event
of a redemption upon the occurrence of a Tax Event on a pro rata basis.
(b) Notice of any exchange pursuant to this Section 4.4 (an "Exchange
Notice") of the Trust Securities, which Exchange Notice shall be irrevocable,
will be given by the Property Trustee by first-class mail to the Depositor and
to each record Holder of Trust Securities to be exchanged not fewer than 30 nor
more than 60 days prior to the date fixed for exchange thereof. For purposes of
the calculation of the date of exchange and the dates on which notices are given
pursuant to this paragraph (b), an Exchange Notice shall be deemed to be given
on the day such notice is first mailed by first-class mail, postage prepaid, to
each Holder. Each Exchange Notice shall be addressed to each Holder of Trust
Securities at the address of such Holder appearing in the books and records of
the Trust. Each Exchange Notice shall state: (A) the exchange date; (B) the
aggregate Liquidation Amount and any unpaid Distributions (including any
Additional Amounts) on the Trust Securities to be exchanged and the aggregate
principal amount and any accrued interest on the Debentures to be exchanged
therefor; (C) that on the exchange date the Trust Securities to be so exchanged
shall be exchanged for Debentures and that Distributions on the Trust Securities
so exchanged will cease
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to accumulate on and after said date; (D) the record date for the determination
of Holders of Trust Securities to be exchanged as provided in Section 4.4(g);
and (E) the identity of the Conversion Agent, if any, and the place or places
where each Trust Certificate to be exchanged is to be surrendered in exchange
for Debentures. No defect in the Exchange Notice or in the mailing thereof with
respect to any Trust Security shall affect the validity of the exchange
proceedings for any other Trust Security.
(c) In the event that fewer than all the Outstanding Preferred
Securities are to be exchanged, then, on the exchange date, (i) if all of the
Outstanding Preferred Securities are represented by Definitive Preferred
Securities Certificates, the particular Preferred Securities to be exchanged
will be selected by the Property Trustee from the Outstanding Preferred
Securities not previously called for redemption or exchange on a pro rata basis,
(ii) if all of the Outstanding Preferred Securities are represented by
Book-Entry Preferred Securities Certificates, the Property Trustee shall provide
for the selection for exchange of a portion of the Global Certificate
representing the Book-Entry Preferred Securities Certificates on a pro rata
basis and (iii) if Outstanding Trust Securities are represented by both
Definitive Preferred Securities Certificates and Book-Entry Preferred Securities
Certificates, the Property Trustee shall select the portion of the Global
Certificate representing the Book-Entry Preferred Securities Certificates and
the particular Outstanding Preferred Securities represented by Definitive
Preferred Securities Certificates to be exchanged on a pro rata basis. In the
case of clause (ii) or (iii) above, the particular Book-Entry Preferred
Securities Certificates to be exchanged shall be selected in accordance with the
applicable rules and procedures for the Clearing Agency in whose name, or whose
nominee's name, such global certificate is then held. Any Preferred Securities
Certificate that is to be exchanged only in part shall be surrendered with due
endorsement or by a written instrument of transfer fully executed by the Holder
thereof (or its attorney duly authorized in writing) and the Trust shall prepare
and deliver to such Holder, without service charge, a new Preferred Securities
Certificate or Certificates in aggregate stated Liquidation Amount equal to, and
in exchange for, the unredeemed portion of the Preferred Securities Certificate
so surrendered. The Common Securities shall be exchanged in a similar manner.
(d) In the event of an exchange pursuant to this Section 4.4, on the
date fixed for any such exchange, (i) if the Preferred Securities are
represented by Book-Entry Preferred Securities Certificates, the Clearing Agency
or its nominee, as the record Holder of the Preferred Securities, will exchange
through the Conversion Agent the Global Certificate representing the Preferred
Securities to be exchanged for a registered Global Certificate or certificates
representing the Debentures to be delivered upon such exchange, (ii) if the
Preferred Securities are represented by Definitive Preferred Securities
Certificates, the certificates representing the Preferred Securities to be so
exchanged will be deemed to represent Debentures having a principal amount equal
to the aggregate stated
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Liquidation Amount of such Preferred Securities until such certificates are
presented to the Conversion Agent for exchange for definitive certificates
representing Debentures and (iii) all rights of the Holders of the Preferred
Securities so exchanged will cease, except for the right of such Holders to
receive Debentures. The Common Securities shall be exchanged in a similar
manner.
(e) Each Holder, by becoming a party to this Trust Agreement pursuant
to Section 10.11 of this Trust Agreement, will be deemed to have agreed to be
bound by these exchange provisions in regard to the exchange of Trust Securities
for Debentures pursuant to the terms described above.
(f) Nothing in this Section 4.4 shall limit the requirement of the
Trust to withhold taxes pursuant to the terms of the Trust Securities or as set
forth in this Trust Agreement or otherwise require the Property Trustee or the
Trust to pay any amounts on account of such withholdings.
(g) An exchange of Trust Securities for Debentures pursuant to this
Section 4.4 shall be made to Holders of Trust Securities as they appear on the
Securities Register for Trust Securities on the relevant record date, which
shall be the date which is the fifteenth day (whether or not a Business Day)
preceding the exchange date.
SECTION 4.5. Subordination of Common Securities. Payment of
Distributions (including Additional Amounts, if applicable) on, and the
Redemption Price of, the Trust Securities, as applicable, shall be made pro rata
based on the Liquidation Amount of the Trust Securities; provided, however, that
if on any Distribution Date or Redemption Date an Event of Default shall have
occurred and be continuing, no payment of any Distribution (including Additional
Amounts, if applicable) on, or the Redemption Price of, any Common Security, and
no other payment on account of the redemption, liquidation or other acquisition
of Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions (including Additional Amounts, if
applicable) on all Outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all Outstanding Preferred
Securities, shall have been made or provided for, and all funds immediately
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions (including Additional Amounts, if applicable) on,
or the Redemption Price of, Preferred Securities then due and payable.
SECTION 4.6. Payment Procedures. Payments in respect of the Preferred
Securities shall be made by check mailed to the address of the Person entitled
thereto as such address shall appear on the Securities Register or, if the
Preferred Securities are held by a Clearing Agency, such Distributions shall be
made to the Clearing Agency in immediately available funds, in accordance with
the
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Certificate Depositary Agreement on the applicable Distribution Dates. Payments
in respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Holder of the Common
Securities.
SECTION 4.7. Tax Returns and Reports. The Administrative Trustees shall
prepare (or cause to be prepared), at the Depositor's expense, and file all
United States Federal, State and local tax and information returns and reports
required to be filed by or in respect of the Trust. In this regard, the
Administrative Trustees shall (a) prepare and file (or cause to be prepared or
filed) Form 1041 or the appropriate Internal Revenue Service form required to be
filed in respect of the Trust in each taxable year of the Trust and (b) prepare
and furnish (or cause to be prepared and furnished) to each Securityholder a
Form 1099 or the appropriate Internal Revenue Service form required to be
furnished to such Securityholder or the information required to be provided on
such form. The Administrative Trustees shall provide the Depositor with a copy
of all such returns, reports and schedules promptly after such filing or
furnishing. The Trustees shall comply with United States Federal withholding and
backup withholding tax laws and information reporting requirements with respect
to any payments to Securityholders under the Trust Securities.
SECTION 4.8. Payment of Taxes, Duties, Etc. of the Trust. Upon receipt
under the Debentures of Additional Sums, the Property Trustee, upon receipt of
written notice from the Depositor or the Administrative Trustees, shall promptly
pay from such Additional Sums any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Trust by the
United States or any other taxing authority.
SECTION 4.9. Payments under Indenture. Any amount payable hereunder to
any Holder of Preferred Securities shall be reduced by the amount of any
corresponding payment such Holder (or any Owner with respect thereto) has
directly received pursuant to Section 5.8 of the Indenture in accordance with
the terms of Section 6.8 hereof.
ARTICLE 5
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership. Upon the creation of the Trust and
until the issuance of the Trust Securities, and at any time during which no
Trust Securities are Outstanding, the Depositor shall be the sole beneficial
owner of the Trust.
SECTION 5.2. The Trust Securities Certificates. The Preferred
Securities Certificates shall be issued in minimum denominations of $50
Liquidation
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Amount and integral multiples of $50 in excess thereof, and the Common
Securities Certificates shall be issued in denominations of $50 Liquidation
Amount and integral multiples thereof. The consideration received by the Trust
for the issuance of the Trust Securities shall constitute a contribution to the
capital of the Trust and shall not constitute a loan to the Trust. Preferred
Securities initially sold to qualified institutional buyers in reliance on Rule
144A under the Securities Act ("Rule 144A Preferred Securities") initially will
be represented by one or more certificates in registered, global form
(collectively, the "Restricted Global Certificate"). Preferred Securities
initially sold in offshore transactions in reliance on Regulation S ("Regulation
S Preferred Securities") initially will be represented by one or more
certificates in registered, global form (collectively, the "Regulation S Global
Certificate" and, together with the Restricted Global Certificate, the "Global
Certificates"). Preferred Securities initially transferred, in accordance with
Section 5.4, in a manner exempt from the registration requirements of the
Securities Act will be exchanged for Preferred Securities in registered,
certificated form (the "Certificated Preferred Securities"). The Trust
Securities Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of at least one Administrative Trustee and authenticated by
the Property Trustee. Trust Securities Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefit of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.4.
SECTION 5.3. Delivery of Trust Securities Certificates. On the Closing
Date, the Administrative Trustees shall cause Trust Securities Certificates, in
an aggregate Liquidation Amount as provided in Sections 2.4 and 2.5, to be
executed on behalf of the Trust and delivered to or upon the written order of
the Depositor, signed by its Chairman of the Board, any Vice Chairman, its
President, any Senior Vice President or any Vice President, Treasurer or
Assistant Treasurer or Controller without further corporate action by the
Depositor, in authorized denominations.
A Trust Security Certificate shall not be valid until authenticated by
the manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Trust Security Certificate has
been authenticated under this Trust Agreement. Upon a written order of the Trust
signed by one Administrative Trustee, the Property Trustee shall authenticate
the Trust Security Certificates for original issue.
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The Property Trustee may appoint an authenticating agent acceptable to
the Administrative Trustees to authenticate Trust Security Certificates. An
authenticating agent may authenticate Trust Security Certificates whenever the
Property Trustee may do so. Each reference in this Trust Agreement to
authentication by the Property Trustee includes authentication by such agent. An
authenticating agent has the same rights as the Property Trustee to deal with
the Depositor or an Affiliate with respect to the authentication of Trust
Securities.
SECTION 5.4. Registration of Transfer and Exchange of Preferred
Securities; Restrictions on Transfer. (a) The Securities Registrar shall keep or
cause to be kept, at the office or agency maintained pursuant to Section 5.8, a
Securities Register in which, subject to such reasonable regulations as it may
prescribe, the Securities Registrar shall provide for the registration of
Preferred Securities Certificates and Common Securities Certificates (subject to
Section 5.10 in the case of the Common Securities Certificates) and registration
of transfers and exchanges of Preferred Securities Certificates as herein
provided. The Property Trustee shall be the initial Securities Registrar.
Subject to the other provisions of this Trust Agreement regarding
restrictions on transfer, upon surrender for registration of transfer of any
Preferred Security at an office or agency of the Securities Registrar designated
pursuant to Section 5.8 for such purpose, an Administrative Trustee shall
execute on behalf of the Trust by manual or facsimile signature, and the
Property Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Preferred Securities of any
authorized denominations and of a like aggregate principal amount and bearing
such restrictive legends as may be required by this Trust Agreement.
At the option of the Holder, and subject to the other provisions of
this Section 5.4, Preferred Securities may be exchanged for other Preferred
Securities of any authorized denomination and of a like Liquidation Amount, upon
surrender of the Preferred Securities to be exchanged at any such office or
agency. Whenever any Preferred Securities are so surrendered for exchange, an
Administrative Trustee shall execute on behalf of the Trust by manual or
facsimile signature, and the Property Trustee shall authenticate and deliver,
the Preferred Securities which the Holder making the exchange is entitled to
receive.
All Preferred Securities issued upon any registration of transfer or
exchange of Preferred Securities shall be entitled to the same benefits under
this Trust Agreement, as the Securities surrendered upon such registration of
transfer or exchange.
Every Preferred Security presented or surrendered for registration of
transfer or for exchange shall (if so requested by the Depositor or the
Securities Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer
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in form satisfactory to the Depositor and the Securities Registrar duly
executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
(b) Certain Transfers and Exchanges. Notwithstanding any other
provision of this Trust Agreement or the Preferred Securities, transfers and
exchanges of Preferred Securities and beneficial interests in a Global
Certificate of the kinds specified in this Section 5.4(b) shall be made only in
accordance with this Section 5.4(b).
(i) Restricted Global Certificate to Regulation S Global
Certificate. If the owner of a beneficial interest in the Restricted
Global Certificate wishes at any time to transfer such interest to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Regulation S Global Certificate, such transfer may be
effected in accordance with the provisions of this Clause (b)(i) and
Clause (sic) (b)(vii) [(b)(vi)] below and subject to the Applicable
Procedures. Upon receipt by the Property Trustee, as Securities
Registrar, of (A) a written order given by the Clearing Agency or its
authorized representative directing that a beneficial interest in the
Regulation S Global Certificate in a specified Liquidation Amount (or
number of Preferred Securities) be credited to a specified
participant's account and that a beneficial interest in the Restricted
Global Certificate in an equal Liquidation Amount (or number of
Preferred Securities) be debited from another specified participant's
account and (B) a Regulation S Certificate, satisfactory to the
Property Trustee and duly executed by the owner of such beneficial
interest in the Restricted Global Certificate or his attorney duly
authorized in writing, then the Property Trustee, as Securities
Registrar but subject to Clause (sic) (b)(vii) [(b)(vi)] below, shall
reduce the share number of the Restricted Global Certificate and
increase the share number of the Regulation S Global Certificate by
such specified Liquidation Amount (or number of Preferred Securities)
as provided in Section 5.11(b).
(ii) Regulation S Global Certificate to Restricted Global
Certificate. If the owner of a beneficial interest in the Regulation S
Global Certificate wishes at any time to transfer such interest to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Restricted Global Certificate, such transfer may be
effected only in accordance with this Clause (b)(ii) and subject to the
Applicable Procedures. Upon receipt by the Property Trustee, as
Securities Registrar, of (A) a written order given by the Clearing
Agency or its authorized representative directing
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that a beneficial interest in the Restricted Global Certificate in a
specified Liquidation Amount (or number of Preferred Securities) be
credited to a specified participant's account and that a beneficial
interest in the Regulation S Global Certificate in an equal Liquidation
Amount (or number of Preferred Securities) be debited from another
specified participant's account and (B) if such transfer is to occur
during the Restricted Period, a Restricted Securities Certificate,
satisfactory to the Property Trustee and duly executed by the owner of
such beneficial interest in the Regulation S Global Certificate or his
attorney duly authorized in writing, then the Property Trustee, as
Securities Registrar, shall reduce the Liquidation Amount (or number of
Preferred Securities) of the Regulation S Global Certificate and
increase the Liquidation Amount of (or number of Preferred Securities
represented by) the Restricted Global Certificate by such specified
Liquidation Amount (or number of securities) as provided in Section
5.11(b).
(iii) Restricted Non-Global Certificate to Restricted Global
Certificate or Regulation S Global Certificate. If the Holder of a
Restricted Security (other than a Global Certificate) wishes at any
time to transfer all or any portion of such Restricted Security to a
Person who wishes to take delivery thereof in the form of a beneficial
interest in the Restricted Global Certificate or the Regulation S
Global Certificate, such transfer may be effected only in accordance
with the provisions of this Clause (b)(iii) and Clause (sic) (b)(vii)
[(b)(vi)] below and subject to the Applicable Procedures. Upon receipt
by the Property Trustee, as Securities Registrar, of (A) such
Restricted Security as provided in Section 5.4(a) and written
instructions satisfactory to the Property Trustee directing that a
beneficial interest in the Restricted Global Certificate or Regulation
S Global Certificate in a specified Liquidation Amount (or number of
Preferred Securities) not greater than the amount of such Preferred
Security be credited to a specified participant's account and (B) a
Restricted Securities Certificate, if the specified account is to be
credited with a beneficial interest in the Restricted Global
Certificate, or a Regulation S Certificate, if the specified account is
to be credited with a beneficial interest in the Regulation S Global
Certificate, in either case satisfactory to the Property Trustee and
duly executed by such Holder or his attorney duly authorized in
writing, then the Property Trustee, as Securities Registrar but subject
to Clause (sic) (b)(vii) [(b)(vi)] below, shall cancel such Restricted
Security (and issue a new Restricted Security in respect of any
untransferred portion thereof) as provided in Section 5.4(a) and
increase the Liquidation Amount of (or number of Preferred Securities
represented by) the Restricted Global Certificate or the Regulation S
Global Certificate, as the case may be, by the specified Liquidation
Amount (or number of securities) as provided in Section 5.11(b).
(iv) Regulation S Non-Global Certificate to Restricted Global
Certificate or Regulation S Global Certificate. If the Holder of a
Regulation
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S Preferred Security (other than a Global Certificate) wishes at any
time to transfer all or any portion of such Regulation S Security to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Restricted Global Certificate or the Regulation S
Global Certificate, such transfer may be effected only in accordance
with this Clause (b)(iv) and Clause (sic) (b)(vii) [(b)(vi)] below and
subject to the Applicable Procedures. Upon receipt by the Property
Trustee, as Securities Registrar, of (A) such Regulation S Security as
provided in Section 5.4(a) and written instructions satisfactory to the
Property Trustee directing that a beneficial interest in the Restricted
Global Certificate or Regulation S Global Certificate in a specified
Liquidation Amount (or number of Preferred Securities) not greater than
the amount of such Preferred Security be credited to a specified
participant's account and (B) if the transfer is to occur during the
Restricted Period and the specified account is to be credited with a
beneficial interest in the Restricted Global Certificate, a Restricted
Securities Certificate satisfactory to the Property Trustee and duly
executed by such Holder or his attorney duly authorized in writing then
the Property Trustee, as Securities Registrar but subject to Clause
(sic) (b)(vii) [(b)(vi)] below, shall cancel such Regulation S Security
(and issue a new Regulation S Security in respect of any untransferred
portion thereof) as provided in Section 5.4(a) and increase the
Liquidation Amount of (or number of Preferred Securities represented
by) the Restricted Global Certificate or the Regulation S Global
Certificate, as the case may be, by the specified Liquidation Amount
(or number of securities) as provided in Section 5.11(b).
(v) Non-Global Certificate to Non-Global Certificate. A Security
that is not a Global Certificate may be transferred, in whole or in
part, to a Person who takes delivery in the form of another Security
that is not a Global Certificate as provided in Section 5.11, provided
that, if the Security to be transferred in whole or in part is a
Restricted Security, or is a Regulation S Preferred Security and the
transfer is to occur during the Restricted Period, then the Property
Trustee shall have received (A) a Restricted Securities Certificate,
satisfactory to the Property Trustee and duly executed by the
transferor Holder or his attorney duly authorized in writing, in which
case the transferee Holder shall take delivery in the form of a
Restricted Security, or (B) a Regulation S Certificate, satisfactory to
the Property Trustee and duly executed by the transferor Holder or his
attorney duly authorized in writing, in which case the transferee
Holder shall take delivery in the form of a Regulation S Preferred
Security (subject in every case to Section 5.4(c)).
(vi) Regulation S Global Certificate to be Held Through Euroclear
or Cedel during Restricted Period. The Depositor shall use its best
efforts to cause the Clearing Agency to ensure that, until the
expiration of the Restricted Period, beneficial interests in the
Regulation S Global Certificate
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may be held only in or through accounts maintained at the Clearing
Agency by Euroclear or Cedel (or by participants acting for the account
thereof), and no Person shall be entitled to effect any transfer or
exchange that would result in any such interest being held otherwise
than in or through such an account; provided that this Clause (sic)
(b)(vii) [(b)(vi)] shall not prohibit any transfer or exchange of such
an interest in accordance with Clause (b)(ii) or (sic) (vi) [(v)]
above.
(c) Securities Act Legends. Rule 144A Securities, Certificated
Preferred Securities and their respective Successor Securities shall bear a
Restricted Securities Legend as set forth in Section 5.15, and the Regulation S
Preferred Securities and their Successor Securities shall bear a Regulation S
Legend, subject to the following:
(i) subject to the following Clauses of this Section 5.4(c), a
Preferred Security or any portion thereof which is exchanged, upon
transfer or otherwise, for a Global Certificate or any portion thereof
shall bear the Securities Act Legend borne by such Global Certificate
while represented thereby;
(ii) subject to the following Clauses of this Section 5.4(c), a new
Preferred Security which is not a Global Certificate and is issued in
exchange for another Preferred Security (including, a Global
Certificate) or any portion thereof, upon transfer or otherwise, shall
bear the Securities Act Legend borne by such other Preferred Security,
provided that, if such new Preferred Security is required pursuant to
Section 5.4(b)(v) to be issued in the form of a Restricted Security, it
shall bear a Restricted Securities Legend and, if such new Preferred
Security is so required to be issued in the form of a Regulation S
Preferred Security, it shall bear a Regulation S Legend;
(iii) Any Preferred Securities which are sold or otherwise disposed
of pursuant to an effective registration statement under the Securities
Act, together with their Successor Securities shall not bear a
Securities Act Legend; the Depositor shall inform the Property Trustee
in writing of the effective date of any such registration statement
registering the Preferred Securities under the Securities Act and shall
notify the Property Trustee at any time when prospectuses may not be
delivered with respect to Preferred Securities to be sold pursuant to
such registration statement. The Property Trustee shall not be liable
for any action taken or omitted to be taken by it in good faith in
accordance with the aforementioned registration statement;
(iv) at any time after the Preferred Securities may be freely
transferred without registration under the Securities Act or without
being subject to transfer restrictions pursuant to the Securities Act,
a new Preferred Security which does not bear a Securities Act Legend
may be issued in exchange for or in lieu of a Preferred Security (other
than a Global
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Certificate) or any portion thereof which bears such a legend if the
Property Trustee has received an Unrestricted Securities Certificate,
satisfactory to the Property Trustee and duly executed by the Holder of
such legended Preferred Security or his attorney duly authorized in
writing, and after such date and receipt of such certificate, an
Administrative Trustee shall execute on behalf of the Trust by manual
or facsimile signature, and the Property Trustee shall authenticate and
deliver such a new Preferred Security in exchange for or in lieu of
such other Preferred Security as provided in this Article 5;
(v) a new Preferred Security which does not bear a Securities Act
Legend may be issued in exchange for or in lieu of a Preferred Security
(other than a Global Certificate) or any portion thereof which bears
such a legend if, in the Depositor's judgment, placing such a legend
upon such new Preferred Security is not necessary to ensure compliance
with the registration requirements of the Securities Act, and an
Administrative Trustee shall execute on behalf of the Trust by manual
or facsimile signature, and the Property Trustee, at the written
direction of the Depositor, shall authenticate and deliver such a new
Preferred Security as provided in this Article 5; and
(vi) notwithstanding the foregoing provisions of this Section
5.4(c), a Successor Security of a Preferred Securities that does not
bear a particular form of Securities Act Legend shall not bear such
form of legend unless the Depositor has reasonable cause to believe
that such Successor Security is a "restricted security" within the
meaning of Rule 144, in which case an Administrative Trustee shall
execute on behalf of the Trust by manual or facsimile signature, and
the Property Trustee, at the written direction of the Depositor, shall
authenticate and deliver a new Preferred Security bearing a Restricted
Securities Legend in exchange for such Successor Security as provided
in this Article 5.
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust shall execute and make available for authentication and delivery, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust
Securities Certificate, a new Trust Securities Certificate of like denomination.
In connection with the issuance of any new Trust Securities Certificate under
this Section, the Securities Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may
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be imposed in connection therewith. Any duplicative Trust Securities Certificate
issued pursuant to this Section shall constitute conclusive evidence of an
undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
SECTION 5.6. Persons Deemed Securityholders. The Property Trustee and
the Securities Registrar shall treat the Person in whose name any Trust
Securities Certificate shall be registered in the Securities Register as the
owner of such Trust Securities Certificate for the purpose of receiving
Distributions and for all other purposes whatsoever, and neither the Property
Trustee nor the Securities Registrar shall be bound by any notice to the
contrary.
SECTION 5.7. Access to List of Securityholders' Names and Addresses.
The Administrative Trustees or the Depositor shall furnish or cause to be
furnished (unless the Property Trustee is acting as Securities Registrar with
respect to the Trust Securities under the Trust Agreement) a list, in such form
as the Property Trustee may reasonably require, of the names and addresses of
the Securityholders as of the most recent record date (a) to the Property
Trustee, quarterly at least 5 Business Days before each Distribution Date, and
(b) to the Property Trustee, promptly after receipt by the Depositor of a
written request therefor from the Property Trustee in order to enable the
Property Trustee to discharge its obligations under this Trust Agreement, in
each case to the extent such information is in the possession or control of the
Administrative Trustees or the Depositor and is not identical to a previously
supplied list or has not otherwise been received by the Property Trustee in its
capacity as Securities Registrar. The rights of Securityholders to communicate
with other Securityholders with respect to their rights under this Trust
Agreement or under the Trust Securities, and the corresponding rights of the
Trustee shall be as provided in the Trust Indenture Act, except to the extent
Section 3819 of the Delaware Business Trust Act would require greater access to
such information, in which case the latter shall apply. Each Holder, by
receiving and holding a Trust Securities Certificate, and each Owner shall be
deemed to have agreed not to hold the Depositor, the Property Trustee or the
Administrative Trustees accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
SECTION 5.8. Maintenance of Office or Agency. The Securities Registrar
shall maintain in The City of New York an office or offices or agency or
agencies where Preferred Securities Certificates may be surrendered for
registration of transfer, exchange or conversion and where notices and demands
to or upon the Trustees in respect of the Trust Securities Certificates may be
served. The Securities Registrar initially designates 450 W. 33rd Street, 15th
Floor, New York, New York 10001, Attention: Corporate Trustee Administration
Department, as its principal corporate trust office for such purposes. The
Securities Registrar shall give prompt written notice to the Depositor and to
the
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Securityholders of any change in the location of the Securities Register or any
such office or agency.
SECTION 5.9. Appointment of Paying Agent. In the event that the
Preferred Securities are not in book-entry form only, the Trust shall maintain
in the Borough of Manhattan, City of New York, an office or agency (the "Paying
Agent") where the Preferred Securities may be presented for payment. The Paying
Agent shall make Distributions to Securityholders from the Payment Account and
shall report the amounts of such Distributions to the Property Trustee and the
Administrative Trustees. Any Paying Agent shall have the revocable power to
withdraw funds from the Payment Account for the purpose of making the
Distributions referred to above. The Administrative Trustees may revoke such
power and remove the Paying Agent if such Trustees determine in their sole
discretion that the Paying Agent shall have failed to perform its obligations
under this Trust Agreement in any material respect. The Paying Agent shall
initially be the Property Trustee, and any co-paying agent chosen by the
Property Trustee and acceptable to the Administrative Trustees and the
Depositor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Property Trustee and the
Depositor. In the event that the Property Trustee shall no longer be the Paying
Agent or a successor Paying Agent shall resign or its authority to act be
revoked, the Administrative Trustees shall appoint a successor that is
acceptable to the Property Trustee and the Depositor to act as Paying Agent
(which shall be a bank or trust company). Each successor Paying Agent or any
additional Paying Agent shall agree with the Trustees that, as Paying Agent,
such successor Paying Agent or additional Paying Agent will hold all sums, if
any, held by it for payment to the Securityholders in trust for the benefit of
the Securityholders entitled thereto until such sums shall be paid to each
Securityholder. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Property Trustee. The provisions of
Sections 8.1, 8.3 and 8.6 shall apply to the Property Trustee also in its role
as Paying Agent, for so long as the Property Trustee shall act as Paying Agent
and, to the extent applicable, to any other paying agent appointed hereunder.
Any reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
SECTION 5.10. Ownership of Common Securities by Depositor. On the
Closing Date provided for in Section 2.5, the Depositor shall acquire beneficial
and record ownership of the Common Securities. The Depositor has covenanted in
the Indenture to maintain directly or indirectly 100% ownership of the Common
Securities, provided that any permitted successor of the Company under the
Indenture may succeed to the Company's ownership of the Common Securities. To
the fullest extent permitted by law, any attempted transfer of the Common
Securities in violation of that covenant shall be void. The Administrative
Trustees shall cause each Common Securities Certificate to contain a legend
stating, "THIS
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CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO AN ENTITY WHOLLY OWNED BY NEWELL CO.
OR TO CERTAIN SUCCESSORS OF NEWELL CO."
SECTION 5.11. Global Securities; Non-Global Securities; Common
Securities Certificate. (a) Each Global Certificate authenticated under this
Trust Agreement shall be registered in the name of the Clearing Agency
designated by the Depositor for such Global Certificate or a nominee thereof and
delivered to such Clearing Agency or a nominee thereof or custodian therefor,
and each such Global Certificate shall constitute a Preferred Security for all
purposes of this Trust Agreement.
(b) If a Global Certificate is to be exchanged for Certificated
Preferred Securities or canceled in whole, it shall be surrendered by or on
behalf of the Clearing Agency, its nominee or custodian to the Property Trustee,
as Securities Registrar, for exchange or cancellation as provided in this
Article 5. If any Global Certificate is to be exchanged for Certificated
Preferred Securities or cancelled in part, or if another Preferred Security is
to be exchanged in whole or in part for a beneficial interest in any Global
Certificate, in each case, as provided in Section 5.4, then either (i) such
Global Certificate shall be so surrendered for exchange or cancellation as
provided in this Article 5 or (ii) the principal amount thereof (or number of
Preferred Securities represented thereby) shall be reduced or increased by an
amount equal to the portion thereof to be so exchanged or cancelled, or equal to
the principal amount of (or number of securities represented by) such
Certificated Preferred Security to be so exchanged for a beneficial interest
therein, as the case may be, by means of an appropriate adjustment made on the
records of the Property Trustee, as Securities Registrar, whereupon the Property
Trustee, in accordance with the Applicable Procedures, shall instruct the
Clearing Agency or its authorized representative to make a corresponding
adjustment to its records. Upon any such surrender or adjustment of a Global
Certificate, an Administrative Trustee shall execute on behalf of the Trust by
manual or facsimile signature, and the Property Trustee shall, subject to
Section 5.4 and as otherwise provided in this Article 5, authenticate and
deliver any Preferred Securities issuable in exchange for such Global
Certificate (or any portion thereof) to or upon the written order of, and
registered in such names as may be directed by, the Clearing Agency or its
authorized representative. Upon the request of the Property Trustee in
connection with the occurrence of any of the events specified in the preceding
paragraph, the Depositor shall promptly make available to the Property Trustee a
reasonable supply of Preferred Securities that are not in the form of Global
Certificates. The Property Trustee shall be entitled to conclusively rely upon
any order, direction or request of the Clearing Agency or its authorized
representative which is given or made pursuant to this Article 5 if such order,
direction or request is given or made in accordance with the Applicable
Procedures.
(c) Every Preferred Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global
Certificate or any
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portion thereof, whether pursuant to this Article 5 or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Certificate,
unless such Preferred Security is registered in the name of a Person other than
the Clearing Agency for such Global Certificate or a nominee thereof.
(d) The Clearing Agency or its nominee, as registered owner of a Global
Certificate, shall be the holder of such Global Certificate for all purposes
under this Trust Agreement and the Preferred Securities, and owners of
beneficial interests in a Global Certificate shall hold such interests pursuant
to the Applicable Procedures. Accordingly, any such Owner's beneficial interest
in a Global Certificate will be shown only on, and the transfer of such interest
shall be effected only through, records maintained by the Clearing Agency or its
nominee or its participants and such owners of beneficial interests in a Global
Certificate will not be considered the owners or holders of such Global
Certificate for any purpose of this Trust Agreement or the Preferred Securities.
(e) A single Common Securities Certificate representing the Common
Securities shall initially be issued to the Depositor in the form of a
definitive Common Securities Certificate.
SECTION 5.12. Notices to Clearing Agency. To the extent that a notice
or other communication to the Owners is required under this Trust Agreement,
unless and until Definitive Preferred Securities Certificates shall have been
issued to Owners pursuant to Section 5.13, the Trustees shall give all such
notices and communications specified herein to be given to Owners to the
Clearing Agency, and shall have no obligations to provide notices directly to
the Owners.
SECTION 5.13. Definitive Preferred Securities Certificates.
Notwithstanding any other provision in this Trust Agreement, no Global
Certificate may be exchanged in whole or in part for Preferred Securities
registered, and no transfer of a Global Certificate in whole or in part may be
registered, in the name of any Person other than the Clearing Agency for such
Global Certificate or a nominee thereof unless (i) such Clearing Agency (A) has
notified the Trust and the Depositor that it is unwilling or unable to continue
as Clearing Agency for such Global Certificate or (B) has ceased to be a
clearing agency registered as such under the Securities Exchange Act of 1934, as
amended, and in either case the Trust and the Depositor thereupon fail to
appoint a successor Clearing Agency, (ii) the Trust and the Depositor, at their
option, notify the Property Trustee in writing that it elects to cause the
issuance of the Preferred Securities in certificated form or (iii) there shall
have occurred and be continuing an Event of Default or any event which after
notice or lapse of time or both would be an Event of Default. In all cases,
Certificated Preferred Securities delivered in exchange for any Global
Certificate or beneficial interests therein will be registered in the names, and
issued in any approved denominations, requested by or on behalf of the Clearing
Agency (in accordance with its customary procedures).
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SECTION 5.14. Rights of Securityholders. The legal title to the Trust
Property is vested exclusively in the Property Trustee (in its capacity as such)
in accordance with Section 2.9, and the Securityholders shall not have any right
or title therein other than the undivided beneficial interest in the assets of
the Trust conferred by their Trust Securities and they shall have no right to
call for any partition or division of property, profits or rights of the Trust
except as described below. The Trust Securities shall be personal property
giving only the rights specifically set forth therein and in this Trust
Agreement. The Trust Securities shall have no preemptive or similar rights and,
when issued and delivered to Securityholders against payment of the purchase
price therefor, will be fully paid and nonassessable undivided beneficial
interests in the assets of the Trust. The Holders of the Trust Securities, in
their capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 5.15. Restrictive Legends. (a) The Restricted Global
Certificate and the Certificated Preferred Securities shall bear the following
legend (the "Restricted Securities Legend") unless the Depositor determines
otherwise in accordance with applicable law:
"THE SECURITIES EVIDENCED HEREBY AND THE COMMON STOCK ISSUABLE UPON
THEIR CONVERSION AND THE DEBENTURES THAT MAY BE ISSUED IN EXCHANGE THEREFOR HAVE
NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (1) TO A PERSON WHO THE TRANSFEROR AND ANY PERSON ACTING ON
BEHALF OF SUCH TRANSFEROR REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER
ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
IN A TRANSACTION COMPLYING WITH RULE 144A UNDER THE SECURITIES ACT, (2) IN AN
OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE,
IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS."
(b) The Regulation S Preferred Securities shall bear the following
legend (the "Regulation S Legend") unless the Depositor determines otherwise in
accordance with the applicable law:
"THE PREFERRED SECURITIES, THE DEBENTURES, THE SHARES OF COMPANY COMMON
STOCK ISSUABLE UPON CONVERSION OF THE PREFERRED SECURITIES AND THE DEBENTURES,
AND THE
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GUARANTEE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE OFFERED, SOLD OR DELIVERED IN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, ANY U.S. PERSON UNLESS SUCH SECURITIES ARE REGISTERED
UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
THEREOF IS AVAILABLE."
ARTICLE 6
ACT OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Voting Rights. (a) Except as provided in
this Section, in Section 8.2 and 10.2 and in the Indenture and as otherwise
required by law, no Holder of Preferred Securities shall have any right to vote
or in any manner otherwise control the administration, operation and management
of the Trust or the obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the Trust Securities Certificates, be
construed so as to constitute the Securityholders from time to time as partners
or members of an association.
(b) Subject to Section 8.2 hereof, if an Event of Default with respect
to the Preferred Securities has occurred and been subsequently cured, waived or
otherwise eliminated, the provisions of Section 6.1(b)(ii) hereof shall apply.
During (x) the period commencing on the date of the occurrence of an Event of
Default with respect to the Preferred Securities and ending on the date when
such Event of Default is cured, waived or otherwise eliminated, or (y) any
period not described in either the preceding sentence or the preceding clause
(x), the provisions of Section 6.1(b)(i) shall apply.
(i) The Holders of a majority in aggregate Liquidation Amount of
the Preferred Securities will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Property Trustee or to exercise any trust or power conferred upon the
Property Trustee under the Trust Agreement, including the right to
direct the Property Trustee to exercise the remedies available to it as
a holder of the Debentures but excluding the right to direct the
Property Trustee to consent to an amendment, modification or
termination of the Indenture (which shall be as provided below). So
long as any Debentures are held by the Property Trustee, the Trustees
shall not (A) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Debenture Trustee with
respect to such Debentures, (B) waive any past default which is
waivable under Section 5.13 of the Indenture, (C) exercise any right to
rescind or annul a declaration that the principal of all the Debentures
shall be due and payable or (D) consent to any amendment, modification
or
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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 aggregate Liquidation Amount of all
Outstanding Preferred Securities (except in the case of clause (D),
which consent, in the event that no Event of Default shall occur and be
continuing, shall be of the Holders of a majority in aggregate
Liquidation Amount of all Trust Securities, voting together as a single
class); provided, however, that where a consent under the Indenture
would require the consent of each holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee without
the prior written consent of each Holder of Preferred Securities. The
Trustees shall not revoke any action previously authorized or approved
by a vote of the Holders of the Preferred Securities, except by a
subsequent vote of the Holders of the Preferred Securities. The
Property Trustee shall notify all Holders of record of the Preferred
Securities of any notice of default received from the Debenture Trustee
with respect to the Debentures. In addition to obtaining the foregoing
approvals of the Holders of the Preferred Securities, prior to taking
any of the foregoing actions, the Trustees shall, at the expense of the
Depositor, 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 or partnership for United States Federal
income tax purposes on account of such action.
(ii) Subject to Section 8.2 of this Trust Agreement and only after
the Event of Default with respect to the Preferred Securities has been
cured, waived, or otherwise eliminated the Holders of a majority in
aggregate Liquidation Amount of the Common Securities will have the
right to direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee or to exercise any
trust or power conferred upon the Property Trustee under the Trust
Agreement, including the right to direct the Property Trustee to
exercise the remedies available to it as a holder of the Debentures but
excluding the right to direct the Property Trustee to consent to an
amendment, modification or termination of the Indenture (which shall be
as provided below). So long as any Debentures are held by the Property
Trustee, the Trustees shall not (A) direct the time, method and place
of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Debenture
Trustee with respect to such Debentures, (B) waive any past default
which is waivable under Section 5.13 of the Indenture, (C) exercise any
right to rescind or annul a 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, without, in each case, obtaining the
prior approval of the Holders of a majority in aggregate Liquidation
Amount of all Common Securities (except in the case of clause (D),
which consent, in the event that no Event of Default shall occur and be
continuing, shall be of the Holders of
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a majority in aggregate Liquidation Amount of all Trust Securities,
voting together as a single class); provided, however, that where a
consent under the Indenture would require the consent of each holder of
Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of
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 a subsequent vote of the Holders of the Common
Securities. The Property Trustee shall notify all Holders of record of
the Common Securities of any notice of default received from the
Debenture Trustee with respect to the Debentures. In addition to
obtaining the foregoing approvals of the Holders of the Common
Securities, prior to taking any of the foregoing actions, the Trustees
shall, at the expense of the Depositor, 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 or partnership
for United States Federal income tax purposes on account of such
action.
(iii) The provisions of this Section 6.1(b) and Section 6.1(a) of
this Trust Agreement shall be in lieu of Section 316(a)(1)(A) of the
Trust Indenture Act, and such Section 316(a)(1)(A) is hereby expressly
excluded from this Trust Agreement and the Preferred Securities, as
permitted by the Trust Indenture Act.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect the dissolution, winding-up or
termination of the Trust, other than pursuant to the terms of this Trust
Agreement, then the Holders of Outstanding Preferred Securities as a class will
be entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of the Holders of a majority in
aggregate Liquidation Amount of the Outstanding Preferred Securities.
SECTION 6.2. Notice of Meetings. Notice of all meetings of the Holders
of the Preferred Securities, stating the time, place and purpose of the meeting,
shall be given by the Property Trustee pursuant to Section 10.8 to each
Preferred Securityholder of record, at its registered address, at least 15 days
and not more than 90 days before the meeting. At any such meeting, any business
properly before the meeting may be so considered whether or not stated in the
notice of the meeting. Any adjourned meeting may be held as adjourned without
further notice.
SECTION 6.3. Meetings of Preferred Securityholders. No annual meeting
of Securityholders is required to be held. The Administrative Trustees, however,
shall call a meeting of Securityholders to vote on any matter upon the written
request of the Preferred Securityholders of record of 25% of the Preferred
Securities (based upon their Liquidation Amount), and the Administrative
Trustees
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or the Property Trustee may, at any time in their discretion, call a meeting of
the Holders of Preferred Securities to vote on any matters as to which such
Holders are entitled to vote.
Holders of record of 50% of the Preferred Securities (based upon their
Liquidation Amount), present in person or by proxy, shall constitute a quorum at
any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Holders
of record of Preferred Securities present, in person or by proxy, holding a
majority of the Preferred Securities (based upon their Liquidation Amount) held
by Holders of record of Preferred Securities present, either in person or by
proxy, at such meeting shall constitute the action of the Securityholders,
unless this Trust Agreement requires a greater number of affirmative votes.
SECTION 6.4. Voting Rights. Securityholders shall be entitled to one
vote for each $50 of Liquidation Amount represented by their Trust Securities in
respect of any matter as to which such Securityholders are entitled to vote.
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 at such time by the Depositor, the Trustees or any
affiliate of any Trustee shall, for purposes of such vote or consent, be treated
as if such Preferred Securities were not outstanding.
SECTION 6.5. Proxies, Etc. At any meeting of Securityholders, any
Securityholders entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Pursuant to a resolution of the Property
Trustee, proxies may be solicited in the name of the Property Trustee or one or
more officers of the Property Trustee. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons, any
one of them may vote at any meeting in person or represented by proxy in respect
of such Trust Securities, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid more than three years after its date of execution.
SECTION 6.6. Securityholder Action by Written Consent. Any action which
may be taken by Securityholders at a meeting may be taken without a meeting if
Securityholders holding a majority of all Outstanding Trust Securities
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(based upon their Liquidation Amount) entitled to vote in respect of such action
(or such larger proportion thereof as shall be required by any express provision
of this Trust Agreement) shall consent to the action in writing.
SECTION 6.7. Record Date for Voting and Other Purposes. For the
purposes of determining the Securityholders who are entitled to notice of and to
vote at any meeting or by written consent, or to participate in any Distribution
on the Trust Securities in respect of which a record date is not otherwise
provided for in this Trust Agreement, or for the purpose of any other action,
the Property Trustee may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Securityholders or the payment of
Distributions or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.
SECTION 6.8. Acts of Securityholders. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Trust Agreement to be given, made or taken by Securityholders
or Owners may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders or Owners in person
or by an agent duly appointed in writing; and, except as otherwise expressly
provided herein, such action shall become effective when such instrument or
instruments are delivered to an Administrative Trustee. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Securityholders or Owners signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Trust Agreement and (subject to Section 8.1) conclusive in favor of the
Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
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Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article 6, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
Upon the occurrence and continuation of an Event of Default, the
Holders of Preferred Securities shall rely on the enforcement by the Property
Trustee of its rights as holder of the Debentures against the Depositor. If the
Property Trustee fails to enforce its rights as holder of the Debentures after a
request therefor by a Holder of Preferred Securities, such holder may proceed to
enforce such rights directly against the Depositor. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Depositor to pay interest or principal on
the Debentures on the date such interest or principal is otherwise payable (or
in the case of redemption, on the Redemption Date), then a Holder of Preferred
Securities shall have the right to institute a proceeding directly against the
Depositor, for enforcement of payment to such holder of the principal amount of
or interest on Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Preferred Securities of such holder after the
respective due date specified in the Debentures (a "Direct Action"). In
connection with any such Direct Action, the rights of the Depositor will be
subrogated to the rights of any Holder of the Preferred Securities to the extent
of any payment made by the Depositor to such Holder of Preferred Securities as a
result of such Direct Action.
SECTION 6.9. Inspection of Records. Upon reasonable notice to the
Administrative Trustees and the Property Trustee, the records of the Trust shall
be open to inspection by Securityholders during normal business hours for any
purpose reasonably related to such Securityholder's interest as a
Securityholder.
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ARTICLE 7
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee and
the Delaware Trustee. The Property Trustee and the Delaware Trustee, each
severally on behalf of and as to itself, hereby represents and warrants for the
benefit of the Depositor and the Securityholders that (each such representation
and warranty made by the Property Trustee and the Delaware Trustee being made
only with respect to itself):
(a) the Property Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of New York;
(b) the Delaware Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(c) each of the Property Trustee and the Delaware Trustee has full
corporate power, authority and legal right to execute, deliver and perform its
obligations under this Trust Agreement and has taken all necessary action to
authorize the execution, delivery and performance by it of this Trust Agreement;
(d) this Trust Agreement has been duly authorized, executed and
delivered by each of the Property Trustee and the Delaware Trustee and
constitutes the valid and legally binding agreement of the Property Trustee and
the Delaware Trustee enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and
(e) the execution, delivery and performance by each of the Property
Trustee and the Delaware Trustee of this Trust Agreement have been duly
authorized by all necessary corporate or other action on the part of the
Property Trustee and the Delaware Trustee and do not require any approval of
stockholders of the Property Trustee or the Delaware Trustee and such execution,
delivery and performance will not (i) violate either of the Property Trustee's
or the Delaware Trustee's charter or by-laws or (ii) violate any law,
governmental rule or regulation of the United States or the State of Delaware,
as the case may be, governing the banking, corporate, or trust powers of the
Property Trustee or the Delaware Trustee (as appropriate in context) or any
order, judgment or decree applicable to the Property Trustee or the Delaware
Trustee.
SECTION 7.2. Representations and Warranties of Depositor. The Depositor
hereby represents and warrants for the benefit of the Securityholders that:
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(a) the Trust Securities Certificates issued on the Closing Date on
behalf of the Trust have been duly authorized and will have been duly and
validly executed, issued and delivered by the Trustees pursuant to the terms and
provisions of, and in accordance with the requirements of, this Trust Agreement
and the Securityholders will be, as of such date, entitled to the benefits of
this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Property Trustee or the Delaware
Trustee, as the case may be, of this Trust Agreement.
ARTICLE 8
THE TRUSTEES
SECTION 8.1. Certain Duties and Responsibilities. (a) The duties and
responsibilities of the Trustees shall be as provided by this Trust Agreement
and, in the case of the Property Trustee, by the Trust Indenture Act. The
Property Trustee, before the occurrence of any Event of Default and after the
curing or waiving of all Events of Default that may have occurred, shall
undertake to perform only such duties and obligations as are specifically set
forth in this Trust Agreement and the Trust Indenture Act and no implied
covenants shall be read into this Trust Agreement against the Property Trustee.
In case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 8.2) of which a Responsible Officer of the Property Trustee
has actual knowledge, the Property Trustee shall exercise such rights and powers
vested in it by this Trust Agreement and the Trust Indenture Act, and use the
same degree of care and skill in its exercise, as a prudent individual would
exercise or use under the circumstances in the conduct of his or her own
affairs. Notwithstanding the foregoing, no provision of this Trust Agreement
shall require the Trustees to expend or risk their own funds or otherwise incur
any financial liability in the performance of any of their duties hereunder, or
in the exercise of any of their rights or powers, if they shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Trust Agreement relating to the
conduct or affecting the liability of or affording protection to the Trustees
shall be subject to the provisions of this Section. Nothing in this Trust
Agreement shall be construed to release the Administrative Trustees from
liability for their own grossly negligent action, their own grossly negligent
failure to act, or their own willful misconduct. To the extent that, at law or
in equity, an Administrative Trustee has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to the Securityholders, such
Administrative Trustee shall not be liable to the Trust or to any Securityholder
for such Administrative Trustee's good faith reliance on the provisions of this
Trust
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Agreement. The provisions of this Trust Agreement, to the extent that they
restrict the duties and liabilities of the Administrative Trustees otherwise
existing at law or in equity, are agreed by the Depositor and the
Securityholders to replace such other duties and liabilities of the
Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.1(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in
the Trust Indenture Act.
(c) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in aggregate
Liquidation Amount of the Trust Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the custody,
safekeeping and physical preservation of the Debentures and the Payment
Account shall be to deal with such property as fiduciary assets,
subject to the protections and limitations on liability afforded to the
Property Trustee under this Trust Agreement and the Trust Indenture
Act;
(iv) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the
Depositor and money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Payment Account
maintained by the
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Property Trustee pursuant to Section 3.1 and except to the extent
otherwise required by law;
(v) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with
their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor; and
(vi) the Property Trustee shall have no duty or liability with
respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments thereon or in
connection therewith.
SECTION 8.2. Notice of Defaults. (a) Within ten days after the
occurrence of any Event of Default actually known to a Responsible Officer of
the Property Trustee, the Property Trustee shall transmit, in the manner and to
the extent provided in Section 10.8, notice of such Event of Default to the
Holders of Preferred Securities, the Administrative Trustees and the Depositor,
unless such Event of Default shall have been cured or waived, 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 the Board of Directors, the
executive committee, or a trust committee of directors and/or responsible
officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Preferred Securities.
(b) Within ten days after the receipt of notice of the Depositor's
exercise of its right to extend the interest payment period for the Debentures
pursuant to the Indenture, the Property Trustee shall transmit, in the manner
and to the extent provided in Section 10.8, notice of such exercise to the
Securityholders, unless such exercise shall have been revoked.
(c) The Holders of a majority in Liquidation Amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Debenture
Event of Default:
(i) is not waivable under the Indenture, the Event of Default under
this Trust Agreement shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures, including the
consent or vote of all such holders, (a "Super Majority") to be waived
under the Indenture, the Event of Default under this Trust Agreement
may only be waived by the vote of the Holders of the same proportion in
Liquidation
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Amount of the Preferred Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures
outstanding.
The provisions of Section 6.1(b) and this Section 8.2(c) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Trust Agreement and the Preferred 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 Preferred Securities arising therefrom
shall be deemed to have been cured, for every purpose of this Trust Agreement,
but no such waiver shall extend to any subsequent or other default or an Event
of Default with respect to the Preferred Securities or impair any right
consequent thereon. Any waiver by the Holders of the Preferred Securities of an
Event of Default with respect to the Preferred 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 Trust
Agreement without any further act, vote, or consent of the Holders of the Common
Securities.
(d) 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 Debenture
Event of Default:
(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 8.2(d),
the Event of Default under this Trust Agreement 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 this Trust Agreement as provided
below in this Section 8.2(d), the Event of Default under this Trust
Agreement may only be waived by the vote of the Holders of the same
proportion in Liquidation Amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding;
provided further, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Preferred 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 Preferred Securities and only the Holders of the Preferred Securities
will have the right to direct the Property Trustee in accordance with the terms
of the Securities.
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The provisions of Section 6.1(b) and this Section 8.2(d) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Trust Agreement
and the Preferred Securities, as permitted by the Trust Indenture Act. Subject
to the foregoing provisions of this Section 8.2(d), 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 Trust Agreement, 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.
(e) A waiver of an Event of Default under the Indenture by the Property
Trustee at the direction of the Holders of the Preferred Securities, constitutes
a waiver of the corresponding Event of Default under this Trust Agreement. The
foregoing provisions of this Section 8.2(e) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Trust Agreement and
the Preferred Securities, as permitted by the Trust Indenture Act.
SECTION 8.3. Certain Rights of Property Trustee. Subject to the
provisions of Section 8.1:
(a) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder or
transferee such as of a certificate presented for transfer, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if no Event of Default has occurred and is continuing and, (i) in
performing its duties under this Trust Agreement the Property Trustee is
required to decide between alternative courses of action or (ii) in construing
any of the provisions in this Trust Agreement the Property Trustee finds the
same ambiguous or inconsistent with any other provisions contained herein or
(iii) the Property Trustee is unsure of the application of any provision of this
Trust Agreement, then, except as to any matter as to which the Holders of
Preferred Securities are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken and the Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; provided, however, that if the
Property Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably shorter
period
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of time set forth in such notice (which to the extent practicable shall not be
less than two Business Days), it may, but shall be under no duty to, take or
refrain from taking such action not inconsistent with this Trust Agreement as it
shall deem advisable and in the best interests of the Securityholders, in which
event the Property Trustee shall have no liability except for its own bad faith,
negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an Officers'
Certificate and an Opinion of Counsel which, upon receipt of such request, shall
be promptly delivered by the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to accomplish any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel at the Depositor's
expense (which counsel may be counsel to the Depositor or any of its Affiliates,
and may include any of its employees) and the advice of such counsel 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 and in accordance with such advice; and the Property
Trustee shall have the right at any time to seek instructions concerning the
administration of this Trust Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity satisfactory to it against the costs, expenses (including
attorneys' fees and expenses and the expenses of the Property Trustee's agents,
custodians or nominees) and liabilities which might be incurred by it in
compliance with such request or direction;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolutions, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or
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document, but the Property Trustee may make such further inquiry or
investigation into such facts or custodian or nominee matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents, custodians or nominees, attorneys or an Affiliate, provided that the
Property Trustee shall not be responsible for the negligence or recklessness on
the part of any agent, attorney, custodian or nominee appointed by it with due
care hereunder;
(j) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the Trust Securities,
which instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii) shall
be fully protected in conclusively relying on or acting in accordance with such
instructions;
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement;
(l) the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Trust Agreement; and
(m) in the event that the Property Trustee is also acting as a Paying
Agent, Conversion Agent, and/or Securities Registrar hereunder, the rights and
protections afforded to the Property Trustee pursuant to this Article 8 shall
also be afforded to such Paying Agent, Conversion Agent, and/or Securities
Registrar.
No provision of this Trust Agreement shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates shall not
be taken as the statements of the Trustees, and the Trustees do not assume any
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responsibility for their correctness. The Trustees shall not be accountable for
the use or application by the Depositor of the proceeds of the Debentures.
SECTION 8.5. May Hold Securities. Except as provided in the definition
of the term "Outstanding" in Article 1, any Trustee or any other agent of any
Trustee or the Trust, in its individual or any other capacity, may become the
owner or pledgee of Trust Securities and, subject to Section 8.8 and 8.12, may
otherwise deal with the Trust with the same rights it would have if it were not
a Trustee or such other agent.
SECTION 8.6. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay the Trustees from time to time reasonable compensation for
all services rendered by them hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith;
(c) to the fullest extent permitted by applicable law, to indemnify and
hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee, (iii) any
officer, director, shareholder, employee, representative or agent of any
Trustee, and (iv) any employee or agent of the Trust or its Affiliates (referred
to herein as an "Indemnified Person") from and against any loss, damage,
liability, tax, penalty, expense or claim of any kind or nature whatsoever
incurred by such Indemnified Person by reason of the creation, operation,
dissolution or termination of the Trust or in connection with the administration
of the Trust or any act or omission performed or omitted by such Indemnified
Person in good faith on behalf of the Trust and in a manner such Indemnified
Person reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Trust Agreement, except that no Indemnified Person
shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Indemnified Person by reason of negligence or willful
misconduct with respect to such acts or omissions; and
(d) no Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.6.
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SECTION 8.7. Property Trustee Required; Eligibility of Trustees. (a)
There shall at all times be a Property Trustee hereunder with respect to the
Trust Securities. The Property Trustee shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Property Trustee with respect to the Trust
Securities shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.
SECTION 8.8. Conflicting Interests. If the Property Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Property Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Trust Agreement.
SECTION 8.9. Resignation and Removal; Appointment of Successor. (a)
Subject to Sections 8.9(b) and 8.9(c), Trustees (the "Relevant Trustee") may be
appointed or removed without cause at any time:
(i) until the issuance of any Trust Securities, by written
instrument executed by the Depositor; and
(ii) after the issuance of any Securities, by vote of the Holders
of a majority in Liquidation Amount of the Common Securities voting as
a class.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 8.9(a) until a successor possessing the qualifications
to act as a Property Trustee under Section 8.7 (a "Successor Property Trustee")
has
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been appointed and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the Depositor and the
removed Property Trustee.
(c) The Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 8.9(a) until a successor possessing the qualifications
to act as Delaware Trustee under Section 8.7 (a "Successor Delaware Trustee")
has been appointed and has accepted such appointment by instrument executed by
such Successor Delaware Trustee and delivered to the Trust, the Depositor and
the removed Delaware Trustee.
(d) A Trustee appointed to office shall hold office until his, her or
its successor shall have been appointed or until his, her or its death, removal,
resignation, dissolution or liquidation. 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 Depositor 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
Depositor 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;
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by
such Successor Delaware Trustee and delivered to the Trust, the
Depositor and the resigning Delaware Trustee; and
(iii) no appointment of a successor Property Trustee or Delaware
Trustee shall be effective until all fees, charges, and expenses of the
retiring Property Trustee or retiring Delaware Trustee, as the case may
be, have been paid.
(e) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Property Trustee or Successor Delaware
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Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with Section 8.9(d).
(f) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
8.9 within 60 days after delivery pursuant to this Section 8.9 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.
(g) 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.
(h) The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.8 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
(i) Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of the remaining Administrative Trustees
if there are at least two of them or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees or the Delaware Trustee, as the case may be, set
forth in Section 8.7).
(j) The indemnity provided to a Trustee under Section 8.6 shall survive
any Trustee's resignation or removal or termination of this Trust Agreement.
SECTION 8.10. Acceptance of Appointment by Successor. In case of the
appointment hereunder of a successor Relevant Trustee, the retiring Relevant
Trustee and each successor Relevant Trustee shall execute and deliver an
amendment hereto wherein each successor Relevant Trustee shall accept such
appointment and which (a) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Relevant
Trustee all the rights, powers, trusts and duties of the retiring Relevant
Trustee and (b) shall add to or change any of the provisions of this Trust
Agreement as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by
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more than one Relevant Trustee, it being understood that nothing herein or in
such amendment shall constitute such Relevant Trustees co-trustees and upon the
execution and delivery of such amendment the resignation or removal of the
retiring Relevant Trustee shall become effective to the extent provided therein
and each such successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Relevant Trustee; but, on request of the Trust or any successor
Relevant Trustee, such retiring Relevant Trustee shall duly assign, transfer and
deliver to such successor Relevant Trustee all Trust Property, all proceeds
thereof and money held by such retiring Relevant Trustee hereunder.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION 8.11. Merger, Conversion, Consolidation or Succession to
Business. 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 Relevant Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of such Relevant Trustee, shall be the successor of such Relevant
Trustee hereunder, provided such 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.
SECTION 8.12. Preferential Collection of Claims Against Depositor or
Trust. If and when the Property Trustee shall be or become a creditor of the
Depositor or the Trust (or any other obligor upon the Debentures or the Trust
Securities), the Property Trustee shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any such
other obligor).
SECTION 8.13. Reports by Property Trustee. (a) To the extent required
by the Trust Indenture Act, within 60 days after December 31 of each year
commencing with December 31, 1997 the Property Trustee shall transmit to all
Securityholders in accordance with Section 10.8 and to the Depositor, a brief
report dated as of such December 31 with respect to:
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(i) its eligibility under Section 8.7 or, in lieu thereof, if to
the best of its knowledge it has continued to be eligible under said
Section, a written statement to such effect;
(ii) a statement that the Property Trustee has complied with all of
its obligations under this Trust Agreement during the twelve-month
period (or, in the case of the initial report, the period since the
Closing Date) ending with such December 31 or, if the Property Trustee
has not complied in any material respects with such obligations, a
description of such noncompliance;
(iii) any change in the property and funds in its possession as
Property Trustee since the date of its last report and any action taken
by the Property Trustee in the performance of its duties hereunder
which it has not previously reported and which in its opinion
materially affects the Trust Securities; and
(iv) such other information as is required by Section 313(a) of the
Trust Indenture Act.
(b) In addition, the Property Trustee shall transmit to Securityholders
such reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of such report shall, at the time of such transmissions to
Holders, be filed by the Property Trustee with each national securities exchange
or self-regulatory organization upon which the Trust Securities are listed, with
the Commission and with the Depositor.
SECTION 8.14. Reports to the Property Trustee. The Depositor and the
Administrative Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as are required by Section 314
of the Trust Indenture Act (if any) and the compliance certificate required by
Section 314(a) of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 8.15. Evidence of Compliance with Conditions Precedent. Each of
the Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act shall be given in the form of an Officers'
Certificate.
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SECTION 8.16. Number of Trustees. (a) The number of Trustees shall be
five, provided that the Holder of all of the Common Securities by written
instrument may increase or decrease the number of Administrative Trustees. The
Property Trustee and the Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.16(a), or if the
number of Trustees is increased pursuant to Section 8.16(a), a vacancy shall
occur.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to dissolve, terminate or annul the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.9, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 8.17. Delegation of Power. (a) Any Administrative Trustee may,
by power of attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the purpose of executing
any documents contemplated in Section 2.7(a), including any registration
statement or amendment thereof filed with the Commission, or making any other
governmental filing.
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of the Trust, as set forth herein.
ARTICLE 9
DISSOLUTION, LIQUIDATION AND MERGER
SECTION 9.1. Dissolution upon Expiration Date. Unless earlier
dissolved, the Trust shall automatically dissolve on November 24, 2042 (the
"Expiration Date").
SECTION 9.2. Early Dissolution. The first to occur of any of the
following events is an "Early Dissolution Event":
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(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) the occurrence of a Special Event except in the case of a Tax Event
following which the Depositor has elected (i) to pay any Additional Sums (in
accordance with Section 4.4) such that the net amount received by Holders of
Preferred Securities in respect of Distributions are not reduced as a result of
such Tax Event and the Depositor has not revoked any such election or failed to
make such payments or (ii) to redeem all or some of the Debentures pursuant to
Section 4.4(a);
(c) the redemption, conversion or exchange of all of the Trust
Securities;
(d) an order for dissolution of the Trust shall have been entered by a
court of competent jurisdiction; and
(e) receipt by the Property Trustee of written notice from the
Depositor at any time (which direction is optional and wholly within the
discretion of the Depositor) of its intention to dissolve the Trust and
distribute the Debentures in exchange for the Preferred Securities.
SECTION 9.3. Dissolution. The respective obligations and
responsibilities of the Trustees and the Trust created and continued hereby
shall terminate upon the latest to occur of the following: (a) the distribution
by the Property Trustee to Securityholders upon the liquidation of the Trust
pursuant to Section 9.4, or upon the redemption of all of the Trust Securities
pursuant to Section 4.2, of all amounts required to be distributed hereunder
upon the final payment of the Trust Securities; (b) the payment of all expenses
owed by the Trust; and (c) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders.
SECTION 9.4. Liquidation. (a) If an Early Dissolution Event specified
in clause (a), (b), (d) or (e) of Section 9.2 occurs or upon the Expiration
Date, the Trust shall be liquidated by the Trustees as expeditiously as the
Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, to each
Securityholder an aggregate principal amount of Debentures equal to the
aggregate Liquidation Amount of Trust Securities held by such Holder, subject to
Section 9.4(d). Notice of liquidation shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not later than 30 nor more than 60
days prior to the Liquidation Date to each Holder of Trust Securities at such
Holder's address as it appears in the Securities Register. All notices of
liquidation shall:
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(i) state the Liquidation Date;
(ii) state that, from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent an aggregate principal amount of Debentures equal to the
aggregate Liquidation Amount of Preferred Securities held by such
Holder; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for
Debentures, or, if Section 9.4(d) applies, receive a Liquidation
Distribution, as the Administrative Trustees or the Property Trustee
shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect
the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation Date
and, unless the Property Trustee determines otherwise, shall be the date which
is the fifteenth day (whether or not a Business Day) next preceding the
Liquidation Date) and, either itself acting as exchange agent or through the
appointment of a separate exchange agent, shall establish such procedures as it
shall deem appropriate to effect the distribution of Debentures in exchange for
the Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) the Clearing Agency or its nominee, as the record holder of
such Trust Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution
and (iii) any Trust Securities Certificates not held by the Clearing Agency will
be deemed to represent an aggregate principal amount of Debentures equal to the
aggregate Liquidation Amount of Preferred Securities held by such Holders, and
bearing accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on such Trust Securities until such certificates are presented to
the Property Trustee for transfer or reissuance.
(d) In the event that, notwithstanding the other provisions of this
Section 9.4, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practicable, the Trust Property shall be liquidated, and the Trust shall be
wound-up or terminated, by the Property Trustee in such manner as the Property
Trustee determines, and an Administrative Trustee shall prepare, execute and
file the certificate of cancellation with the Secretary of State of the State of
Delaware. In such event, Securityholders will be entitled to receive out of the
assets of the Trust available for
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distribution to Securityholders, after satisfaction of liabilities to creditors
of the Trust as provided by applicable law, an amount equal to the Liquidation
Amount per Trust Security plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution"). If, upon any
such winding-up or termination, the Liquidation Distribution can be paid only in
part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Trust Securities shall be paid
on a pro rata basis (based upon Liquidation Amounts). The Holder of the Common
Securities will be entitled to receive Liquidation Distributions upon any such
winding-up or termination pro rata (determined as aforesaid) with Holders of
Preferred Securities, except that, if a Debenture Event of Default has occurred
and is continuing, the Preferred Securities shall have a priority over the
Common Securities.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of
the Trust. The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, except pursuant to this Section 9.5
or Section 9.4. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the Property Trustee, the
Delaware Trustee or the Holders of the Preferred Securities, the Trust may merge
with or into, consolidate, amalgamate, be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any State; provided, that (i) such successor
entity either 9.6. expressly assumes all of the obligations of the Trust with
respect to the Preferred Securities or (b) substitutes for the Preferred
Securities other securities having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the Successor Securities rank
the same as the Preferred Securities rank in priority with respect to
Distributions and payments upon liquidation, redemption and otherwise, (ii) the
Depositor expressly appoints a trustee of such successor entity possessing the
same powers and duties as the Property Trustee as the holder of the Debentures,
(iii) the Successor Securities are listed, or any Successor Securities will be
listed upon notification of issuance, on any national securities exchange or
other organization on which the Preferred Securities are then listed, if any,
(iv) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose substantially identical to that of the Trust, (vii) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
the Depositor has received an Opinion of Counsel to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely
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affect the rights, preferences and privileges of the Holders of the Preferred
Securities (including any Successor Securities) in any material respect (other
than with respect to any dilution of the Holder's interest in the new entity),
(b) following such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease neither the Trust nor such successor entity will be required
to register as an investment company under the 1940 Act, and (c) following such
merger, consolidation, amalgamation or replacement, the Trust or such successor
entity will be treated as a grantor trust for United States Federal income tax
purposes and (viii) the Depositor or any permitted successor or assignee owns,
directly or indirectly, all of the common securities of such successor entity
and guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding the
foregoing, the Trust shall not, except with the consent of Holders of 100% in
aggregate Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to any other entity or permit
any other entity to consolidate, amalgamate, merge with or into, or replace it
if such consolidation, amalgamation, merger, replacement, conveyance, transfer
or lease would cause the Trust or the successor entity to be classified as other
than a grantor trust for United States Federal income tax purposes.
ARTICLE 10
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Securityholders. Other than as
set forth in Section 9.1, the death, incapacity, dissolution, bankruptcy or
termination of any Person having an interest, beneficial or otherwise, in Trust
Securities shall not operate to dissolve the Trust or terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such Person or any
Securityholder for such Person to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding-up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
SECTION 10.2. Amendment. (a) This Trust Agreement may be amended from
time to time by the Trustees and the Depositor, without the consent of any
Securityholders, (i) to cure any ambiguity, correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this Trust
Agreement, which shall not be inconsistent with the other provisions of this
Trust Agreement, (ii) to modify, eliminate or add to any provisions of this
Trust Agreement to such extent as shall be necessary to ensure that the Trust
will be classified for United States Federal income tax purposes as a grantor
trust at all times that any Trust Securities are Outstanding or to ensure that
the Trust will not
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be required to register as an "investment company" under the 1940 Act, or be
classified as other than a grantor trust for United States Federal income tax
purposes, or (iii) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Trust Agreement under the Trust
Indenture Act; provided, however, that in the case of clause (i), such action
shall not adversely affect in any material respect the interests of any
Securityholder, and any such amendments of this Trust Agreement shall become
effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 10.2(c) hereof, any provision of this
Trust Agreement may be amended by the Trustees and the Depositor with (i) the
consent of Holders representing not less than a majority (based upon Liquidation
Amounts) of the Trust Securities then Outstanding, acting as a single class, 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 Trustee's status as a grantor trust for
United States Federal income tax purposes or the Trust's exemption from the
status of an "investment company" under the 1940 Act, provided, however, if any
amendment or proposal that would adversely affect the powers, preferences or
special rights of the Trust Securities, whether by way of amendment or
otherwise, would adversely affect only the Preferred Securities or only the
Common Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a majority in Liquidation Amount of such class of
Trust Securities.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 6.3 or 6.6 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 6.3 or 6.6 hereof), this
paragraph (c) of this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
the status of an "investment company" under the 1940 Act or be classified as
other than a grantor trust for United States Federal income tax purposes.
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(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
SECTION 10.3. Separability. In case any provision in this Trust
Agreement or in the Trust Securities Certificates shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 10.4. Governing Law. THIS TRUST AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND TRUSTEES WITH RESPECT
TO THIS TRUST AGREEMENT IN THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO ITS
CONFLICT OF LAWS PRINCIPLES AND EXCLUDING SECTIONS 3540 AND 3561 OF TITLE 12
THEREOF.
SECTION 10.5. Payments Due on Non-Business Day. If the date fixed for
any payment on any Trust Security shall be a day which is not a Business Day,
then such payment need not be made on such date but may be made on the next
succeeding day which is a Business Day except as otherwise provided in Section
4.1(a) and Section 4.2(d)), with the same force and effect as though made on the
date fixed for such payment, and no interest shall accrue thereon for the period
after such date.
SECTION 10.6. Successors. This Trust Agreement shall be binding upon
and shall inure to the benefit of any successor to the Depositor, the Trust or
the Relevant Trustee, including any successor by operation of law. Except in
connection with a transaction that is permitted under Article 8 of the Indenture
and pursuant to which the assignee agrees in writing to perform the Depositor's
obligations hereunder, the Depositor shall not assign its obligations hereunder.
SECTION 10.7. Headings. The Article and Section headings are for
convenience only and shall not affect the construction of this Trust Agreement.
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SECTION 10.8. Reports, Notices and Demands. Any report, notice, demand
or other communications which by any provision of this Trust Agreement is
required or permitted to be given or served to or upon any Securityholder or the
Depositor may be given or served in writing by deposit thereof, first-class
postage prepaid, in the United States mail, hand delivery or facsimile
transmission, in each case, addressed, (a) in the case of a Holder of Preferred
Securities, to such Holder as such Holder's name and address may appear on the
Securities Register; and (b) in the case of the Holder of the Common Securities,
to Newell Co., Newell Center, 29 East Stephenson Street, Freeport, Illinois
61032.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee, the Delaware Trustee or the Administrative
Trustees shall be given in writing addressed (until another address is published
by the Trust) as follows: (a) with respect to the Property Trustee, to The Chase
Manhattan Bank, 450 W. 33rd Street, 15th Floor, New York, New York 10001,
Attention: Corporate Trustee Administration Department, (b) with respect to the
Delaware Trustee, to Chase Manhattan Bank Delaware, 1201 Market Street,
Wilmington, Delaware 19801, with a copy of any such notice to the Property
Trustee at its address above, and (c) with respect to the Administrative
Trustees, to them at the address for notices to the Depositor, marked
"Attention: Vice President - Treasurer". Such notice, demand or other
communication to or upon the Trust or the Property Trustee shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the Trust or the Property Trustee.
SECTION 10.9. Agreement Not to Petition. Each of the Trustees and the
Depositor agrees for the benefit of the Securityholders that, until at least one
year and one day after the Trust has been dissolved in accordance with Article
9, it shall not file, or join in the filing of, a petition against the Trust
under any bankruptcy, insolvency, reorganization or other similar law
(including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of any
proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 10.9, the Property Trustee
agrees, for the benefit of Securityholders, that, at the expense of the
Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.9 shall survive the
dissolution of this Trust Agreement.
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust Indenture
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Act that are required to be part of this Trust Agreement and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is the trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Trust Agreement as so modified
or to be excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE
INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER
AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE
BINDING, OPERATIVE AND EFFECTIVE AS THE AGREEMENT OF THE TRUST AND SUCH
SECURITYHOLDER AND SUCH OTHERS.
SECTION 10.12. Counterparts. This Trust Agreement may contain more than
one counterpart of the signature page and this Trust Agreement 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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ARTICLE 11
REGISTRATION RIGHTS
SECTION 11.1. Registration Rights. The Holders of the Preferred
Securities, the Debentures and the Guarantee and the shares of Common Stock of
the Depositor issuable upon conversion of the Debentures and/or the Preferred
Securities are entitled to the benefits of the Registration Rights Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed as of the day and year first above written.
NEWELL CO.,
as Depositor
By: /s/ Dale L. Matschullat
Name: Dale L. Matschullat
Title: Vice President
THE CHASE MANHATTAN BANK,
as Property Trustee
By: /s/ Joanne Adamis
Name: Joanne Adamis
Title: Second Vice President
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By: /s/ John J. Cashin
Name: John J. Cashin
Title: Vice-President
/s/ C.R. Davenport
----------------------------------------
Clarence R. Davenport,
as Administrative Trustee
/s/ Brett E. Gries
----------------------------------------
Brett E. Gries,
as Administrative Trustee
/s/ Ronn L. Claussen
----------------------------------------
Ronn L. Claussen,
as Administrative Trustee
<PAGE> 80
EXHIBIT A -- Certificate of Trust of
Newell Financial Trust I
CERTIFICATE OF TRUST
OF
NEWELL FINANCIAL TRUST I
THIS Certificate of Trust of Newell Financial Trust I (the "Trust"),
dated as of November 24, 1997, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. C. Section 3801 et seq.).
1. Name. The name of the business trust formed hereby is Newell
Financial Trust I.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are Chase
Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first-above written.
CHASE MANHATTAN BANK DELAWARE, not
in its individual capacity but solely as
trustee of the Trust
By: /s/ John J. Cashin
---------------------------------------
Name: John J. Cashin
Title: Vice President
BRETT E. GRIES, not in his individual
capacity but solely as trustee of the Trust
/s/ Brett E. Gries
--------------------------------------------
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EXHIBIT B -- Form of Certificate
Depositary Agreement
B-1
<PAGE> 82
EXHIBIT C -- Form of Common Securities of
Newell Financial Trust I
THE SECURITIES EVIDENCED HEREBY AND THE COMMON STOCK ISSUABLE UPON
THEIR CONVERSION AND THE DEBENTURES THAT MAY BE ISSUED IN EXCHANGE THEREFOR HAVE
NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (1) TO A PERSON WHO THE TRANSFEROR AND ANY PERSON ACTING ON
BEHALF OF SUCH TRANSFEROR REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER
ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
IN A TRANSACTION COMPLYING WITH RULE 144A UNDER THE SECURITIES ACT, (2) IN AN
OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE, IN
COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.
C-1
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THIS CERTIFICATE IS NOT TRANSFERABLE
EXCEPT TO AN ENTITY WHOLLY OWNED BY
NEWELL CO. OR TO CERTAIN SUCCESSORS OF
NEWELL CO.
Certificate Number ______ Number of Common Securities _______
Certificate Evidencing Common Securities
of
Newell Financial Trust I
Common Securities
(Liquidation Amount $50 per Common Security)
Newell Financial Trust I, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that Newell Co.
(the "Holder") is the registered owner of ______________ common securities of
the Trust representing undivided beneficial interests in the assets of the Trust
(the "Common Securities"). Except as set forth in Section 5.10 of the Trust
Agreement (as defined below), the Common Securities are not transferable and any
attempted transfer hereof shall be void. The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust dated
as of December ____, 1997, as the same may be amended from time to time (the
"Trust Agreement") including the designation of the terms of the Common
Securities as set forth therein. The Holder is entitled to the benefits of the
Common Securities Guarantee Agreement entered into by Newell Co., a Delaware
corporation, and The Chase Manhattan Bank, as Guarantee Trustee, dated as of
December ____, 1997 (the "Guarantee"), to the extent provided therein. The Trust
will furnish a copy of the Trust Agreement and the Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
C-2
<PAGE> 84
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ______ day of December 1997.
NEWELL FINANCIAL TRUST I
By: ____________________________________
Name: __________________________________
As Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the within-
mentioned Trust Agreement.
Dated: _______________________
THE CHASE MANHATTAN BANK,
as Property Trustee
By: ____________________________________
Name: __________________________________
Authorized Signatory
C-3
<PAGE> 85
EXHIBIT D -- Form of Preferred Securities of
Newell Financial Trust I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE, INSERT - This
Preferred Security is a Book-Entry Preferred Securities Certificate within the
meaning of the Trust Agreement hereinafter referred to and is registered in the
name of The Depository Trust Company ("DTC") or a nominee of DTC. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than DTC or its nominee only in the limited circumstances described
in the Trust Agreement and no transfer of this Preferred Security (other than a
transfer of this Preferred Security as a whole by DTC to a nominee of DTC or by
a nominee of DTC to DTC or another nominee of DTC) may be registered except in
limited circumstances.
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
["THE SECURITIES EVIDENCED HEREBY AND THE COMMON STOCK ISSUABLE UPON
THEIR CONVERSION AND THE DEBENTURES THAT MAY BE ISSUED IN EXCHANGE THEREFOR HAVE
NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (1) TO A PERSON WHO THE TRANSFEROR AND ANY PERSON ACTING ON
BEHALF OF SUCH TRANSFEROR REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER
ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
IN A TRANSACTION COMPLYING WITH RULE 144A UNDER THE SECURITIES ACT, (2) IN AN
OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE,
IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS."]
D-1
<PAGE> 86
["THE PREFERRED SECURITIES, THE DEBENTURES, THE SHARES OF COMPANY
COMMON STOCK ISSUABLE UPON CONVERSION OF THE PREFERRED SECURITIES AND THE
DEBENTURES, AND THE GUARANTEE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR DELIVERED IN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON UNLESS SUCH
SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS THEREOF IS AVAILABLE."]
D-2
<PAGE> 87
Certificate Number ______ Number of Preferred Securities ________
CUSIP NO. ____________
CERTIFICATE EVIDENCING PREFERRED SECURITIES
OF
NEWELL FINANCIAL TRUST I
____% Convertible Preferred Securities
(Liquidation Amount $50 per Preferred Security)
Newell Financial Trust I, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that
__________________ (the "Holder") is the registered owner of _______ preferred
securities of the Trust representing an undivided beneficial interest in the
assets of the Trust and designated the Newell Financial Trust I ____%
Convertible Preferred Securities (Liquidation Amount $50 per Preferred Security)
(the "Preferred Securities"). Except to the extent set forth in the Trust
Agreement (as defined below), the Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of December ____, 1997 as the same may be
amended from time to time (the "Trust Agreement") including the designation of
the terms of Preferred Securities as set forth therein. The Holder is entitled
to the benefits of the Guarantee Agreement entered into by Newell Co., a
Delaware corporation, and The Chase Manhattan Bank, as Guarantee Trustee, dated
as of December ____, 1997 (the "Guarantee"), to the extent provided therein. The
Trust will furnish a copy of the Trust Agreement and the Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
D-3
<PAGE> 88
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this _____ day of December 1997.
NEWELL FINANCIAL TRUST I
By: ____________________________________
Name: __________________________________
As Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the within-
mentioned Trust Agreement.
Dated: _______________________
THE CHASE MANHATTAN BANK,
as Property Trustee
By: ____________________________________
Name: __________________________________
Authorized Signatory
D-4
<PAGE> 89
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this Preferred Securities Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: ________________________________
Signature: ________________________________
(Sign exactly as your name appears on the other side of this Preferred
Securities Certificate)
1
<PAGE> 90
[TO BE ATTACHED TO GLOBAL CERTIFICATE]
SCHEDULE A
The initial Liquidation Amount of this Global Certificate shall be
$__________. The following increases or decreases in the Liquidation Amount of
this Global Certificate have been made:
<TABLE>
<CAPTION>
==================================================================================================================================
Amount of increase in
Liquidation Amount of
this Global Certificate Liquidation Amount of Signature of
including upon Amount of decrease in this Global Certificate authorized officer of
exercise of over- Liquidation Amount of following such Trustee or Securities
Date Made allotment option this Global Certificate decrease or increase Custodian
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
==================================================================================================================================
</TABLE>
2
<PAGE> 91
EXHIBIT E -- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to Sections 5.4(b)(i), (iii), (iv) and (v)
of the Trust Agreement)
[Property Trustee]
Attention: Corporate Trust Department
Re: ____% Convertible Quarterly Income Preferred
Securities of Newell Financial Trust I (the "Securities")
Reference is made to the Amended and Restated Trust Agreement, dated as
of December ____, 1997 (as amended from time to time, the "Trust Agreement"),
among Newell Co. (the "Company"), The Chase Manhattan Bank, Chase Manhattan Bank
Delaware, the Administrative Trustees named therein and the holders, from time
to time, of undivided beneficial interests in the assets of the Trust. Terms
used herein and defined in the Trust Agreement or in Regulation S or Rule 144
under the U.S. Securities Act of 1933, as amended (the "Securities Act") are
used herein as so defined.
This certificate relates to _________ shares of Securities, which are
evidenced by the following certificate(s) (the "Specified Securities"):
CUSIP No(s).: ______________________________
CERTIFICATE No(s).: ______________________________
The Person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Certificate, they are
held through the Clearing Agency or participant in the name of the Undersigned,
as or on behalf of
E-1
<PAGE> 92
the Owner. If the Specified Securities are not represented by a Global
Certificate, they are registered in the name of the Undersigned, as or on behalf
of the Owner.
The Owner has requested that the Specified Securities be transferred to
a person (the "Transferee") who will take delivery in the form of a Regulation S
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
904 or Rule 144 under the Securities Act and with all applicable securities laws
of the states of the United States and other jurisdictions. Accordingly, the
Owner hereby further certifies as follows:
(1) Rule 904 Transfers. If the transfer is being effected in accordance
with Rule 904:
(A) the Owner is not a distributor of the Securities, an affiliate of
the Company or any such distributor or a person acting on behalf of any of the
foregoing;
(B) the offer of the Specified Securities was not made to a person in
the United States;
(C) either:
(i) at the time the buy order was originated, the Transferee was
outside the United States or the Owner and any person acting on its
behalf reasonably believed that the Transferee was outside the United
States, or
(ii) the transaction is being executed in, on or through the
facilities of the Eurobond market, as regulated by the Association of
International Bond Dealers, or another designated offshore securities
market and neither the Owner nor any person acting on its behalf knows
that the transaction has been prearranged with a buyer in the United
States;
(D) no directed selling efforts have been made in the United States by
or on behalf of the Owner or any affiliate thereof;
(E) if the Owner is a dealer in securities or has received a selling
concession, fee or other remuneration in respect of the Specified Securities,
and the transfer is to occur during the Restricted Period, then the requirements
of Rule 904(c)(1) have been satisfied; and
E-2
<PAGE> 93
(F) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected pursuant to
Rule 144:
(A) the transfer is occurring after a holding period of at least one
year (computed in accordance with paragraph (d) of Rule 144) has lapsed since
the Specified Securities were last acquired from the Trust or from an affiliate
of the Trust, whichever is later, and is being effected in accordance with the
applicable amount, manner of sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at least two
years has elapsed since the Specified Securities were last acquired from the
Trust or from an affiliate of the Trust, whichever is later, and the Owner is
not, and during the preceding three months has not been, an affiliate of the
Trust.
E-3
<PAGE> 94
This certificate and the statements contained herein are made for your
benefit and the benefit of the Trust and the Purchasers.
Dated: __________________________________
(Print the name of the Undersigned, as
such term is defined in the second paragraph
of this certificate)
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the
Undersigned must be stated.)
E-4
<PAGE> 95
EXHIBIT F -- Form of Restricted
Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Sections 5.4(b)(ii), (iii), (iv)
and (v) of the Trust Agreement)
[Property Trustee]
Attention: Corporate Trust Department
Re: ____% Convertible Quarterly Income Preferred
Securities of Newell Financial Trust I (the "Securities")
Reference is made to the Amended and Restated Trust Agreement, dated as
of December ____, 1997 (as amended from time to time, the "Trust Agreement"),
among Newell Co. (the "Company"), The Chase Manhattan Bank, Chase Manhattan Bank
Delaware, the Administrative Trustees named therein and the holders, from time
to time, of undivided beneficial interests in the assets of the Trust. Terms
used herein and defined in the Trust Agreement or in Regulation S or Rule 144
under the U.S. Securities Act of 1933, as amended (the "Securities Act") are
used herein as so defined.
This certificate relates to _________ shares of Securities, which are
evidenced by the following certificate(s) (the "Specified Securities"):
CUSIP No(s).: ________________________
CERTIFICATE No(s).: ________________________
The Person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Certificate, they are
held through the Clearing Agency or participant in the name of the Undersigned,
as or on behalf of
F-1
<PAGE> 96
the Owner. If the Specified Securities are not represented by a Global
Certificate, they are registered in the name of the Undersigned, as or on behalf
of the Owner.
The Owner has requested that the Specified Securities be transferred to
a person (the "Transferee") who will take delivery in the form of a Restricted
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
144A or Rule 144 under the Securities Act and all applicable securities laws of
the states of the United States and other jurisdictions. Accordingly, the Owner
hereby further certifies as follows:
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to a person that the
Owner and any person acting on its behalf reasonably believe is a
"qualified institutional buyer" within the meaning of Rule 144A, acquiring
for its own account or for the account of a qualified institutional buyer;
and
(B) the Owner and any person acting on its behalf have taken reasonable
steps to ensure that the Transferee is aware that the Owner may be relying
on Rule 144A in connection with the transfer; and
(2) Rule 144 Transfers. If the transfer is being effected pursuant to
Rule 144:
(A) the transfer is occurring after a holding period of at least one
year (computed in accordance with paragraph (d) of Rule 144) has elapsed
since the Specified Securities were last acquired from the Trust or from an
affiliate of the Trust, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale, and notice
requirements of rule 144; or
(B) the transfer is occurring after a holding period of at least two
years has elapsed since the Specified Securities were last acquired from
the Trust or from an affiliate of the Trust, whichever is later, and the
Owner is not, and during the preceding three months has not been, an
affiliate of the Trust.
(3) Regulation S Transfers. If the transfer is being effected in
accordance with Regulation S:
F-2
<PAGE> 97
(A) the transfer is being made to a person who is not a U.S. person; or
(B) the transferee is not acquiring such Specified Securities for the
account or benefit of any U.S. person.
This certificate and the statements contained herein are made for your
benefit and benefit of the Trust and the Purchasers.
Dated: __________________
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
(If the Undersigned is a
corporation, partnership or
fiduciary, the title of the person
signing on behalf of the
Undersigned must be stated.)
F-3
<PAGE> 98
EXHIBIT G -- Form of Unrestricted
Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to Section 5.4(c))
[Property Trustee]
Attention: Corporate Trust Department
Re: ____% Convertible Quarterly Income Preferred
Securities of Newell Financial Trust I (the "Securities")
Reference is made to the Amended and Restated Trust Agreement, dated as
of December ____, 1997 (as amended from time to time, the "Trust Agreement"),
among Newell Co. (the "Company"), The Chase Manhattan Bank, Chase Manhattan Bank
Delaware, the Administrative Trustees named therein and the holders, from time
to time, of undivided beneficial interests in the assets of the Trust. Terms
used herein and defined in the Trust Agreement or in Regulation S or Rule 144
under the U.S. Securities Act of 1933, as amended (the "Securities Act") are
used herein as so defined.
This certificate relates to ________________ shares of Securities,
which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).: ____________________________
CERTIFICATE No(s).: ____________________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Certificate, they are
held through the Clearing Agency or participant in the name of the Undersigned,
as or on behalf of the Owner. If the Specified Securities are not represented by
a Global Certificate, they are registered in the name of the Undersigned as or
on behalf of the Owner.
G-1
<PAGE> 99
The Owner has requested that the Specified Securities be exchanged for
Securities bearing no Securities Act Legend pursuant to Section 5.4(c) of the
Trust Agreement. In connection with such exchange, the Owner hereby certifies
that the exchange is occurring after a holding period of at least two years
(computed in accordance with paragraph (d) of Rule 144) has elapsed since the
Specified Securities were last acquired from the Trust or from an affiliate of
the Trust, whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Trust. The Owner also
acknowledges that any future transfers of the Specified Securities must comply
with all applicable securities laws of the states of the United States and other
jurisdictions.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Trust and the Purchasers.
Dated: __________________
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
(If the Undersigned is a
corporation, partnership or
fiduciary, the title of the person
signing on behalf of the
Undersigned must be stated.)
G-2
<PAGE> 100
EXHIBIT H -- Notice of Conversion
NOTICE OF CONVERSION
To: The Chase Manhattan Bank,
as Property Trustee of
Newell Financial Trust I
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock of Newell Co. (the "Newell Common Stock") in
accordance with the terms of the Amended and Restated Trust Agreement (as
amended from time to time, the "Trust Agreement"), dated as of December ____,
1997, by ________________, __________________ and ___________ ___________, as
Administrative Trustees, Chase Manhattan Bank Delaware, as Delaware Trustee, The
Chase Manhattan Bank, as Property Trustee, Newell Co., as Depositor, and by the
Holders, from time to time, of undivided beneficial interests in the assets of
the Trust to be issued pursuant to the Trust Agreement. Pursuant to the
aforementioned exercise of the option to convert these Preferred Securities, the
undersigned hereby directs the Conversion Agent (as that term is defined in the
Trust Agreement) to (i) exchange such Preferred Securities for a portion of the
Debentures (as that term is defined in the Trust Agreement) held by the Trust
(at the rate of exchange specified in the terms of the Preferred Securities set
forth in the Trust Agreement) and (ii) immediately convert such Debentures on
behalf of the undersigned, into Newell Common Stock (at the conversion rate
specified in the terms of the Preferred Securities set forth in the Trust
Agreement).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Trust Agreement and the Preferred Securities, agrees to be
bound by the terms of the Registration Rights Agreement relating to the Newell
Common Stock issuable upon conversion of the Preferred Securities.
H-1
<PAGE> 101
Date: ___________________________
in whole _____ in part _____
Number of Preferred Securities to be converted:
_______________________________________________
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the shares of Newell Common
Stock are to be issued, along with the address
or addresses of such person or persons
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
_______________________________________________
_______________________________________________
_______________________________________________
Signature Guarantee:* _______________________________________________
- --------
* (Signature must be guaranteed by an institution which is a member of
the following recognized Signature Guaranty Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) The New York
Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange
Medallion Program (SEMP); or (iv) in such other guarantee programs
acceptable to the Trustee.
H-2
<PAGE> 1
EXHIBIT 4.3
- --------------------------------------------------------------------------------
NEWELL CO.
to
THE CHASE MANHATTAN BANK,
as Trustee
----------------------------------------------------------
JUNIOR CONVERTIBLE SUBORDINATED INDENTURE
DATED AS OF DECEMBER 12, 1997
----------------------------------------------------------
5 1/4% CONVERTIBLE SUBORDINATED DEBENTURES
DUE DECEMBER 1, 2027
- --------------------------------------------------------------------------------
<PAGE> 2
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 Junior Convertible
Subordinated Indenture whether or not physically contained therein) and the
Junior Convertible Subordinated Indenture, dated as of December 12, 1997.
<TABLE>
<CAPTION>
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
- --------------- ---------
<S> <C>
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
(b)(2)..........................................................................7.3(a)
Section 312(a).............................................................................7.1
........................................................................7.2(a), 7.2(b)
(c).............................................................................7.2(c)
Section 313(a)..................................................................7.3(a), 7.3(b)
(b).............................................................................7.3(a)
(c).............................................................................7.3(a)
(d).............................................................................7.3(c)
Section 314(a)(1), (2),(3) and (4).........................................................7.4
(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)
(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)............................................................................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
</TABLE>
<PAGE> 3
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Convertible Subordinated Indenture.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<S> <C> <C>
SECTION 1.1 Definitions............................................................1
SECTION 1.2 Compliance Certificate and Opinions...................................10
SECTION 1.3 Forms of Documents Delivered to Trustee...............................11
SECTION 1.4 Acts of Holders.......................................................11
SECTION 1.5 Notices, Etc. to Trustee and Company..................................12
SECTION 1.6 Notice to Holders; Waiver.............................................13
SECTION 1.7 Conflict with Trust Indenture Act.....................................13
SECTION 1.8 Effect of Headings and Table of Contents..............................13
SECTION 1.9 Successors and Assigns................................................13
SECTION 1.10 Separability Clause...................................................13
SECTION 1.11 Benefits of Indenture.................................................13
SECTION 1.12 Governing Law.........................................................14
SECTION 1.13 Non-Business Days.....................................................14
ARTICLE 2
DEBENTURE FORM
SECTION 2.1 Forms Generally.......................................................14
SECTION 2.2 Form of Face of Debenture.............................................14
SECTION 2.3 Form of Reverse of Debenture..........................................15
SECTION 2.4 Additional Provisions Required in Global Debenture....................24
SECTION 2.5 Form of Trustee's Certificate of Authentication.......................24
SECTION 2.6 Initial Issuance to Property Trustee..................................24
ARTICLE 3
THE DEBENTURES
SECTION 3.1 Amount of Debentures..................................................25
SECTION 3.2 Denominations.........................................................25
SECTION 3.3 Execution, Authentication, Delivery and Dating........................25
SECTION 3.4 Temporary Debentures..................................................25
SECTION 3.5 Registration, Transfer and Exchange...................................26
SECTION 3.6 Mutilated, Destroyed, Lost and Stolen Debentures......................27
SECTION 3.7 Payment of Interest; Interest Rights Preserved........................28
SECTION 3.8 Persons Deemed Owners.................................................29
SECTION 3.9 Cancellation..........................................................29
SECTION 3.10 Computation of Interest...............................................29
SECTION 3.11 Deferrals of Interest Payment Dates...................................29
</TABLE>
i
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 3.12 Right of Set-off......................................................30
SECTION 3.13 Agreed Tax Treatment..................................................30
SECTION 3.14 CUSIP Numbers.........................................................31
SECTION 3.15 Global Security.......................................................31
ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture...............................32
SECTION 4.2 Application of Trust Money............................................33
ARTICLE 5
REMEDIES
SECTION 5.1 Events of Default.....................................................34
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment....................35
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee.......36
SECTION 5.4 Trustee May File Proofs of Claim......................................36
SECTION 5.5 Trustee May Enforce Claim Without Possession of Debentures............37
SECTION 5.6 Application of Money Collected........................................37
SECTION 5.7 Limitation on Suits...................................................38
SECTION 5.8 Unconditional Right of Holders to Receive
Principal, Premium and Interest.......................................38
SECTION 5.9 Restoration of Rights and Remedies....................................39
SECTION 5.10 Rights and Remedies Cumulative........................................39
SECTION 5.11 Delay or Omission Not Waiver..........................................39
SECTION 5.12 Control by Holders....................................................39
SECTION 5.13 Waiver of Past Defaults...............................................40
SECTION 5.14 Undertaking for Costs.................................................40
SECTION 5.15 Waiver of Usury, Stay, or Extension Laws..............................41
ARTICLE 6
THE TRUSTEE
SECTION 6.1 Certain Duties and Responsibilities...................................41
SECTION 6.2 Notice of Defaults....................................................42
SECTION 6.3 Certain Rights of Trustee.............................................42
SECTION 6.4 Not Responsible for Recitals or Issuance of Debentures................43
SECTION 6.5 May Hold Debentures...................................................44
SECTION 6.6 Money Held in Trust...................................................44
SECTION 6.7 Compensation and Reimbursement........................................44
SECTION 6.8 Disqualification; Conflicting Interests...............................44
SECTION 6.9 Corporate Trustee Required; Eligibility...............................45
SECTION 6.10 Resignation and Removal; Appointment of Successor.....................45
SECTION 6.11 Acceptance of Appointment by Successor................................46
</TABLE>
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SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business...........47
SECTION 6.13 Preferential Collection of Claims Against Company.....................47
SECTION 6.14 Appointment of Authenticating Agent...................................47
ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1 Company to Furnish Names and Addresses of Holders.....................49
SECTION 7.2 Preservation of Information: Communications to Holders...............49
SECTION 7.3 Reports by Trustee....................................................49
SECTION 7.4 Reports by Company....................................................50
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1 Company May Consolidate, Etc., Only on Certain Terms..................50
SECTION 8.2 Successor Corporation Substituted.....................................51
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Holders....................51
SECTION 9.2 Supplemental Indentures with Consent of Holders.......................52
SECTION 9.3 Execution of Supplemental Indentures..................................53
SECTION 9.4 Effect of Supplemental Indentures.....................................53
SECTION 9.5 Conformity with Trust Indenture Act...................................54
SECTION 9.6 Reference in Debentures to Supplemental Indentures....................54
ARTICLE 10
COVENANTS
SECTION 10.1 Payment of Principal, Premium and Interest...................................54
SECTION 10.2 Maintenance of Office or Agency..............................................54
SECTION 10.3 Money for Debenture Payments to Be Held in Trust.............................54
SECTION 10.4 Payment of Taxes and Other Claims............................................55
SECTION 10.5 Statement as to Compliance...................................................56
SECTION 10.6 Waiver of Certain Covenants..................................................56
SECTION 10.7 Additional Sums..............................................................56
SECTION 10.8 Additional Covenants.........................................................56
SECTION 10.9 Registration Rights..........................................................57
SECTION 10.10 Payment of Expenses of the Trust.............................................57
</TABLE>
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ARTICLE 11
REDEMPTION OR EXCHANGE OF DEBENTURES
<S> <C> <C>
SECTION 11.1 Election to Redeem; Notice to Trustee........................................58
SECTION 11.2 Selection of Debentures to Be Redeemed.......................................58
SECTION 11.3 Notice of Redemption.........................................................59
SECTION 11.4 Deposit of Redemption Price..................................................59
SECTION 11.5 Debentures Payable on Redemption Date........................................60
SECTION 11.6 Debentures Redeemed in Part..................................................60
SECTION 11.7 Mandatory Redemption.........................................................61
SECTION 11.8 Optional Redemption..........................................................61
SECTION 11.9 Exchange of Trust Securities for Debentures..................................61
ARTICLE 12
SUBORDINATION OF DEBENTURES
SECTION 12.1 Debentures Subordinate to Senior Debt........................................62
SECTION 12.2 Payment Over of Proceeds Upon Dissolution, Etc...............................62
SECTION 12.3 Prior Payment to Senior Debt upon Acceleration of Debentures.................63
SECTION 12.4 No Payment When Senior Debt in Default.......................................64
SECTION 12.5 Payment Permitted If No Default..............................................64
SECTION 12.6 Subrogation to Rights of Holders of Senior Debt..............................65
SECTION 12.7 Provisions Solely to Define Relative Rights..................................65
SECTION 12.8 Trustee to Effectuate Subordination..........................................65
SECTION 12.9 No Waiver of Subordination Provisions........................................65
SECTION 12.10 Notice to Trustee............................................................65
SECTION 12.11 Reliance on Judicial Order or Certificate of Liquidating Agent...............66
SECTION 12.12 Trustee Not Fiduciary for Holders of Senior Debt.............................66
SECTION 12.13 Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights..........................................................66
SECTION 12.14 Article Applicable to Paying Agents..........................................66
SECTION 12.15 Certain Conversions or Exchanges Deemed Payment..............................66
ARTICLE 13
CONVERSION OF DEBENTURES
SECTION 13.1 Conversion Rights............................................................67
SECTION 13.2 Conversion Procedures........................................................67
SECTION 13.3 Expiration of Conversion Rights..............................................70
SECTION 13.4 Conversion Price Adjustments.................................................70
SECTION 13.5 Fundamental Change...........................................................74
SECTION 13.6 Notice of Adjustments of Conversion Price....................................75
SECTION 13.7 Prior Notice of Certain Events...............................................76
SECTION 13.8 Certain Additional Rights....................................................77
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SECTION 13.9 Restrictions on Company Common Stock
Issuable Upon Conversion..............................................77
SECTION 13.10 Trustee Not Responsible for Determining Conversion
Price or Adjustments..................................................78
</TABLE>
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<PAGE> 9
JUNIOR CONVERTIBLE SUBORDINATED INDENTURE, dated as of December 12, 1997
between NEWELL CO., a Delaware corporation (the "Company") having its principal
office at Newell Center, 29 East Stephenson Street, Freeport, Illinois 61032,
and THE CHASE MANHATTAN BANK, a New York banking corporation ("Chase"), as
Trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its 5 1/4% Convertible Subordinated
Debentures (the "Debentures") of substantially the tenor hereinafter provided
which evidence loans made to the Company of the proceeds from the issuance by
Newell Financial Trust I, a Delaware business trust (the "Trust"), of preferred
trust interests in the Trust (the "Preferred Securities") and common interests
in the Trust (the "Common Securities"), and to provide the terms and conditions
upon which the Debentures are to be authenticated, issued and delivered.
All things necessary to make the Debentures, 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
Debentures by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Debentures, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 Definitions. For all purpose of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) 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; and
(d) the words "herein" 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.
<PAGE> 10
"Additional Interest" means the interest, if any, that shall accrue on
any interest on the Debentures that is in arrears for more than one interest
payment period or not paid during any Extension Period, which in either case (to
the extent permitted by law) shall accrue at the stated rate per annum specified
or determined as specified in such Debenture and compounded quarterly.
"Additional Sums" has the meaning specified in Section 10.7.
"Additional Taxes" means the sum of any additional taxes, duties and
other governmental charges to which the Trust has become subject from time to
time as a result of a Tax Event.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Company shall be deemed not to include the Trust to which Debentures have been
issued. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Applicable Price" means (i) in the case of a Non-Stock Fundamental
Change in which the holders of Company Common Stock receive only cash, the
amount of cash received by the holder of one share of Company Common Stock and
(ii) in the event of any other Non-Stock Fundamental Change or any Common Stock
Fundamental Change, the average of the Closing Prices for Company Common Stock
during the ten trading days prior to and including the record date for the
determination of the holders of Company Common Stock entitled to receive such
securities, cash, or other property in connection with such Non-Stock
Fundamental Change or Common Stock Fundamental Change or, if there is no such
record date, the date upon which the holders of Company Common Stock shall have
the right to receive such securities, cash, or other property, in each case as
adjusted in good faith by the Company to appropriately reflect any of the events
referred to in Section 13.4.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Debentures.
"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 the resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of the Company to which authority to act on behalf of the Board of Directors has
been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in the City of New York are authorized or required by
law or executive order to remain closed or a day on which the Corporate Trust
Office of the Trustee, or the principal office of the Property Trustee under the
Trust Agreement, is closed for business.
2
<PAGE> 11
"Closing Price" means on any day the reported last sale price on such
day or, in case no sale takes place on such day, the average of the reported
closing bid and asked prices in each case on the NYSE Consolidated Transactions
Tape or, if the stock is not listed or admitted to trading on such Exchange, on
the principal national securities exchange on which such stock is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices as
furnished by any NYSE member firm, selected by the Trustee for that purpose.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Common Securities" has the meaning specified in the first recital of
this Indenture.
"Common Stock Fundamental Change" means any Fundamental Change in which
more than 50% of the value (as determined in good faith by the Board of
Directors) of the consideration received by holders of Company Common Stock
consists of common stock that for each of the ten consecutive trading days prior
to the record date for the determination of the holders of Company Common Stock
entitled to receive such common stock or, if there is no such record date, the
date on which the holders of Company Common Stock shall have the right to
receive such common stock, has been admitted for listing or admitted for listing
subject to notice of issuance on a national securities exchange or quoted on the
Nasdaq National Market; provided, however, that a Fundamental Change shall not
be a Common Stock Fundamental Change unless either (i) the Company continues to
exist after the occurrence of such Fundamental Change and the outstanding
Preferred Securities continue to exist as outstanding Preferred Securities or
(ii) not later than the occurrence of such Fundamental Change, the outstanding
Preferred Securities are converted into or exchanged for shares of convertible
preferred stock of an entity succeeding to the business of the Company or a
subsidiary thereof, which convertible preferred stock has powers, preferences,
and relative, participating, optional, or other rights, and qualifications,
limitations, and restrictions, substantially similar to those of the Preferred
Securities.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Common Stock" means common stock, par value $1.00, of the
Company.
"Company Request" and "Company Order" means, respectively, the written
request or order signed in the name of the Company by its Chairman of the Board,
its Vice Chairman, its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Controller, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Conversion Agent" has the meaning specified in Section 13.2.
"Conversion Date" has the meaning specified in Section 13.2.
3
<PAGE> 12
"Conversion Price" has the meaning specified in Section 13.1.
"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 hereof is located at 450 W. 33rd Street, 15th Floor,
New York, New York 10001, Attention: Corporate Trustee Administration.
"Current Market Price" means for any day the last reported sale price,
regular way, on such day of Company Common Stock, or, if no sale takes place on
such day, the average of the reported closing bid and asked prices on such day,
regular way, in either case as reported on the NYSE Consolidated Transactions
Tape, or, if Company Common Stock is not listed or admitted to trading on the
NYSE on such day, on the principal national securities exchange on which Company
Common Stock is listed or admitted to trading, if Company Common Stock is listed
on a national securities exchange, or the Nasdaq National Market, or, if Company
Common Stock is not quoted or admitted to trading on such quotation system, on
the principal quotation system on which Company Common Stock may be listed or
admitted to trading or quoted, or, if not listed or admitted to trading or
quoted on any national securities exchange or quotation system, the average of
the closing bid and asked prices of Company Common Stock in the over-the-counter
market on the day in question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting service, or, if not so
available in such manner, as furnished by any NYSE member firm selected from
time to time by the Board of Directors for that purpose or, if not so available
in such manner, as otherwise determined in good faith by the Board of Directors.
"Debentures" or "Debenture" means any debt securities or debt security,
as the case may be, authenticated and delivered under this Indenture.
"Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person, and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible for or liable, directly or indirectly,
as obligor or otherwise.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means, with respect to the Debentures issuable or issued in
whole or in part in the form of one or more Global Debentures, the Person
designated as Depositary by the Company (or any successor thereto).
"Dollar" means the currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debts.
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<PAGE> 13
"Events of Default" has the meaning specified in Article 5.
"Expiration Time" has the meaning specified in Section 13.4(e).
"Extension Period" has the meaning specified in Section 3.11.
"Fundamental Change" means the occurrence of any Transaction or event in
connection with a plan pursuant to which all or substantially all of Company
Common Stock shall be exchanged for, converted into, acquired for, or constitute
solely the right to receive securities, cash, or other property (whether by
means of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization, or otherwise); provided, that,
in the case of a plan involving more than one such Transaction or event, for
purposes of adjustment of the conversion price, such Fundamental Change shall be
deemed to have occurred when substantially all of Company Common Stock shall be
exchanged for, converted into, or acquired for or constitute solely the right to
receive securities, cash, or other property, but the adjustment shall be based
upon consideration that a holder of Company Common Stock received in such
Transaction or event as a result of which more than 50% of Company Common Stock
shall have been exchanged for, converted into, or acquired for or constitute
solely the right to receive securities, cash, or other property.
"Global Debenture" means a Debenture in the form prescribed in Section
2.4 evidencing all or part of the Debentures, issued to the Depositary or its
nominee, and registered in the name of such Depositary or its nominee.
"Guarantee" means the guarantee by the Company of distributions on the
Preferred Securities of the Trust to the extent provided in the Guarantee
Agreement, substantially in the form attached hereto as Annex C, as amended from
time to time.
"Holder" means a Person in whose name a Debenture is registered in the
Securities Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Initial Purchasers" with respect to the Preferred Securities, means
Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated, Robert W. Baird & Co.
Incorporated, Bear, Stearns & Co. Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
"Interest Payment Date" means as to the Debentures the Stated Maturity
of an installment of interest on such Debentures.
"Interest Rate" means the rate of interest specified or determined as
specified in each Debenture as being the rate of interest payable on such
Debenture.
5
<PAGE> 14
"Investment Company Event" means, in respect of the Trust, the receipt
by the Property Trustee, on behalf of the Trust of an Opinion of Counsel,
rendered by a law firm having a national tax and securities practice (which
opinion shall not have been rescinded by such law firm), to the effect that, as
a result of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
there is more than an insubstantial risk that the Trust is or will be considered
an "investment company" that is required to be registered under the 1940 Act,
which Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities of the Trust.
"Junior Subordinated Payment" has the meaning specified in Section 12.2.
"Liquidated Damages" has the meaning specified in the form of reverse of
Debenture set forth in Section 2.3.
"Maturity" when used with respect to the Debentures, means the date on
which the principal of the Debentures become due and payable as herein provided,
whether at the Stated Maturity or by declaration of acceleration, call or
redemption or otherwise.
"1940 Act" means the Investment Company Act of 1940, as amended.
"Non Book-Entry Preferred Securities" has the meaning specified in
Section 3.15.
"Non-Stock Fundamental Change" means any Fundamental Change other than a
Common Stock Fundamental Change.
"Notice of Conversion" means the notice given by a Holder of Preferred
Securities to the Conversion Agent directing the Conversion Agent to exchange
such Preferred Securities for Debentures and to convert such Debentures into
Company Common Stock on behalf of such holder.
"Notice of Default" has the meaning specified in Section 5.1(c).
"NYSE" means the New York Stock Exchange.
"Officers' Certificate" means a certificate signed by (i) the Chairman,
Chief Executive Officer, President or a Vice President, and by (ii) the
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, the Trust, or the Trustee, but who may be an employee
thereof, and who shall be reasonably acceptable to the Trustee.
"Outstanding" means, as of the date of determination, all Debentures
theretofore authenticated and delivered under this Indenture, except:
6
<PAGE> 15
(i) Debentures theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Debentures for whose payment money in the necessary amount
has been theretofore irrevocably deposited with the Trustee or any
Paying Agent in trust for the Holders of such Debentures; and
(iii) Debentures in substitution for or in lieu of which other
Debentures have been authenticated and delivered or which have been paid
pursuant to Section 3.6, or which have been converted into Company
Common Stock pursuant to Section 13.1, unless proof satisfactory to the
Trustee is presented that any Debentures are held by Holders in whose
hands such Debentures are valid, binding and legal obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Debentures have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Debentures owned
by the Company or any other obligor upon the Debentures 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 fully
protected in conclusively relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Debentures which a Responsible
Officer of the Trustee actually knows to be so owned shall be so disregarded.
Debentures 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 Debentures and that the pledgee
is not the Company or any other obligor upon the Debentures or any Affiliate of
the Company or such other obligor. Upon request of the Trustee, the Company
shall furnish to the Trustee promptly an Officers' Certificate listing and
identifying all Debentures, 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 Debentures 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
Debentures 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 Debentures on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Predecessor Debenture" of any particular Debenture means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by such
particular Debenture, and, for the purposes of this definition, any Debenture
authenticated and delivered under Section 3.6 in lieu of a lost, destroyed or
stolen Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Debenture.
"Preferred Securities" has the meaning specified in the first recital of
this Indenture.
"Proceeding" has the meaning specified in Section 12.2.
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<PAGE> 16
"Property Trustee" means, in respect of the Trust, the commercial bank
or trust company identified as the "Property Trustee" in the Trust Agreement,
solely in its capacity as Property Trustee of the Trust under the Trust
Agreement and not in its individual capacity, or its successor in interest in
such capacity, or any successor property trustee appointed as therein provided.
"Purchase Agreement" means the Purchase Agreement dated December 8, 1997
by and among Newell Financial Trust I, Newell Co. and the Initial Purchasers.
"Purchased Shares" has the meaning specified in Section 13.4(e).
"Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change the average of the Closing Prices for common stock received
in such Common Stock Fundamental Change for the ten consecutive trading days
prior to and including the record date for the determination of the holders of
common stock entitled to receive such common stock or if there is no such record
date, the date on which the holders of common stock shall have the right to
receive such common stock, as adjusted in good faith by the Company to
appropriately reflect any of the events referred to in Section 13.4.
"Redemption Date", when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price" has the meaning specified in Section 11.3(b).
"Reference Date" has the meaning specified in Section 13.4(c).
"Reference Market Price" initially means $27.25 (which is an amount
equal to 66 2/3% of the reported last sale price for Company Common Stock on the
NYSE Consolidated Transactions Tape on December 8, 1997), and in the event of
any adjustment of the Conversion Price other than as a result of a Non-Stock
Fundamental Change, the Reference Market Price shall also be adjusted so that
the ratio of the Reference Market Price to the Conversion Price after giving
effect to any such adjustment shall always be the same as the ratio of the
initial Reference Market Price to the initial Conversion Price of the
Debentures.
"Regular Record Date" means for the interest payable on any Interest
Payment Date the fifteenth day (whether or not a Business Day) next preceding
such Interest Payment Date.
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Trustee's Corporate Trust Office, including any managing
director, vice president, assistant vice president, assistant treasurer,
assistant secretary or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Indenture, and also,
with respect to a particular matter, any other officer, to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Restricted Preferred Securities" means all Preferred Securities
required to bear any restricted securities legend pursuant to the Trust
Agreement.
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<PAGE> 17
"Restricted Securities" means all the Debentures required pursuant to
Section 2.6 to bear a Restricted Securities Legend.
"Restricted Securities Legend" has the meaning specified in Section 2.6.
"Rights" has the meaning specified in Section 13.2(g).
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5.
"Senior Debt" means the principal of (and premium, if any) and interest,
if any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt of the
Company, whether incurred on or prior to the date of this Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Debentures or to other
Debt which is pari passu with, or subordinated to, the Debentures, provided,
however, that Senior Debt shall not be deemed to include (a) any Debt of the
Company which when incurred and, without respect to any election under Section
1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to the
Company, (b) any Debt of the Company to any of its Subsidiaries, (c) Debt to any
employee of the Company, (d) any liability for taxes, (e) Debt or other monetary
obligations to trade creditors created or assumed by the Company or any of its
Subsidiaries in the ordinary course of business in connection with the obtaining
of goods, materials or services and (f) the Debentures.
"Special Event" means a Tax Event or an Investment Company Event.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" when used with respect to the Debentures or any
installment of principal thereof or interest thereon means the date specified in
the Debentures as the fixed date on which the principal of the Debentures or
such installment of interest is due and payable.
"Stockholder Rights Agreement" means the Rights Agreement dated as of
October 20, 1988 by and between Newell Co. and First Chicago Trust Company of
New York (formerly known as Morgan Shareholder Services Trust Company) as Rights
Agent, as amended from time to time, or any successor to, or replacement of,
such Rights Agreement.
"Subsidiary" means any corporation of which at the time of determination
the Company and/or one or more Subsidiaries owns or controls directly or
indirectly more than 50% of the outstanding shares of voting stock. For purposes
of this definition, "voting stock" means stock which has voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency.
"Tax Event" means the receipt by the Property Trustee on behalf of the
Trust of an Opinion of Counsel, rendered by a law firm having a national tax and
securities practice (which opinion shall
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not have been rescinded by such law firm), 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 affecting taxation, 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 Preferred Securities of the Trust and does not pertain to the
use of the proceeds of the issuance of the Debentures, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the date
thereof, subject to United States Federal income tax with respect to income
received or accrued on the Debentures, (ii) interest payable by the Company on
the Debentures is not, or within 90 days of the date thereof, will not be,
deductible, 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 thereof, subject to
more than a de minimis amount of other taxes, duties or other governmental
charges.
"Transaction" has the meaning specified in Section 13.5(a).
"Trust" has the meaning specified in the first recital of this
Indenture.
"Trust Agreement" means the Trust Agreement substantially in the form
attached hereto as Annex A, as amended by the form of Amended and Restated Trust
Agreement substantially in the form attached hereto as Annex B, as amended from
time to time.
"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 if at any time there is
more than one such Person.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15
U.S.C.ss.ss. 77aaa-77bbb), as amended and as in effect on the date as of this
Indenture.
"Trust Securities" means the Common Securities and Preferred Securities.
"Vice President" when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president."
SECTION 1.2 Compliance Certificate and Opinions. Upon any application or
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent (including covenants,
compliance with which constitutes a condition precedent), if any, provided for
in this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent (including covenants compliance with which constitute a
condition precedent), if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished. Every certificate or opinion with
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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:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) 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;
(c) 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
(d) 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; 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
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to Section 6.1) conclusive in favor of the Trustee and the Company and
any agent of the Trustee or 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 Debentures shall be proved by the Securities
Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Debenture shall
bind every future Holder of the same Debenture and the Holder of every
Debenture 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 Debenture.
(f) The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to take any
action under this Indenture by vote or consent. Except as otherwise
provided herein, such record date shall be the later of 30 days prior to
the first solicitation of such consent or vote or the date of the most
recent list of Holders furnished to the Trustee pursuant to Section 7.1
prior to such solicitation. If a record date is fixed, those persons who
were Holders at such record date (or their duly designated proxies), and
only those persons, shall be entitled to take such action by vote or
consent or to revoke any vote or consent previously given, whether or
not such persons continue to be Holders after such record date.
(g) Without limiting the foregoing, a Holder entitled hereunder
to give or take any such action with regard to any particular Debenture
may do so with regard to all or any part of the principal amount of such
Debenture or by one or more duly appointed agents each of which may do
so pursuant to such appointment with regard to all or any different 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
(a) the Trustee by any Holder or by 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
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(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose (except as otherwise provided in Section
5.1 hereof) hereunder if in writing and mailed, first class, postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the
Company.
SECTION 1.6 Notice to Holders; Waiver. Where this Indenture provides for
notice to Holders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first class
postage prepaid, to each Holder affected by such event, at the address of such
Holder as it appears in the Securities Register on the date such notice is
mailed, which shall be 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. In
case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 1.7 Conflict with Trust Indenture Act. If any provision of this
Indenture limits, qualifies or conflicts with a provision of the Trust Indenture
Act that is required under such act to be a part of and govern this Indenture,
the latter provision shall control. If any provision of this Indenture modifies
or excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the former provision shall be deemed to apply.
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 Debentures 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
Debentures, express or implied, shall give to any Person, other than the parties
thereto, any Paying Agent and their successors and assigns and the Holders of
the Debentures, 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 Debentures shall be
governed by and construed in accordance with the laws of the State of New York
without regard to its principles of conflicts of laws.
SECTION 1.13 Non-Business Days. Except as otherwise provided in Section
11.8, in any case where any Interest Payment Date, Redemption Date, or Stated
Maturity of any Debenture shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or the Debentures) payment of interest or
principal 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 Interest Payment Date or
Redemption Date or at the Stated Maturity, provided that no interest shall
accrue for the period from and after such Interest Payment Date or Redemption
Date or Stated Maturity.
ARTICLE 2
DEBENTURE FORM
SECTION 2.1 Forms Generally. The Debentures and the Trustee's
certificate of authentication shall be in substantially the forms sets forth in
this Article 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 Debentures,
as evidenced by their execution of the Debentures.
The definitive Debentures shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, if required by any
securities exchange on which the Debentures 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 Debentures may be
listed, all as determined by the officers executing such Debentures, as
evidenced by their execution of such Debentures.
SECTION 2.2 Form of Face of Debenture.
5 1/4% Convertible Subordinated Debenture due December 1, 2027
No. 1 $
Newell Co., a corporation organized and existing under the laws of
Delaware (the "Company", which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to , or registered assigns, the principal sum of
on December 1, 2027 and to pay interest on said principal sum from December 12,
1997 or from the most recent interest payment date (each such date, an "Interest
Payment Date") on which interest has been paid or duly provided for, quarterly
plus Additional Interest, if any until the principal hereof is paid or duly
provided for or made
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available for payment subject to deferral as set forth herein in arrears on
March 1, June 1, September 1 and December 1 of each year, commencing March 1,
1998 at the rate of 5 1/4% per annum, until the principal hereof shall have
become due and payable.
Reference is hereby made to the further provisions of this Debenture set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Debenture
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
By:_____________________________
SECTION 2.3 Form of Reverse of Debenture. This Debenture is one of a
duly authorized issue of Debentures of the Company (the "Debentures") limited to
the aggregate principal amount of $515,465,000, issued and to be issued under a
Junior Convertible Subordinated Indenture, dated as of December 12, 1997 (the
"Indenture"), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which the Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Trustee, the Company and the
Holders of the Debentures, and of the terms upon which the Debentures are, and
are to be, authenticated and delivered. All terms used in this Debenture that
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. For periods less than a full
month, interest shall be computed on the actual number of elapsed days over 360
days. In the event that any date on which interest is payable on this Debenture
is not a Business Day, then payment of the interest on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay) with the same force and effect as if
made on the date the payment was originally payable. A "Business Day" shall mean
any day other than a Saturday or a Sunday, or a day on which banking
institutions in the City of New York are authorized or required by law or
executive order to remain closed or a day on which the Corporate Trust Office of
the Trustee, or the principal office of the Property Trustee under the Trust
Agreement is closed for business. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Debenture
(or one or more Predecessor Debentures, as defined in the Indenture) is
registered at the close of business on the Regular Record Date, for such
interest installment which shall be the date which is the Business Day next
preceding such Interest Payment Date. Any such interest
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installment not so punctually paid or duly provided for shall forthwith cease to
be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Debenture (or one or more Predecessor Debentures)
is registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Debentures not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Debentures may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture.
The Company shall have the right at any time during the term of this
Debenture, from time to time, to extend the interest payment period of such
Debenture for up to 20 consecutive quarters with respect to each deferral period
(each such deferral period, an "Extension Period"), during which periods the
Company shall have the right not to make payments of interest on any Interest
Payment Date, and at the end of which the Company shall pay all interest then
accrued and unpaid (together with Additional Interest and Liquidated Damages, if
any, thereon to the extent permitted by applicable law); provided that during
any such Extension Period, the Company will not, and will not permit any
Subsidiary to (a) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any shares of
the Company's capital stock or (b) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of the Company that
rank pari passu with or junior to the Debentures (other than (i) any dividend,
redemption, liquidation, interest, principal or guarantee payment by the Company
where the payment is made by way of securities (including capital stock) that
rank pari passu with or junior to the securities on which such dividend,
redemption, interest, principal or guarantee payment is being made, (ii)
redemptions or purchases of any rights pursuant to the Company's Stockholder
Rights Agreement and the declaration of a dividend of such rights or the
issuance of preferred stock under such plans in the future, (iii) payments under
the Guarantee, (iv) purchases of Company Common Stock related to the issuance of
Company Common Stock under any of the Company's benefit plans for its directors,
officers or employees, (v) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one series or class of the
Company's capital stock for another series or class of the Company's capital
stock and (vi) 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). Prior to the termination of
any such Extension Period, the Company may further extend the interest payment
period, provided that no Extension Period shall exceed 20 consecutive quarters
or extend beyond the Stated Maturity of this Debenture. Upon the termination of
any such Extension Period and upon the payment of all accrued and unpaid
interest and any Additional Interest then due, the Company may elect to begin a
new Extension Period, subject to the above requirements. No interest shall be
due and payable during an Extension Period except at the end thereof. The
Company shall give the Trustee, the Property Trustee and the Administrative
Trustees notice of its selection of an Extension Period at least one Business
Day prior to the earlier of (i) the record date for the date the distributions
on the Preferred Securities (or if no Preferred Securities are outstanding, for
the date interest on the Debentures) would have been payable except for the
election to begin such Extension Period or (ii) the date the Property Trustee of
the Newell Financial Trust I is (or if no Preferred Securities are outstanding,
the Debenture Trustee is) required to give notice to NYSE or other applicable
self-regulatory organizations or to holders of such Preferred
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Securities (or, if no Preferred Securities are outstanding, to the Holders of
such Debentures) of the record date.
Payment of the principal of (and premium, if any) and interest on this
Debenture will be made [INSERT, IF A GLOBAL SECURITY IS ISSUED - TO THE
DEPOSITARY TRUST COMPANY OR ITS NOMINEE] [INSERT IF SECURITIES IN DEFINITIVE
FORM ARE ISSUED - AT THE OFFICE OR AGENCY OF THE PAYING AGENT MAINTAINED FOR
THAT PURPOSE IN THE UNITED STATES], in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts provided, however, that at the option of the Company
payment of interest may be made (a) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Securities Register or (b)
by wire transfer in immediately available funds at such place and to such
account as may be designated by the Person entitled thereto as specified in the
Securities Register.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Debt (as defined in the Indenture), and this
Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Debenture, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such actions as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance hereof, waives
all notice of the acceptance of the subordination provisions contained herein
and in the Indenture by each holder of Senior Debt, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
At any time on or after December 1, 2001, the Company may, at its
option, subject to the terms and conditions of Article 11 of the Indenture,
redeem this Debenture in whole at any time or in part from time to time, at the
Redemption Prices set forth in Section 11.8 of the Indenture.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
If a Special Event shall occur and be continuing, this Debenture shall
be exchangeable for Preferred Securities in accordance with Section 11.9 of the
Indenture or, in certain circumstances, redeemable by the Company in accordance
with Section 11.8 of the Indenture.
Subject to the terms and conditions set forth in Article 13 of the
Indenture, this Debenture is convertible, at the option of the Holder, hereof
into shares of Company Common Stock.
If an Event of Default shall occur and be continuing, the principal of
the Debentures may be declared due and payable in the manner, with the effect
and subject to the conditions provided in the Indenture.
The Indenture contains provisions for satisfaction, discharge and
defeasance of the entire indebtedness of this Debenture upon compliance by the
Company with certain conditions set forth in the Indenture.
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The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debentures to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in principal amount of the Debentures. The Indenture also
contains provisions permitting Holders of specified percentages in principal
amount of the Debentures at the time Outstanding, on behalf of the Holders of
all Debentures, 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 shall be conclusive and binding upon
the Holder of this Debenture and upon all future Holders of this Debenture and
of any Debenture issued upon the registration of transfer hereof or in exchange
therefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Debenture.
As provided in and subject to the provisions of the Indenture, if an
Event of Default shall occur and be continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures may declare the principal amount of all the Debentures to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), provided that, if an Event of Default shall
occur and be continuing, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Debentures fail to declare the principal of
all the Debentures to be immediately due and payable, the holders of at least
25% in aggregate liquidation amount of the Preferred Securities then outstanding
shall have such right by a notice in writing to the Company and the Trustee; and
upon any such declaration such principal amount (or specified amount) of and the
accrued interest (including any Additional Interest) on all the Debentures shall
become immediately due and payable, provided that the payment of principal and
interest (including any Additional Interest) on such Debentures shall remain
subordinated to the extent provided in Article 12 of the Indenture.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Debenture at the times, place and rate, and in the coin or
currency, herein prescribed.
The holders of the Preferred Securities, the Debentures issuable in
respect of the Preferred Securities, the shares of Company Common Stock issuable
upon conversion of the Preferred Securities and the Debentures, and the
Guarantee (collectively, the "Registrable Securities") are entitled to the
benefits of a Registration Rights Agreement, dated as of December 12, 1997,
among Newell Financial Trust I, the Company and the Initial Purchasers (the
"Registration Rights Agreement"). Pursuant to the Registration Rights Agreement,
the Company has agreed for the benefit of the holders of Registrable Securities
that (i) it will, at its cost, use its best efforts within 90 days after the
date of original issuance of the Registrable Securities, to file a shelf
registration statement (the "Shelf Registration Statement") with the Commission
with respect to the resales of the Registrable Securities, (ii) it will use its
best efforts to cause such Shelf Registration Statement to be declared effective
by the Commission within 180 days after the date of issuance of the Registrable
Securities and (iii) it will use its best efforts to maintain such Shelf
Registration Statement continuously effective under the Securities Act until two
years after the date of original issuance of the Preferred Securities (or such
earlier date as the holders of Registrable Securities are able to sell all
Registrable Securities immediately without restriction, whether pursuant to Rule
144(k) under the Securities Act or any successor rule thereto or otherwise) (the
"Effectiveness
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<PAGE> 27
Period".) The Trust and the Company will be permitted to suspend the use of the
prospectus (which is a part of the Shelf Registration Statement) in connection
with sales of Registrable Securities by holders during certain periods of time
under certain circumstances relating to pending corporate developments relating
to the Company and public filings with the Commission and similar events.
If (i) on or prior to 90 days following the date of original issuance of
the Registrable Securities, a Shelf Registration Statement has not been filed
with the Commission, or (ii) on or prior to the 180th day following the original
issuance of the Registrable Securities, such Shelf Registration Statement has
not been declared effective (each such event a "Registration Default"),
additional interest ("Liquidated Damages") will accrue on the Debentures and,
accordingly, additional distributions will accrue on the Preferred Securities,
from and including the day following such Registration Default until such time
as such Shelf Registration Statement is filed or such Shelf Registration
Statement is declared effective, as the case may be. Liquidated Damages will be
paid quarterly in arrears (subject to the Company's ability to defer payment of
Liquidated Damages during any Extension Period), with the first quarterly
payment due on the first Interest Payment Date following the date on which such
Liquidated Damages begin to accrue, and will accrue at a rate per annum equal to
an additional 0.25% of the principal amount or liquidation amount, as
applicable, to and including the 90th day following such Registration Default
and 0.50% thereof from and after the 91st day following such Registration
Default. In the event that during the Effectiveness Period the Shelf
Registration Statement ceases to be effective for more than 90 days, whether or
not consecutive, during any 12-month period then the interest rate borne by the
Debentures and the distribution rate borne by the Preferred Securities will each
increase by an additional 0.50% per annum from the 91st day of the applicable
12-month period such Shelf Registration Statement ceases to be effective until
the earlier of such time as (i) the Shelf Registration Statement again becomes
effective or (ii) the Effectiveness Period expires.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Debenture is registrable in the Securities
Register, upon surrender of this Debenture 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 Debentures, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees. No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Debenture 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 Debenture is registered as the owner hereof for
all purposes, whether or not this Debenture be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
The Debentures are issuable only in registered form without coupons in
denominations of $50 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations
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<PAGE> 28
therein set forth, Debentures are exchangeable for a like aggregate principal
amount of Debentures of a different authorized denomination, as requested by the
Holder surrendering the same.
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States Federal, state and
local tax purposes it is intended that this Debenture constitute indebtedness.
THE INDENTURE AND THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES THEREOF.
ASSIGNMENT FORM
To assign this Debenture, fill in the form below:
(I) or (we) assign and transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------------
agent to transfer this Debenture on the books of the Company. The agent may
substitute another to act for him.
Your Signature:
---------------------------------------------------------
(Sign exactly as your name appears on the other side of
this Security)
Date:
-----------------------------
Signature Guarantee:*
-------------------------------------------------
- ----------
* Signature must be guaranteed by an institution which is a member of one
of the following recognized Signature Guaranty Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) The New York
Stock Exchange Medallion Program (MSP); (iii) The
20
<PAGE> 29
[Include the following if the Debenture bears a Restricted Securities Legend --
In connection with any transfer of any of the Debentures evidenced by this
certificate, the undersigned confirms that such Debentures 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; or
(3) [ ] transferred pursuant to and in compliance with
Regulation S under the Securities Act of 1933; or
(4) [ ] transferred pursuant to another available exemption from
the registration requirements of the Securities Act of
1933; or
(5) [ ] transferred pursuant to an effective Registration
Statement under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Debentures 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 Trustee may require, prior to registering any such transfer of the
Securities such legal opinions, certifications and other information as the
Company has reasonably requested in writing and directed the Trustee to require
confirmation 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, such as the exemption provided by Rule 144 under such Act;
provided, further, that after the date that a shelf Registration Statement under
the Securities Act of 1933 has been filed and so long as such shelf Registration
Statement continues to be effective, the Trustee may only permit transfers for
which box (5) has been checked.
-----------------------------------
Signature
Signature Guarantee:*
- --------
Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee
programs acceptable to the Trustee.
* Signature must be guaranteed by an institution which is a member of one
of the following recognized Signature Guaranty Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) The New York
Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange
Medallion Program (SEMP); or (iv) in such other guarantee programs
acceptable to the Trustee.
21
<PAGE> 30
]
- ----------------------------------- ------------------------------------
Signature must be guaranteed Signature
- --------------------------------------------------------------------------------
[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Debenture for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:
-------------------- --------------------------------------------
NOTICE: To be executed by an executive
officer]
22
<PAGE> 31
NOTICE OF CONVERSION
To: Newell Co.
The undersigned owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion below designated,
into Common Stock of NEWELL CO. in accordance with the terms of the Indenture
referred to in this Debenture, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.
Any Holder, upon the exercise of its conversion rights in
accordance with the terms of the Indenture and the Debenture, agrees to be bound
by the terms of the Registration Rights Agreement relating to Company Common
Stock issuable upon conversion of the Debenture.
Date: ____________, ____
in whole __
Portions of Debenture to be
in part __ converted ($50 or integral multiples thereof):
$
-----------------
-----------------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or Other
Identifying Number
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
Signature Guarantee:*
----------------
- --------
* Signature must be guaranteed by an institution which is a member of one
of the following recognized Signature Guaranty Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) The New York
Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange
Medallion Program (SEMP); or (iv) in such other guarantee programs
acceptable to the Trustee.
23
<PAGE> 32
SECTION 2.4 Additional Provisions Required in Global Debenture. Any
Global Debenture 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 Debenture is a Global Debenture within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Debenture is exchangeable for Debentures
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Indenture and 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. The form of
Trustee's Certificate of Authentication shall be as follows:**
"This is one of the Debentures designated therein referred to in the within
mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
Authorized Signatory
Dated:"
SECTION 2.6 Initial Issuance to Property Trustee. The Debentures
initially issued to the Property Trustee of the Trust shall be in the form of
one or more individual certificates in definitive, fully registered form without
distribution coupons and shall bear the following legend (the "Restricted
Securities Legend") unless the Company determines otherwise in accordance with
applicable law:
"THE SECURITIES EVIDENCED HEREBY AND THE COMMON STOCK ISSUABLE UPON
THEIR CONVERSION HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHO THE TRANSFEROR AND ANY PERSON
ACTING ON BEHALF OF SUCH TRANSFEROR REASONABLY BELIEVE IS A QUALIFIED
INSTITUTIONAL BUYER ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION COMPLYING WITH RULE 144A UNDER THE
SECURITIES ACT, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND, IN
- --------
** Or in the form provided in Section 6.14 in the event that a separate
Authenticating Agent is appointed pursuant thereto.
24
<PAGE> 33
EACH CASE, IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES AND OTHER JURISDICTIONS."
ARTICLE 3
THE DEBENTURES
SECTION 3.1 Amount of Debentures. The aggregate principal amount of
Debentures which may be authenticated and delivered under this Indenture is
$515,465,000 except for Debentures authenticated and delivered upon registration
of, transfer of, or in exchange for, or in lieu of, other Debentures pursuant to
Sections 3.4, 3.5 or 3.6.
SECTION 3.2 Denominations. The Debentures shall be in registered form
without coupons and shall be issuable in denominations of $50 and any integral
multiple thereof.
SECTION 3.3 Execution, Authentication, Delivery and Dating. The
Debentures shall be executed on behalf of the Company by its President or one of
its Vice Presidents under its corporate seal reproduced or impressed thereon and
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Debentures may be manual or facsimile.
Debentures 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 Debentures or did not
hold such offices at the date of such Debentures. Upon the execution and
delivery of this Indenture, or from time to time thereafter, Debentures may be
executed by the Company and delivered to the Trustee for authentication, and the
Trustee shall thereupon authenticate and deliver said Securities to or upon
Company Order without any further action by the Company. Debentures may be
authenticated on original issuance from time to time and delivered pursuant to
such procedures acceptable to the Trustee ("Procedures") as may be specified
from time to time by Company Order. Procedures may authorize authentication and
delivery pursuant to instructions of the Company or a duly authorized agent,
which instructions shall be promptly confirmed in writing.
Each Debenture shall be dated the date of its authentication.
No Debenture shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Debenture 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 Debenture shall be conclusive evidence,
and the only evidence, that such Debenture has been duly authenticated and
delivered hereunder.
SECTION 3.4 Temporary Debentures. Pending the preparation of definitive
Debentures, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Debentures which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Debentures in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other
25
<PAGE> 34
variations as the officers executing such Debentures may determine, as evidenced
by their execution of such Debentures.
If temporary Debentures are issued, the Company will cause definitive
Debentures to be prepared without unreasonable delay. After the preparation of
definitive Debentures, the temporary Debentures shall be exchangeable for
definitive Debentures upon surrender of the temporary Debentures at the office
or agency of the Company designated for the purpose without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Debentures,
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Debentures of authorized
denominations. Until so exchanged, the temporary Debentures shall in all
respects be entitled to the same benefits under this Indenture as definitive
Debentures.
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 Debentures and of transfers of Debentures. Such
register is herein sometimes referred to as the "Securities Register." The
Trustee is hereby appointed "Securities Registrar" for the purpose of
registering Debentures and transfers of Debentures as herein provided.
Upon surrender for registration or transfer of any Debenture 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 Debentures of any
authorized denominations, of a like aggregate principal amount.
At the option of the Holder, Debentures may be exchanged for other
Debentures of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Debentures to be exchanged at such office or
agency. Whenever any Debentures are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Debentures
which the Holder making the exchange is entitled to receive.
All Debentures issued upon any transfer or exchange of Debentures shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Debentures surrendered upon
such transfer or exchange.
Every Debenture 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 Debentures, 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 Debentures.
Notwithstanding any of the foregoing, the Global Debenture shall be
exchangeable pursuant to this Section 3.5 for Debentures registered in the names
of Persons other than the Depositary for such Debenture or its nominee only if
(a) such Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Global Debenture, and the Company shall not
26
<PAGE> 35
have appointed a successor depositary within 90 days after such notice, (b) at
any time such Depositary ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and the Company shall not have
appointed a successor depositary within 90 days, (c) the Company executes and
delivers to the Trustee a Company Order that the Global Debenture shall be so
exchangeable or (d) there shall have occurred and be continuing an Event of
Default. The Global Debenture shall be exchangeable for Debentures registered in
such names as such Depositary shall direct.
Notwithstanding any other provisions in this Indenture, the Global
Debenture may not be transferred except as a whole by the Depositary with
respect to the Global Debenture to a nominee of such Depositary or by a nominee
of such Depositary to such Depositary or another nominee of such Depositary.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (a) to issue, transfer or exchange any Debenture
during a period beginning at the opening of business 15 days before the day of
selection for redemption of Debentures pursuant to Article 11 and ending at the
close of business on the day of mailing of notice of redemption or (b) to
transfer or exchange any Debenture so selected for redemption in whole or in
part, except, in the case of any Debenture to be redeemed in part, any portion
thereof not to be redeemed.
The Debentures may not be transferred except in compliance with the
Restricted Securities Legend unless otherwise determined by the Company in
accordance with applicable law. Upon any distribution of the Debentures to the
holders of the Preferred Securities in accordance with the Trust Agreement, the
Company and the Trustee shall enter into a supplemental indenture pursuant to
Section 9.1(h) to provide for transfer procedures and restrictions with respect
to the Debentures substantially similar to those contained in the Trust
Agreement to the extent applicable in the circumstances existing at the time of
such distribution.
SECTION 3.6 Mutilated, Destroyed, Lost and Stolen Debentures. If any
mutilated Debenture 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 Debenture and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (a)
evidence to their satisfaction of the destruction, loss or theft of any
Debenture, and (b) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of actual notice to the Company or
the Trustee that such Debenture has been acquired by a bona fide purchaser, the
Company shall execute and upon the receipt of a Company Order requesting
authentication its request the Trustee shall authenticate and deliver, in lieu
of any such destroyed, lost or stolen Debenture, a new Debenture bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debenture, pay such Debenture.
27
<PAGE> 36
Upon the issuance of any new Debenture 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 Debenture issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture 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 Debentures 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 Debentures.
SECTION 3.7 Payment of Interest; Interest Rights Preserved. Interest on
any Debenture 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
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the Regular Record Date, except that interest payable on the Stated
Maturity of the Debentures shall be paid to the Person to whom principal is
paid.
Any interest on the Debentures which is payable, but is not timely paid
or duly provided for, on an Interest Payment Date ("Defaulted Interest"), shall
forthwith cease to be payable to the registered Holder on the 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 (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their
respective Predecessors Debentures) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on the Debentures 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 the Debentures
at the address of such Holder as it appears in the Securities Register
not less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest shall
be paid to the Persons
28
<PAGE> 37
in whose names the Debentures (or their respective Predecessor
Debentures) are registered on such Special Record Date and shall no
longer be payable pursuant to the following clause (b).
(b) 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 Debentures may be listed and, upon such
notice as may be required by such exchange (or by the Trustee if the
Debentures 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 Debenture
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Debenture shall carry the rights to interest accrued and unpaid, and
to accrue, which were carried by such other Debenture.
SECTION 3.8 Persons Deemed Owners. The Company, the Trustee, the Paying
Agent and any agent of the Company or the Trustee or the Paying Agent may treat
the Person in whose name any Debenture is registered as the owner of such
Debenture for the purpose of receiving payment of principal of and (subject to
Section 3.7) interest or premium on such Debenture and for all other purposes
whatsoever, whether or not such Debenture 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 Debentures surrendered for payment,
redemption, conversion transfer or exchange shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee, and any such Debentures and
Debentures surrendered directly to the Trustee for any such purpose shall be
promptly canceled by it. The Company may at any time deliver or cause to be
delivered to the Trustee for cancellation any Debentures previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Debentures so delivered shall be promptly canceled by
the Trustee. No Debentures shall be authenticated in lieu of or in exchange for
any Debentures canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Debentures shall be destroyed by the
Trustee and upon written request, the Trustee shall deliver to the Company a
certificate of such destruction.
SECTION 3.10 Computation of Interest. Interest on the Debentures shall
be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.11 Deferrals of Interest Payment Dates. The Company shall have
the right, at any time during the term of the Debentures, so long as no Event of
Default has occurred and is continuing, from time to time to extend the interest
payment period for the Debentures for up to 20 consecutive quarters with respect
to each deferral period (each, an "Extension Period") during which periods the
Company shall have the right to not make payments of interest (including any
Liquidated Damages) on any Interest Payment Date, and at the end of such
Extension Period the Company shall pay all interest then accrued and unpaid
thereon (together with Additional Interest thereon, if any, at the rate
specified for the Debentures, to the extent permitted by applicable law),
provided, however, that during any such Extension Period, the Company shall not,
and shall cause any Subsidiary not to, (a) declare or pay any dividends or
distributions on, or redeem, purchase,
29
<PAGE> 38
acquire or make a liquidation payment with respect to, any shares of the
Company's capital stock or (b) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of the Company that
rank pari passu with or junior to the Debentures (other than (i) any dividend,
redemption, liquidation, interest, principal or guarantee payment by the Company
where the payment is made by way of securities (including capital stock) that
rank pari passu with or junior to the securities on which such dividend,
redemption, interest, principal or guarantee payment is being made, (ii)
redemptions or purchases of any rights pursuant to the Company's Stockholder
Rights Agreement and the declaration of a dividend of such rights or the
issuance of preferred stock under such plans in the future, (iii) payments under
the Guarantee, (iv) purchases of Company Common Stock related to the issuance of
Company Common Stock under any of the Company's benefit plans for its directors,
officers or employees, (v) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one series or class of the
Company's capital stock for another series or class of the Company's capital
stock and (vi) 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). Prior to the termination of
any such Extension Period, the Company may further extend the interest payment
period, provided that no such Extension Period shall exceed 20 consecutive
quarters or extend beyond the Stated Maturity of the Debentures. Upon
termination of any Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, the Company may select a
new Extension Period, subject to the above requirements. No interest, including
Additional Interest and Liquidated Damages, if any, shall be due and payable
during an Extension Period, except at the end thereof. The Company shall give
the Trustee, the Property Trustee and the Administrative Trustees written notice
of its selection of such Extension Period at least one Business Day prior to the
earlier of (i) the record date for the date the distributions on the Preferred
Securities of the Trust (or if no, Preferred Securities are outstanding, for the
date interest on the Debentures) would have been payable except for the election
to begin such Extension Period and (ii) the date the Property Trustee (or, if no
Preferred Securities are outstanding, the Trustee) is required to give notice to
NYSE or other applicable self-regulatory organization or to holders of such
Preferred Securities (or, if no Preferred Securities are outstanding, to the
Holders of such Debentures) of such record date, but in any event not less than
one Business Day prior to such record date. Such notice shall specify the period
selected.
The Trustee shall promptly give notice of the Company's selection of
such Extension Period to the Holders of the outstanding Debentures and Preferred
Securities.
SECTION 3.12 Right of Set-off. 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 the Debenture to the extent
the Company has theretofore made, or is concurrently on the date of such payment
making, a payment relating to the Debentures under the Guarantee.
SECTION 3.13 Agreed Tax Treatment. Each Debenture issued hereunder shall
provide that the Company and, by its acceptance of a Debenture or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, such Debenture agree that for United States Federal, state and
local tax purposes it is intended that such Debenture constitute indebtedness.
30
<PAGE> 39
SECTION 3.14 CUSIP Numbers. The Company in issuing the Debentures may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use such "CUSIP" number 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 number either as printed on the Debentures or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Debentures, and any such redemption shall
not be affected by any defect in or omission of such numbers.
SECTION 3.15 Global Security.
(a) In connection with distribution of Debentures to holders of
the Preferred Securities in connection with the involuntary or voluntary
dissolution of the Trust, including a dissolution following the
occurrence of a Special Event,
(i) the Debentures in certificated form may be presented
to the Trustee by the Property Trustee in exchange for a global
certificate in an aggregate principal amount equal to the
aggregate principal amount of all outstanding Debentures (a
"Global Debenture"), to be registered in the name of the
Depositary, or its nominee, and delivered by the Trustee to the
Depositary, or its custodian, for crediting to the accounts of
its participants pursuant to the procedures of the Depositary.
The Company upon any such presentation shall execute a Global
Debenture in such aggregate principal amount and deliver the
same to the Trustee for authentication and delivery in
accordance with this Indenture; and
(ii) if any Preferred Securities are held in non
book-entry certificated form, the Debentures in certificated
form may be presented to the Trustee by the Property Trustee and
any Preferred Security certificate which represents Preferred
Securities other than Preferred Securities held by the
Depositary or its nominee ("Non Book- Entry Preferred
Securities") will be deemed to represent beneficial interests in
Debentures presented to the Trustee by the Property Trustee
having an aggregate principal amount equal to the aggregate
liquidation amount of the Non Book-Entry Preferred Securities
until such Preferred Security certificates are presented to the
Securities Registrar for transfer or reissuance at which time
such Non-Book Entry Preferred Security certificates will be
canceled and a Debenture, registered in the name of the holder
of the Preferred Security certificate or the transferee of the
holder of such Preferred Security certificate, as the case may
be, with an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Security certificate
canceled, will be executed by the Company and delivered to the
Trustee for authentication and delivery in accordance with this
Indenture. On issue of such Debentures, Debentures with an
equivalent aggregate principal amount that were presented by the
Property Trustee to the Trustee will be deemed to have been
cancelled.
(b) A Global Debenture may be transferred, in whole but not in
part, only to another nominee of the Depositary, or to a nominee of such
successor Depositary.
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(c) If (a) the Depositary notifies the Company that it is
unwilling or unable to continue as a depositary for such Global
Debenture and no successor depositary shall have been appointed within
90 days by the Company, (b) the Depositary, at any time, ceases to be a
clearing agency registered under the Exchange Act at which time the
Depositary is required to be so registered to act as such depositary and
no successor depositary shall have been appointed within 90 days by the
Company, (c) the Company, in its sole discretion, determines that such
Global Debenture shall be so exchangeable or (d) there shall have
occurred and be continuing an Event of Default with respect to such
Debentures, as the case may be, the Company will execute, and, subject
to Article 3 of this Indenture, the Trustee, upon written notice from
the Company and receipt of a Company Order, will authenticate and
deliver the Debentures in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to
the principal amount of the Global Debenture in exchange for such Global
Debenture. In addition, upon an Event of Default that has occurred and
is continuing or in the event the Company determines that the Debenture
shall no longer be represented by a Global Debenture, the Company will
execute, and subject to Section 3.5 of this Indenture, the Trustee, upon
receipt of an Officers' Certificate evidencing such determination by the
Company and a Company Order, will authenticate and make available for
delivery, the Debentures in definitive registered form without coupons,
in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Debenture in exchange for such
Global Debenture. Upon the exchange of the Global Debenture for such
Debentures in definitive registered form without coupons, in authorized
denominations, the Global Debenture shall be cancelled by the Trustee.
Such Debentures in definitive registered form issued in exchange for the
Global Debenture shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct
the Trustee in writing. The Trustee shall deliver such Debentures to the
Depositary for delivery to the Persons in whose names such Debentures
are so registered.
ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect (except as to (i) any surviving rights of
transfer, substitution and exchange of Debentures, (ii) rights hereunder of
Holders to receive payments of principal of (and premium, if any) and interest
(including Additional Interest, if any) on the Debentures and other rights,
duties and obligations of the Holders as beneficiaries hereof with respect to
the amounts, if any, so deposited with the Trustee and (iii) the rights and
obligations of the Trustee hereunder), 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
(a) either
(i) all Debentures theretofore authenticated and delivered
(other than (i) Debentures which have been destroyed, lost or
stolen and which have been replaced or paid as provided in
Section 3.6 and (ii) Debentures for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by
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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
(ii) all such Debentures not theretofore delivered to
the Trustee for cancellation:
(A) have become due and payable, or
(B) will become due and payable at their Stated
Maturity within one year of the date of deposit or are to
be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
written notice of redemption to 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 Debentures are payable
sufficient (without regard to investment of such amount
deposited) to pay and discharge the entire indebtedness on
the Debentures 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 or to the Stated Maturity; or
(C) have been redeemed or tendered for conversion;
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(c) 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 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of clause (a) 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 it, in accordance with the
provisions of the Debentures 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 whose payment such money or
obligations have been deposited with or received by the Trustee; provided,
however, such moneys need not be segregated from other funds except to the
extent required by law.
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ARTICLE 5
REMEDIES
SECTION 5.1 Events of Default. "Event of Default", wherever used herein
with respect to the Debentures, means any one of the following events that has
occurred and is continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any interest upon the Debenture,
including any Additional Interest in respect thereof, when it becomes
due and payable, and continuance of such default for a period of 30 days
(subject to the deferral of any due date in the case of an Extension
Period);
(b) default in the payment of the principal of (or premium, if
any, on) the Debentures when due whether at Stated Maturity, upon
redemption by declaration or otherwise;
(c) failure on the part of the Company duly to observe or perform
in any material respect any other of the covenants or agreements on the
part of the Company contained in the Debentures or contained in this
Indenture (other than a covenant or agreement which has been expressly
included in this Indenture solely for the benefit of the Company) and
continuance for such failure for a period of 90 days after the date on
which written notice of such failure, requiring the same to be remedied
and stating that such notice is a "Notice of Default" hereunder, shall
have been given to the Company by the Trustee, by registered or
certified mail, or to the Company and the Trustee by a Holder or Holders
of at least 25% in aggregate principal amount of the Debentures at the
time Outstanding or the holder or holders of at least 25% in aggregate
liquidation amount of the Preferred Securities;
(d) failure by the Company to issue Company Common Stock upon an
appropriate election by the Holder or Holders of the Debentures to
convert the Debentures into shares of Company Common Stock;
(e) the entry of a decree or order by a court having jurisdiction
in the premises adjudging the Company as bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjudication or composition of or in respect of the Company
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official)
of the Company or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any
such decree or order unstayed and in effect for a period of 60
consecutive days; or
(f) the institution by the Company of proceedings to be
adjudicated as bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the filing
of any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Company or of any substantial part of its property or the making by it
of an assignment for the benefit
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of creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due and its willingness to be
adjudicated as bankrupt, or the taking of corporate action by the
Company in furtherance of any such action.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment. If an
Event of Default occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Debentures may declare the principal amount of all the Debentures to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), provided that, if an Event of Default occurs
and is continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Debentures fail to declare the principal of
all the Debentures to be immediately due and payable, the holders of at least
25% in aggregate liquidation amount of the Preferred Securities then outstanding
shall have such right by a notice in writing to the Company and the Trustee, and
upon any such declaration such principal amount (or specified amount) of and the
accrued interest (including any Additional Interest) on all the Debentures shall
become immediately due and payable, provided that the payment of principal and
interest (including any Additional Interest) on the Debentures shall remain
subordinated to the extent provided in Article 12.
At any time after such a declaration of acceleration with respect to
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in aggregate principal amount of the
Outstanding Debentures, by written notice to the Company and the Trustee may
rescind and annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all overdue installments of interest (including any
Additional Interest) on the Debentures;
(ii) the principal of (and premium, if any, on) the
Debentures which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
borne by the Debentures;
(iii) to the extent that payment of such interest is
lawful, interest (including any Additional Interest) upon overdue
installments of interest at the rate borne by the Debentures;
(iv) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel; and
(b) all Events of Default that shall have occurred and been
continuing with respect to Debentures, other than the non-payment of the
principal of the Debentures which has become due solely by such
acceleration, have been cured or waived as provided in Section 5.13. If
the holders of a majority in aggregate principal amount of the
Outstanding Debentures fail to rescind and annul such declaration and
its consequences, the holders of a majority in liquidation amount of the
Preferred Securities then outstanding shall have such right.
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SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if:
(a) default is made in the payment of any installment of interest
(including any Additional Interest) on the Debentures when such interest
becomes due and payable and such default continues for a period of 30
days, or
(b) default is made in the payment of the principal of (and
premium, if any, on) the Debentures whether at the Stated Maturity
thereof upon redemption by declaration or otherwise, the Company will,
upon demand of the Trustee, pay to it, for the benefit of the Holders of
the Debentures, the whole amount then due and payable on the Debentures
for principal (and premium, if any) and interest (including any
Additional Interest), including, to the extent that payment of such
interest shall be lawful, interest on any overdue principal (and
premium, if any) and on any overdue installments of interest (including
any Additional Interest) at the rate borne by the Debentures, 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 judgement or final decree, and may enforce the same
against the Company or any other obligor upon the Debentures and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Debentures, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of the Debentures 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 Debentures or the property of the
Company or of such other obligor or their creditors:
(a) the Trustee (irrespective of whether the principal of the
Debentures 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
(or premium, if any) or interest (including any Additional Interest))
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim (including a claim for
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) for the whole amount of
principal (and premium, if any) and interest (including any
Additional Interest) owing and unpaid in respect to the
Debentures 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
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claims of the Holders and any predecessor to the Trustee under
Section 6.7 and, of the Holders allowed in any such judicial
proceedings; and
(ii) in particular, the Trustee shall be authorized to
collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same in
accordance with Section 5.6; and
(b) any custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the Trustee
for distribution in accordance with Section 5.6, and in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it and any predecessor
Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debentures
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 Debentures.
All rights of action and claims under this Indenture or the Debentures may be
prosecuted and enforced by the Trustee without the possession of any of the
Debentures 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 judgement 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 Debentures in respect of which such
judgement 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 the Debentures
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money or
property on account of principal (or premium, if any) or interest (including any
Additional Interest), upon presentation of the Debentures 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 the amounts then due and unpaid upon the
Debentures for principal (and premium, if any) and interest (including any
Additional Interest), in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Debentures for principal (and
premium, if any) and interest (including any Additional Interest), respectively;
and
THIRD: the balance, if any, to the Person or Persons entitled thereto.
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SECTION 5.7 Limitation on Suits. No Holder of the Debentures, including
a holder of Preferred Securities acting to enforce the rights of the Property
Trustee as a Holder of the Debentures pursuant to Section 5.8 of the Trust
Agreement, 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:
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(b) if the Trust is not the sole holder of the Outstanding
Debentures, the Holders of not less than 25% in principal amount of the
Outstanding Debentures 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;
(c) 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;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(e) 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 Debentures;
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 of any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of the Debentures, 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. Notwithstanding any other provision in this Indenture, the Holder
of any Debenture shall have the right which is absolute and unconditional to
receive payment of the principal of (and premium, if any) and (subject to
Section 3.7) interest (including any Additional Interest) on such Debenture on
the Maturity or to convert such Debenture in accordance with Article 13 and to
institute suit for the enforcement of any such payment and right to convert, and
such right shall not be impaired without the consent of such Holder. For so long
as any Preferred Securities remain Outstanding, to the fullest extent permitted
by law and subject to the terms of this Indenture and the Trust Agreement, upon
an Event of Default that has occurred and is continuing specified in Sections
5.1(a) or 5.1(b), any holder of Preferred Securities shall have the right to
institute a proceeding directly against the Company, for enforcement of payment
to such holder of the principal amount of (or premium, if any) or interest on
Debentures having a principal amount equal to the liquidation amount of the
Preferred Securities of such holder (a "Direct Action"). Notwithstanding any
payment made to such holder of Preferred Securities by the Company in connection
with a Direct Action, the Company shall remain obligated to pay the principal of
(or premium, if any) or interest on the Debentures held
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by the Trust or the Property Trustee. In connection with any such Direct Action,
the rights of the Company will be subrogated to the rights of any holder of the
Preferred Securities to the extent of any payment made by the Company to such
holder of Preferred Securities as a result of such Direct Action. Except as set
forth in this Section, the holders of Preferred Securities shall have no right
to execute any right or remedy available to the Holders of or in respect of, the
Debentures.
SECTION 5.9 Restoration of Rights and Remedies. If the Trustee or any
Holder 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 or to such Holder, then and in
every such case the Company, the Trustee and the Holder 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 and the Holders 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 or of any Holder of the Debentures to exercise any right or remedy
accruing upon any Event of Default that shall have occurred and be continuing
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 may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12 Control by Holders. The Holders of a majority in aggregate
principal amount of the Outstanding Debentures 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 Debentures, provided that:
(a) such direction shall not be in conflict with any rule of law
or with this Indenture,
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(c) subject to the provisions of Section 6.1, the Trustee shall
have the right to decline to follow such direction if the Trustee in
good faith shall, by a Responsible Officer or Officers of the Trustee,
determine that the proceeding so directed would be unjustly prejudicial
to the Holders not joining in any such direction or would involve the
Trustee in personal liability.
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Upon receipt by the Trustee of any written notice directing the time,
method or place of conducting any such proceeding or exercising any such trust
or power, with respect to the Debentures and, if all or part of the Debentures
is represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Debentures entitled to join in such notice,
which record date shall be at the close of business on the day the Trustee
receives such notice. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such notice,
whether or not such Holders remain Holders after such record date, provided,
that, unless the Holders of a majority in principal amount of the Outstanding
Debentures shall have joined in such notice prior to the day which is 90 days
after such record date, such notice shall automatically and without further
action by any Holder be canceled and of no further effect. Nothing in this
paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after
expiration of such 90-day period, a new notice identical to a notice which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 5.12.
SECTION 5.13 Waiver of Past Defaults. Subject to Section 9.2 hereof, the
Holders of not less than a majority in aggregate principal amount of the
Outstanding Debentures affected by any past default may on behalf of the Holders
of all the Debentures waive any past default hereunder with respect to
Debentures and its consequences, except a default:
(a) in the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on the Debentures (unless
such default has been cured or waived and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Trustee), or
(b) in respect of a covenant or provision hereof which under
Article 9 cannot be modified or amended without the consent of the
Holder of each Outstanding Debenture;
provided, however, that if the Debentures are held by the Trust or a trustee of
the Trust, such waiver shall not be effective until the holders of a majority in
liquidation amount of Trust Securities shall have consented to such waiver;
provided, further, that if the consent of the Holder of each outstanding
Debenture is required, such waiver shall not be effective until each holder of
the Trust Securities shall have consented to such waiver.
Upon any such waiver, 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. If the Holders of a
majority in aggregate principal amount of the Outstanding Debentures fail to
waive such Event of Default, the holders of a majority in aggregate liquidation
amount of Preferred Securities shall have such right. No such rescission shall
affect any subsequent default or impair any right consequent thereon. The
provisions of this Section 5.13 shall be in lieu of Section 316(a)(1)(B) of the
Trust Indenture Act, and such Section 316(a)(1)(B) of the Trust Indenture Act is
hereby expressly excluded from this Indenture and the Debentures, as permitted
by the Trust Indenture Act.
SECTION 5.14 Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Debenture 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,
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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 and expenses, 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 Debentures, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
(or premium, if any) or interest (including any Additional Interest) on the
Debentures on or after the Maturity of the Debentures or to convert a Debenture
in accordance with Article 13. The provisions of this Section 5.14 shall be in
lieu of Section 315(e) of the Trust Indenture Act, and such Section 315(e) of
the Trust Indenture Act is hereby expressly excluded from this Indenture and the
Debentures, as permitted by the Trust Indenture Act.
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 6
THE TRUSTEE
SECTION 6.1 Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(i) 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
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture, but in the case of any such
certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
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(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
(i) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(ii) 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
(iii) 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.
(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.
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,
the Trustee shall transmit by mail to all Holders of Debentures, as their names
and addresses appear in the Securities Register, notice of such default
hereunder known to the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest (including any Additional
Interest) on Debenture, the Trustee shall be fully 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 Debentures; and provided, further, that, except in the case of any
default of the character specified in Section 5.1(c), no such notice to Holders
of the Debentures 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.
SECTION 6.3 Certain Rights of Trustee. Subject to the provisions of
Section 6.1:
(a) the 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, Debenture or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
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(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it 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, conclusively rely upon an Officers' Certificate
and an Opinion of Counsel;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee is not required to expend or risk its own funds
or otherwise incur personal financial liability in the performance of
its duties if the Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it;
(g) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, indenture, Debenture 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;
(h) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
attorneys, custodians or nominees and the Trustee shall not be
responsible for any misconduct or negligence on any part of any agent,
custodian, nominee or attorney appointed with due care by it hereunder;
and
(i) in the event that the Trustee is also acting as a Paying
Agent, Authenticating Agent, Conversion Agent, and/or Securities
Registrar hereunder, the rights and protections afforded to the Trustee
pursuant to this Article 6 shall also be afforded to such Paying Agent,
Authenticating Agent, Conversion Agent, and/or Securities Registrar.
SECTION 6.4 Not Responsible for Recitals or Issuance of Debentures. The
recitals contained herein and in the Debentures, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Debentures. The Trustee shall not be accountable for the use or
application by the Company of the Debentures or the proceeds thereof.
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SECTION 6.5 May Hold Debentures. The Trustee, any Paying Agent,
Securities Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Debentures 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, Paying Agent, Securities Registrar or such
other agent.
SECTION 6.6 Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability of interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION 6.7 Compensation and Reimbursement. The Company agrees
(a) 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);
(b) 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); and
(c) to indemnify the Trustee and its officers, directors and
employees for, and to hold it harmless against, any loss, liability or
expense (including the reasonable compensation and the expenses and
disbursements of its agents and counsel) incurred without negligence or
bad faith, arising out of or in connection with the acceptance or
administration of this trust or the performance of its duties hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder. This Indemnification shall survive the
termination of this Agreement or the earlier resignation or removal of
the Trustee.
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 Debentures
on all money or property held or collected by the Trustee except assets held in
trust to pay principal and premium, if any, or interest on particular Debentures
pursuant to Section 4.1(a)(ii)(B), or pursuant to any redemption pursuant to
Article 11 hereof if monies have been deposited for such redemption and notice
has been given and the Redemption Date has passed. Such lien shall survive the
satisfaction and discharge of this Indenture or the earlier resignation or
removal of the Trustee.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(e) or (f) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Reform Act of 1978 or a successor statute.
SECTION 6.8 Disqualification; Conflicting Interests. The Trustee shall
be subject to the provisions of Section 310(b) of the Trust Indenture Act.
Nothing herein shall prevent the Trustee
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from filing with the Commission the application referred to in the second to
last paragraph of Section 310(b) of the Trustee Indenture Act. The Trust
Agreement and the Guarantee shall be deemed to be specifically described in this
Indenture for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
SECTION 6.9 Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws of
the United States of America or of any State, 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
(b) a corporation or other Person organized and doing business
under the laws of a foreign government that is permitted to act as
Trustee pursuant to a rule, regulation or order of the Commission,
authorized under such laws to exercise corporate trust powers, and
subject to supervision or examination by authority of such foreign
government or a political subdivision thereof substantially equivalent
to supervision or examination applicable to United States institutional
trustees,
in either case having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
to 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 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.
(b) The Trustee may resign at any time 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.
(c) The Trustee may be removed at any time by Act of the Holders
of a majority in principal amount of the Outstanding Debentures,
delivered to the Trustee and to the Company.
(d) If at any time:
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(i) 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 Debenture for at least six
months, or
(ii) 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
(iii) the Trustee shall become incapable of acting or
shall be adjudged as 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, (A) the
Company by Board Resolution may remove the Trustee, or (B)
subject to Section 5.14, any Holder who has been a bona fide
Holder of a Debenture for at least six months may, on behalf of
himself and all other similarly situated Holders, petition any
court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(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 Debentures, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee. If, within one
year after such resignation, removal or incapability, or the occurrence
of such vacancy, a successor Trustee with respect to the Debentures
shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Debentures 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
and supersede the successor Trustee appointed by the Company. If no
successor Trustee 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 Debenture 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.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by
mailing written notice of such event by first-class mail, postage
prepaid, to the Holders of the Debentures as their name and addresses
appear in the Securities Register. Each notice shall include the name of
the successor Trustee 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,
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 written 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
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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) 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, power and trusts
referred to in paragraph (a) of this Section.
(c) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified
and eligible under this Article.
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 Debentures shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Debentures so authenticated, and in case any
Debentures shall not have been authenticated, any successor to the Trustee may
authenticate such Debentures 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
Debentures 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 Debentures), 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, as described and with the powers and
obligations conferred by this Section 6.14 ("Authenticating Agent or Agents"),
with respect to the Debentures which shall be authorized to act on behalf of the
Trustee to authenticate the Debentures issued upon exchange, registration of
transfer or partial redemption thereof, and Debentures 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 Debentures 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, 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
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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.
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 the
Debentures. 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 is made pursuant to this Section, the Debentures 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 Debentures referred to in the within mentioned
indenture.
---------------------------
---------------------------
As Trustee
By:
-----------------------
As Authenticating Agent
By:
-----------------------
Authorized Officer
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ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1 Company to Furnish Names and Addresses of Holders. The
Company will furnish or cause to be furnished to the Trustee (unless the Trustee
is acting as the Securities Registrar).
(a) quarterly at least five Business Days before each Interest
Payment Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of each such date.
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished.
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 Debentures,
and the corresponding rights and privileges of the Trustee, shall be as
provided in the Trust Indenture Act.
(c) Every Holder of Debentures, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company
nor the Trustee nor any agent of either of them shall be held
accountable by reason of the disclosure of information as to the names
and addresses of the Holders made pursuant to the Trust Indenture Act.
SECTION 7.3 Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act, at the times and in the manner
provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of
not more than 12 months shall be transmitted within 60 days after
December 31 in each calendar year, commencing with December 31, 1997.
(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 or self regulatory organization of which the Trustee has
received notice by the Company upon which the Debentures are listed and
also with the Commission. The Company will notify the Trustee in writing
whenever the Debentures are listed on any stock exchange or
self-regulatory organization.
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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
Securities Exchange Act of 1934 shall be filed with the Trustee within 15 days
after the same is required to be filed with the Commission. Notwithstanding that
the Company may not be required to remain subject to the reporting requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company shall
continue to file with the Commission and provide the Trustee and Holders with
the annual reports and the information, documents and other reports which are
specified in Sections 13 and 15(d) of the Securities Exchange Act of 1934. The
Company also shall comply with the other provisions of Trust Indenture Act
Section 314(a).
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1 Company May Consolidate, Etc., Only on Certain Terms. The
Company shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, and no Person shall consolidate with or merge into the Company or
convey, transfer or lease its properties and assets substantially as an entirety
to the Company, unless:
(a) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a Person
organized and existing under the laws of the United States of America or
any State or the District of Columbia, and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest (including any
Additional Interest) on all the Debentures and the performance of every
covenant of this Indenture on the part of the Company to be performed or
observed and shall have provided for conversion rights in accordance
with Article 13;
(b) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time, or both,
would become an Event of Default, shall have happened and be continuing;
(c) such consolidation, merger, conveyance, transfer or lease is
permitted under the Trust Agreement and Guarantee and does not give rise
to any breach or violation of the Trust Agreement or Guarantee; and
(d) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and any such
supplemental indenture complies with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with, and the
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Trustee, subject to Section 6.1, may rely upon such Officers'
Certificate and Opinion of Counsel as conclusive evidence that such
transaction complies with this Section 8.1.
SECTION 8.2 Successor Corporation Substituted. Upon any consolidation or
merger by the Company with or into any other corporation, or any conveyance,
transfer or lease by the Company of its properties and assets substantially as
an entirety to any Person in accordance with Section 8.1, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein; and in the event of any such conveyance, transfer
or lease the Company shall be discharged from all obligations and covenants
under the Indenture and the Debentures and may be dissolved and liquidated.
Such successor corporation may cause to be signed, and may issue either
in its own name or in the name of the Company, any or all of the Debentures
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee, and, upon the Company Order of such successor
corporation instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Debentures which previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication
pursuant to a Company Order such provisions and any Debentures which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee on its behalf for the purpose pursuant to such provisions. All the
Debentures so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Debentures theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Debentures had
been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Debentures thereafter to
be issued as may be appropriate.
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Holders. Without
the consent of or notice to any Holder, 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:
(a) 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 Debentures contained; or
(b) 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
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(c) to add to covenants of the Company for the benefit of the
Holders of the Debentures or to surrender any right or power herein
conferred upon the Company; or
(d) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article 13; or
(e) to add any additional Events of Default; or
(f) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture, provided that such action pursuant to this clause
shall not materially adversely affect the interest of the Holders of
Debentures and for so long as any of the Preferred Securities shall
remain outstanding, the holders of such Preferred Securities; or
(g) to evidence and provide for the acceptance of appointment
hereunder by successor Trustee 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 Trust hereunder by more than one
Trustee, pursuant to the requirements of Section 6.11(b); or
(h) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act; or
(i) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities legends, if
any, to be placed on Debentures, and all other matters required pursuant
to Section 3.5 or otherwise necessary, desirable or appropriate in
connection with the issuance of Debentures to holders of Preferred
Securities in the event of a distribution of Debentures by the Trust if
a Special Event occurs and is continuing.
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 Debentures, 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 the Debentures under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Debenture affected thereby,
(a) except to the extent permitted by Section 3.11 with respect
to the extension of the interest payment period of the Debentures,
change the Stated Maturity of the principal of, or any installment of
interest (including any Additional Interest) on, the Debentures, or
reduce the principal amount thereof or the rate of interest thereon or
reduce any premium payable upon the redemption thereof, or change the
place of payment where, or the coin or currency in which, any Debenture
or interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Maturity thereof
(or, in the case of redemption, on or after the date fixed for
redemption thereof), or
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(b) adversely affect any right to convert or exchange any
Debenture or modify the provisions of this Indenture with respect to the
subordination of the Debentures in a manner adverse to such Holder; or
(c) reduce the percentage in principal amount of the Outstanding
Debentures, 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
(d) modify any of the provisions of this Section, Section 4.1,
Section 5.8, Section 5.13 or Section 10.6, 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
Debenture affected thereby, or the consent of the holders of all the
Preferred Securities as the case may be; or
(e) modify the provisions in Article 12 of this Indenture with
respect to the subordination of Outstanding Debentures in a manner
adverse to the Holders thereof;
provided that, so long as any Preferred Securities remain outstanding (i) no
such modification may be made that adversely affects the holders of such
Preferred Securities in any material respect, no termination of this Indenture
shall occur, and no waiver of any Event of Default or compliance with any
covenant under this Indenture shall be effective, without the prior consent of
the holders of at least a majority of the aggregate liquidation amount of such
Preferred Securities then outstanding unless and until the principal (and
premium, if any) of the Debentures and all accrued and unpaid interest
(including any Additional Interest) thereon have been paid in full and (ii)
where a consent under this Indenture would require the consent of each Holder of
Debentures, no such consent will be given by the Property Trustee without the
prior consent of each holder of the Preferred Securities.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.3 Execution of Supplemental Indentures. In executing or
accepting the additional trusts created by any supplemental indenture permitted
by this Article or the modifications thereby of the trust created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.1) shall be fully protected in conclusively 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 the Debentures theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
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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 Debentures to Supplemental Indentures.
Debentures authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Debentures
so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Debentures presented to the Trustee.
ARTICLE 10
COVENANTS
SECTION 10.1 Payment of Principal, Premium and Interest. The Company
covenants and agrees for the benefit of the Debentures that it will duly and
punctually pay the principal of (and premium, if any) and interest on the
Debentures in accordance with the terms of the Debentures and this Indenture.
SECTION 10.2 Maintenance of Office or Agency. The Company will maintain
in the United States, an office or agency where Debentures may be presented or
surrendered for payment and an office or agency where Debentures may be
surrendered for transfer or exchange and where notices and demands to or upon
the Company in respect of the Debentures 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 Debentures 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 the
United States 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 Debenture Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent with respect to the
Debentures, it will, on or before each due date of the principal of (or premium,
if any) or interest on any of the Debentures, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum sufficient to pay the
principal (or premium, if any) or interest so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided, and will
promptly notify the Trustee of its failure so to act. Whenever the Company shall
have one or more Paying Agents, it will, on or before each due date
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of the principal of or interest on the Debentures, deposit with a Paying Agent a
sum sufficient to pay the principal (or 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:
(a) hold all sums held by it for the payment of the principal of
(or premium, if any) or interest on Debentures 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;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Debentures) in the making of any payment of
principal (or premium, if any) or interest;
(c) 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
(d) 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 the Company or 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 (or premium, if
any) or interest on any Debenture and remaining unclaimed for two years after
such principal (or premium, if any) or interest has become due and payable shall
(unless otherwise required by mandatory provision of applicable escheat or
abandoned or unclaimed property law) be paid on Company Request, after all
payments owing the Trustee have been paid, 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 Debenture 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.
SECTION 10.4 Payment of Taxes and Other Claims. The Company will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary
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or upon the income, profits or property of the Company or any Subsidiary, and
(b) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 10.5 Statement as to Compliance. The Company shall deliver to
the Trustee, within 120 days after the end of each calendar year of the Company
an Officers' Certificate (signed by at least one of the officers referred to in
Section 314(a)(4) of the Trust Indenture Act) 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 10.5, compliance shall be determined without regard to
any grace period or requirement of notice provided pursuant to the terms of this
Indenture.
SECTION 10.6 Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any covenant or condition set forth in this
Article 10, if before or after the time for such compliance the Holders of at
least a majority in principal amount of the Outstanding Debentures, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company in
respect of any such covenant or condition shall remain in full force and effect.
SECTION 10.7 Additional Sums. In the event that (a) the Property Trustee
is the Holder of all of the Outstanding Debentures, (b) a Tax Event in respect
of the Trust shall have occurred and be continuing and (c) the Company shall not
have (i) redeemed the Debentures pursuant to Section 11.7 or 11.8 or (ii)
dissolved the Trust pursuant to Section 9.2(b) of the Trust Agreement, the
Company shall pay to the Trust (and its permitted successors or assigns under
the Trust Agreement) for so long as the Trust (or its permitted successor or
assignee) is the registered Holder of the Debentures, such additional amounts as
may be necessary in order that the amount of distributions (including any
Additional Amounts (as defined in the Trust Agreement)) then due and payable by
the Trust on the Preferred Securities and Common Securities that at any time
remain outstanding in accord with the terms thereof shall not be reduced as a
result of any Additional Taxes (the "Additional Sums"). Whenever in this
Indenture or the Debentures there is a reference in any context to the payment
of principal of (or premium, if any) or interest on the Debentures, 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, provided, however, that the extension of an interest payment period
pursuant to Section 3.11 or the Debentures shall not extend the payment of any
Additional Sums that may be due and payable during such interest payment period.
SECTION 10.8 Additional Covenants. The Company covenants and agrees with
each Holder of Debentures that so long as the Debentures are outstanding, if (i)
there shall have
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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 hereunder and (B) in respect of which the Company shall not have taken
reasonable steps to cure, (ii) the Company shall be in default with respect to
its payment of any obligations under the Guarantee or (iii) the Company shall
have given notice of its selection of an Extension Period as provided herein and
shall not have rescinded such notice, or such period, or any extension thereof,
shall be continuing, then the Company shall not, and shall cause any Subsidiary
not to, (x) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any shares of
the Company's capital stock or (y) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of the Company that
rank pari passu with or junior to the Debentures (other than (1) any dividend,
redemption, liquidation, interest, principal or guarantee payment by the Company
where the payment is made by way of securities (including capital stock) that
rank pari passu with or junior to the securities on which such dividend,
redemption, interest, principal or guarantee payment is being made, (2)
redemptions or purchases of any rights pursuant to the Company's Stockholder
Rights Agreement and the declaration of a dividend of such rights or the
issuance of preferred stock under such plans in the future, (3) payments under
the Guarantee, (4) purchases of Company Common Stock related to the issuance of
Company Common Stock under any of the Company's benefit plans for its directors,
officers or employees, (5) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one series or class of the
Company's capital stock for another series or class of the Company's capital
stock and (6) 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).
The Company also covenants with each Holder of the Debentures (i) that
for so long as Preferred Securities are outstanding not to convert the
Debentures except pursuant to a notice of conversion delivered to the Conversion
Agent by a holder of Preferred Securities and (ii) to maintain directly or
indirectly 100% ownership of the Common Securities of the Trust; provided,
however, that any permitted successor of the Company hereunder may succeed to
the Company's ownership of such Common Securities, (iii) not to voluntarily
terminate, wind-up, liquidate or dissolve the Trust, except (a) in connection
with a distribution of the Debentures to the holders of Preferred Securities in
dissolution of the Trust or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the Trust Agreement and (iv) to use
its reasonable efforts, consistent with the terms and provisions of the Trust
Agreement to cause the Trust to remain a business trust and not to be classified
as an association taxable as a corporation for United States Federal income tax
purposes.
SECTION 10.9 Registration Rights. The holders of the Preferred
Securities, the Holders, the holders of the Guarantee and the shares of Company
Common Stock issuable upon conversion of the Securities are entitled to the
benefits of a Registration Rights Agreement, dated as of December 12, 1997,
among the Company and the Initial Purchasers (the "Registration Rights
Agreement").
SECTION 10.10 Payment of Expenses of the Trust. In connection with the
offering, sale and issuance of the Debentures to the Property Trustee and in
connection with the sale of the Preferred Securities by the Trust, the Company
shall:
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(a) pay for all costs, fees and expenses relating to the
offering, sale and issuance of the Securities (as defined in the
Purchase Agreement), including commissions, discounts and expenses
payable pursuant to the Purchase Agreement and compensation of the
Trustee under the Indenture in accordance with the provisions of Section
6.7 of the Indenture;
(b) be responsible for and pay for all debts and obligations
(other than with respect to the Preferred Securities) of the Trust, pay
for all costs and expenses of the Trust (including, but not limited to,
costs and expenses relating to the organization of the Trust, the
offering, sale and issuance of the Preferred Securities (including
commissions, discounts and expenses in connection therewith), the fees
and expenses of the Property Trustee and the Delaware Trustee, the costs
and expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing
or accounting equipment, paying agent(s), registrar(s), transfer
agent(s), duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the
acquisition, financing, and disposition of Trust assets); and
(c) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
ARTICLE 11
REDEMPTION OR EXCHANGE OF DEBENTURES
SECTION 11.1 Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Debentures shall be evidenced by or pursuant to a Board
Resolution. In case of any redemption at the election of the Company, the
Company shall, not less than 45 days prior to the date fixed for redemption
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee in writing of such date and of the principal amount of Debentures to be
redeemed.
SECTION 11.2 Selection of Debentures to Be Redeemed. If less than all
the Debentures are to be redeemed, the particular Debentures to be redeemed
shall be selected not more than 45 days prior to the Redemption Date by the
Trustee from the Outstanding Debentures not previously called for redemption, by
lot or by such other 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 the Debentures Outstanding, provided that the unredeemed portion of
the principal amount of the Debentures be in an authorized denomination (which
shall not be less than the minimum authorized denomination) for the Debentures.
The Trustee shall promptly notify the Company in writing of the
Debentures 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 Debentures shall relate,
in the case of any Debenture redeemed or to be redeemed only in part, to the
portion of the principal amount of such Debenture which has been or is to be
redeemed. If the Company shall so direct, Debentures registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Debentures selected for redemption.
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SECTION 11.3 Notice of Redemption. Notice of redemption shall be given
by first-class mail, postage prepaid, mailed not later than the thirtieth (30th)
day, and not earlier than the sixtieth (60th) day, prior to the date fixed for
redemption, to each Holder of Debentures to be redeemed, at the address of such
Holder as it appears in the Securities Register.
With respect to Debentures to be redeemed, each notice of redemption
shall state:
(a) the Redemption Date;
(b) the redemption price at which the Debentures are to be
redeemed (the "Redemption Price");
(c) if less than all Outstanding Debentures are to be redeemed,
the identification (and, in the case of partial redemption, the
respective principal amounts) of the particular Debentures to be
redeemed (including, if relevant, the CUSIP or ISIN number);
(d) that on the Redemption Date the Redemption Price will become
due and payable upon each such Debenture or portion thereof, and that
upon deposit with the Paying Agent interest thereon, if any, shall cease
to accrue on and after the Redemption Date;
(e) the place or places where the Debentures are to be
surrendered for payment of the redemption price at which the Debentures
are to be redeemed;
(f) that a Holder of Debentures who desires to convert Debentures
called for redemption must satisfy the requirements for conversion
contained in the Debentures, the then existing Conversion Price, and the
date and time when the option to convert shall expire; and
(g) the record date for the determination of holders entitled to
receive payment of the Redemption Price, as provided in Section 11.5.
Notice of redemption of Debentures to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request, by
the Trustee in the name and at the expense of the Company and shall 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 Debenture designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Debenture.
SECTION 11.4 Deposit of Redemption Price. Prior to 12:00 noon, New York
City time, on the Redemption Date specified in the notice of redemption given as
provided in Section 11.3, 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,
segregate and hold in trust as provided in Section 4.2) an amount of money
sufficient to redeem on the Redemption Date all the Debentures so called for
redemption at the applicable Redemption Price.
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If any Debenture called for redemption has been converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Debenture shall (subject to any right of the
Holder of such Debenture or any Predecessor Debenture to receive interest as
provided in the last paragraph of Section 3.7) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 11.5 Debentures Payable on Redemption Date. If notice of
redemption has been given as provided in Section 11.3, the Debentures so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, including any accrued interest (and any Additional
Interest) thereon, and from and after such date (unless the Company shall
default in the payment of the Redemption Price or any accrued interest on
(including any Additional Interest)) such Debentures shall cease to bear
interest. Upon surrender of any such Debenture for redemption in accordance with
said notice, such Debenture shall be paid by the Company at the Redemption
Price, including any accrued interest (and any Additional Interest) to the
Redemption Date, provided, however, that installments of interest on Debentures
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Debentures, or one of more Predecessor Debentures,
registered as such at the close of business on the relevant Regular Record Dates
or Special Record Dates, as the case may be, according to their terms and the
provisions of Section 3.7. In the event that any date on which any Redemption
Price is payable is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, with the same
force and effect as if made on such date. Payment of the Redemption Price shall
be made to the Holders of such Debentures as they appear on the Securities
Register for the Debentures on the relevant record date, which shall be the date
which is the fifteenth (15th) day (whether or not a Business Day) preceding such
Redemption Date.
If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Debenture.
SECTION 11.6 Debentures Redeemed in Part. In the event of any redemption
in part, the Company shall not be required to (i) issue, register the transfer
of or exchange any Debenture during a period beginning at 9:00 a.m. (New York
City time) 15 Business Days before any selection for redemption of Debentures
and ending at 5:00 p.m. (New York City time) on the earliest date in which the
relevant notice of redemption is deemed to have been given to all Holders of
Debentures to be so redeemed and (ii) register the transfer of or exchange any
Debentures so selected for redemption, in whole or in part, except for the
unredeemed portion of any Debentures being redeemed in part.
Any Debenture which is to be redeemed only in part shall be surrendered
at the place of payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and make available for delivery to the Holder of
such Debenture without service charge, a new Debenture or Debentures, of any
authorized denomination as
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requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Debenture so surrendered.
Each Debenture shall be subject to partial redemption only in the amount of $50
or integral multiples thereof.
The Debentures are not entitled to the benefit of any Sinking or like
fund.
SECTION 11.7 Mandatory Redemption. Upon (i) repayment at maturity or
(ii) as a result of acceleration upon the occurrence and continuation of an
Event of Default, the Company shall redeem the Outstanding Debentures, in whole
but not in part, at a redemption price equal to 100% of the principal amount of
such Debentures plus any accrued and unpaid interest, including any Additional
Interest, to the date fixed for redemption.
SECTION 11.8 Optional Redemption. Except as set forth below, on and
after December 1, 2001 and subject to the next succeeding sentence, the Company
shall have the right, at any time and from time to time, to redeem the
Debentures, in whole or in part, upon notice given as set forth in Section 11.3
during the twelve month periods beginning on December 1 in each of the following
years at the indicated Redemption Price (expressed as a percentage of the
principal amount of the Debentures being redeemed), together with any accrued
but unpaid interest on the portion being redeemed:
<TABLE>
<CAPTION>
Redemption Price Redemption Price
Year (% of principal amount) Year (% of principal amount)
- ---- ------------------------ ---- -----------------------
<S> <C> <C> <C>
2001.......... 103.150% 2005......... 101.050%
2002.......... 102.625% 2006......... 100.525%
2003.......... 102.100% 2007 and thereafter 100.000%
2004.......... 101.575%
</TABLE>
The Company may not redeem the Debentures in part unless all accrued and
unpaid interest has been paid in full on all outstanding Debentures for all
quarterly interest periods terminating on or prior to the giving of notice of
the Redemption Date.
If a Tax Event shall occur and be continuing, the Company shall have
the right, upon not less than 30 nor more than 60 days' notice, to redeem the
Debentures in whole or in part, for cash upon the later of (i) 90 days following
the occurrence of such Tax Event or (ii) December 1, 2001, at a Redemption Price
equal to the principal amount of such Debentures plus any accrued and unpaid
interest, including Additional Interest, to the date fixed for such redemption.
SECTION 11.9 Exchange of Trust Securities for Debentures.
(a) At any time, the Company shall have the right to dissolve the
Trust and cause the Debentures to be distributed to the holders of the
Preferred Securities in dissolution of the Trust after satisfaction of
liabilities to creditors of the Trust as provided by applicable law.
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(b) If a Special Event in respect of the Trust shall occur and
be continuing, the Company shall give the Property Trustee notice of the
same. If a Special Event in respect of the Trust shall occur and be
continuing, the Trust Agreement requires the Property Trustee to direct
the Conversion Agent (as defined in the Trust Agreement) to exchange all
outstanding Trust Securities for the Debentures having a principal
amount equal to the aggregate liquidation amount of the Trust Securities
to be exchanged with accrued interest in an amount equal to any unpaid
distributions (including any Additional Amounts) on the Trust Securities
provided that, in the case of a Tax Event that shall have occurred and
be continuing, the Company shall have the right to direct the Property
Trustee that less than all, or none, of the Trust Securities be so
exchanged (i) if and for so long as the Company shall have elected to
pay any Additional Sums such that the amounts received by holders of the
Trust Securities that remain outstanding are not reduced as a result of
such Tax Event, and shall not have revoked any such election or failed
to make such payments or (ii) if the Company shall instead elect to
redeem the Debentures, in whole or in part, in the manner set forth in
Section 11.8.
ARTICLE 12
SUBORDINATION OF DEBENTURES
SECTION 12.1 Debentures Subordinate to Senior Debt. The Company
covenants and agrees, and each Holder of a Debenture, by its acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth in this Article, the payment of the principal of (and premium, if any)
and interest (including any Additional Interest) on each and all of the
Debentures are hereby expressly made junior and subordinate and subject in right
of payment to the prior payment in full of all amounts then due and payable in
respect of all Senior Debt (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Debt. Notwithstanding the foregoing, any and
all amounts payable to the Trustee pursuant to Section 6.7 are not subject to
the provisions of Article 12.
SECTION 12.2 Payment Over of Proceeds Upon Dissolution, Etc. Upon any
payment or distribution of assets of the Company to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceeding in connection with any insolvency or
bankruptcy proceeding of the Company (each such event, if any, herein sometimes
referred to as a "Proceeding"), then the holders of Senior Debt shall be
entitled to receive payment in full of principal of (and premium, if any) and
interest (including interest after the commencement of any such proceeding at
the rate specified in the applicable Senior Debt), if any, on such Senior Debt,
or provision shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt, before the
Holders of the Debentures, are entitled to receive or retain any payment or
distribution of any kind or character, whether in cash, property or Debentures
(including any payment or distribution which may be payable or deliverable by
reason of the payment of any other Debt of the Company (including the
Debentures) subordinated to the payment of the Debentures, but not including any
payments that are made from funds on deposit pursuant to Section 4.1(a)(ii)(B)
or funds on deposit for the redemption of Debentures for which notice of
Redemption has been given and the applicable Redemption Date has passed, such
payment or distribution being hereinafter referred to as a "Junior Subordinated
Payment"), in
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respect of principal of (or premium, if any) or interest (including any
Additional Interest, if any) on the Debentures or on account of the purchase or
other acquisition of Debentures by the Company or any Subsidiary and to that end
the holders of Senior Debt shall be entitled to receive, for application to the
payment thereof any payment or distribution of any kind of character, whether in
cash, property or Debentures, including any Junior Subordinated Payment, which
may be payable or deliverable in respect of the Debentures in any such
Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Debenture shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or Debentures, including any Junior Subordinated
Payment, before all Senior Debt is paid in full or payment thereof is provided
for in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, and if such fact shall, at or prior to the time of such
payment or distribution, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment or distribution shall be
paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other Person making payment
or distribution of assets of the Company for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
For the purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or securities"
shall not be deemed to include shares of stock of the Company, as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment which securities are subordinated in
right of payment to all then outstanding Senior Debt to substantially the same
extent as the Debentures are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person upon the terms and conditions set forth in Article 8 shall not be deemed
a Proceeding for the purposes of this Section, if the Person formed by such
consolidation or into which the Company is merged or the Person which acquires
by sale such properties and assets as an entirety, as the case may be, shall, as
a part of such consolidation, merger, or sale comply with the conditions set
forth in Article Eight.
SECTION 12.3 Prior Payment to Senior Debt upon Acceleration of
Debentures. In the event that the Debentures are declared due and payable before
their Maturity, then and in such event the holders of the Senior Debt
outstanding at the time the Debentures so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Debt (including any amounts due upon acceleration), or provision shall be
made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the Holders of the Debentures
are entitled to receive any payment or distribution of any kind or character,
whether in cash, properties or securities (including any Junior Subordinated
Payment) by the Company on account of the principal of (or premium, if any) or
interest (including any Additional Interest) on the Debentures or on account of
the purchase or other acquisition of Debentures by the Company or any
Subsidiary.
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In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of the Debentures prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known, as set forth in Section 12.10, to a
Responsible Officer of the Trustee or, as the case may be, such Holder, then and
in such event such payment shall be paid over and delivered forthwith to the
Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 12.2 would be applicable.
SECTION 12.4 No Payment When Senior Debt in Default.
(a) In the event and during the continuation of any default in
the payment of principal of (or premium, if any) or interest on any
Senior Debt, or in the event that any event of default with respect to
any Senior Debt shall have occurred and be continuing and shall have
resulted in such Senior Debt becoming or being declared due and payable
prior to the date on which it would otherwise have become due and
payable, unless and until such event of default shall have been cured or
waived or shall have ceased to exist and such acceleration shall have
been rescinded or annulled, or (b) in the event any judicial proceeding
shall be pending with respect to any such default in payment or such
event or default, then no payment or distribution of any kind or
character, whether in cash, properties or Debentures (including any
Junior Subordinated Payment) shall be made by the Company on account of
principal of (or premium, if any) or interest (including any Additional
Interest), if any, on the Debentures or on account of the purchase or
other acquisition of Debentures by the Company or any Subsidiary other
than payments made from funds on deposit pursuant to Section
4.1(a)(ii)(B) or from funds on deposit for the redemption of Debentures
for which notice of redemption has been given and the Redemption Date
has passed.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of the Debentures prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known as set forth in Section 12.10, to a
Responsible Officer of the Trustee or, as the case may be, such Holder, then and
in such event such payment shall be paid over and delivered forthwith to the
Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 12.2 would be applicable.
SECTION 12.5 Payment Permitted If No Default. Nothing contained in this
Article or elsewhere in this Indenture or in any of the Debentures shall prevent
(a) the Company, at any time except during the pendency of any Proceeding
referred to in Section 12.2 or under the conditions described in Sections 12.3
and 12.4, from making payments at any time of principal of (or premium, if any)
or interest on the Debentures, or (b) the application by the Trustee of any
money deposited with it hereunder to the payment of or on account of the
principal of (or premium, if any) or interest (including any Additional
Interest) on the Debentures or the retention of such payment by the Holders, if,
at the time of such application by the Trustee, a Responsible Officer of the
Trustee did not have actual knowledge that such payment would have been
prohibited by the provisions of this Article.
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SECTION 12.6 Subrogation to Rights of Holders of Senior Debt. Subject to
the payment in full of all Senior Debt, or the provision for such payment in
cash or cash equivalents or otherwise in a manner satisfactory to the holders of
Senior Debt, the Holders of the Debentures shall be subrogated to the extent of
the payments or distributions made to the holders of such Senior Debt pursuant
to the provisions of this Article (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to Senior
Debt of the Company to substantially the same extent as the Debentures are
subordinated to the Senior Debt and is entitled to like rights of subrogation by
reason of any payments or distributions made to holders of such Senior Debt) to
the rights of the holders of such Senior Debt to receive payments and
distributions of cash, property and securities applicable to the Senior Debt
until the principal of (and premium, if any) and interest on the Debentures
shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of any cash, property or
securities to which the Holders of the Debentures or the Trustee would be
entitled except for the provisions of this Article, and no payments pursuant to
the provisions of this Article to the holders of Senior Debt by Holders of the
Debentures or the Trustee, shall, as among the Company, its creditors other than
holders of Senior Debt, and the Holders of the Debentures, be deemed to be a
payment or distribution by the Company to or on account of the Senior Debt.
SECTION 12.7 Provisions Solely to Define Relative Rights. The provisions
of this Article are and are intended solely for the purpose of defining the
relative rights of the Holders of the Debentures on the one hand and the holders
of Senior Debt on the other hand. Nothing contained in this Article or elsewhere
in this Indenture or in the Debentures is intended to or shall (a) impair, as
between the Company and the Holders of the Debentures, the obligations of the
Company, which are absolute and unconditional, to pay to the Holders of the
Debentures the principal of (and premium, if any) and interest (including any
Additional Interest) on the Debentures as and when the same shall become due and
payable in accordance with their terms, or (b) affect the relative rights
against the Company of the Holders of the Debentures and creditors of the
Company other than their rights in relation to the holders of Senior Debt, or
(c) prevent the Trustee or the Holder of any Debenture from exercising all
remedies otherwise permitted by applicable law upon default under this Indenture
including, without limitation, filing and voting claims in any Proceeding,
subject to the rights, if any, under this Article of the holders of Senior Debt
to receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
SECTION 12.8 Trustee to Effectuate Subordination. Each Holder of a
Debenture by his or her acceptance thereof authorizes and directs the Trustee on
his or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination provided in this Article and
appoints the Trustee his or her attorney-in-fact for any and all such purposes.
SECTION 12.9 No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Debt to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof that any such holder may have or be otherwise charged with.
SECTION 12.10 Notice to Trustee. The Company shall give prompt written
notice to the Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the Debentures.
Notwithstanding the provisions of this Article or any
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other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Debentures, unless and until the
Trustee shall have received written notice thereof from the Company or a person
representing itself as a holder of Senior Debt or from any trustee, agent or
representative therefor (whether or not the facts contained in such notice are
true).
SECTION 12.11 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Article 6, and the
Holders of the Debentures shall be entitled to conclusively rely upon any order
or decree entered by any court of competent jurisdiction in which a Proceeding
is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Debentures, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.
SECTION 12.12 Trustee Not Fiduciary for Holders of Senior Debt. With
respect to the holders of the Senior Debt of the Company, the Trustee undertakes
to perform or observe only such of its obligations and covenants as are set
forth in this Article 12, and no implied covenants or obligations with respect
to the holders of such Senior Debt shall be read into this Indenture against
Chase and/or the Trustee. Chase and/or the Trustee shall not be deemed to owe
any fiduciary duty to the holders of such Senior Debt and, subject to the
provisions of Section 6.3, neither the Trustee (nor Chase) shall be liable to
the holder of any Senior Debt if it shall pay over or deliver to Holders, the
Company, or any other person, money or assets to which any holder of such Senior
Debt shall be entitled to by virtue of this Article 12 or otherwise.
SECTION 12.13 Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights. The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior Debt which
may at any time be held by it, to the same extent as any other holder of Senior
Debt, and, subject to the requirements of the Trust Indenture Act, nothing in
this Indenture shall deprive the Trustee of any of its rights as such holder.
SECTION 12.14 Article Applicable to Paying Agents. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intent
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee.
SECTION 12.15 Certain Conversions or Exchanges Deemed Payment. For the
purpose of this Article only, (a) the issuance and delivery of junior securities
upon conversion or exchange of Debentures shall not be deemed to constitute a
payment or distribution on account of the principal of (or premium, if any) or
interest (including any Additional Interest) on the Debentures or on account of
the purchase or other acquisition of Debentures, and (b) the payment, issuance
or delivery of cash (including any payments for fractional shares), property or
securities (other than junior securities) upon conversion or exchange of a
Debenture shall be deemed to constitute payment on account of the principal of
such security. For the purpose of this Section, the term
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"junior securities" means (i) shares of any stock of any class of the Company
and (ii) securities of the Company which are subordinated in right of payment to
all Senior Debt which may be outstanding at the time of issuance or delivery of
such securities to substantially the same extent as, or to a greater extent
than, the Debentures are so subordinated as provided in this Article.
ARTICLE 13
CONVERSION OF DEBENTURES
SECTION 13.1 Conversion Rights. Subject to and upon compliance with the
provisions of this Article, the Debentures are convertible, at the option of the
Holder, at any time prior to the redemption or maturity, into fully paid and
nonassessable shares of Company Common Stock at an initial conversion rate of
0.9865 shares of Company Common Stock for each $50 in aggregate principal amount
of Debentures (equal to a conversion price of approximately $50.685 per share of
Company Common Stock), subject to adjustment as described in this Article 13 (as
adjusted, the "Conversion Price"). A Holder of Debentures may convert any
portion of the principal amount of the Debentures into that number of fully paid
and nonassessable shares of Company Common Stock (calculated as to each
conversion to the nearest 1/100th of a share) obtained by dividing the principal
amount of the Debentures to be converted by the Conversion Price. In case a
Debenture or portion thereof is called for redemption, such conversion right in
respect of the Debenture or portion so called shall expire at the close of
business on the Redemption Date, unless the Company defaults in making the
payment due upon redemption.
SECTION 13.2 Conversion Procedures.
(a) In order to convert all or a portion of the Debentures, the
Holder thereof shall deliver to the Property Trustee, as conversion
agent or to such other agent appointed for such purposes (the
"Conversion Agent") an irrevocable Notice of Conversion setting forth
the principal amount of Debentures to be converted, together with the
name or names, if other than the Holder, in which the shares of Company
Common Stock should be issued upon conversion and, if such Debentures
are definitive Debentures, surrender to the Conversion Agent the
Debentures to be converted, duly endorsed or assigned to the Company or
in blank. In addition, a holder of Preferred Securities may exercise its
right under the Trust Agreement to convert such Preferred Securities
into Company Common Stock by delivering to the Conversion Agent an
irrevocable Notice of Conversion setting forth the information called
for by the preceding sentence and directing the Conversion Agent (i) to
exchange such Preferred Security for a portion of the Debentures held by
the Trust (at an exchange rate of $50 principal amount of Debentures for
each Preferred Security) and (ii) to immediately convert such
Debentures, on behalf of such holder, into Company Common Stock pursuant
to this Article 13 and, if such Preferred Securities are in definitive
form, surrendering such Preferred Securities, duly endorsed or assigned
to the Company or in blank. So long as any Preferred Securities are
outstanding, the Trust shall not convert any Debentures except pursuant
to a Notice of Conversion delivered to the Conversion Agent by a holder
of Preferred Securities.
If a Notice of Conversion is delivered on or after the Regular
Record Date and prior to the subsequent Interest Payment Date, the
Holder of record on the Regular Record Date will be entitled to receive
the interest paid on the subsequent Interest Payment Date on the
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portion of Debentures to be converted notwithstanding the conversion
thereof prior to such Interest Payment Date. Except as otherwise
provided in the immediately preceding sentence, in the case of any
Debenture which is converted, interest whose Stated Maturity is on or
after the date of conversion of such Debenture shall not be payable, and
the Company shall not make nor be required to make any other payment,
adjustment or allowance with respect to accrued but unpaid interest on
the Debentures being converted, which shall be deemed to be paid in
full. Debentures submitted for conversion prior to the expiration of
conversion rights as provided in Section 13.3 shall be deemed to have
been effected immediately prior to the close of business on the day on
which the Notice of Conversion was received (the "Conversion Date") by
the Conversion Agent from the Holder or from a holder of the Preferred
Securities effecting a conversion thereof pursuant to its conversion
rights under the Trust Agreement, as the case may be. The Person or
Persons entitled to receive Company Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or
holders of such Company Common Stock as of the Conversion Date and such
Person or Persons will cease to be a record Holder or record Holders of
the Debentures on that date. As promptly as practicable on or after the
Conversion Date, the Company shall issue and deliver at the office of
the Conversion Agent, unless otherwise directed by the Holder or holder
in the Notice of Conversion, a certificate or certificates for the
number of full shares of Company Common Stock issuable upon such
conversion, together with the cash payment, if any, in lieu of any
fraction of any share to the Person or Persons entitled to receive the
same. The Conversion Agent shall deliver such certificate or
certificates to such Person or Persons.
(b) The Company's delivery upon conversion of the fixed number of
shares of Company Common Stock into which the Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares)
shall be deemed to satisfy the Company's obligation to pay the principal
amount at Maturity of the portion of Debentures so converted
and any unpaid interest (including Additional Interest and Liquidated
Damages) accrued on such Debentures at the time of such conversion.
(c) No fractional shares of Company Common Stock will be issued
as a result of conversion, but in lieu thereof, the Company shall pay to
the Conversion Agent a cash adjustment in an amount equal to the same
fraction of the Current Market Price with respect to such fractional
interest on the date on which the Debentures or Preferred Securities, as
the case may be, were duly surrendered to the Conversion Agent for
conversion, and the Conversion Agent in turn will make such payment, if
any, to the Holder of the Securities or the holder of the Preferred
Securities so converted.
(d) In the event of the conversion of any Debenture in part only,
a new Debenture or Debentures for the unconverted portion thereof will
be issued in the name of the Holder thereof upon the cancellation of the
Debenture converted in part in accordance with Section 3.5.
(e) In effecting the conversion transactions described in this
Section, the Conversion Agent is acting as agent of the holders of
Preferred Securities (in the exchange of Preferred Securities for
Debentures) and as agent of the Holders of Debentures (in the conversion
of Debentures into Company Common Stock), as the case may be, directing
it to effect such conversion transactions. The Conversion Agent is
hereby authorized (i) to
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exchange Debentures held by the Trust from time to time for Preferred
Securities in connection with the conversion of such Preferred
Securities in accordance with this Article 13 and (ii) to convert all or
a portion of the Debentures into Company Common Stock and thereupon to
deliver such shares of Company Common Stock in accordance with the
provisions of this Article 13 and to deliver to the Trust a new
Debenture or Debentures for any resulting unconverted principal amount.
(f) Except as provided in Section 2.6, all shares of Company
Common Stock delivered upon any conversion of Restricted Securities
shall bear a Restrictive Securities Legend substantially in the form of
the legend required to be set forth on such Debentures and shall be
subject to the restrictions on transfer provided in such legend and in
Section 3.5 hereof. Neither the Trustee nor the Conversion Agent shall
have any responsibility for the inclusion or content of any such
Restrictive Securities Legend on such Company Common Stock; provided,
however, that the Trustee or the Conversion Agent shall have provided to
the Company or to the Company's transfer agent for such Company Common
Stock, prior to or concurrently with a request to the Company to deliver
to such Conversion Agent certificates for such Company Common Stock,
written notice that the Debentures delivered for conversion are
Restricted Securities.
(g) The Company shall at all times reserve and keep available
out of its authorized and unissued Company Common Stock, solely for
issuance upon the conversion of the Debentures, such number of shares of
Company Common Stock as shall from time to time be issuable upon the
conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, the Company shall be entitled to deliver upon conversion of
Debentures shares of Company Common Stock reacquired and held in the
treasury of the Company (in lieu of the issuance of authorized and
unissued shares of Company Common Stock) so long as any such treasury
shares are free and clear of all liens, charges, security interests or
encumbrances. Whenever the Company issues shares of Company Common Stock
upon conversion of Debentures, and the Company has in effect at such
time a stock purchase rights agreement under which holders of Company
Common Stock are issued rights ("Rights") entitling the holders under
certain circumstances to purchase an additional share or shares of
stock, the Company will issue, together with each such share of Company
Common Stock, such number of Rights (which number may be a fraction) as
shall at that time be issuable with a share of Company Common Stock
pursuant to such stock purchase rights agreement. Any shares of Company
Common Stock issued upon conversion of the Debentures shall be duly
authorized, validly issued and fully paid and nonassessable. The
Conversion Agent shall deliver the shares of Company Common Stock
received upon conversion of the Debentures to the converting Holder free
and clear of all liens, charges, security interests and encumbrances,
except for United States withholding taxes. The Company shall use its
best efforts to obtain and keep in force such governmental or regulatory
permits or other authorizations as may be required by law, and shall
comply with all applicable requirements as to registration or
qualification of Company Common Stock (and all requirements to list
Company Common Stock issuable upon conversion of Debentures that are at
the time applicable), in order to enable the Company to lawfully issue
Company Common Stock upon conversion of the Debentures and to lawfully
deliver Company Common Stock to each Holder upon conversion of the
Debentures.
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(h) The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Company Common Stock on
conversion of Debentures. The Company shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in
the issue and delivery of shares of Company Common Stock in a name other
than that in which the Debentures so converted were registered, and no
such issue or delivery shall be made unless and until the Person
requesting such issue has paid to the Conversion Agent the amount of any
such tax, or has established to the satisfaction of the Conversion Agent
that such tax has been paid.
(i) Nothing in this Article 13 shall limit the requirement of the
Company to withhold taxes pursuant to the terms of the Debentures or as
set forth in this Agreement or otherwise require the Trustee or the
Company to pay any amounts on account of such withholdings.
SECTION 13.3 Expiration of Conversion Rights. The conversion rights of
Holders of Debentures shall expire at the close of business on the date set for
redemption of the Debentures upon the redemption or Stated Maturity of the
Debentures.
SECTION 13.4 Conversion Price Adjustments. The conversion price shall be
subject to adjustment (without duplication) from time to time as follows:
(a) In case the Company shall, while any of the Debentures are
outstanding, (i) pay a dividend or make a distribution with respect to
its Company Common Stock exclusively in shares of Company Common Stock,
(ii) subdivide its outstanding shares of Company Common Stock, (iii)
combine its outstanding shares of Company Common Stock into a smaller
number of shares or (iv) issue by reclassification of its shares of
Company Common Stock any shares of capital stock of the Company, the
conversion privilege and the Conversion Price in effect immediately
prior to such action shall be adjusted so that the Holder of any
Debentures thereafter surrendered for conversion shall be entitled to
receive the number of shares of capital stock of the Company which he
would have owned immediately following such action had such Debentures
been converted immediately prior thereto. An adjustment made pursuant to
this subsection (a) shall become effective immediately after the record
date in the case of a dividend or other distribution and shall become
effective immediately after the effective date in case of a subdivision,
combination or reclassification (or immediately after the record date if
a record date shall have been established for such event). If, as a
result of an adjustment made pursuant to this subsection (a), the Holder
of any Debenture thereafter surrendered for conversion shall become
entitled to receive shares of two or more classes or series of capital
stock of the Company, the Board of Directors (whose determination shall
be conclusive and shall be described in a Board Resolution filed with
the Trustee) shall determine the allocation of the adjusted Conversion
Price between or among shares of such classes or series of capital
stock. In the event that such dividend, distribution, subdivision,
combination or issuance is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be
in effect if such record date had not been fixed.
(b) In case the Company shall, while any of the Debentures are
Outstanding, issue rights or warrants to all holders of its Company
Common Stock entitling them (for a period expiring within 45 days after
the record date for the determination of stockholders entitled to
receive such rights or warrants) to subscribe for or purchase shares of
Company
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Common Stock at a price per share less than the Current Market Price per
share of Company Common Stock on such record date, the Conversion Price
for the Debentures shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect
immediately prior to the date of issuance of such rights or warrants by
a fraction of which the numerator shall be the number of shares of
Company Common Stock outstanding on the date of issuance of such rights
or warrants plus the number of shares which the aggregate offering price
of the total number of shares so offered for subscription or purchase
would purchase at such Current Market Price, and of which the
denominator shall be the number of shares of Company Common Stock
outstanding on the date of issuance of such rights or warrants plus the
number of additional shares of Company Common Stock offered for
subscription or purchase. Such adjustment shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such rights or warrants. For the purposes of this
subsection, the number of shares of Company Common Stock at any time
outstanding shall not include shares held in the treasury of the
Company. The Company shall not issue any rights or warrants in respect
of shares of Company Common Stock held in the treasury of the Company.
In case any rights or warrants referred to in this subsection in respect
of which an adjustment shall have been made shall expire unexercised
within 45 days after the same shall have been distributed or issued by
the Company, the Conversion Price shall be readjusted at the time of
such expiration to the Conversion Price that would have been in effect
if no adjustment had been made on account of the distribution or
issuance of such expired rights or warrants.
(c) Subject to the last sentence of this subparagraph, in case
the Company shall, by dividend or otherwise, distribute to all holders
of its Company Common Stock evidences of its indebtedness, shares of any
class or series of capital stock, cash or assets (including securities,
but excluding any rights or warrants referred to in subparagraph (b),
any dividend or distribution paid exclusively in cash and any dividend
or distribution referred to in subparagraph (a) of this Section 13.4),
the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect
immediately prior to the effectiveness of the Conversion Price reduction
contemplated by this subparagraph (c) by a fraction of which the
numerator shall be the Current Market Price per share of Company Common
Stock on the date fixed for the payment of such distribution (the
"Reference Date") less the fair market value (as determined in good
faith by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors), on the
Reference Date, of the portion of the evidences of indebtedness, shares
of capital stock, cash and assets so distributed applicable to one share
of Company Common Stock and the denominator shall be such Current Market
Price per share of Company Common Stock, such reduction to become
effective immediately prior to the opening of business on the day
following the Reference Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not occurred. For purposes of this
subparagraph (c), any dividend or distribution that includes shares of
Company Common Stock or rights or warrants to subscribe for or purchase
shares of Company Common Stock shall be deemed instead to be (i) a
dividend or distribution of the evidences of indebtedness, shares of
capital stock, cash or assets other than such shares of Company Common
Stock or such rights or warrants (making any Conversion Price reduction
required by this subparagraph (c)) immediately followed by (ii)
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<PAGE> 80
a dividend or distribution of such shares of Company Common Stock or
such rights or warrants (making any further conversion price reduction
required by subparagraph (a) or (b)), except (A) the Reference Date of
such dividend or distribution as defined in this subparagraph shall be
substituted as (x) "the record date in the case of a dividend or other
distribution," and (y) "the record date for the determination of
stockholders entitled to receive such rights or warrants" and (z) "the
date fixed for such determination" within the meaning of subparagraphs
(a) and (b) and (B) any shares of Company Common Stock included in such
dividend or distribution shall not be deemed outstanding for purposes of
computing any adjustment of the conversion price in subparagraph (a).
(d) In case the Company shall pay or make a dividend or other
distribution on its Company Common Stock exclusively in cash (excluding
(i) all cash dividends, if the amount thereof does not exceed the per
share amount of the immediately preceding regular cash dividend (as
adjusted to reflect any of the events referred to in subparagraphs (a),
(b), (c), (d) or (e) of this Section and (ii) all cash dividends, if the
annualized amount thereof per share of Company Common Stock does not
exceed 12.5% of the Current Market Price per share of Company Common
Stock on the trading day immediately preceding the date of declaration
of such dividend), the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the effectiveness of the Conversion
Price reduction contemplated by this subparagraph (d) by a fraction of
which the numerator shall be the Current Market Price per share of
Company Common Stock on the date fixed for the payment of such
distribution less the amount of cash so distributed (excluding that
portion of such distribution that does not exceed 12.5% of the Current
Market Price per share, determined as provided above) applicable to one
share of Company Common Stock and the denominator shall be such Current
Market Price per share of Company Common Stock, such reduction to become
effective immediately prior to the opening of business on the day
following the date fixed for the payment of such distribution; provided,
however, that in the event the portion of the cash so distributed
applicable to one share of Company Common Stock is equal to or greater
than the Current Market Price per share of Company Common Stock on the
record date mentioned above (excluding that portion of such distribution
that does not exceed 12.5% of the Current Market Price per share,
determined as provided above), in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder of shares of
Debentures shall have the right to receive upon conversion the amount of
cash such Holder would have received had such Holder converted each
share of the Debentures immediately prior to the record date for the
distribution of the cash (less that portion of such distribution that
does not exceed 12.5% of the Current Market Price per share, determined
as provided above). In the event that such dividend or distribution is
not so paid or made, the Conversion Price shall again be adjusted to be
the conversion price which would then be in effect if such record date
had not been fixed.
(e) In case a tender or exchange offer (other than an odd-lot
offer) made by the Company or any Subsidiary of the Company for all or
any portion of Company Common Stock shall expire and such tender or
exchange offer shall involve the payment by the Company or such
Subsidiary of consideration per share of Company Common Stock having a
fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors) at the last time (the "Expiration
Time") tenders or exchanges may be made pursuant to
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<PAGE> 81
such tender or exchange offer (as it shall have been amended) that
exceeds 110% of the Current Market Price per share of Company Common
Stock on the trading day next succeeding the Expiration Time, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately
prior to the effectiveness of the Conversion Price reduction
contemplated by this subparagraph (e) by a fraction of which the
numerator shall be the number of shares of Company Common Stock
outstanding (including any tendered or exchanged shares) at the
Expiration Time (including the Purchased Shares) (as defined below)
multiplied by the Current Market Price per share of Company Common Stock
on the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based
on the acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of all shares validly tendered or exchanged
and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares") (excluding that portion of such consideration that does not
exceed 110% of the Current Market Price per share) and (y) the product
of the number of shares of Company Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the Current Market Price
per share of Company Common Stock on the trading day next succeeding the
Expiration Time, such reduction to become effective immediately prior to
the opening of business on the day following the Expiration Time. In the
event that such tender or exchange offer is not so made, the Conversion
Price shall again be adjusted to be the Conversion Price which would
then be in effect if such record date had not been fixed.
(f) If the distribution date for the Rights of the Company
provided in the Stockholder Rights Agreement occurs prior to the
Conversion Date, and a Holder of the Debentures who converts such
Debentures after such distribution date is not entitled to receive the
Rights that would otherwise be attached (but for the date of conversion)
to the shares of Company Common Stock received upon such conversion,
then an adjustment shall be made to the Conversion Price pursuant to
clause (ii) of Section 13.4(a) as if the Rights were being distributed
to Company Common Stockholders of the Company immediately prior to such
conversion. If such an adjustment is made and the Rights are later
redeemed, invalidated or terminated, then a corresponding reversing
adjustment shall be made to the Conversion Price, on an equitable basis,
to take account of such event.
(g) The Company shall have the right to reduce from time to time
the Conversion Price by any amount selected by the Company for any
period of at least 30 days, provided, that Company shall give at least
15 days' written notice of such reduction to the Trustee and the
Property Trustee. The Company may, at its option, make such reductions
in the Conversion Price, in addition to those set forth above in Section
13.4(a), as the Board of Directors deems advisable to avoid or diminish
any income tax to holders of Company Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from
any event treated as such for United States Federal income tax purposes.
(h) Notwithstanding anything to the contrary in this Section
13.4, no adjustment of the Conversion Price will be made upon the
issuance of any shares of Company Common Stock (or securities
convertible or exchangeable for Company Common Stock), except as
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<PAGE> 82
specifically provided above, including pursuant to any present or future
plan providing for the reinvestment of dividends or interest payable on
securities of the Company and the investment of additional optional
amounts in shares of Company Common Stock under any such plan, or the
issuance of any shares of Company Common Stock or options or rights to
purchase such shares pursuant to any present or future employee benefit
plan or program of the Company or pursuant to any option, warrant,
right, or exercisable, exchangeable or convertible security which does
not constitute an issuance to all holders of Company Common Stock of
rights or warrants entitling holders of such rights or warrants to
subscribe for or purchase Company Common Stock at less than the Current
Market Price. Further, such issuances shall not be deemed to constitute
an issuance of Company Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment
provisions described above applies. There shall also be no adjustment of
the Conversion Price in case of the issuance of any stock (or securities
convertible into or exchangeable for stock) of the Company except as
specifically described in this Article 13. No adjustment in the
Conversion Price will be required unless such adjustment would require
an increase or decrease of at least 1% of the Conversion Price, but any
adjustment that would otherwise be required to be made shall be carried
forward and taken into account in a subsequent adjustment.
(i) If any action would require adjustment of the Conversion
Price pursuant to more than one of the provisions described above, only
one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value to the Holder of the
Debentures.
SECTION 13.5 Fundamental Change.
(a) In the event that the Company is a party to any transaction
(including, without limitation, a merger other than a merger that does
not result in a reclassification, conversion, exchange or cancellation
of Company Common Stock), consolidation, sale of all or substantially
all of the assets of the Company, recapitalization or reclassification
of Company Common Stock (other than a change in par value, or from par
value to no par value, or from no par value to par value or as a result
of a subdivision or combination of Company Common Stock) or any
compulsory share exchange (each of the foregoing being referred to as a
"Transaction"), in each case, as a result of which shares of Company
Common Stock shall be converted into the right to receive, or shall be
exchanged for, (i) in the case of any Transaction other than a
Transaction involving a Common Stock Fundamental Change (and subject to
funds being legally available for such purpose under applicable law and
the time of such conversion), securities, cash or other property, each
Debenture shall thereafter be convertible into the kind and, in the case
of a Transaction which does not involve a Fundamental Change, amount of
securities, cash and other property receivable upon the consummation of
such Transaction by a holder of that number of shares of Company Common
Stock into which a Debenture was convertible immediately prior to such
Transaction, or (ii) in the case of a Transaction involving a Common
Stock Fundamental Change, common stock, each Debenture shall thereafter
be convertible (in the manner described herein) into common stock of the
kind received by holders of Company Common Stock (but in each case after
giving effect to any adjustment discussed in paragraphs (b) and (c)
relating to a Fundamental Change if such Transaction constitutes
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<PAGE> 83
a Fundamental Change). The holders of Debentures or Preferred Securities
will have no voting rights with respect to any Transaction.
(b) If any Fundamental Change occurs, then the Conversion Price
in effect will be adjusted immediately after such Fundamental Change as
described in paragraph (c) below. In addition, in the event of a Common
Stock Fundamental Change, each Debenture shall be convertible solely
into common stock of the kind received by holders of Company Common
Stock as a result of such Common Stock Fundamental Change.
(c) The Conversion Price in the case of any Transaction involving
a Fundamental Change will be adjusted immediately after such Fundamental
Change:
(i) in the case of a Non-Stock Fundamental Change, the
Conversion Price of the Debentures will thereupon become the
lower of (A) the Conversion Price in effect immediately prior to
such Non-Stock Fundamental Change, but after giving effect to any
other prior adjustments effected pursuant to the preceding
paragraphs, and (B) the result obtained by multiplying the
greater of the Applicable Price or the then applicable Reference
Market Price by a fraction of which the numerator will be $50 and
the denominator will be (x) the amount of the Redemption Price
for one Debenture if the Redemption Date were the date of such
Non-Stock Fundamental Change (or, for the period commencing on
the first date of original issuance of the Debentures and through
December 1, 1998, and the twelve-month periods commencing
December 1, 1998, December 1, 1999 and December 1, 2000, the
product of 105.250%, 104.725%, 104.200% and 103.675%,
respectively, multiplied by $50) plus (y) any then-accrued and
unpaid interest on one Debenture; and
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price of the Debentures in effect immediately prior to
such Common Stock Fundamental Change, but after giving effect to
any other prior adjustments effected pursuant to the preceding
paragraphs, will thereupon be adjusted by multiplying such
Conversion Price by a fraction of which the numerator will be the
Purchaser Stock Price and the denominator will be the Applicable
Price; provided, however, that in the event of a Common Stock
Fundamental Change in which (A) 100% of the value of the
consideration received by a holder of common stock is common
stock of the successor, acquiror, or other third party (and cash,
if any, is paid only with respect to any fractional interests in
such common stock resulting from such Common Stock Fundamental
Change) and (B) all of common stock will have been exchanged for,
converted into, or acquired for common stock (and cash with
respect to fractional interests) of the successor, acquiror, or
other third party, the Conversion Price of the Debentures in
effect immediately prior to such Common Stock Fundamental Change
will thereupon be adjusted by multiplying such Conversion Price
by a fraction of which the numerator will be one and the
denominator will be the number of shares of common stock of the
successor, acquiror, or other third party received by a holder of
one share of common stock as a result of such Common Stock
Fundamental Change.
SECTION 13.6 Notice of Adjustments of Conversion Price. Whenever the
Conversion Price is adjusted as herein provided:
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<PAGE> 84
(a) the Company shall compute the adjusted conversion price and
shall prepare a certificate signed by the Chief Financial Officer or the
Treasurer of the Company setting forth the adjusted conversion price and
showing in reasonable detail the facts upon which such adjustment is
based, and such certificate shall forthwith be filed with the Trustee,
the Conversion Agent and the transfer agent for the Preferred Securities
and the Debentures; and
(b) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as practicable
be mailed by the Company to all record holders of Preferred Securities
and the Debentures at their last addresses as they appear upon the stock
transfer books of the Company and the Trust and the Securities
Registrar.
SECTION 13.7 Prior Notice of Certain Events. In case:
(a) the Company shall (i) declare any dividend (or any other
distribution) on its Company Common Stock, other than (A) a dividend
payable in shares of Company Common Stock or (B) a dividend payable in
cash that would not require an adjustment pursuant to Section 13.4(c) or
(d) or (ii) authorize a tender or exchange offer that would require an
adjustment pursuant to Section 13.4(e);
(b) the Company shall authorize the granting to all holders of
Company Common Stock of rights or warrants to subscribe for or purchase
any shares of stock of any class or series or of any other rights or
warrants;
(c) of any reclassification of Company Common Stock (other than a
subdivision or combination of the outstanding Company Common Stock, or a
change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of stockholders of the Company
shall be required, or of the sale or transfer of all or substantially
all of the assets of the Company or of any compulsory share exchange
whereby Company Common Stock is converted into other securities, cash or
other property; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall (A) if any Preferred Securities are outstanding under the
Trust Agreement, cause to be filed with the transfer agent for the Preferred
Securities, and shall cause to be mailed to the holders of record of the
Preferred Securities, at their last addresses as they shall appear upon the
stock transfer books of the Trust or (B) shall cause to be mailed to all Holders
at their last addresses as they shall appear in the Security Register, at least
15 days prior to the applicable record or effective date hereinafter specified,
a notice stating (x) the date on which a record (if any) is to be taken for the
purpose of such dividend, distribution, rights or warrants or, if a record is
not to be taken, the date as of which the holders of Company Common Stock of
record to be entitled to such dividend, distribution, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, share exchange, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Company Common Stock of record shall be entitled to exchange their
shares of Company
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<PAGE> 85
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).
SECTION 13.8 Certain Additional Rights. In case the Company shall, by
dividend or otherwise, declare or make a distribution on its Company Common
Stock referred to in Section 13.4(c) or 13.4(d) (including, without limitation,
dividends or distributions referred to in the last sentence of Section 13.4(c)),
the Holders of the Debentures, upon the conversion thereof subsequent to the
close of business on the date fixed for the determination of stockholders
entitled to receive such distribution and prior to the effectiveness of the
Conversion Price adjustment in respect of such distribution, shall also be
entitled to receive for each share of Company Common Stock into which the
Debentures are converted, the portion of the shares of Company Common Stock,
rights, warrants, evidences of indebtedness, shares of capital stock, cash and
assets so distributed applicable to one share of Company Common Stock; provided,
however, that, at the election of the Company (whose election shall be evidenced
by a resolution of the Board of Directors) with respect to all Holders so
converting, the Company may, in lieu of distributing to such Holder any portion
of such distribution not consisting of cash or securities of the Company, pay
such Holder an amount in cash equal to the fair market value thereof (as
determined in good faith by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors). If any
conversion of Debentures described in the immediately preceding sentence occurs
prior to the payment date for a distribution to holders of Company Common Stock
which the Holder of Debentures so converted is entitled to receive in accordance
with the immediately preceding sentence, the Company may elect (such election to
be evidenced by a resolution of the Board of Directors) to distribute to such
Holder a due bill for the shares of Company Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash or assets to which such
Holder is so entitled, provided, that such due bill (i) meets any applicable
requirements of the principal national securities exchange or other market on
which Company Common Stock is then traded and (ii) requires payment or delivery
of such shares of Company Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets no later than the date of
payment or delivery thereof to holders of shares of Company Common Stock
receiving such distribution.
SECTION 13.9 Restrictions on Company Common Stock Issuable Upon
Conversion.
(a) Shares of Company Common Stock to be issued upon conversion
of a Debenture in respect of Restricted Preferred Securities shall bear
such restrictive legends as the Company may provide in accordance with
applicable law.
(b) If shares of Company Common Stock to be issued upon
conversion of a Debenture in respect of Restricted Preferred Securities
are to be registered in a name other than that of the Holder of such
Preferred Security, then the Person in whose name such shares of Company
Common Stock are to be registered must deliver to the Conversion Agent a
certificate satisfactory to the Company and signed by such Person, as to
compliance with the restrictions on transfer applicable to such
Preferred Security. Neither the Trustee nor any Conversion Agent or
Registrar shall be required to register in a name other than that of the
Holder shares of Company Common Stock issued upon conversion
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<PAGE> 86
of any such Debenture in respect of such Preferred Securities not so
accompanied by a properly completed certificate.
SECTION 13.10 Trustee Not Responsible for Determining Conversion Price
or Adjustments.
Neither the Trustee nor any Conversion Agent shall at any time be under
any duty or responsibility to any Holder of any Debenture or to any holder of a
Preferred Security to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or extent of
any such adjustment when made, or with respect to the method employed, or herein
or in any supplemental indenture provided to be employed, in making the same.
Neither the Trustee nor any Conversion Agent shall be accountable with respect
to the validity or value (or the kind of account) of any shares of Company
Common Stock or of any securities or property, which may at any time be issued
or delivered upon the conversion of any Debenture; and neither the Trustee nor
any Conversion Agent makes any representation with respect thereto. Neither the
Trustee nor any Conversion Agent shall be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any shares of
Company Common Stock or stock certificates or other securities or property upon
the surrender of any Debenture for the purpose of conversion, or, except as
expressly herein provided, to comply with any of the covenants of the Company
contained in Article 10 or this Article 13.
* * * *
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This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
NEWELL CO.
By: /s/ Dale L. Matschullat
--------------------------------------------
Name: Dale L. Matschullat
------------------------------------------
Title: Vice President
-----------------------------------------
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ Joanne Adamis
--------------------------------------------
Name: Joanne Adamis
------------------------------------------
Title: Vice President
-----------------------------------------
79
<PAGE> 1
EXHIBIT 4.6
---------------------------------------------------------
GUARANTEE AGREEMENT
Newell Co.
and
The Chase Manhattan Bank
Relating to the Preferred Securities of
Newell Financial Trust I
Dated as of December 12, 1997
---------------------------------------------------------
<PAGE> 2
CROSS REFERENCE TABLE*
<TABLE>
<CAPTION>
SECTION OF TRUST SECTION OF
INDENTURE ACT OF GUARANTEE
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).....................................................................................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
317(a)............................................................................Inapplicable
317(b)............................................................................Inapplicable
318(a)..................................................................................2.1(b)
318(b).....................................................................................2.1
318(c)..................................................................................2.1(a)
</TABLE>
- --------
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions.....................................................................2
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application................................................4
SECTION 2.2 List of Holders.................................................................4
SECTION 2.3 Reports by the Guarantee Trustee................................................4
SECTION 2.4 Periodic Reports to Guarantee Trustee...........................................5
SECTION 2.5 Evidence of Compliance with Conditions Precedent................................5
SECTION 2.6 Events of Default; Waiver.......................................................5
SECTION 2.7 Event of Default; Notice........................................................5
SECTION 2.8 Conflicting Interests...........................................................5
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee......................................6
SECTION 3.2 Certain Rights of Guarantee Trustee.............................................7
SECTION 3.3 Indemnity.......................................................................9
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility..................................................9
SECTION 4.2 Appointment, Removal and Resignation of the Guarantee Trustee..................10
ARTICLE 5
GUARANTEE
SECTION 5.1 Guarantee......................................................................10
SECTION 5.2 Waiver of Notice and Demand....................................................11
SECTION 5.3 Obligations Not Affected.......................................................11
SECTION 5.4 Rights of Holders..............................................................11
SECTION 5.5 Guarantee of Payment...........................................................12
SECTION 5.6 Subrogation....................................................................12
SECTION 5.7 Independent Obligations........................................................12
</TABLE>
i
<PAGE> 4
<TABLE>
ARTICLE 6
COVENANTS AND SUBORDINATION
<S> <C> <C>
SECTION 6.1 ...............................................................................12
SECTION 6.2 Certain Covenants of the Guarantor.............................................12
ARTICLE 7
TERMINATION
SECTION 7.1 Termination....................................................................14
ARTICLE 8
MISCELLANEOUS
SECTION 8.1 Successors and Assigns.........................................................14
SECTION 8.2 Amendments.....................................................................14
SECTION 8.3 Notices........................................................................14
SECTION 8.4 Benefit........................................................................15
SECTION 8.5 Interpretation.................................................................15
SECTION 8.6 Governing Law..................................................................16
</TABLE>
ii
<PAGE> 5
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of December 12, 1997, is executed and
delivered by Newell Co., a Delaware corporation (the "Guarantor"), and The Chase
Manhattan Bank, a New York banking corporation, as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of Newell Financial Trust I, a
Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of December 12, 1997, among the Trustees named therein,
the Guarantor, as Depositor, and the Holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing
8,600,000 (10,000,000 if the over-allotment option is exercised in full) of its
5 1/4% Convertible Quarterly Income Preferred Securities (liquidation preference
$50 per preferred security) (the "Preferred Securities") representing preferred
undivided beneficial interests in the assets of the Issuer and having the terms
set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Debentures
(as defined in the Trust Agreement) of the Guarantor which will be deposited
with The Chase Manhattan Bank, as Property Trustee under the Trust Agreement, as
trust assets;
WHEREAS, as incentive for the Holders to purchase Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Preferred Securities the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Guarantee for the benefit of the holders of the Common Securities (as
defined herein), except that if an event of default (as defined in the Indenture
(as defined herein)), has occurred and is continuing, the rights of holders of
the Common Securities to receive Guarantee Payments (as defined in the Common
Securities Guarantee) under the Common Securities Guarantee shall be
subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments (as defined herein) under this Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time of the Preferred Securities.
<PAGE> 6
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. As used in this Guarantee Agreement, the terms
set forth below shall, unless the context otherwise requires, have the following
meanings. Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Trust Agreement as
in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct common control with such
specified Person, provided, however, that an Affiliate of the Guarantor shall
not be deemed to include the Issuer. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the securities representing common beneficial
interests in the assets of the Issuer.
"Company Common Stock" shall mean the common stock, par value $1.00, per
share, of the Guarantor.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received written notice of default and shall not have cured
such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Preferred Securities, to the extent the Issuer shall have funds on hand
available therefor at such time, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the Preferred Securities called for redemption by the
Issuer to the extent the Issuer shall have funds on hand available therefor, and
(iii) upon a voluntary or involuntary dissolution of the Issuer, unless
Debentures are distributed to the Holders, the lesser of (a) the aggregate of
the liquidation preference of $50 per Preferred Security plus accrued and unpaid
Distributions on the Preferred Securities to the date of payment to the extent
the Issuer shall have funds on hand available to make such payment and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
in dissolution of the Issuer (in either case, the "Stockholder Distribution").
"Guarantee Trustee" means The Chase Manhattan Bank, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
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"Holder" means any holder, as registered on the books and records of the
Issuer, of any Preferred Securities; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee or any Affiliate of the Guarantor
or the Guarantee Trustee.
"Indenture" means the Junior Convertible Subordinated Indenture, dated
as of December 12, 1997, as supplemented and amended between the Guarantor and
The Chase Manhattan Bank, as trustee.
"List of Holders" has the meaning specified in Section 2.2 (a).
"Majority in Liquidation Preference of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the liquidation preference of all the
outstanding Preferred Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by (i) the Chairman, Chief Executive Officer, President or a Vice
President, and by (ii) the Treasurer, an Assistant Treasurer, the Controller,
the Secretary or an Assistant Secretary of such Person, and delivered to the
Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee Agreement
shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each 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.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
officer assigned to the Trustee's Corporate Trust Office, including any managing
director, vice president, assistant vice president, assistant treasurer,
assistant secretary or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Guarantee Agreement,
and also, with respect to a particular matter, any other officer, to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
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"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such
provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
SECTION 2.2 List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (unless the Guarantee Trustee is acting as Securities
Registrar with respect to the Debentures under the Indenture) (i)
semi-annually, on or before January 15 and July 15 of each year, a list,
in such form as the Guarantee Trustee may reasonably require, of the
names and addresses of the Holders ("List of Holders") as of a date not
more than 15 days prior to the delivery thereof, and (ii) at such other
times as the Guarantee Trustee may request in writing, within 30 days
after the receipt by the Guarantor of any such written request, a List
of Holders as of a date not more than 15 days prior to the time such
list is furnished, in each case to the extent such information is in the
possession or control of the Guarantor and is not identical to a
previously supplied list of Holders or has not otherwise been received
by the Guarantee Trustee. Notwithstanding the foregoing, the Guarantor
shall not be obligated to provide such List of Holders at any time the
Preferred Securities are represented by one or more Global Certificates
(as defined in the Indenture). The Guarantee Trustee may destroy any
List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act.
SECTION 2.3 Reports by the Guarantee Trustee. Within 60 days after
December 31 in each calendar year, commencing with December 31, 1997, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Guarantee Trustee. The Guarantor shall
provide to the Guarantee Trustee, the Securities and Exchange Commission and the
Holders such documents, reports and information, if any, as required by Section
314 of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act; and such compliance
certificate of the Guarantor shall be delivered on or before 120 days after the
end of each calendar year.
SECTION 2.5 Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver. The Holders of a Majority in
Liquidation Preference of the Securities may, by vote, on behalf of the Holders,
waive any past Event of Default and its consequences. Upon such waiver, any such
Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.
SECTION 2.7 Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known
to a Responsible Officer of the Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, that, except
in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be fully protected in withholding such notice if
and so long as the Board of Directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the
Guarantee Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have actual
knowledge of any Event of Default unless the Guarantee Trustee shall
have received written notice, or a Responsible Officer charged with the
administration of the Trust Agreement shall have obtained written
notice, of such Event of Default.
SECTION 2.8 Conflicting Interests. The Trust Agreement and the Indenture
shall be deemed to be specifically described in this Guarantee Agreement for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
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ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall
not transfer this Guarantee Agreement to any Person except a Holder
exercising his or her rights pursuant to Section 5.4(iv) or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee. The
right, title and interest of the Guarantee Trustee shall automatically
vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such
vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Guarantee Trustee has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit
of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee Agreement, and no implied
covenants shall be read into this Guarantee Agreement against the
Guarantee Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) and is actually known
to the Responsible Officer of the Guarantee Trustee, the Guarantee
Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in
its exercise thereof, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed
to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct,
except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that
may have occurred;
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express
provisions of this Guarantee Agreement, and the Guarantee
Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth
in this Guarantee Agreement, and no implied covenants or
obligations shall be read into this Guarantee Agreement
against the Guarantee Trustee; and
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(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such
certificates or opinions that by any provision hereof or
of the Trust Indenture Act are specifically required to be
furnished to the Guarantee Trustee, the Guarantee Trustee
shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of
the Guarantee Trustee, unless it shall be proved that the
Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less
than a Majority in Liquidation Preference of the Securities
relating to the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or
powers, if the Guarantee Trustee shall have reasonable grounds
for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Guarantee
Agreement or indemnity satisfactory to it against such risk or
liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, proxy, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
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(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or
omitting to take any action hereunder, the Guarantee Trustee
(unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and conclusively
rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered
by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel,
and the written advice or opinion of such legal counsel with
respect to legal matters shall be full and complete authorization
and protection in respect of any action taken, suffered or
omitted to be taken by it hereunder in good faith and in
accordance with such advice or opinion. Such legal counsel may be
legal counsel to the Guarantor or any of its Affiliates and may
be one of its employees. The Guarantee Trustee shall have the
right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of
competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder,
unless such Holder shall have provided to the Guarantee Trustee
and its officers, directors and agents such adequate security and
indemnity as would satisfy a reasonable person in the position of
the Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Guarantee Trustee; provided that, nothing contained in this
Section 3.2(a)(v) shall be taken to relieve the Guarantee
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Guarantee Agreement and use the same degree of care and skill in
the exercise thereof as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit.
(vii) The Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either
directly or by or through its agents, custodians, nominees or
attorneys or any Affiliate, and the Guarantee Trustee shall not
be responsible for any misconduct or negligence on the part of
any such agent or attorney appointed with due care by it
hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Guarantee
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Trustee (A) may request written instructions from the Holders of
a Majority in Liquidation Preference of the Securities, (B) may
refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (C) shall be
fully protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred
or imposed on it in any jurisdiction in which it shall be illegal, or in
which the Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power
or authority available to the Guarantee Trustee shall be construed to be
a duty to act in accordance with such power and authority.
SECTION 3.3 Indemnity. The Guarantor agrees to indemnify the Guarantee
Trustee for, and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on the part of the Guarantee Trustee,
arising out of or in connection with the acceptance or administration of this
Guarantee Agreement, including the reasonable 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. The Guarantee Trustee will
not claim or exact any lien or charge on any Guarantee Payment as a result of
any amount due to it under this Guarantee Agreement.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and
surplus of at least $50,000,000, and shall be a corporation
meeting the requirements of Section 310(a) of the Trust Indenture
Act. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the
supervising or examining authority, then, for the purposes of
this Section and to the extent permitted by the Trust Indenture
Act, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and
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Guarantor shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
by written instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office
until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
by an instrument in writing executed by such Successor Guarantee Trustee
and delivered to the Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days
after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition, at the expense of the
Guarantor, any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor
Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or
omissions of any successor Guarantor Trustee.
(f) Upon the removal or resignation of the Guarantee Trustee, the
Guarantor shall pay all amounts due and owing to such Guarantee Trustee.
ARTICLE 5
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 which the Issuer may
have or assert other than the defense of payment. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
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SECTION 5.2 Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Guarantee Agreement and of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, 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 Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred
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 (other than an extension of time for
payment of Distributions that results from the extension of any interest
payment period on the Debentures as so provided in the Indenture),
Redemption Price, Liquidation Distribution or any other sums payable
under the terms of the Preferred Securities or the extension of time for
the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the
Preferred Securities, or any action on the part of the 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 Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders or the Guarantee Trustee to
give notice to, or obtain the consent of, the Guarantor with respect to the
happening of any of the foregoing.
SECTION 5.4 Rights of Holders. The Guarantor expressly acknowledges
that: (i) this Guarantee Agreement will be deposited with the Guarantee Trustee
to be held for the benefit of the Holders; (ii) the Guarantee Trustee has the
right to enforce this Guarantee Agreement on
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behalf of the Holders; (iii) the Holders of a Majority in Liquidation Preference
of the Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of this Guarantee Agreement or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under this Guarantee Agreement; and
(iv) if the Guarantee Trustee fails to enforce the Guarantee, any Holder may
institute a legal proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Guarantee Trustee, the Issuer or any other Person.
SECTION 5.5 Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement 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 Trust Agreement.
SECTION 5.6 Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement and shall have the
right to waive payment by the Issuer pursuant to Section 5.1; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE 6
COVENANTS AND SUBORDINATION
SECTION 6.1 Subordination. The Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank subordinate and junior in
right of payment to all liabilities of the Guarantor and pari passu with the
most senior preferred stock of the Guarantor, if any, now or hereafter issued by
the Company and with any guarantee now or hereafter entered into by the Company
in respect of any preferred or preference stock of any affiliate of the
Guarantor.
SECTION 6.2 Certain Covenants of the Guarantor.
(a) Guarantor covenants and agrees that if and so long as (i) the
Issuer is the holder of all the Debentures, (ii) a Tax Event (as defined
in the Trust Agreement) in respect of the Issuer has occurred and is
continuing and (iii) the Guarantor has elected, and has not revoked such
election, to pay Additional Sums (as defined in the Trust Agreement) in
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respect of the Preferred Securities and Common Securities, the Guarantor
will pay to the Issuer such Additional Sums.
(b) The Guarantor covenants and agrees that it will not, and will
not cause any subsidiary of the Guarantor to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Guarantor's capital
stock or (ii) make any payment of principal, interest or premium, if
any, on or repay or repurchase or redeem any debt securities (including
guarantees of indebtedness for money borrowed) of the Guarantor that
rank pari passu with or junior to the Debentures (other than (a) any
dividend, redemption, liquidation, interest, principal or guarantee
payment by the Guarantor where the payment is made by way of securities
(including capital stock) that rank pari passu with or junior to the
securities on which such dividend, redemption, interest, principal or
guarantee payment is being made, (b) redemptions or purchases of any
rights pursuant to the Stockholder Rights Agreement (as defined in the
Indenture), or any successor to such Stockholder Rights Agreement, and
the declaration of a dividend of such rights or the issuance of
preferred stock under such plans in the future, (c) payments under this
Agreement, (d) purchases of Company Common Stock related to the issuance
of Company Common Stock under any of the Guarantor's benefit plans for
its directors, officers or employees, (e) as a result of a
reclassification of the Guarantor's capital stock or the exchange or
conversion of one series or class of the Guarantor's capital stock for
another series or class of the Guarantor's capital stock and (f) 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) if at such time (i)
there shall have occurred any event of which the Guarantor has actual
knowledge that (a) 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 Debentures and (b) in respect of which the Guarantor
shall not have taken reasonable steps to cure, (ii) the Guarantor shall
be in default with respect to its payment of any obligations under the
Guarantee or (iii) the Guarantor shall have given notice of its
selection of an Extension Period (as defined in the Indenture) with
respect to the Debentures and shall not have rescinded such notice, or
such Extension Period, or any extension thereof, shall be continuing.
(c) The Guarantor covenants and agrees (i) to maintain directly
or indirectly 100% ownership of the Common Securities, provided that
certain successors which are permitted by the Indenture may succeed to
the Guarantor's ownership of the Common Securities, (ii) not to
voluntarily dissolve the Issuer, except (a) in connection with a
distribution of the Debentures to the holders of the Preferred
Securities in dissolution of the Issuer or (b) in connection with
certain mergers, consolidations or amalgamations permitted by the Trust
Agreement, (iii) to use its reasonable efforts, consistent with the
terms and provisions of the Trust Agreement, to cause the Issuer to
remain classified as a grantor trust and not as an association taxable
as a corporation for United States Federal income tax purposes, (iv) for
so long as Preferred Securities are outstanding, not to convert
Debentures except pursuant to a notice of conversion delivered to the
Conversion Agent (as defined in the Trust Agreement) by a Holder, (v) to
maintain the reservation for issuance of the number of shares of Company
Common Stock that would be required from time to time upon the
conversion of all the Debentures then outstanding, (vi) to deliver
shares of Company
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<PAGE> 18
Common Stock upon an election by the Holders to convert such Preferred
Securities into Company Common Stock and (vii) to honor all obligations
described herein relating to the conversion or exchange of the Preferred
Securities into or for Company Common Stock or Debentures.
ARTICLE 7
TERMINATION
SECTION 7.1 Termination. This Guarantee Agreement shall terminate and be
of no further force and effect upon (i) full payment of the Redemption Price of
all Preferred Securities, (ii) the distribution of Debentures to the Holders in
exchange for all of the Preferred Securities, (iii) full payment of the amounts
payable in accordance with the Trust Agreement upon dissolution of the Issuer or
(iv) upon the distribution, if any, of Company Common Stock to the holders of
the Preferred Securities in respect of the conversion of all such holders'
Preferred Securities into Company Common Stock. Notwithstanding the foregoing,
this Guarantee Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment of any sums paid
with respect to Preferred Securities or this Guarantee Agreement.
ARTICLE 8
MISCELLANEOUS
SECTION 8.1 Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then outstanding. Except in
connection with a consolidation, merger or sale involving the Guarantor that is
permitted under Article 8 of the Indenture and pursuant to which the assignee
agrees in writing to perform the Guarantor's obligations hereunder, the
Guarantor shall not assign its obligations hereunder.
SECTION 8.2 Amendments. Except with respect to any changes which do not
adversely affect the rights of the Holders in any material respect (in which
case no consent of the Holders will be required), this Guarantee Agreement may
only be amended with the prior approval of the Holders of not less than a
Majority in Liquidation Preference of the Securities. The provisions of Article
6 of the Trust Agreement concerning meetings of the Holders shall apply to the
giving of such approval. The Guarantor shall furnish the Guarantee Trustee with
an Officers' Certificate and an Opinion of Counsel to the effect that any
amendment of this Agreement is authorized and permitted.
SECTION 8.3 Notices. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Holders:
14
<PAGE> 19
Newell Co.
29 East Stephenson Street
Freeport, Illinois 61032
Phone No.: (815) 235-4171
Facsimile No.: (815) 233-8060
Attention: Vice President -- Treasurer
(b) if given to the Issuer, in care of the Guarantee Trustee, at
the Issuer's (and the Guarantee Trustee's) address set forth below or
such other address as the Guarantee Trustee on behalf of the Issuer may
give notice of to the Holders:
Newell Financial Trust I
c/o Newell Co.
29 East Stephenson Street
Freeport, Illinois 61032
Phone No.: (815) 235-4171
Facsimile No.: (815) 233-8060
Attention: Vice President -- Treasurer
with a copy to:
The Chase Manhattan Bank
430 W. 33rd Street, 15th Floor
New York, NY 10001-2697
Phone No.: (212) 946-3040
Facsimile No.: (212) 946-8154
Attention: Corporate Trustee Administration Department
(c) if given to any Holder, at the address set forth on the books
and records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4 Benefit. This Guarantee Agreement is solely for the benefit
of the Holders and is not separately transferable from the Preferred Securities.
SECTION 8.5 Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to
them in Section 1.1;
15
<PAGE> 20
(b) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.6 Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
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.
16
<PAGE> 21
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
NEWELL CO.
By: /s/ Dale L. Matschullat
Name: Dale L. Matschullat
Title: Vice President
THE CHASE MANHATTAN BANK,
as Guarantee Trustee
By: /s/ Joanne Adamis
Name: Joanne Adamis
Title: Second Vice President
17
<PAGE> 1
EXHIBIT 10.1
EXECUTION COPY
10,000,000
5-1/4% CONVERTIBLE QUARTERLY INCOME PREFERRED SECURITIES
(CONVERTIBLE QUIPS(SM)* Securitization)
(Liquidation Preference $50 per preferred security)
December 12, 1997
REGISTRATION RIGHTS AGREEMENT
Goldman, Sachs & Co.,
Morgan Stanley & Co. Incorporated
Robert W. Baird & Co. Incorporated
Bear, Stearns & Co. Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o Goldman Sachs & Co.,
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Newell Financial Trust I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), and Newell Co., a Delaware
corporation (the "Company"), as depositor of the Trust and as guarantor, propose
to issue and sell to the Purchasers (as defined herein), upon the terms set
forth in the Purchase Agreement (as defined herein) an aggregate of 8,600,000
and, at the election of the Purchasers, up to an additional 1,400,000 of 5-1/4%
Convertible Quarterly Income Preferred Securities (liquidation preference $50
per preferred security) (the "Preferred Securities") of the Trust. The Preferred
Securities are guaranteed on a subordinated basis by the Company as to the
payment of distributions, and as to payments on liquidation or redemption, to
the extent set forth in a guarantee agreement (the "Guarantee") between the
Company and The Chase Manhattan Bank, as trustee, and may be converted or
exchanged under certain circumstances into the 5-1/4% Convertible Subordinated
Debentures due December 1, 2027 of the Company (the "Debentures") held by the
Trust and then into common stock, $1.00 par value per share (together with the
associated preferred stock purchase rights provided under the Rights Agreement
(as defined herein), "Common Stock"), of the Company. The Preferred Securities,
the Debentures, the Guarantee and, the Common
- --------
*QUIPS is a servicemark of Goldman, Sachs & Co.
<PAGE> 2
Stock issuable upon conversion of the Preferred Securities and/or the Debentures
are referred to collectively as the "Securities." As an inducement to the
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Purchasers thereunder, the Trust and the
Company each agree with the Purchasers for the benefit of Holders (as defined
herein) from time to time of the Registrable Securities (as defined herein) as
follows:
1. Definitions. (a) Capitalized terms used herein without
definition shall have the meanings ascribed thereto in the Purchase Agreement.
As used in this Registration Rights Agreement, the following defined terms shall
have the following meanings:
"Act" or "Securities Act" means the Securities Act of 1933, or
any successor thereto, as the same may be amended from time to time.
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
"DTC" means the Depository Trust Company.
"Effectiveness Period" has the meaning assigned thereto in
Section 2(b)(i) hereof.
"Effective Time" means the date on which the Commission declares
the Shelf Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective.
"Electing Holder" has the meaning assigned thereto in
Section 3(a)(3) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, or any
successor thereto, as the same may be amended from time to time.
"Holder" means when used with respect to any Security, the holder
of such Security. For all purposes of this Agreement, the Company shall be
entitled to treat the record owner of a Security as the beneficial owner of such
Security unless the Company has been given written notice of the existence and
identity of a different beneficial owner.
"Indenture" means the Convertible Subordinated Indenture, dated
as of December 12, 1997, between the Company and The Chase Manhattan Bank, as
indenture trustee, as amended and supplemented from time to time in accordance
with its terms.
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<PAGE> 3
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, conducted pursuant to Section 6 hereof.
"NASD Rules" means the Rules of the National Association of
Securities Dealers, Inc., as amended.
"Notice and Questionnaire" means a Notice of Registration
Statement and Selling Securityholder Questionnaire substantially in the form of
Exhibit A hereto.
"Person" means a corporation, association, partnership,
organization, business, individual, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Prospectus" means the prospectus (including, without limitation,
any preliminary prospectus, any final prospectus and any prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A under the Act)
included in the Shelf Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by the Shelf Registration Statement and by
all other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act and incorporated
by reference therein.
"Purchase Agreement" means the purchase agreement dated December
8, 1997 among the Purchasers, the Trust and the Company.
"Purchasers" means the Purchasers named in Schedule I to the
Purchase Agreement.
"Registrable Securities" means all or any portion of the
Securities issued from time to time; provided, however, that a security ceases
to be a Registrable Security when it is no longer a Restricted Security.
"Restricted Security means any Security except any such Security
which (i) has been effectively registered under the Securities Act and sold in a
manner contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to paragraph (k) of
such Rule 144 (or any successor provision thereto), (iii) has been sold in
compliance with Regulation S under the Securities Act (or any successor thereto)
and does not constitute the unsold allotment of a distributor within the meaning
of Regulation S under the Securities Act, or (iv) has otherwise been transferred
and a new Security not subject to transfer restrictions under the Securities Act
has been delivered by or on behalf of the Company in accordance with the terms
of the Trust Agreement or the Indenture, as the case may be.
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<PAGE> 4
"Rights Agreement" means the Rights Agreement dated as of October
20, 1988 between the Company and First Chicago Trust Company of New York
(formerly known as Morgan Shareholders Service Trust Company), and any successor
or replacements thereof.
"Rules and Regulations" means the published rules and regulations
of the Commission promulgated under the Securities Act or the Exchange Act, as
in effect at any relevant time.
"Securities" means the Preferred Securities, the Debentures, the
Guarantee and the Common Stock issuable upon conversion or exchange of the
Preferred Securities and/or the Debentures.
"Shelf Registration" means a registration effected pursuant to
Section 2 hereof.
"Shelf Registration Statement" means a "shelf" registration
statement filed under the Securities Act providing for the registration of, and
the sale on a continuous or delayed basis by the Holders of, all of the
Registrable Securities pursuant to Rule 415 under the Securities Act and/or any
similar rule that may be adopted by the Commission, filed by the Company and the
Trust pursuant to the provisions of Section 2 hereof, including the Prospectus
contained therein, any amendments and supplements to such registration
statement, including posteffective amendments, and all exhibits and all material
incorporated by reference in such registration statement.
"Trust Agreement" means the Amended and Restated Trust Agreement,
dated as of December 12, 1997, among the Company, as Depositor, The Chase
Manhattan Bank, as Property Trustee, Chase Manhattan Bank Delaware, as Delaware
Trustee, and the Administrative Trustees named therein, relating, among other
things, to the Preferred Securities, as amended and supplemented from time to
time in accordance with its terms.
"Trust Indenture Act" means the Trust Indenture Act of 1939, or
any successor thereto, and the rules, regulations and forms promulgated
thereunder, as the same shall be amended.
"Underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
(b) Wherever there is a reference in this Agreement to a
percentage of the "principal amount" of Registrable Securities or to a
percentage of Registrable Securities, the Preferred Securities and the
Debentures issuable upon exchange of the Preferred Securities will be treated as
the same class of Securities and Common Stock shall be treated as representing
the liquidation preference of Preferred Securities or the principal amount of
Debentures which was surrendered for conversion in order to receive such number
of shares of Common Stock.
2. Shelf Registration. (a) The Company and the Trust shall,
within 90 calendar days following the first Time of Delivery (as defined in the
Purchase Agreement), file with the Commission a Shelf Registration Statement
relating to the offer and sale of the Registrable
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<PAGE> 5
Securities and, thereafter, shall use their best efforts to cause such Shelf
Registration Statement to be declared effective under the Act as promptly as
practicable and in no event later than 180 calendar days after the Time of
Delivery; provided however, that no Holder shall be entitled to be named as a
selling securityholder in the Shelf Registration Statement or to use the
Prospectus forming a part thereof for resales of Registrable Securities unless
such Holder is an Electing Holder.
(b) The Company and the Trust shall each use its best efforts:
(i) To keep the Shelf Registration Statement continuously
effective (subject to any Suspension Period (as defined below)) in order
to permit the Prospectus forming a part thereof to be usable by Electing
Holders for resales of Registrable Securities for a period of two years
after the latest date of original issuance of Preferred Securities, or
such shorter period that will terminate upon the earliest of the
following: (A) when all the Preferred Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement; (B) when all Debentures issued to Holders in respect of
Preferred Securities that had not been sold pursuant to the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement; (C) when all shares of Common Stock issued upon conversion of
any such Preferred Securities or any such Debentures that have not been
sold pursuant to the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement; and (D) when, in the
written opinion of counsel to the Trust and the Company, all outstanding
Registrable Securities held by persons which are not Affiliates of the
Trust or the Company may be resold immediately without registration or
restriction, whether under the Act pursuant to Rule 144(k) or any
successor provision thereto or otherwise (in any such case, such period
being called the "Effectiveness Period").
(ii) After the Effective Time of the Shelf Registration Statement
and prior to the end of the Effectiveness Period, promptly upon the
request of any Holder that is not then an Electing Holder identified as
a selling securityholder in the Prospectus at the Effective Time, to
take any action reasonably necessary to enable such Holder to use the
Prospectus forming a part thereof for resales of Registrable Securities,
including, without limitation, any action necessary to identify such
Holder as a selling securityholder in the Shelf Registration Statement;
provided, however, that nothing in this subparagraph shall relieve such
Holder of the obligation to return a completed and signed Notice and
Questionnaire to the Trust in accordance with Section 3(a)(2) hereof and
to provide to the Trust and the Company, in writing, any information
with respect to such Holder or the Registrable Securities held by such
Holder as is, in the reasonable opinion of counsel to the Trust or the
Company, required under applicable law to enable such Holder to use such
Prospectus for resales of such Registrable Securities; and
(iii) If at any time prior to the end of the Effectiveness
Period, the Preferred Securities are convertible into securities other
than Common Stock, the Company and the Trust shall, or shall cause any
successor under the Trust Agreement to, cause such securities to be
included in the Shelf Registration Statement no later than the date on
which the Preferred Securities may first be converted into such
securities.
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<PAGE> 6
(c) If (i) on or prior to the date 90 days after the Time of Delivery a
Shelf Registration Statement has not been filed with the Commission or (ii) on
or prior to the date 180 days after the Time of Delivery such Shelf Registration
Statement has not been declared effective (each such event, a "Registration
Default"), additional interest ("Liquidated Damages") will accrue on the
Debentures, and, accordingly, additional distributions will accrue on the
Preferred Securities, from and including the day following such Registration
Default until the earlier of such date as the Shelf Registration Statement is
filed or declared effective, as the case may be, or the end of the Effectiveness
Period. Liquidated Damages will be paid quarterly in arrears (subject to the
Company's right to defer the payment of Liquidated Damages during any Extension
Period (as defined in the Indenture)), with the first quarterly payment due on
the first interest or distribution payment date, as applicable, following the
date on which such Liquidated Damages begin to accrue, and will accrue at a rate
per annum equal to an additional one-quarter of one percent (0.25%) of the
principal amount or liquidation preference, as applicable, to and including the
90th day following such Registration Default and one-half of one percent (0.50%)
thereof from and after the 91st day following such Registration Default. In the
event that the Shelf Registration Statement ceases to be effective during the
Effectiveness Period for more than 90 days, whether or not consecutive, during
any 12-month period, then the interest rate borne by the Debentures and the
distribution rate borne by the Preferred Securities will each increase by an
additional one-half of one percent (0.50%) per annum from the 91st day of the
applicable 12-month period such Shelf Registration Statement ceases to be
effective until such time as the earlier to occur of the Shelf Registration
Statement again becoming effective and the end of the Effectiveness Period.
(d) The Company and the Trust shall each be deemed not to have used its
best efforts to keep the Shelf Registration Statement effective during the
Effectiveness Period if either the Trust or the Company voluntarily takes any
action that would result in Electing Holders not being able to offer and sell
any of their Registrable Securities during such period, unless (i) such action
is required by applicable law, (ii) upon the occurrence of any event
contemplated by paragraph 3(d)(2)(iii) below, and such action is taken by the
Trust or the Company in good faith and for valid business reasons or (iii) the
continued effectiveness of the Shelf Registration Statement would require the
Trust to disclose a material financing, acquisition or other corporate
development, and the proper officers of the Company shall have determined in
good faith that such disclosure is not in the best interest of the Company and
its stockholders and, in the case of clause (ii) above, the Company and the
Trust thereafter promptly comply with the requirements of paragraph 3(j) below.
Any such period during which the Company and the Trust are permitted to suspend
the effectiveness of the Shelf Registration Statement is referred to herein as
the "Suspension Period."
3. Registration Procedures. In connection with the Shelf Registration
Statement, the following provisions shall apply:
(a) (1) The Company shall not be required to take any action to
name such Holder as a selling securityholder in the Shelf
Registration Statement or to enable such Holder to use the
Prospectus forming a part thereof for resales of Registrable
Securities until such Holder has returned a completed and signed
Notice and Questionnaire to the Company and the Trust and
provided to the Trust and the Company such information with
respect to such Holder or the Registrable Securities held by such
Holder as is, in
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<PAGE> 7
the reasonable opinion of counsel to the Trust or the Company,
required to enable such Holder to use the Prospectus for resales of
Registrable Securities.
(2) Not less than 40 calendar days prior to the Effective Time of
the Shelf Registration Statement, the Company or the Trust shall mail
the Notice and Questionnaire to each Holder. No Holder shall be entitled
to be named as a selling securityholder in the Shelf Registration
Statement as of the Effective Time, and no Holder shall be entitled to
use the Prospectus forming a part thereof for resales of Registrable
Securities at any time, unless such Holder has returned a completed and
signed Notice and Questionnaire to the Company and the Trust and
provided to the Trust and the Company such information with respect to
such Holder of the Registrable Securities held by such Holder as is, in
the reasonable opinion of counsel to the Trust or the Company, required
to enable such Holder to use the Prospectus for resales of Registrable
Securities; provided, however, that only Holders who have completed and
returned the Notice and Questionnaire and any such additional
information requested of such Holder to the Company on or before the day
that is ten days prior to the Effective Time shall be entitled to be
named as a selling securityholder in the Shelf Registration Statement as
of the Effective Time.
(3) The term "Electing Holder" shall mean any Holder that has
returned a completed and signed Notice and Questionnaire to the Company
in accordance with Section 3(a)(1) or 3(a)(2) hereof and provided to the
Trust and the Company such information with respect to such Holder or
the Registrable Securities held by such Holder as is, in the reasonable
opinion of counsel to the Trust or the Company, required to enable such
Holder to use the Prospectus for resales of Registrable Securities.
(b) The Company and the Trust shall furnish to each Electing
Holder, prior to the Effective Time, a copy of the Shelf Registration
Statement initially filed with the Commission, and shall furnish to such
Holders, copies of each amendment thereto and each amendment or
supplement, if any, to the Prospectus included therein, and shall
consider in good faith for inclusion in each such document, at the
Effective Time such comments as such Holders or their counsel reasonably
may propose.
(c) The Company and the Trust shall promptly take such action as
may be necessary so that (i) each of the Shelf Registration Statement
and any amendment thereto and the Prospectus forming part thereof and
any amendment or supplement thereto (and each report or other document
incorporated therein by reference in each case) complies in all material
respects with the Securities Act and the rules and regulations
thereunder, (ii) each of the Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, 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 and (iii) each of the Prospectus forming part of the Shelf
Registration Statement, and any amendment or supplement to such
Prospectus, does not at any time during the Effectiveness Period 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.
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<PAGE> 8
(d) (1) The Company shall promptly advise the Purchasers and, in
the case of clause (i), the Electing Holders and, if requested by the
Purchasers or any such Electing Holder, confirm such advice in writing:
(i) when the Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto
has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus
included therein or for additional information.
(2) The Company shall promptly advise each Electing Holder of:
(i) the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement
or the initiation of any proceedings for such purpose;
(ii) the receipt by the Company or the Trust of any
notification with respect to the suspension of the qualification
of the securities included in the Shelf Registration Statement
for sale in any jurisdiction or the initiation of any proceeding
for such purpose; and
(iii) the happening of any event that requires the making
of any changes in the Shelf Registration Statement or the
Prospectus included therein so that, as of such date, such Shelf
Registration Statement and Prospectus do not contain an untrue
statement of a material fact and do not omit to state a material
fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of
the circumstances under which they were made) not misleading
(which advice shall be accompanied by an instruction to suspend
the use of the Prospectus until the requisite changes have been
made).
(e) The Company and the Trust shall each use its best efforts to
prevent the issuance, and if issued to obtain the withdrawal, of any
order suspending the effectiveness of the Shelf Registration Statement
at the earliest possible time.
(f) The Company and the Trust shall furnish to each Electing
Holder, without charge, at least one copy of the Shelf Registration
Statement and all post-effective amendments thereto, including financial
statements and schedules, and, if such Holder so requests in writing,
all reports, other documents and exhibits that are filed with or
incorporated by reference in the Shelf Registration Statement.
(g) The Company and the Trust shall, during the Effectiveness
Period, deliver to each Electing Holder, without charge, as many copies
of the Prospectus (including each preliminary Prospectus) included in
the Shelf Registration Statement and any amendment or supplement thereto
as such Electing Holder may reasonably
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<PAGE> 9
request; and the Company and the Trust each consents (except during the
continuance of any event described in Section 3(d)(2)(iii) above or
during any Suspension Period) to the use of the Prospectus and any
amendment or supplement thereto by each of the Electing Holders in
connection with the offering and sale of the Registrable Securities
covered by the Prospectus and any amendment or supplement thereto during
the Effectiveness Period.
(h) Prior to any offering of Registrable Securities pursuant to
the Shelf Registration Statement, the Company and the Trust shall (1)
register or qualify or cooperate with the Electing Holders and their
respective counsel in connection with the registration or qualification
of such Registrable Securities for offer and sale under the securities
or "blue sky" laws of such jurisdictions within the United States as any
Electing Holder may reasonably request, (2) keep such registrations or
qualifications in effect (subject to any Suspension Period) and comply
with such laws so as to permit the continuance of offers and sales in
such jurisdictions for so long as may be necessary to enable any
Electing Holder or underwriter, if any, to complete its distribution of
Registrable Securities pursuant to the Shelf Registration Statement, and
(3) take any and all other actions necessary or advisable to enable the
disposition in such jurisdictions of such Registrable Securities;
provided, however, that in no event shall the Company or the Trust be
obligated to (i) qualify generally to do business or as a foreign
corporation or as a dealer in securities in any jurisdiction where each
would not otherwise be required to so qualify but for this Section 3(h),
(ii) file any general consent to service of process in any jurisdiction
where it is not as of the date hereof so subject or (iii) subject itself
to taxation in any jurisdiction where it is not otherwise so subject.
(i) Unless any Registrable Securities shall be in book-entry only
form, the Company and the Trust shall cooperate with the Electing
Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to
the Shelf Registration Statement free of any restrictive legends and in
such permitted denominations and registered in such names as Electing
Holders may request in connection with the sale of Registrable
Securities pursuant to the Shelf Registration Statement.
(j) Upon the occurrence of any event contemplated by paragraph
3(d)(2)(iii) above, the Company and the Trust shall promptly prepare a
post-effective amendment or supplement to the Shelf Registration
Statement or the Prospectus, or any document incorporated therein by
reference, or file any other required document so that, as thereafter
delivered to purchasers of the Registrable Securities included therein,
the Prospectus will not include an untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading (except, in each case, for an untrue statement of a
material fact or omission of a material fact made in reliance on and in
conformity with written information furnished to the Trust or the
Company by or on behalf of any Electing Holders); provided, however, if
the proper officers of the Company determine in good faith that
disclosure in the Shelf Registration Statement of a material financing,
acquisition or other corporate transaction would not be in the best
interests of the Company and its stockholders, the Company and the Trust
shall not be required to
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<PAGE> 10
prepare and file such amendment, supplement or document for such period
as such officers shall have determined in good faith is in the best
interests of the Company. Upon receipt of written notice from the
Company or the Trust of the occurrence of any event contemplated by
paragraph 3(d)(2)(iii) above or of any Suspension Period, each Holder
shall forthwith discontinue disposition of Registrable Securities until
such Holder has received copies of the supplemental or amended
Prospectus required by this paragraph 3(j), or until such Holder is
advised by the Company or the Trust that the use of the Prospectus may
be resumed and, if so directed by the Company, such Holder shall deliver
to the Company (at the Company's expense) all copies then in such
Holder's possession of the Prospectus covering such Registrable
Securities current at the time of such notice.
(k) Not later than the effective date of any Shelf Registration
Statement hereunder, the Company and the Trust shall each provide a
CUSIP number for the Preferred Securities registered under such Shelf
Registration Statement; in the event of and at the time of any
distribution of the Debentures to Holders, the Company and the Trust
shall provide a CUSIP number for the Debentures and provide the
applicable trustee with certificates for such Registrable Securities, in
a form eligible for deposit with DTC.
(l) The Company and the Trust shall each use its best efforts to
comply with all applicable Rules and Regulations, and to make generally
available to its securityholders as soon as practicable, but in any
event not later than 18 months after (i) the effective date (as defined
in Rule 158(c) under the Securities Act) of the Shelf Registration
Statement, (ii) the effective date of each post effective amendment to
the Shelf Registration Statement, and (iii) the date of each filing by
the Company with the Commission of an Annual Report on Form 10-K that is
incorporated by reference in the Shelf Registration Statement, an
earnings statement of the Company and its subsidiaries complying with
Section 11 (a) of the Securities Act and the rules and regulations of
the Commission thereunder (including, at the option of the Company, Rule
158).
(m) The Company and the Trust shall each use its best efforts to
cause the Indenture, the Trust Agreement and the Guarantee to be
qualified under the Trust Indenture Act in a timely manner.
(n) In the event of an underwritten offering conducted pursuant
to Section 6 hereof, the Company and the Trust shall, if requested,
promptly include or incorporate in a Prospectus supplement or
post-effective amendment to the Shelf Registration Statement such
information as the Managing Underwriters reasonably agree should be
included therein and to which the Company does not reasonably object and
shall make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after it is notified of
the matters to be included or incorporated in such Prospectus supplement
or post-effective amendment.
(o) The Company and the Trust shall enter into such customary
agreements (including an underwriting agreement in customary form in the
event of an underwritten
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<PAGE> 11
offering conducted pursuant to Section 6 hereof) and take all other
appropriate actions in order to expedite and facilitate the registration
and disposition of the Registrable Securities, and in connection
therewith, if an underwriting agreement is entered into, cause the same
to contain indemnification provisions and procedures reasonably similar
to those set forth in section 5 hereof with respect to all parties to be
indemnified pursuant to Section 5 hereof.
(p) The Company and the Trust shall:
(i) (A) make available for inspection by Electing Holders, any
underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and any attorney, accountant or other agent
retained by such holders or any such underwriter all relevant financial
and other records, pertinent corporate or other documents and properties
of the Company, its subsidiaries and the Trust, and (B) cause the
officers, directors, employees, trustees and agents of the Company and
the Trust to supply all information requested by such Holders or any
such underwriter, attorney, accountant or agent in connection with the
Shelf Registration Statement, in each case, as is customary for similar
due diligence examinations; provided, however, that each Electing Holder
and its representatives and agents shall execute an agreement (in form
reasonably acceptable to the Company) providing that all records,
information and documents that are designated in writing by the Company
and the Trust, in good faith, as confidential shall not be used for any
other purpose and shall be kept confidential by such Holders and any
such underwriter, attorney, accountant or agent, unless such disclosure
is made in connection with a court proceeding or required by law, or
such records, information or documents become available to the public
generally or through a third party without an accompanying obligation of
confidentiality; and provided further that, if the foregoing inspection
and information gathering would, in the Company's reasonable judgment,
disrupt the Company's conduct of its business, such inspection and
information gathering shall be coordinated on behalf of the Electing
Holders and the other parties entitled thereto by one counsel designated
by and on behalf of Electing Holders and other parties (the fees and
expenses of such counsel to be borne by such Electing Holders except to
the extent set forth in Section 4);
(ii) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, make such representations and warranties
to the Holders participating in such underwritten offering and to the
Managing Underwriters, in form, substance and scope as are customarily
made by the Company and the Trust to underwriters in primary
underwritten offerings of equity and convertible preferred and debt
securities and covering matters including, but not limited to, those set
forth in the Purchase Agreement;
(iii) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, obtain opinions of counsel (which counsel
may be an employee of the Company) to the Company and the Trust (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriters) addressed to each Holder
participating in such underwritten offering and the underwriters,
covering such matters as are customarily covered in opinions requested
in
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<PAGE> 12
underwritten offerings and such other matters as may be reasonably
requested by such Holders and underwriters (it being agreed that the
matters to be covered by such opinions shall include, without
limitation, as of the date of the opinion and as of the Effective Time
of the Shelf Registration Statement or most recent post-effective
amendment thereto, as the case may be, a customary opinion on the
absence from the Shelf Registration Statement and the Prospectus,
including the documents incorporated by reference therein, of an untrue
statement of a material fact or the omission of a material fact required
to be stated therein or necessary to make the statements therein not
misleading;
(iv) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, obtain "cold comfort" letters and updates
thereof from the independent public accountants of the Company and the
Trust, addressed to each Holder participating in such underwritten
offering (if such Holder has provided such letter, representations or
documentation, if any, required for such "cold comfort" letter to be so
addressed) and the underwriters, in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection
with primary underwritten offerings;
(v) deliver such documents and certificates as may be reasonably
requested by any Holders participating in such underwritten offering and
the Managing Underwriters, if any, including, without limitation,
certificates to evidence compliance with Section 3(j) hereof and with
any conditions contained in the underwriting agreement or other
agreements entered into by the Company and the Trust.
(q) The Company and the Trust will each use its best efforts to cause
the Common Stock issuable upon conversion of the Preferred Securities to be
listed for quotation on the New York Stock Exchange and the Chicago Stock
Exchange or other stock exchange or trading system on which the Common Stock
primarily trades on or prior to the Effective Time of the Shelf Registration
Statement hereunder.
(r) The Company and the Trust shall each use reasonable best efforts to
take all other steps necessary to effect the registration, offering and sale of
the Registrable Securities covered by the Shelf Registration Statement
contemplated hereby.
(s) Upon receipt of written notice from the Company that a Suspension
Period is in effect, each Holder shall forthwith discontinue disposition of
Registrable Securities until such Holder has received copies of the supplemental
or amended Prospectus required by Section 3(j) hereof, or until such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and, if so directed by the Company, such Holder shall deliver to the Company (at
the Company's expense) all copies then in such Holder's possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice.
4. Registration Expenses. The Company and the Trust shall each bear all
fees and expenses customarily borne by issuers in a nonunderwritten secondary
offering by selling securityholders or in an underwritten offering, as the case
may be, incurred in connection with the performance of its obligations under
Sections 2, 3 and 6 hereof. In addition, in the event of
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<PAGE> 13
an underwritten offering of Registrable Securities conducted pursuant to Section
6 hereof, or if in any other event the Company requires that inspection and
information gathering be coordinated by counsel for the Electing Holders as
provided in Section 3(p)(i) hereof, the Company shall pay the fees and expenses
of a single counsel selected by the Electing Holders of not less than 25% of the
Registrable Securities to be included in such underwritten offering (or, in any
such other event, included in the Shelf Registration Statement) to represent
them.
5. Indemnification and Contribution.
(a) Indemnification by the Company. Upon the registration of the
Registrable Securities pursuant to Section 2 hereof, and in consideration of the
agreements of the Electing Holders and any underwriters, selling agents or other
securities professionals contained in Section 5(b) hereof, the Company and the
Trust jointly and severally shall, and each hereby agrees to, indemnify and hold
harmless each Electing Holder and each underwriter, selling agent or other
securities professional, if any, which facilitates the disposition of
Registrable Securities, and each of their respective officers and directors and
each person who controls such Electing Holder, underwriter, selling agent or
other securities professional within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (each such person being sometimes referred
to as an "Indemnified Person") against any losses, claims, damages or
liabilities, joint or several, to which such Indemnified Person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Shelf Registration Statement under which such Registrable
Securities are to be registered under the Securities Act, or any Prospectus
contained therein or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and the Company and the Trust hereby agree to reimburse such
Indemnified Person for any reasonable legal or other out-of-pocket expenses
reasonably incurred by them in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company or the Trust shall not be liable to any such Indemnified Person in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such Shelf Registration Statement or
Prospectus, or amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company or the Trust by such Indemnified
Person expressly for use therein.
The foregoing notwithstanding, the Trust and the Company shall not be
liable to the extent that such losses, claims, damages or liabilities arise out
of or are based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in any Prospectus that is a preliminary prospectus if
(i) such Indemnified Person failed to send or deliver a copy of the Prospectus
with or prior to the delivery of written confirmation of the sale of Registrable
Securities giving rise to such losses, claims, damages or liabilities and (ii)
the Prospectus would have corrected such untrue statement or omission.
In addition, the Trust and the Company shall not be liable to the extent
that any such losses, claims, damages or liabilities arise out of or are based
upon an untrue statement or
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<PAGE> 14
alleged untrue statement or omission or alleged omission in a Prospectus (x) if
such untrue statement or omission or alleged untrue statement or omission is
corrected in an amendment or supplement to such Prospectus and (y) having
previously been furnished by or on behalf of the Trust or the Company with
copies of the Prospectus as amended or supplemented, such Indemnified Person
thereafter fails to deliver such Prospectus as so amended or supplemented prior
to or concurrently with the sale to the person who purchased a Registrable
Security from such Indemnified Person and who is asserting such losses, claims,
damages or liabilities.
(b) Indemnification by the Holders and any Agents and Underwriters. Each
Electing Holder agrees, as a consequence of the inclusion of any of such
Holder's Registrable Securities in such Shelf Registration Statement, and each
underwriter, selling agent or other securities professional, if any, which
facilitates the disposition of Registrable Securities shall agree, as a
consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company and
the Trust, its directors, trustees, agents and officers who sign any Shelf
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (collectively referred to as the "Indemnified Party"), against any
losses, claims, damages or liabilities to which the Company or such other
persons may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in such Shelf Registration Statement or Prospectus,
or any amendment or supplement, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company or the Trust by
such Holder, underwriter, selling agent or other securities professional
expressly for use therein, and (ii) reimburse the Company and the Trust for any
reasonable legal or other out-of-pocket expenses reasonably incurred by the
Company and the Trust in connection with investigating or defending any such
action or claim as such expenses are incurred.
(c) Notices of Claims, Etc. If any action or proceeding (including any
governmental investigation or inquiry) shall be brought or asserted against an
Indemnified Person under subsection (a) or an Indemnified Party under subsection
(b) (collectively referred to as the "Indemnified Holder") in respect of which
indemnity may be sought, such Indemnified Holder shall promptly notify the
person against whom such indemnity may be sought (an "Indemnifying Party") in
writing (provided that the failure to give such notice shall not relieve the
Indemnifying Party of its obligations pursuant to this Agreement unless and only
to the extent that such omission results in the loss or compromise of any
material rights or defenses by the Indemnifying Party, as determined by a court
of competent jurisdiction by final judgment), and the Indemnifying Party shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Holder and the payment of all expenses in
connection therewith; but the omission so to notify the Indemnifying Party shall
not relieve it from any liability which it may have to any Indemnified Holder
otherwise than under this Section 5. Such Indemnified Holder shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such separate counsel shall be the
expense of such Indemnified Holder unless (i) the Indemnifying Party has agreed
to
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<PAGE> 15
pay such fees and expenses, (ii) the Indemnifying Party shall have failed to
promptly assume the defense of such action or proceeding or has failed to employ
counsel reasonably satisfactory to such Indemnified Holder in any such action or
proceeding or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both such Indemnified Holder and the
Indemnifying Party, and such Indemnified Holder shall have been advised by
counsel that there may be one or more legal defenses available to such
Indemnified Holder that are different from or additional to those available to
the Indemnifying Party or that a conflict may exist between the Indemnified
Holder and the Indemnifying Party. If such Indemnified Holder notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party as permitted by the provisions of the
preceding sentence, the Indemnifying Party shall not have the right to assume
the defense of such action or proceeding on behalf of such Indemnified Holder.
The foregoing notwithstanding, the Indemnifying Party shall not be liable for
the fees and expenses of more than one separate firm of attorneys (in addition
to any local counsel) at any time for such Indemnified Holder and any other
Indemnified Holders (which firm shall be designated in writing by such
Indemnified Holders) in connection with any one such action or proceeding or
separate but substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances. The
Indemnifying Party shall not be liable for any settlement of any such action or
proceeding effected without the Indemnifying Party's prior written consent, and
the Indemnifying Party agrees to indemnify and hold harmless any Indemnified
Holder from and against any loss, damage, liability or expense by reason of any
settlement of any action effected with the written consent of the Indemnifying
Party. No Indemnifying Party shall, without the written consent of the
Indemnified Holder (which consent shall not be unreasonably withheld), effect
the settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Holder is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment includes an unconditional release
of the Indemnified Holder from all liability arising out of such action or
claim.
(d) Contribution. If the indemnification provided for in this Section 5
is unavailable to an Indemnified Holder under subsection (a) or (b) above in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each Indemnifying Party shall contribute to
the amount paid or payable by such Indemnified Holder as a result of such
losses, claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and the Indemnified Holder in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault of such Indemnifying Party and Indemnified Holder shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such Indemnifying Party or by
such Indemnified Holder, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation (even if
the Electing Holders or any underwriters, selling agents or other securities
professionals or all of them were treated as one entity for such purpose) or by
any other method of allocation which does not
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<PAGE> 16
take account of the equitable considerations referred to in this Section 5(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending
any such action or claim. The obligations of the Electing Holders and any
underwriters, selling agents or other securities professionals in this Section
5(d) to contribute shall be several in proportion to the percentage of principal
amount of Registrable Securities registered or underwritten, as the case may be,
by them and not joint. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) Notwithstanding any other provision of this Section 5, in no event
will any (i) Electing Holder be liable to any person under this Section 5 for
any amounts in excess of the dollar amount of the proceeds to be received by
such holder from the sale of such holder's Registrable Securities (after
deducting any fees, discounts and commissions applicable thereto) pursuant to
any Shelf Registration Statement under which such Registrable Securities are to
be registered under the Securities Act and (ii) underwriter, selling agent or
other securities professional be liable to any person hereunder for any amounts
in excess of the discount, commission or other compensation payable to such
underwriter, selling agent or other securities professional with respect to the
Registrable Securities underwritten by it and distributed to the public.
(f) The obligations of the Company and the Trust under this Section 5
shall be in addition to any liability which the Company and the Trust may
otherwise have to any Indemnified Person and the obligations of any Indemnified
Person under this Section 5 shall be in addition to any liability which such
Indemnified Person may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company, each Administrative
Trustee of the Trust and to each person, if any, who controls the Trust or the
Company within the meaning of the Act. The remedies provided in this Section 5
are not exclusive and shall not limit any rights or remedies which may otherwise
be available to an indemnified party at law or in equity.
6. Underwritten Offering. Any Electing Holder of Registrable Securities
who desires to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided that (i) the Holders of at least a majority in
aggregate principal amount of the outstanding Registrable Securities shall
request such an offering and (ii) at least such aggregate principal amount of
such Registrable Securities shall be included in such offering. Upon receipt of
such a request, the Company and the Trust shall provide all Holders of
Registrable Securities written notice of the request, which notice shall inform
such Holders that they have the opportunity to participate in the offering. In
any such underwritten offering, the investment banker or bankers and manager or
managers that will administer the offering will be selected by, and the
underwriting arrangements with respect thereto (including, subject to clause
(ii) above, the size of the offering) will be approved by the Holders of a
majority of the Registrable Securities to be included in such offering;
provided, however, that such investment bankers and managers and underwriting
arrangements must be reasonably satisfactory to the Company and the Trust. No
Holder may participate in any underwritten offering contemplated
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<PAGE> 17
hereby unless (a) such Holder agrees to sell such Holder's Registrable
Securities to be included in the underwritten offering in accordance with any
approved underwriting arrangements, (b) such Holder completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of such
approved underwriting arrangements, and (c) if such Holder is not then an
Electing Holder, such Holder returns a completed and signed Notice and
Questionnaire to the Company and the Trust in accordance with Section 3(a)(2)
hereof (but in no event later than 10 days prior to commencement of the
underwritten offering) and provides to the Trust and the Company, in writing,
any information with respect to such Holder or the Registrable Securities held
by such Holder as is, in the reasonable opinion of counsel to the Trust or the
Company, required under applicable law to enable such Holder to use such
Prospectus for resales of such Registrable Securities, each within a reasonable
amount of time before such underwritten offering. The Holders participating in
any underwritten offering shall be responsible for any underwriting discounts
and commissions and fees and, subject to Section 4 hereof, expenses of their own
counsel. The Company and the Trust shall pay all expenses customarily borne by
issuers, including but not limited to filing fees, the fees and disbursements of
its counsel and independent public accountants and any printing expenses
incurred in connection with such underwritten offering. Notwithstanding the
foregoing or the provisions of Section 3(n) hereof, upon receipt of a request
from the Managing Underwriter or a representative of Holders of a majority of
the Registrable Securities to be included in an underwritten offering to prepare
and file an amendment or supplement to the Shelf Registration Statement and
Prospectus in connection with an underwritten offering, the Company and the
Trust may delay the filing of any such amendment or supplement for up to 90 days
if the Board of Directors of the Company shall have determined in good faith
that the Company has a bona fide business reason for such delay.
7. Miscellaneous.
(a) Other Registration Rights. The Company may grant registration rights
that would permit any Person that is a third party the right to piggyback on any
Shelf Registration Statement, provided that if the Managing Underwriter of any
underwritten offering conducted pursuant to Section 6 hereof notifies the
Company and the Electing Holders that the total amount of securities which the
Electing Holders and the holders of such piggyback rights intend to include in
any Shelf Registration Statement is so large as to materially threaten the
success of such offering (including the price at which such securities can be
sold), then the amount, number or kind of securities to be offered for the
account of holders of such piggyback rights will be reduced to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount, number and kind recommended by the Managing Underwriter
prior to any reduction in the amount of Registrable Securities to be included in
such Shelf Registration Statement.
(b) Amendments and Waivers. This Agreement, including this Section 7(b),
may be amended, and waivers or consents to departures from the provisions hereof
may be given, only by a written instrument duly executed by the Company and the
Holders of a majority in aggregate principal amount of Registrable Securities
then outstanding. Each Holder of Registrable Securities outstanding at the time
of any such amendment, waiver or consent or thereafter shall be bound by any
amendment, waiver or consent effected pursuant to this
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<PAGE> 18
Section 7(b), whether or not any notice, writing or marking indicating such
amendment, waiver or consent appears on the Registrable Securities or is
delivered to such Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at such address set forth on the record books
of the Company or the Trust, as the case may be;
(ii) if to the Purchasers, initially at the address set forth in
the Purchase Agreement; and
(iii) if to the Company or the Trust, initially at its address
set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have duly given when
received.
The Purchasers or the Company and the Trust by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(d) Parties in Interest. The parties to this Registration Rights
Agreement intend that all Holders of Registrable Securities shall be entitled to
receive the benefits of this Registration Rights Agreement and that any Electing
Holder shall be bound by the terms and provisions of this Registration Rights
Agreement by reason of such election with respect to the Registrable Securities
which are included in a Shelf Registration Statement. All the terms and
provisions of this Registration Rights Agreement shall be binding upon, shall
inure to the benefit of and shall be enforceable by the respective successors
and assigns of the parties hereto and any Holder from time to time of the
Registrable Securities to the aforesaid extent. In the event that any transferee
of any Holder of Registrable Securities shall acquire Registrable securities, in
any manner, whether by gift, bequest, purchase, operation of law or otherwise,
such transferee shall, without any further writing or action of any kind, be
entitled to receive the benefits of and, if an Electing Holder, be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Registration Rights Agreement to the aforesaid extent.
(e) Counterparts. This Registration Rights Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(f) Headings. The headings in this Registration Rights Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This Registration Rights Agreement shall be governed
by and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
-18-
<PAGE> 19
(h) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
-19-
<PAGE> 20
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Trust and you.
Very truly yours,
NEWELL FINANCIAL TRUST I
By: /s/ Ronn L. Claussen
------------------------------------
Name: Ronn L. Claussen
Title: Administrative Trustee
NEWELL CO.
By: /s/ Dale L. Matschullat
------------------------------------
Name: Dale L. Matschullat
Title: Vice President
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
Goldman, Sachs & Co.
Morgan Stanley & Co., Incorporated
Robert W. Baird & Co. Incorporated
Bear, Stearns & Co. Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By: /s/ Goldman, Sachs & Co.
----------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Purchasers
-20-
<PAGE> 21
EXHIBIT A
NEWELL CO.
NEWELL FINANCIAL TRUST I
INSTRUCTION TO DTC PARTICIPANTS
(Date of Mailing)
URGENT -- IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: (DATE)
The Depository Trust Company ("DTC") has identified you as a DTC
Participant through which beneficial interests in 5 1/4% Convertible Quarterly
Income Preferred Securities (liquidation preference $50 per preferred security)
of Newell Financial Trust I (the "Trust") are held. The Preferred Securities are
guaranteed on a subordinated basis by Newell Co. (the "Company") as to the
payment of distributions, and as to payments on liquidation or redemption, to
the extent set forth in a guarantee agreement between the Company and The Chase
Manhattan Bank, as trustee (the "Guarantee") and may be exchanged under certain
circumstances into 5 1/4% Convertible Subordinated Debentures due December 1,
2027 of the Company (the "Debentures") held by the Trust and converted into
common stock, $1.00 par value per share ("Common Stock"), of the Company. The
Preferred Securities, the Debentures, the Guarantee and the Common Stock are
referred to collectively as the "Registrable Securities."
The Company and the Trust are in the process of registering the
Registrable Securities under the Securities Act of 1933 for resale by the
beneficial owners thereof. In order to have their Registrable Securities
included in the registration statement, beneficial owners must complete and
return the enclosed Notice of Registration Statement and Selling Securityholder
Questionnaire.
It is important that beneficial owners of the Registrable Securities
receive a copy of the enclosed materials as soon as possible as their rights to
have the Registrable Securities included in the registration statement depend
upon their returning the Notice and Questionnaire by (DEADLINE FOR RESPONSE).
Please forward a copy of the enclosed documents to each beneficial owner that
holds interests in the Registrable Securities through you. If you require more
copies of the enclosed materials or have any questions pertaining to this
matter, please contact:
Newell Co.
----------------------
----------------------
Attn: General Counsel
-21-
<PAGE> 22
FORM OF
NEWELL CO.
NEWELL FINANCIAL TRUST I
NOTICE OF REGISTRATION STATEMENT
AND
SELLING SECURITY HOLDER QUESTIONNAIRE
[Date]
Newell Co. (the "Company") and Newell Financial Trust I (the
"Trust") have filed with the United States Securities and Exchange Commission
(the "Commission") a preliminary registration statement on Form S-3 (the "Shelf
Registration Statement") for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the "Securities Act"), of the Trust's 5-1/4%
Convertible Quarterly Income Preferred Securities (liquidation preference $50
per preferred security (the "Preferred Securities"), the Company's 5-1/4%
Convertible Subordinated Debentures due December 1, 2027 (the "Debentures"), the
guarantee of the Company pursuant to the Guarantee Agreement between the Company
and The Chase Manhattan Bank, as trustee (the "Guarantee"), the shares of common
stock of the Company, $1.00 par value, issuable upon conversion of the Preferred
Securities and/or the Debentures (together with the associated preferred stock
purchase rights (the "Rights") provided under the Rights Agreement, the "Company
Common Stock"), and together with the Preferred Securities, the Debentures and
the Guarantee, the "Registrable Securities"), in accordance with the terms of
the Registration Rights Agreement, dated as of December 12, 1997 (the
"Registration Rights Agreement"), between the Trust, the Company and the Initial
Purchasers named therein (the "Initial Purchasers"). A copy of the Registration
Rights Agreement is attached hereto. All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.
Each beneficial owner of Registrable Securities is entitled to
have the Registrable Securities beneficially owned by it included in the Shelf
Registration Statement. In order to have Registrable Securities included in the
Shelf Registration Statement, this Notice of Registration Statement and Selling
Security Holder Questionnaire ("Notice and Questionnaire") must be completed,
executed and delivered to the Company's counsel at the address set forth herein
for receipt ON OR BEFORE (DEADLINE FOR RESPONSE). Beneficial owners of
Registrable Securities who do not complete, execute and return this Notice and
Questionnaire by such date (i) will not be named as selling security holders in
the Shelf Registration Statement and related Prospectus and (ii) may not sell
their Registrable Securities pursuant thereto, unless the Company, in its
discretion, consents to include such owner's securities in the Shelf
Registration Statement.
-22-
<PAGE> 23
Certain legal consequences arise from being named as a selling
security holder in the Shelf Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling security holder in the Shelf Registration
Statement and related Prospectus.
-23-
<PAGE> 24
ELECTION
The undersigned holder (the "Selling Security Holder") of
Registrable Securities hereby elects to include in the Shelf Registration
Statement the Registrable Securities beneficially owned by it and listed below
in Item (3). The undersigned, by signing and returning this Notice and
Questionnaire, agrees to be bound with respect to such Registrable Securities by
the terms and conditions of this Notice and Questionnaire and the Registration
Rights Agreement.
The Selling Security Holder hereby undertakes, in accordance with
Section 5 of the Registration Rights Agreement, to (i) indemnify and hold
harmless the Company and the Trust, its directors, trustees, agents and officers
who sign any Shelf Registration Statement and each person, if any, who controls
the Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities to which the Company or such other persons may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
such Shelf Registration Statement or prospectus which is a part thereof, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company or the Trust by
such Selling Security Holder expressly for use therein, and (ii) reimburse the
Company and the Trust for any reasonable legal or other out-of-pocket expenses
reasonably incurred by the Company and the Trust in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Selling Security Holder shall not be
liable for any claims thereunder in excess of the amount of net proceeds
received by such Selling Security Holder from the sale of Registrable Securities
pursuant to the Shelf Registration Statement. The undersigned further
undertakes, if applicable, to comply with the provisions of Sections 5(c) and
(d) of the Registration Rights Agreement that are applicable to the undersigned.
Upon any sale of Registrable Securities pursuant to the Shelf
Registration Statement under the Securities Act, the Selling Security Holder
will be required to deliver to the Company, the Trust and Trustee the Notice of
Transfer set forth in Appendix I attached to this Notice and Questionnaire
(completed and signed) and hereby undertakes to do so.
The Selling Security Holder hereby provides the following
information to the Company and the Trust and represents and warrants that such
information is accurate and complete:
-24-
<PAGE> 25
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Security Holder:
-----------------------------------------------------------------
(b) Full Legal Name of Registered Holder (if not the same as in (a)
above) of Registrable Securities Listed in (3) below:
-----------------------------------------------------------------
(c) Full Legal Name of DTC Participant (if applicable and if not the
same as (b) above) Through Which Registrable Securities Listed in
(3) Below Are Held:
-----------------------------------------------------------------
(2) Address for Notices to Selling Security Holder:
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
Telephone:
------------------------------------
Fax:
------------------------------------
Contact Person:
------------------------------------
(3) Beneficial Ownership of Registrable Securities:
Except as set forth below in this Item (3), the undersigned does not
beneficially own any Securities or shares of Company Common Stock issued upon
conversion of any Securities.
(a) Principal amount or liquidation preference of Registrable
Securities (as defined in the Registration Rights Agreement)
beneficially owned:
-------------------------------------------
CUSIP No(s). of such Registrable Securities:
-------------------
Number of shares of Company Common Stock (if any) issued upon
conversion of such Registrable Securities:
-------------------
-25-
<PAGE> 26
(b) Principal amount or liquidation preference of Registrable
Securities which the undersigned wishes to be included in the
Shelf Registration Statement: __________
CUSIP No(s). of such Registrable Securities to be included in the
Shelf Registration Statement: _______________
Number of shares of Company Common Stock (if any) issued upon
conversion of such Registrable Securities which are to be
included in the Shelf Registration Statement:
(4) Beneficial Ownership of Other Securities of the Company:
Except as set forth below in this Item (4), the undersigned Selling
Security Holder is not the beneficial or registered owner of any shares of
Common Stock or any other securities of the Company or any of its affiliates,
other than the Registrable Securities listed above in Item (3).
State any exceptions here:
(5) Relationships with the Company:
Except as set forth below, neither the Selling Security Holder
nor any of its affiliates, officers, directors or principal equity holders (5%
or more) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates) during the
past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Security
Holder intends to distribute the Registrable Securities listed above in Item (3)
only as follows (if at all): Such Registrable Securities may be sold from time
to time directly by the undersigned Selling Security Holder or, alternatively,
through underwriters, broker-dealers or agents. Such Registrable Securities may
be sold in one or more transactions at fixed prices, at prevailing market prices
at the time of sale, at varying prices determined at the time of sale, or at
negotiated prices. Such sales may be effected in transactions (which may involve
crosses or block transactions) (i) on any national securities exchange or
quotation service on which the Registerable Securities may be listed or quoted
at the time of sale, (ii) in the over-the-counter
-26-
<PAGE> 27
market, (iii) in transactions otherwise than on such exchanges or services or in
the over-the-counter market, or (iv) through the writing of options. In
connection with sales of the Registrable Securities or otherwise, the Selling
Security Holder may enter into hedging transactions with broker-dealers, which
may in turn engage in short sales of the Registrable Securities in the course of
hedging positions they assume. The Selling Security Holder may also sell
Registrable Securities short and deliver Registrable Securities to close out
such short positions, or loan or pledge Registrable Securities to broker-dealers
that in turn may sell such securities.
State any exceptions here:
Note: In no event will such method(s) of distribution take the
form of an underwritten offering of the Registrable Securities without the prior
agreement of the Company and the Trust.
By signing below, the Selling Security Holder acknowledges that
it understands its obligation to comply, and agrees that it will comply, with
the provisions of the Exchange Act and the rules and regulations thereunder.
In the event that the Selling Security Holder transfers all or
any portion of the Registrable Securities listed in Item (3) above after the
date on which such information is provided to the Company and the Trust, the
Selling Security Holder agrees to notify the transferee(s) at the time of the
transfer of its rights and obligations under this Notice and Questionnaire and
the Registration Rights Agreement.
By signing below, the Selling Security Holder consents to the
disclosure of the information contained herein in its answers to Items (1)
through (6) above and the inclusion of such information in the Shelf
Registration Statement and related Prospectus. The Selling Security Holder
understands that such information will be relied upon by the Trust and the
Company in connection with the preparation of the Shelf Registration Statement
and related Prospectus.
In accordance with the Selling Security Holder's obligation under
Section 3(a) of the Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Security Holder agrees to promptly notify the Company and the Trust of
any inaccuracies or changes in the information provided herein which may occur
subsequent to the date hereof at any time while the Shelf Registration Statement
remains in effect. All notices hereunder and pursuant to the Registration Rights
Agreement shall be made in writing, by hand-delivery, first-class mail, or air
courier guaranteeing overnight delivery as follows:
-27-
<PAGE> 28
(i) To the Trust:
Newell Financial Trust I
c/o Newell Co.
Newell Center
29 East Stephenson Street
Attn: Vice President-Treasurer
(ii) With a copy to:
Schiff Hardin & Waite
7200 Sears Tower
Chicago Illinois 60606
Attn: Stuart L. Goodman
Once this Notice and Questionnaire is executed by the Selling
Security Holder and received by the Company's counsel, the terms of this Notice
and Questionnaire, and the representations and warranties contained herein,
shall be binding on, shall inure to the benefit of and shall be enforceable by
the respective successors, heirs, personal representatives, and assigns of the
Company, the Trust and the Selling Security Holder (with respect to the
Registrable Securities beneficially owned by such Selling Security Holder and
listed in Item (3) above). This Agreement shall be governed in all respects by
the laws of the State of New York.
-28-
<PAGE> 29
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.
Dated:
-----------------------------
- -------------------------------------
SELLING SECURITY HOLDER
(Print/type full legal name of beneficial
owner of Registrable Securities)
By:
---------------------------------
Name:
Title:
NEWELL FINANCIAL TRUST I
By:
---------------------------------
Name:
Title: Administrative Trustee
NEWELL CO.
By:
---------------------------------
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:
-29-
<PAGE> 30
Schiff Hardin & Waite
7200 Sears Tower
Chicago, IL 60606
Attn: Stuart L. Goodman
EXHIBIT B
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
- -------------------------------------
Attention:
--------------------------
- -------------------------------------
- -------------------------------------
- -------------------------------------
Re: Newell Financial Trust I (the "Trust")
5-1/4% Convertible Quarterly Income Preferred
Securities (the "Preferred Securities")
--------------------------------------------------
Dear Sirs:
Please be advised that _________________________ has transferred
_________ Preferred Securities, or $__________ aggregate principal amount of
the Newell Co. (the "Company") 5 1/4% Convertible Subordinated Debentures due
December 1, 2027 (the "Debentures") or _______ shares of the Company's common
stock, $1.00 par value per share, issued on conversion of the Preferred
Securities and/or the Debentures ("Stock") pursuant to an effective Shelf
Registration Statement on Form S-3 (File No. 333- ) filed by the Company.
We hereby certify that the prospectus delivery requirements, if
any, of the Securities Act of 1933, as amended, have been satisfied with respect
to the transfer described above and that the above-named beneficial owner of the
Preferred Securities, Debentures or Stock is named as a "Selling Security
Holder" in the Prospectus dated __________ __, ____ or in amendments or
supplements thereto, and that the aggregate principal amount of the Debentures,
or number of shares of Preferred Securities or shares of Stock transferred are
(a portion of) the Debentures, the Preferred Securities or Stock listed in such
Prospectus, as amended or supplemented, opposite such owner's name.
Dated:
Very truly yours,
- ----------------------------------------
(Name)
-9-
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
January 27, 1997 included and incorporated by reference in Newell Co.'s Form
10-K for the year ended December 31, 1996 and to all references to our Firm
included in this registration statement.
/s/ Arthur Andersen LLP
----------------------------------------
ARTHUR ANDERSEN LLP
Milwaukee, WI
February 25, 1998
<PAGE> 1
EXHIBIT 25.1
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------------
NEWELL CO.
(Exact name of obligor as specified in its charter)
DELAWARE 36-3514169
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
NEWELL CENTER
29 EAST STEPHENSON STREET
FREEPORT, ILLINOIS 61032
(Address of principal executive offices) (Zip Code)
--------------------------------------------
CONVERTIBLE SUBORDINATED DEBENTURES DUE 2027
OF NEWELL CO.
(Title of the indenture securities)
1
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 10th day of February, 1998.
THE CHASE MANHATTAN BANK
By /s/ J. Adamis
------------------------------------
/s/ J. Adamis
Second Vice President
-3-
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1997, in accordance with a
call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................... $ 11,760
Interest-bearing balances ........................... 4,343
Securities:
Held to maturity securities.............................. 2,704
Available for sale securities............................ 37,885
Federal funds sold and securities purchased under
agreements to resell................................. 27,358
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,370
Less: Allowance for loan and lease losses 2,760
Less: Allocated transfer risk reserve .... 13
--------
Loans and leases, net of unearned income,
allowance, and reserve............................... 124,597
Trading Assets........................................... 64,630
Premises and fixed assets (including capitalized
leases).............................................. 2,925
Other real estate owned.................................. 286
Investments in unconsolidated subsidiaries and
associated companies................................. 232
Customers' liability to this bank on acceptances
outstanding.......................................... 2,212
Intangible assets........................................ 1,480
Other assets............................................. 11,117
--------
TOTAL ASSETS............................................. $291,529
========
</TABLE>
-4-
<PAGE> 5
LIABILITIES
<TABLE>
<S> <C>
Deposits
In domestic offices.................................. $ 86,574
Noninterest-bearing ...................... $ 31,818
Interest-bearing ......................... 54,756
--------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ........................................... 69,887
Noninterest-bearing ...................... $ 3,777
Interest-bearing ......................... 66,110
Federal funds purchased and securities sold under agree-
ments to repurchase...................................... 45,307
Demand notes issued to the U.S. Treasury ................ 161
Trading liabilities...................................... 47,406
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ....... 4,578
With a remaining maturity of more than one year
through three years.............................. 261
With a remaining maturity of more than three years... 131
Bank's liability on acceptances executed and outstanding 2,212
Subordinated notes and debentures ....................... 5,715
Other liabilities........................................ 12,355
TOTAL LIABILITIES........................................ 274,587
========
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock............................................. 1,211
Surplus (exclude all surplus related to preferred stock) 10,294
Undivided profits and capital reserves .................. 5,414
Net unrealized holding gains (losses)
on available-for-sale securities......................... 7
Cumulative foreign currency translation adjustments ..... 16
TOTAL EQUITY CAPITAL..................................... 16,942
--------
TOTAL LIABILITIES AND EQUITY CAPITAL..................... $291,529
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
<PAGE> 1
EXHIBIT 25.2
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------------
NEWELL FINANCIAL TRUST I
(Exact name of obligor as specified in its charter)
DELAWARE 36-7213787
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
NEWELL CENTER
29 EAST STEPHENSON STREET
FREEPORT, ILLINOIS 61032
(Address of principal executive offices) (Zip Code)
----------------------------------------------------
CONVERTIBLE QUARTERLY INCOME PREFERRED SECURITIES OF
NEWELL FINANCIAL TRUST I
(Title of the indenture securities)
-------------------------------------------------------------------
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 10th day of February, 1998.
THE CHASE MANHATTAN BANK
By /s/ J. Adamis
------------------------------------
/s/ J. Adamis
Second Vice President
-3-
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1997, in accordance with a
call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin.................................... $ 11,760
Interest-bearing balances............................ 4,343
Securities:
Held to maturity securities.............................. 2,704
Available for sale securities............................ 37,885
Federal funds sold and securities purchased under
agreements to resell................................. 27,358
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,370
Less: Allowance for loan and lease losses 2,760
Less: Allocated transfer risk reserve .... 13
--------
Loans and leases, net of unearned income,
allowance, and reserve............................... 124,597
Trading Assets........................................... 64,630
Premises and fixed assets (including capitalized
leases).................................................. 2,925
Other real estate owned.................................. 286
Investments in unconsolidated subsidiaries and
associated companies................................. 232
Customers' liability to this bank on acceptances
outstanding.......................................... 2,212
Intangible assets........................................ 1,480
Other assets............................................. 11,117
--------
TOTAL ASSETS............................................. $291,529
========
</TABLE>
-4-
<PAGE> 5
LIABILITIES
<TABLE>
<S> <C>
Deposits
In domestic offices.................................. $ 86,574
Noninterest-bearing ...................... $ 31,818
Interest-bearing ......................... 54,756
--------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's........................................... 69,887
Noninterest-bearing ...................... $ 3,777
Interest-bearing ......................... 66,110
Federal funds purchased and securities sold under agree-
ments to repurchase...................................... 45,307
Demand notes issued to the U.S. Treasury ................ 161
Trading liabilities...................................... 47,406
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ....... 4,578
With a remaining maturity of more than one year
through three years.............................. 261
With a remaining maturity of more than three years... 131
Bank's liability on acceptances executed and outstanding 2,212
Subordinated notes and debentures ....................... 5,715
Other liabilities........................................ 12,355
TOTAL LIABILITIES........................................ 274,587
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock............................................. 1,211
Surplus (exclude all surplus related to preferred stock) 10,294
Undivided profits and capital reserves .................. 5,414
Net unrealized holding gains (losses)
on available-for-sale securities......................... 7
Cumulative foreign currency translation adjustments ..... 16
TOTAL EQUITY CAPITAL..................................... 16,942
--------
TOTAL LIABILITIES AND EQUITY CAPITAL..................... $291,529
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
<PAGE> 1
EXHIBIT 25.3
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------------
NEWELL CO.
(Exact name of obligor as specified in its charter)
DELAWARE 36-3514169
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
NEWELL CENTER
29 EAST STEPHENSON STREET
FREEPORT, ILLINOIS 61032
(Address of principal executive offices) (Zip Code)
--------------------------------------------
PREFERRED SECURITIES GUARANTEE OF NEWELL CO.
(Title of the indenture securities)
-------------------------------------------------------------------
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 10th day of February, 1998.
THE CHASE MANHATTAN BANK
By /s/ J. Adamis
------------------------------------
/s/ J. Adamis
Second Vice President
-3-
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1997, in accordance with a
call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin.................................... $ 11,760
Interest-bearing balances............................ 4,343
Securities:
Held to maturity securities.............................. 2,704
Available for sale securities............................ 37,885
Federal funds sold and securities purchased under
agreements to resell................................. 27,358
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,370
Less: Allowance for loan and lease losses 2,760
Less: Allocated transfer risk reserve ... 13
--------
Loans and leases, net of unearned income,
allowance, and reserve............................... 124,597
Trading Assets........................................... 64,630
Premises and fixed assets (including capitalized
leases).............................................. 2,925
Other real estate owned.................................. 286
Investments in unconsolidated subsidiaries and
associated companies................................. 232
Customers' liability to this bank on acceptances
outstanding.......................................... 2,212
Intangible assets........................................ 1,480
Other assets............................................. 11,117
--------
TOTAL ASSETS............................................. $291,529
========
</TABLE>
-4-
<PAGE> 5
LIABILITIES
<TABLE>
<S> <C>
Deposits
In domestic offices.................................. $ 86,574
Noninterest-bearing ....................... $31,818
Interest-bearing .......................... 54,756
-------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's............................................ 69,887
Noninterest-bearing ....................... $ 3,777
Interest-bearing .......................... 66,110
Federal funds purchased and securities sold under agree-
ments to repurchase...................................... 45,307
Demand notes issued to the U.S. Treasury ................ 161
Trading liabilities...................................... 47,406
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ....... 4,578
With a remaining maturity of more than one year
through three years.............................. 261
With a remaining maturity of more than three years... 131
Bank's liability on acceptances executed and outstanding 2,212
Subordinated notes and debentures ....................... 5,715
Other liabilities........................................ 12,355
TOTAL LIABILITIES........................................ 274,587
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock............................................. 1,211
Surplus (exclude all surplus related to preferred stock) 10,294
Undivided profits and capital reserves .................. 5,414
Net unrealized holding gains (losses)
on available-for-sale securities......................... 7
Cumulative foreign currency translation adjustments ..... 16
TOTAL EQUITY CAPITAL..................................... 16,942
--------
TOTAL LIABILITIES AND EQUITY CAPITAL..................... $291,529
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
