AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 20, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------
<TABLE>
<S> <C> <C>
TRAVELERS GROUP INC. DELAWARE 52-1568099
TRAVELERS CAPITAL I DELAWARE 06-6432178
TRAVELERS CAPITAL II DELAWARE 06-6432179
TRAVELERS CAPITAL III DELAWARE 06-6432181
TRAVELERS CAPITAL IV DELAWARE 06-6432183
TRAVELERS CAPITAL V DELAWARE 06-6432184
(EXACT NAME OF REGISTRANT AS (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBERS)
</TABLE>
------------
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(212) 816-8000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF EACH REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------
CHARLES O. PRINCE, III
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(212) 816-8000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE FOR EACH REGISTRANT)
------------
COPIES TO:
<TABLE>
<S> <C>
KENNETH J. BIALKIN, ESQ. FREDERICK W. KANNER, ESQ.
SKADDEN, ARPS, SLATE, DEWEY BALLANTINE
MEAGHER & FLOM 1301 AVENUE OF THE AMERICAS
919 THIRD AVENUE NEW YORK, NEW YORK 10019
NEW YORK, N.Y. 10022 (212) 259-8000
(212) 735-3000
</TABLE>
------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of the registration statement, as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. X
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. X
(cover continued on next page)
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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, 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>
(Continued from previous page)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF EACH CLASS TO BE REGISTERED PER OFFERING REGISTRATION FEE
OF SECURITIES TO BE REGISTERED (1) UNIT (1)(2)(3) PRICE (1)(2)(3) (2)
<S> <C> <C> <C> <C>
Trust Preferred Securities of the
Trusts...........................
Junior Subordinated Debt Securities
of Travelers Group Inc.............
Guarantees of Trust Preferred
Securities of the Trusts and
certain back-up obligations
(4)..............................
Total.............................. $1,000,000,000 100% $1,000,000,000 $344,828
</TABLE>
(1) Such indeterminate number of Preferred Securities of Travelers Capital I,
Travelers Capital II, Travelers Capital III, Travelers Capital IV and
Travelers Capital V (each a "Trust") and such indeterminate principal amount
of Junior Subordinated Debt Securities of Travelers Group Inc. as may from
time to time be issued at indeterminate prices. Includes Preferred
Securities which may be purchased by underwriters to cover over-allotments,
if any. Junior Subordinated Debt Securities may be issued and sold to any
Trust, in which event such Junior Subordinated Debt Securities may later be
distributed to the holders of Preferred Securities upon a dissolution of
such Trust and the distribution of the assets thereof.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. The aggregate public offering price of the Preferred
Securities of the Trusts and the Junior Subordinated Debt Securities of
Travelers Group Inc. registered hereby will not exceed $1,000,000,000.
(3) Exclusive of accrued interest and distributions, if any.
(4) Includes the rights of holders of the Preferred Securities under the
Guarantee and certain back-up undertakings, comprised of the obligations of
Travelers Group Inc. to provide certain indemnities in respect of, and pay
and be responsible for certain costs, expenses, debts and liabilities of,
each Trust (other than with respect to the Preferred Securities) and such
obligations of Travelers Group Inc. as set forth in the Amended and Restated
Declaration of Trust of each Trust and the Indenture, in each case as
further described in the Registration Statement. The Guarantee, when taken
together with Travelers Group Inc.'s obligations under the Junior
Subordinated Debt Securities, the Indenture and the Amended and Restated
Declaration of Trust, will provide a full and unconditional guarantee on a
subordinated basis by Travelers Group Inc. of payments due on the Preferred
Securities. No separate consideration will be received for any Guarantees or
such back-up obligations.
<PAGE>
SUBJECT TO COMPLETION, DATED SEPTEMBER 20, 1996
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1996)
TRUST PREFERRED SECURITIES
TRAVELERS CAPITAL I
% TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER TRUST PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
TRAVELERS GROUP INC.
------------
The % Trust Preferred Securities (the "Preferred Securities") offered
hereby represent preferred undivided beneficial interests in the assets of
Travelers Capital I, a statutory business trust formed under the laws of the
State of Delaware ("TRV Capital" or the "Trust"). Travelers Group Inc., a
Delaware corporation (the "Company"), will directly or indirectly own all the
common securities (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities") representing undivided beneficial interests
in the assets of TRV Capital. TRV Capital exists for the sole purpose of issuing
the Preferred Securities and Common Securities and investing the proceeds
thereof in an equivalent amount of % Junior Subordinated Deferrable Interest
Debentures due , 203 (the "Junior Subordinated Debt Securities") of the
Company.
(continued on next page)
SEE "RISK FACTORS RELATING TO THE PREFERRED SECURITIES" BEGINNING ON PAGE
S-8 FOR A DISCUSSION OF FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS, INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH
PAYMENTS OF DISTRIBUTIONS ON THE PREFERRED SECURITIES MAY BE DEFERRED AND THE
RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF SUCH DEFERRAL.
The Company intends to apply for listing of the Preferred Securities on the
New York Stock Exchange, Inc. (the "New York Stock Exchange"). Trading of the
Preferred Securities on the New York Stock Exchange is expected to commence
within a 30-day period after the initial delivery of the Preferred Securities.
See "Underwriting."
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE><CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO TRV
OFFERING PRICE(1) COMMISSIONS(2) CAPITAL(3)(4)(5)
<S> <C> <C> <C>
Per Preferred Security $ (3) $
Total $ (3) $
</TABLE>
(1) Plus accrued distributions, if any, from , 199 .
(2) For information regarding indemnification of the Underwriters, see
"Underwriting."
(3) Because the proceeds of the sale of the Preferred Securities will be
invested in the Junior Subordinated Debt Securities, the Company has agreed
to pay to the Underwriters, as compensation ("Underwriters' Compensation")
for their arranging the investment therein of such proceeds, $ per
Preferred Security ($ in the aggregate); provided, that such
compensation for sales of 10,000 or more Preferred Securities to a single
purchaser will be $ per Preferred Security. Therefore, to the extent of
such sales, the actual amount of Underwriters' Compensation will be less
than the aggregate amount specified in the preceding sentence. See
"Underwriting."
(4) Expenses of the offering, which are payable by the Company, are estimated to
be $ .
(5) The Trust has granted to the Underwriters a 30-day option to purchase up to
additional Preferred Securities on the same terms as set forth above
solely to cover over-allotments, if any. See "Underwriting." If such option
is exercised in full, the total Initial Public Offering Price and Proceeds
to TRV Capital will be $ and $ , respectively. The Company will
pay Underwriters' Compensation in the amoutns per Preferred Security set
forth above with respect to such additional Preferred Securities.
------------
The Preferred Securities offered hereby are being offered by the several
Underwriters named herein, subject to prior sale, when, as and if accepted by
them and subject to certain conditions. It is expected that delivery of the
Preferred Securities will be made only in book-entry form through the facilities
of The Depository Trust Company, on or about , 199 .
------------
SMITH BARNEY INC.
, 199
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
<PAGE>
(continued from previous page)
Upon the event of a default under the Declaration (as defined herein), the
holders of Preferred Securities will have a preference over the holders of the
Common Securities with respect to payments in respect of distributions and
payments upon redemption, liquidation and otherwise.
Holders of the Preferred Securities are entitled to receive cumulative cash
distributions at an annual rate of % of the liquidation amount of $25 per
Preferred Security, accruing from, and including, the date of original issuance
and payable quarterly in arrears on March 31, June 30, September 30 and December
31 of each year, commencing ,199_ ("distributions"). The payment of
distributions out of monies held by TRV Capital and payments on liquidation of
TRV Capital or the redemption of Preferred Securities out of monies held by TRV
Capital, as set forth below, are guaranteed by the Company (the "Guarantee") to
the extent described under "Description of Guarantee." The Guarantee covers
payments of distributions and other payments on the Preferred Securities only if
and to the extent that the Company has made a payment of interest or principal
or other payments on the Junior Subordinated Debt Securities held by TRV Capital
as its sole asset. The Guarantee, when taken together with the Company's
obligations under the Junior Subordinated Debt Securities, the Indenture (as
defined herein) pursuant to which the Junior Subordinated Debt Securities are
issued and its obligations under the Declaration, including its liabilities to
pay costs,expenses, debts and liabilities of TRV Capital (other than with
respect to the Trust Securities), provides a full and unconditional guarantee
of amounts due on the Preferred Securities. The obligations of the Company under
the Guarantee rank (i) subordinate and junior in right of payment to all other
liabilities of the Company, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Company and with any guarantee
now or hereafter entered into by the Company in respect of any preferred or
preference stock of any subsidiary of the Company and (iii) senior to the
Company's common stock. The obligations of the Company under the Junior
Subordinated Debt Securities are subordinate and junior in right of payment to
all present and future Senior Indebtedness (as defined herein) of the Company.
The distribution rate and the distribution payment date and other payment
dates for the Preferred Securities will correspond to the interest rate and
interest payment dates and other payment dates on the Junior Subordinated Debt
Securities, which will be the sole assets of TRV Capital. As a result, if
principal or interest is not paid on the Junior Subordinated Debt Securities by
the Company, no amounts will be paid on the Preferred Securities because TRV
Capital will not have sufficient funds to make distributions on the Preferred
Securities. In such event, the Guarantee will not apply to such distributions
until TRV Capital has sufficient funds available therefor.
The Company has the right to defer payments of interest on the Junior
Subordinated Debt Securities by extending the interest payment period on the
Junior Subordinated Debt Securities at any time for up to 20 consecutive
quarters (each, an "Extension Period"), provided, that no Extension Period may
extend beyond the maturity of the Junior Subordinated Debt Securities. If
interest payments are so deferred, distributions on the Preferred Securities
will also be deferred. During any Extension Period, distributions on the
Preferred Securities will continue to accrue with interest thereon (to the
extent permitted by applicable law) at an annual rate of % per annum
compounded quarterly. Additionally, during any Extension Period, holders of
Preferred Securities will be required to include deferred interest income in
the form of original issue discount ("OID") in their gross income for United
States federal income tax purposes in advance of receipt of the cash
distributions with respect to such deferred interest payments. There
could be up to 80 Extension Periods of varying lengths throughout the term of
the Junior Subordinated Debt Securities. See "Description of the Junior
Subordinated Debt Securities--Option to Extend Interest Payment Period," "Risk
Factors Relating to the Preferred Securities--Option to Extend Interest Payment
Period" and "United States Federal Income Taxation--Interest Income and Original
Issue Discount."
The Junior Subordinated Debt Securities are redeemable by the Company, in
whole or in part, from time to time, on or after , 200 , or at any
time, in whole or in part, in certain circumstances upon the occurrence of a Tax
Event (as defined herein). If the Company redeems Junior Subordinated Debt
Securities, TRV Capital must redeem Trust Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Junior
Subordinated Debt Securities so redeemed at $25 per Trust Security plus accrued
and unpaid distributions thereon (the "Redemption Price") to the date fixed for
redemption. See "Description of the Preferred Securities--Mandatory Redemption
of Trust Securities." The Preferred Securities will be redeemed upon maturity of
the Junior Subordinated Debt Securities. The Junior Subordinated Debt Securities
mature on , 203 . In addition, upon the occurrence of a Special
Event arising from a change in law or a change in legal interpretation regarding
tax or investment company matters, unless the Junior Subordinated Debt
Securities are redeemed in the limited circumstances described herein, TRV
Capital shall be dissolved, with the result that the Junior Subordinated Debt
Securities will be distributed to the holders of the Trust Securities, on a pro
rata basis, in lieu of any cash distribution. See "Description of the Preferred
Securities--Special Event Redemption or Distribution." In certain circumstances,
the Company will have the right to redeem the Junior Subordinated Debt
Securities prior to , 200 , which would result in the redemption by
TRV Capital of Trust Securities in the same amount on a pro rata basis. If the
Junior Subordinated Debt Securities are distributed to the holders of the
Preferred Securities, the Company will use its best efforts to have the Junior
S-2
<PAGE>
Subordinated Debt Securities listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities are then listed. See "Description of
the Preferred Securities--Special Event Redemption or Distribution" and
"Description of the Junior Subordinated Debt Securities."
In the event of the involuntary or voluntary dissolution, winding up or
termination of TRV Capital, the holders of the Preferred Securities will be
entitled to receive for each Preferred Security a liquidation amount of $25 plus
accrued and unpaid distributions thereon (including interest thereon) to the
date of payment, unless, in connection with such dissolution, the Junior
Subordinated Debt Securities are distributed to the holders of the Preferred
Securities. See "Description of the Preferred Securities--Liquidation
Distribution Upon Dissolution."
Following the initial distribution of Preferred Securities, Smith Barney
Inc. ("Smith Barney"), an indirect wholly owned subsidiary of the Company and an
affiliate of TRV Capital, may offer and sell previously issued Preferred
Securities in the course of its business as a broker-dealer (subject to
obtaining any necessary approval of the New York Stock Exchange for any such
offers and sales). Smith Barney may act as a principal or agent in such
transactions.
This Prospectus Supplement, together with an appropriate Prospectus, may be
used by Smith Barney in connection with offers and sales of an indeterminate
amount of the Preferred Securities in market-making transactions at negotiated
prices related to prevailing market prices at the time of sale. Smith Barney may
act as principal or agent in such transactions.
-------------------
FOR NORTH CAROLINA INVESTORS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS SUCH
COMMISSIONER RULED UPON THE ACCURACY OR THE ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING TRANSACTIONS, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-3
<PAGE>
SUMMARY
The following information is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus Supplement and the
accompanying Prospectus.
THE COMPANY
The Company is a financial services holding company engaged, through its
subsidiaries, principally in four business segments: Investment Services,
Consumer Finance Services, Life Insurance Services and Property & Casualty
Insurance Services.
The Company's Investment Services segment consists of investment banking,
asset management, brokerage and other financial services provided through Smith
Barney Holdings Inc. and its subsidiaries. The Company's Consumer Finance
Services segment includes consumer lending services and credit card and
credit-related insurance services provided through Commercial Credit Company and
its subsidiaries. The Company's Life Insurance Services segment includes
individual life insurance, annuities and pension programs which are offered
primarily through The Travelers Insurance Company, The Travelers Life and
Annuity Company and the Primerica Financial Services group of companies,
including Primerica Life Insurance Company. The Company's Property & Casualty
Insurance Services segment provides insurance products including workers'
compensation, liability, automobile, property and multiple-peril. In addition,
this segment provides commercial and personal property and casualty products
throughout the United States. Property and casualty insurance policies are
issued primarily by subsidiaries of the Company's newly formed indirect
majority-owned subsidiary Travelers/Aetna Property Casualty Corp. ("TAP") and
affiliated property-casualty insurance companies, including Gulf Insurance
Company.
In addition to its four business segments, the Company's Corporate and Other
segment consists of unallocated expenses and earnings primarily related to
interest, corporate administration, and certain corporate investments.
On April 2, 1996, TAP purchased from Aetna Life and Casualty Company all of
the outstanding capital stock of The Aetna Casualty and Surety Company and The
Standard Fire Insurance Company for $4.16 billion in cash.
The principal offices of the Company are located at 388 Greenwich Street,
New York, New York 10013 and its telephone number is (212) 816-8000.
TRV CAPITAL
TRV Capital is a statutory business trust formed under Delaware law pursuant
to (i) a declaration of trust, dated as of September 19, 1996, executed by the
Company, as sponsor (the "Sponsor"), and the trustees of TRV Capital (as
described below) and (ii) the filing of a certificate of trust with the
Secretary of State of the State of Delaware on September 19, 1996. Such
declaration will be amended and restated in its entirety (as so amended and
restated, the "Declaration") substantially in the form filed as an exhibit to
the Registration Statement of which this Prospectus Supplement and the
accompanying Prospectus form a part. The Declaration will be qualified as an
indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). Upon issuance of the Preferred Securities, the purchasers
thereof will own all of the Preferred Securities. See "Description of the
Preferred Securities--Book-Entry Only Issuance--The Depository Trust Company."
The Company will directly or indirectly acquire Common Securities in an
aggregate liquidation amount equal to 3% or more of the total capital of TRV
Capital. TRV Capital exists for the exclusive purposes of (i) issuing the Trust
Securities representing undivided beneficial interests in the assets of the
Trust, (ii) investing the gross proceeds of the Trust Securities in the Junior
Subordinated Debt Securities and (iii) engaging in only those other activities
necessary or incidental thereto.
TRV Capital's business and affairs are conducted by its trustees, each
appointed by the Company as holder of the Common Securities. Pursuant to the
Declaration, the number of trustees of TRV Capital will be four: The Chase
Manhattan Bank, a New York banking association that is unaffiliated with
the Company, as the institutional trustee (the "Institutional Trustee"), Chase
Manhattan Bank Delaware, a banking association with its principal place of
business in the State of Delaware, as the Delaware trustee (the "Delaware
Trustee"), and two individual trustees (the "Regular Trustees" and, together
with the Institutional Trustee and the Delaware Trustee, the "TRV Trustees")
will be persons who are employees or officers of, or who are affiliated with the
Company. Initially, the Regular Trustees will be Heidi G. Miller and Irwin
Ettinger, each of whom is an officer of the Company. The Institutional Trustee
will act as the sole indenture trustee under the Declaration for purposes of
compliance with the Trust Indenture Act until removed or replaced by the holder
of the Common Securities. The Chase Manhattan Bank will also act as
indenture trustee (the "Guarantee Trustee") under the Guarantee. See
"Description of Guarantee" and "Description of Junior Subordinated Debt
Securities."
S-4
<PAGE>
The Institutional Trustee will hold title to the Junior Subordinated Debt
Securities for the benefit of the holders of the Trust Securities and, in its
capacity as the holder, the Institutional Trustee will have the power to
exercise all rights, powers and privileges under the indenture pursuant to which
the Junior Subordinated Debt Securities are issued. In addition, the
Institutional Trustee will maintain exclusive control of a segregated non-
interest bearing bank account (the "Property Account") to hold all payments made
in respect of the Junior Subordinated Debt Securities for the benefit of the
holders of the Trust Securities. The Institutional Trustee will make payments of
distributions and payments on liquidation, redemption and otherwise to the
holders of the Trust Securities out of funds from the Property Account. The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the
Preferred Securities. The Company, as the direct or indirect holder of all the
Common Securities, will have the right, subject to certain restrictions
contained in the Declaration, to appoint, remove or replace any TRV Trustee and
to increase or decrease the number of TRV Trustees. The Company will pay all
fees and expenses related to TRV Capital and the offering of the Trust
Securities. See "Description of the Junior Subordinated Debt
Securities--Miscellaneous."
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Delaware Business Trust Act (the "Trust Act") and the Trust
Indenture Act. See "Description of the Preferred Securities."
PREFERRED SECURITIES OFFERING
<TABLE>
<CAPTION>
<S> <C>
General...................... The Preferred Securities represent undivided beneficial interests in
TRV Capital's assets, which will consist solely of the Junior Subordinated
Debt Securities. The Junior Subordinated Debt Securities, in which the
proceeds of the Preferred Securities offered hereby will be invested,
mature on , 203 , unless the Junior Subordinated Debt Securities
are redeemed by the Company prior to such maturity as described under
"Description of the Preferred Securities--Mandatory Redemption of
Trust Securities" and "Description of the Preferred
Securities--Special Event Redemption or Distribution."
Distributions................ The distributions payable on each Preferred Security will be fixed at
a rate per annum of % of the stated liquidation amount of $25 per
Preferred Security, will be cumulative, will accrue from , 199 ,
the date of issuance of the Preferred Securities, and will be payable
quarterly in arrears, on March 31, June 30, September 30 and December
31 of each year, commencing , 199 . See "Description of the
Preferred Securities-- Distributions."
</TABLE>
S-5
<PAGE>
<TABLE>
<S> <C>
Option to Extend Interest
Payment Period...............
The Company has the right, at any time, to defer payments of interest
on the Junior Subordinated Debt Securities for a period not exceeding
20 consecutive quarters; provided, that no Extension Period may extend
beyond the maturity date of the Junior Subordinated Debt Securities.
As a consequence of the Company's extension of the interest payment
period, quarterly distributions on the Preferred Securities would be
deferred (though such distributions would continue to accrue with
interest thereon compounded quarterly, since interest would continue
to accrue on the Junior Subordinated Debt Securities) during any such
extended interest payment period. In the event that the Company
exercises its right to extend an interest payment period, then (a) the
Company shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make
any guarantee payment with respect thereto, and (b) the Company shall
not make any payment of interest on or principal of (or premium, if
any, on), or repay, repurchase or redeem, any debt securities issued
by the Company which rank pari passu with or junior to the Junior
Subordinated Debt Securities. The foregoing, however, will not apply
(i) to any stock dividends paid by the Company where the dividend
stock is the same stock as that on which the dividend is being paid or
(ii) in certain other limited events. Prior to the termination of any
Extension Period, the Company may further extend such Extension
Period, provided that such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive
quarters. Upon the termination of any Extension Period and the payment
of all amounts then due, the Company may commence a new Extension
Period, subject to the foregoing requirements. See "Description of the
Junior Subordinated Debt Securities--Option to Extend Interest Payment
Period."
Should an Extension Period occur, Preferred Security holders will
continue to recognize interest income for United States federal income
tax purposes. As a result, such holders will be required to include
such interest in gross income for United States federal income tax
purposes in advance of the receipt of cash, and such holders will not
receive the cash from TRV Capital related to such income if such
holders dispose of Preferred Securities prior to the record date for
payment of distributions. See "United States Federal Income Taxation--
Interest Income and Original Issue Discount."
Mandatory Redemption......... Upon the repayment of the Junior Subordinated Debt Securities, whether
at maturity or upon earlier redemption as provided in the Indenture,
the proceeds from such repayment will be applied by the Institutional
Trustee to redeem a like amount of Trust Securities, upon the terms
and conditions described herein. See "Description of the Preferred
Securities--Mandatory Redemption of Trust Securities."
Optional Redemption.......... The Company has the right to redeem the Junior Subordinated Debt
Securities (a) on or after , 200 , in whole at any time or in
part from time to time, subject to the conditions described in
"Description of the Junior Subordinated Debt Securities--Optional
Redemption" or (b) at any time, in whole or in part, in certain
circumstances upon the occurrence of a Tax Event (as defined herein)
as described under "Description of the Preferred Securities--Special
Event Redemption or Distribution," in each case at a redemption price
equal to 100% of the principal amount of Junior Subordinated Debt
Securities being redeemed, together with any accrued but unpaid
interest, to but not including the redemption date. See "Description
of the Junior Subordinated Debt Securities--Optional Redemption." If
the Company redeems any Junior Subordinated Debt Securities, the
proceeds from such redemption will be applied by the Institutional
Trustee to redeem a like amount of Trust Securities.
</TABLE>
S-6
<PAGE>
<TABLE>
<S> <C>
Special Event Distribution... Subject to certain conditions and except in limited circumstances, if
at any time a Special Event (as defined herein) shall occur and be
continuing, TRV Capital shall be dissolved with the result that Junior
Subordinated Debt Securities with an aggregate principal amount equal
to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and with accrued and unpaid
interest thereon equal to accrued and unpaid distributions on, the
Trust Securities outstanding at such time, would be distributed to the
holders of the Trust Securities in liquidation of such holders'
interests in TRV Capital on a pro rata basis within 90 days following
the occurrence of such Special Event. See "Description of the
Preferred Securities--Special Event Redemption or Distribution."
Voting Rights................ Generally, the holders of the Preferred Securities will not have any
voting rights. See "Description of the Preferred Securities--Voting
Rights."
Subject to certain conditions, including that the Institutional
Trustee obtain the opinion of counsel described under "Description of
the Preferred Securities--Voting Rights" prior to taking certain
actions, the holders of a majority in aggregate liquidation amount of
the Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration
including the right to direct the Institutional Trustee, as holder of
the Junior Subordinated Debt Securities, to (i) exercise the remedies
available under the Indenture with respect to the Junior Subordinated
Debt Securities, (ii) waive any past Indenture Event of Default that
is waivable under the Indenture (as defined herein), (iii) exercise
any right to rescind or annul a declaration that the principal of all
the Junior Subordinated Debt Securities shall be due and payable, or
(iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debt Securities where such
consent shall be required; provided, however, that where a consent or
action under the Indenture would require the consent or act of a Super
Majority (as defined herein) of holders of the Junior Subordinated
Debt Securities affected thereby, only the holders of at least such
Super Majority in aggregate liquidation amount of the Preferred
Securities may direct the Institutional Trustee to give such consent
or take such action. See "Description of the Preferred
Securities--Voting Rights."
Use of Proceeds.............. The proceeds from the sale of the Preferred Securities offered hereby
will be used by TRV Capital to purchase the Junior Subordinated Debt
Securities issued by the Company. The Company expects to use such
proceeds for general corporate purposes. See "Use of Proceeds."
Listing...................... The Company intends to apply for listing of the Preferred Securities
on the New York Stock Exchange. Trading of the Preferred Securities on
the New York Stock Exchange is expected to commence within a 30-day
period after the initial delivery of the Preferred Securities.
</TABLE>
RISK FACTORS
Prospective investors should consider carefully, in addition to the other
information contained in this Prospectus Supplement and the accompanying
Prospectus, the matters set forth under the caption "Risk Factors" in this
Prospectus Supplement before purchasing the Preferred Securities offered hereby.
------------
Unless otherwise indicated, all information in this Prospectus Supplement
and the accompanying Prospectus assumes no exercise of the Underwriters' option
to purchase from the Trust up to additional Preferred Securities solely
to cover over-allotments, if any. See "Underwriting."
S-7
<PAGE>
RISK FACTORS
Prospective investors should consider carefully, in addition to the other
information contained in this Prospectus Supplement and the accompanying
Prospectus, the following risk factors before purchasing the Preferred
Securities offered hereby.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE JUNIOR SUBORDINATED DEBT SECURITIES
AND THE GUARANTEE
The obligations of the Company under the Junior Subordinated Debt Securities
are subordinate and junior in right of payment to all present and future Senior
Indebtedness of the Company. No payment of principal (including redemption
payments, if any), premium, if any, or interest on the Junior Subordinated Debt
Securities may be made if (i) any Senior Indebtedness of the Company is not paid
when due and any applicable grace period with respect to such default has ended
with such default not having been cured or waived or ceasing to exist, or (ii)
the maturity of any Senior Indebtedness of the Company has been accelerated
because of a default. The Company's obligations under the Guarantee rank (i)
subordinate and junior in right of payment to all other liabilities of the
Company, (ii) pari passu with the most senior preferred or preference stock now
or hereafter issued by the Company and with any guarantee now or hereafter
entered into by the Company in respect of any preferred or preference stock of
any subsidiary of the Company and (iii) senior to the Company's Common Stock.
There are no terms in the Preferred Securities, the Junior Subordinated Debt
Securities or the Guarantee that limit the Company's ability to incur additional
indebtedness, including indebtedness that ranks senior to the Junior
Subordinated Debt Securities and the Guarantee. See "Description of
Guarantee--Status of the Guarantee" and "Description of the Junior
Subordinated Debt Securities--Subordination."
RIGHTS UNDER THE GUARANTEE
The Guarantee will be qualified as an indenture under the Trust Indenture
Act. The Chase Manhattan Bank will act as indenture trustee under the Guarantee
for the purposes of compliance with the provisions of the Trust Indenture Act.
The Guarantee Trustee will hold the Guarantee for the benefit of the holders of
the Preferred Securities.
The Guarantee guarantees to the holders of the Preferred Securities the
payment of (i) any accrued and unpaid distributions that are required to be paid
on the Preferred Securities, to the extent TRV Capital has funds available
therefor, (ii) the Redemption Price with respect to Preferred Securities called
for redemption by TRV Capital, to the extent TRV Capital has funds available
therefor, and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of TRV Capital (other than in connection with the distribution of
Junior Subordinated Debt Securities to the holders of Preferred Securities or a
redemption of all the Preferred Securities), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid distributions on the Preferred
Securities to the date of the payment and (b) the amount of assets of TRV
Capital remaining available for distribution to holders of the Preferred
Securities in liquidation of TRV Capital. The holders of a majority in
liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee 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 Preferred Securities may directly
institute a legal proceeding against the Company to enforce the Guarantee
Trustee's rights under the Guarantee without first instituting a legal
proceeding against TRV Capital, the Guarantee Trustee or any other person or
entity. A holder of Preferred Securities may also directly institute a legal
proceeding against the Company to enforce such holder's right to receive payment
under the Guarantee without first (i) directing the Guarantee Trustee to enforce
the terms of the Guarantee or (ii) instituting a legal proceeding against TRV
Capital or any other person or entity. If the Company were to default on its
obligation to pay amounts payable on the Junior Subordinated Debt Securities,
TRV Capital would lack available funds for the payment of distributions or
amounts payable on redemption of the Preferred Securities or otherwise, and, in
such event, holders of the Preferred Securities would not be able to rely upon
the Guarantee for payment of such amounts. Instead, a holder of the Preferred
Securities would rely on the enforcement (1) by the Institutional Trustee of its
rights as registered holder of the Junior Subordinated Debt Securities against
the Company pursuant to the terms of the Junior Subordinated Debt Securities or
(2) by such holder of Preferred
S-8
<PAGE>
Securities of its right against the Company to enforce payments on the Junior
Subordinated Debt Securities. See "Description of Guarantees" and "Description
of Junior Subordinated Debt Securities" in the accompanying Prospectus. The
Declaration provides that each holder of Preferred Securities, by acceptance
thereof, agrees to the provisions of the Guarantee, including the subordination
provisions thereof, and the Indenture (as defined herein).
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Declaration Event of Default (as defined herein) occurs and is
continuing, then the holders of Preferred Securities would rely on the
enforcement by the Institutional Trustee of its rights as a holder of the Junior
Subordinated Debt Securities against the Company. In addition, the holders of a
majority in 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 Institutional Trustee or to direct the exercise of any
trust or power conferred upon the Institutional Trustee under the Declaration,
including the right to direct the Institutional Trustee to exercise the remedies
available to it as a holder of the Junior Subordinated Debt Securities. If the
Institutional Trustee fails to enforce its rights under the Junior Subordinated
Debt Securities, any holder of Preferred Securities may directly institute a
legal proceeding against the Company to enforce the Institutional Trustee's
rights under the Junior Subordinated Debt Securities without first instituting
any legal proceeding against the Institutional Trustee or any other person or
entity. 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 Junior Subordinated Debt Securities 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 also directly
institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the Junior Subordinated Debt Securities having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder (a "Direct Action") on or after the respective due
date specified in the Junior Subordinated Debt Securities without first (i)
directing the Institutional Trustee to enforce the terms of the Junior
Subordinated Debt Securities or (ii) instituting a legal proceeding against the
Company to enforce the Institutional Trustee's rights under the Junior
Subordinated Debt Securities. In connection with such Direct Action, the Company
will be subrogated to the rights of such holder of Preferred Securities under
the Declaration to the extent of any payment made by the Company to such holder
of Preferred Securities in such Direct Action. Consequently, the Company will be
entitled to payment of amounts that a holder of Preferred Securities receives in
respect of an unpaid distribution that resulted in the bringing of a Direct
Action to the extent that such holder receives or has already received full
payment with respect to such unpaid distribution from TRV Capital. The holders
of Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Junior Subordinated Debt Securities.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company has the right under the Indenture to defer payments of interest
on the Junior Subordinated Debt Securities by extending the interest payment
period from time to time on the Junior Subordinated Debt Securities for an
Extension Period not exceeding 20 consecutive quarterly interest periods during
which no interest shall be due and payable, provided, that no Extension Period
may extend beyond the maturity of the Junior Subordinated Debt Securities. As a
consequence of such an extension, quarterly distributions on the Preferred
Securities would be deferred (but despite such deferral would continue to accrue
with interest thereon compounded quarterly) by TRV Capital during any such
extended interest payment period. In the event that the Company exercises this
right to defer interest payments, then (a) the Company shall not declare or pay
any dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
or make any guarantee payment with respect thereto (other than (i) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Company's capital stock for any other class or series of the
Company's capital stock, or (iii) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged), and (b) the
Company shall not make any payment of interest on or principal of (or premium,
if any, on), or repay, repurchase or redeem, any debt securities issued by the
Company which rank pari passu with or junior to such Junior Subordinated Debt
Securities. The foregoing, however, will not apply to any stock dividends paid
by the Company where the dividend stock is the same stock as that on which the
dividend is being paid. Prior to the termination of any Extension Period, the
Company may further extend such Extension
S-9
<PAGE>
Period; provided, that such Extension Period, together with all such previous
and further extensions thereof, may not exceed 20 consecutive quarterly interest
periods; provided, further, that no Extension Period may extend beyond the
maturity of the Junior Subordinated Debt Securities. Upon the termination of any
Extension Period and the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the above requirements.
Consequently, there could be up to 80 Extension Periods of varying lengths
throughout the term of the Junior Subordinated Debt Securities. See "Description
of the Preferred Securities--Distributions" and "Description of the Junior
Subordinated Debt Securities--Option to Extend Interest Payment Period."
The junior subordinated debt securities issued from time to time in
connection with the issuance of trust preferred securities by a Trust will
contain the same restrictive covenants described in the preceding paragraph. The
effect of such restrictive covenants will be to limit the rights of holders of
Preferred Securities to receive payments with respect thereto if there has been
a deferral of interest under any such junior subordinated debt securities.
Should the Company exercise its right to defer any payment of interest on
the Junior Subordinated Debt Securities by extending the interest payment
period, under recently issued Treasury regulations, each holder of Preferred
Securities will continue to accrue income in the form of OID in respect
of the deferred interest allocable to its Preferred Securities for United States
federal income tax purposes, which will be allocated but not distributed, to
holders of record of Preferred Securities. As a result, during any Extension
Period, each such holder of Preferred Securities will recognize income for
United States federal income tax purposes in advance of the receipt of cash
and will not receive the cash from TRV Capital related to such income if such
holder disposes of its Preferred Securities prior to the record date for the
date on which distributions of such amounts are made. The Company has no
current intention of exercising its right to defer payments of interest by
extending the interest payment period on the Junior Subordinated Debt
Securities. However, should the Company exercise such right in the future,
the market price of the Preferred Securities is likely to be affected.
A holder that disposes of its Preferred Securities
during an Extension Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Preferred Securities. 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 an
undivided beneficial interest in the Junior Subordinated Debt Securities) may be
more volatile than other similar securities where the issuer does not have such
rights to defer interest payments. See "United States Federal Income
Taxation--Interest Income and Original Issue Discount" and "--Sales of
Preferred Securities."
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence of a Special Event (as defined herein), TRV Capital will
be dissolved, except in the limited circumstance described below, with the
result that the Junior Subordinated Debt Securities will be distributed to the
holders of the Trust Securities in connection with the liquidation of TRV
Capital. In certain circumstances in connection with a Tax Event, the Company
has the right to redeem the Junior Subordinated Debt Securities, in whole or in
part, in lieu of a distribution of the Junior Subordinated Debt Securities to
holders of Trust Securities by TRV Capital, in which event TRV Capital will
redeem the Trust Securities on a pro rata basis to the same extent as the Junior
Subordinated Debt Securities are redeemed by the Company. See "Description of
the Preferred Securities--Special Event Redemption or Distribution."
Under current United States federal income tax law, a distribution of Junior
Subordinated Debt Securities upon the dissolution of TRV Capital would not be a
taxable event to holders of the Preferred Securities. Upon the occurrence of a
Tax Event, however, a dissolution of TRV Capital in which holders of the
Preferred Securities receive cash would be a taxable event to such holders. See
"United States Federal Income Taxation--Receipt of Junior Subordinated Debt
Securities or Cash Upon Liquidation of TRV Capital."
There can be no assurance as to the market prices for the Preferred
Securities or the Junior Subordinated Debt Securities that may be distributed in
exchange for Preferred Securities if a dissolution or liquidation of TRV Capital
were to occur. Accordingly, the Preferred Securities that an investor may
purchase, whether pursuant to the offer made hereby or in the secondary market,
or the Junior Subordinated Debt Securities that a holder of Preferred Securities
may receive on dissolution and liquidation of TRV Capital, may trade at a
discount to the price that the investor paid to purchase the Preferred
Securities offered hereby. Because holders of Preferred Securities may receive
Junior Subordinated Debt Securities upon the occurrence of a Special Event,
prospective purchasers of Preferred Securities are also making an investment
decision with regard to the Junior Subordinated
S-10
<PAGE>
Debt Securities and should carefully review all the information regarding the
Junior Subordinated Debt Securities contained herein and in the accompanying
Prospectus. See "Description of the Preferred Securities--Special Event
Redemption or Distribution" and "Description of the Junior Subordinated Debt
Securities--General."
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed certain tax law changes (the
"Proposed Legislation") that would, among other things, generally deny corporate
issuers a deduction for interest in respect of certain debt obligations, such as
the Junior Subordinated Debt Securities, issued on or after December 7, 1995. On
March 29, 1996, Senate Finance Committee Chairman William V. Roth, Jr. and House
Ways and Means Committee Chairman Bill Archer issued a joint statement (the
"Joint Statement") indicating their intent that the Proposed Legislation, if
adopted by either of the tax-writing committees of Congress, would have an
effective date that is no earlier than the date of "appropriate Congressional
action." Based upon the Joint Statement, it is expected that if the Proposed
Legislation were to be enacted, such legislation would not apply to the Junior
Subordinated Debt Securities. There can be no assurance, however, that the
effective date guidance contained in the Joint Statement will be incorporated
into the Proposed Legislation, if enacted, or that other legislation enacted
after the date hereof will not otherwise adversely affect the ability of the
Company to deduct the interest payable on the Junior Subordinated Debt
Securities. Accordingly, there can be no assurance that a Tax Event will not
occur. The occurrence of a Tax Event may, among other things, result in a
dissolution of TRV Capital in which holders of the Preferred Securities may
receive cash, which would be a taxable event to such holders. See "--Special
Event Redemption or Distribution" and "Description of the Preferred
Securities--Special Event Redemption or Distribution."
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and will not
be entitled to vote to appoint, remove or replace, or to increase or decrease
the number of, TRV Trustees, which voting rights are vested exclusively in the
holder of the Common Securities. See "Description of the Preferred
Securities--Voting Rights."
TRADING PRICE
Should the Company exercise its option to defer any payment of interest on
the Junior Subordinated Debt 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 Junior Subordinated Debt Securities. In the
event of such a deferral, a holder of Preferred Securities who disposes of its
Preferred Securities between record dates for payments of distributions thereon
will be required to include income as ordinary income accrued but unpaid
interest on the Junior Subordinated Debt Securities to the date of
disposition and to add such amount to its adjusted tax basis in its pro
rata share of the underlying Junior Subordinated Debt Securities deemed
disposed of. To the extent the selling price is less than such holder's
adjusted tax basis (which will include, in the form of OID, all accrued but
unpaid interest), 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. See
"United States Federal Income Taxation-- Interest Income and Original Issue
Discount" and "--Sales of Preferred Securities."
S-11
<PAGE>
USE OF PROCEEDS
All of the net proceeds from the sale of the Preferred Securities offered
hereby will be invested by TRV Capital in Junior Subordinated Debt Securities of
the Company. The Company will use the proceeds from the sale of the Junior
Subordinated Debt Securities to TRV Capital for general corporate purposes,
which may include capital contributions to subsidiaries of the Company, the
redemption of shares of preferred stock of the Company, and/or the reduction or
refinancing of borrowings of the Company or its subsidiaries. See
"Capitalization."
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ---------------------------------------------
JUNE 30, 1996 1995 1994 1993 1992(1) 1991
---------------- ----- ---- ---- ------- -----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to combined fixed charges
and preferred stock dividends 2.15 2.09 2.12 2.64 2.57 1.85
</TABLE>
- ------------
(1) Included in earnings from continuing operations before income taxes (used in
this computation) is a net gain of $216.8 million from the sale of the
Company's ownership interests in Margaretten & Company, Inc., Fingerhut
Companies, Inc. and other affiliated companies. Without giving effect to
this net gain, the ratio for 1992 would have been 2.33.
The ratio of earnings to combined fixed charges and preferred stock
dividends has been computed by dividing earnings from continuing operations
before income taxes and fixed charges by the combined fixed charges and
preferred stock dividends. For purposes of these ratios, fixed charges consist
of interest expense and that portion of rentals deemed representative of the
appropriate interest factor.
ACCOUNTING TREATMENT
The financial statements of TRV Capital will be reflected in the Company's
consolidated financial statements with the Preferred Securities shown as
"TRV-Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trusts
holding solely Junior Subordinated Debt Securities."
S-12
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company at June 30,
1996, and as adjusted to give effect to (i) the conversion, during the third
quarter of 1996, of shares of the Company's 5.50% Convertible Preferred Stock,
Series B, into shares of the Company's common stock, (ii) the issuance and sale
of additional long-term debt of certain subsidiaries of the Company after June
30, 1996 through the date hereof, (iii) the issuance of the Preferred
Securities, and (iv) the application of the proceeds from the issuance of such
long-term debt and the Preferred Securities to the repayment of investment
banking and brokerage borrowings and short-term borrowings, as if such
transactions had occurred on June 30, 1996.
<TABLE>
<CAPTION>
AT JUNE 30, 1996
------------------------
OUTSTANDING AS ADJUSTED
----------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Debt:
Investment banking and brokerage borrowings.................................... $ 3,483 $
Short-term borrowings.......................................................... 2,368
Long-term debt................................................................. 10,161
----------- -----------
Total debt................................................................. $16,012 $
TAP-Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trusts
holding solely Junior Subordinated Debt Securities (1)......................... 900
TRV-Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trusts
holding solely Junior Subordinated Debt Securities (2).........................
Stockholders' equity:
Preferred stock at aggregate liquidation value................................. 763
Common stock ($.01 par value; authorized shares: 1,500,000,000; issued shares:
553,742,005 outstanding and as adjusted)................................ 6
Additional paid-in capital..................................................... 6,983
Retained earnings.............................................................. 6,408
Treasury stock at cost......................................................... (2,102)
Unrealized gain (loss) on investment securities ............................... 1
Other, principally unearned compensation and minimum pension liability......... (334)
----------- -----------
Total stockholders' equity............................................... 11,725
----------- -----------
Total capitalization..................................................... $28,637 $
----------- -----------
----------- -----------
</TABLE>
- ------------
(1) The sole asset of TAP Capital I is $824,743,000 aggregate principal amount
of 8.08% junior subordinated deferrable interest debentures of TAP due April
30, 2036. The sole asset of TAP Capital II is $103,093,000 aggregate
principal amount of 8% junior subordinated deferrable interest debentures of
TAP due May 15, 2036.
(2) The sole asset of each trust will be junior subordinated deferrable interest
debentures of the Company. The sole asset of TRV Capital will be
$ million aggregate principal amount of % junior subordinated
deferrable interest debentures of the Company due , 20 .
S-13
<PAGE>
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Institutional Trustee, The Chase Manhattan Bank, will act as
indenture trustee under the Declaration for purposes of compliance with the
provisions of the Trust Indenture Act. The terms of the Preferred Securities
will include those stated in the Declaration and those made part of the
Declaration by the Trust Indenture Act. This description supplements the
description of the general terms and provisions of the Preferred Securities set
forth in the accompanying Prospectus under the caption "Description of Preferred
Securities." The following summary of the material terms and provisions of the
Preferred Securities does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Declaration (a copy of which is
filed as an exhibit to the Registration Statement of which this Prospectus
Supplement is a part), the Trust Act and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees to issue on behalf of TRV
Capital the Trust Securities, which represent undivided beneficial interests in
the assets of TRV Capital. All of the Common Securities will be owned, directly
or indirectly, by the Company. The Common Securities rank pari passu, and
payments will be made thereon on a pro rata basis, with the Preferred
Securities, except that upon the occurrence and during the continuance of a
Declaration Event of Default, the rights of the holders of the Common Securities
to receive payment of periodic distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. The Declaration does not permit the issuance by TRV
Capital of any securities other than the Trust Securities or the incurrence of
any indebtedness by TRV Capital. Pursuant to the Declaration, the Institutional
Trustee will hold title to the Junior Subordinated Debt Securities purchased by
TRV Capital for the benefit of the holders of the Trust Securities. The payment
of distributions out of money held by TRV Capital, and payments upon redemption
of the Preferred Securities or liquidation of TRV Capital out of money held by
TRV Capital, are guaranteed by the Company to the extent described under
"Description of Guarantee." The Guarantee will be held by The Chase Manhattan
Bank, the Guarantee Trustee, for the benefit of the holders of the Preferred
Securities. The Guarantee does not cover payment of distributions when TRV
Capital does not have sufficient available funds to pay such distributions. In
such event, the remedy of a holder of Preferred Securities is to (i) vote to
direct the Institutional Trustee to enforce the Institutional Trustee's rights
under the Junior Subordinated Debt Securities or (ii) if the failure of TRV
Capital to pay distributions is attributable to the failure of the Company to
pay interest or principal on the Junior Subordinated Debt Securities, institute
a proceeding directly against the Company for enforcement of payment to such
holder of the principal or interest on the Junior Subordinated Debt Securities
having a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such holder on or after the respective due date
specified in the Junior Subordinated Debt Securities. See "--Voting Rights."
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of % of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears beyond the first date such distributions are payable
(or would be payable, if not for any Extension Period or default by the Company
on the Junior Subordinated Debt Securities) will bear interest thereon at the
rate per annum of % thereof compounded quarterly. The term "distribution" as
used herein includes any such interest payable unless otherwise stated. The
amount of distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months.
Distributions on the Preferred Securities will be cumulative, will accrue
from and including , 199 , and will be payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year, commencing
, 199 . When, as and if available for payment, distributions will be made
by the Institutional Trustee, except as otherwise described below.
The distribution rate and the distribution payment dates and other payment
dates for the Preferred Securities will correspond to the interest rate and
interest payment dates and other payment dates on the Junior Subordinated Debt
Securities.
The Company has the right under the Indenture to defer payments of interest
on the Junior Subordinated Debt Securities by extending the interest payment
period from time to time on the Junior Subordinated Debt Securities for an
Extension Period not exceeding 20 consecutive quarterly interest periods during
which no interest shall be due and payable, provided, that no Extension Period
may extend beyond the maturity of the Junior
S-14
<PAGE>
Subordinated Debt Securities. As a consequence of the Company's extension of the
interest payment period, quarterly distributions on the Preferred Securities
would be deferred (though such distributions would continue to accrue with
interest thereon compounded quarterly, since interest would continue to accrue
on the Junior Subordinated Debt Securities) during any such extended interest
payment period. In the event that the Company exercises its right to extend the
interest payment period, then (a) the Company shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
or make any guarantee payment with respect thereto (other than (i) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Company's capital stock for any other class or series of the
Company's capital stock, or (iii) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged), and (b) the
Company shall not make any payment of interest on or principal of (or premium,
if any, on), or repay, repurchase or redeem, any debt securities issued by the
Company which rank pari passu with or junior to the Junior Subordinated Debt
Securities. The foregoing, however, will not apply to any stock dividends paid
by the Company where the dividend stock is the same stock as that on which the
dividend is being paid. Prior to the termination of any Extension Period, the
Company may further extend such Extension Period; provided, that such Extension
Period, together with all such previous and further extensions thereof, may not
exceed 20 consecutive quarterly interest periods; provided further, that no
Extension Period may extend beyond the maturity of the Junior Subordinated Debt
Securities. Upon the termination of any Extension Period and the payment of all
amounts then due, the Company may commence a new Extension Period, subject to
the above requirements. Consequently, there could be up to 80 Extension Periods
of varying lengths throughout the term of the Junior Subordinated Debt
Securities. See "Description of the Junior Subordinated Debt Securities--
Interest" and "--Option to Extend Interest Payment Period." The Regular Trustees
shall give the holders of the Preferred Securities notice of any Extension
Period upon their receipt of notice thereof from the Company. See "Description
of the Junior Subordinated Debt Securities--Option To Extend Interest Payment
Period." If distributions are deferred, the deferred distributions and accrued
interest thereon shall be paid to holders of record of the Preferred Securities
as they appear on the books and records of TRV Capital on the record date next
following the termination of such deferral period.
Distributions on the Preferred Securities will be made on the dates payable
to the extent that TRV Capital has funds available for the payment of such
distributions in the Property Account. TRV Capital's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received from the Company on the Junior Subordinated Debt Securities.
See "Description of the Junior Subordinated Debt Securities." The payment of
distributions out of monies held by TRV Capital is guaranteed by the Company to
the extent set forth under "Description of Guarantee."
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the books and records of TRV Capital at the close of
business on the relevant record dates, which, as long as the Preferred
Securities remain in book-entry only form, will be one Business Day prior to the
relevant payment dates. Such distributions will be paid through the
Institutional Trustee who will hold amounts received in respect of the Junior
Subordinated Debt Securities in the Property Account for the benefit of the
holders of the Trust Securities. Subject to any applicable laws and regulations
and the provisions of the Declaration, each such payment will be made as
described under "--Book-Entry Only Issuance--The Depository Trust Company"
below. In the event that the Preferred Securities do not continue to remain in
book-entry only form, the Regular Trustees shall have the right to select
relevant record dates, which shall be at least 14 days but no more than 60 days
prior to the relevant payment dates. In the event that any date on which
distributions are to be made on the Preferred Securities is not a Business Day,
then payment of the distributions payable on such date will be made on the next
succeeding day 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 record date. A "Business Day" shall mean any day other than Saturday,
Sunday or any other day on which banking institutions in New York City (in the
State of New York) are permitted or required by any applicable law to close.
MANDATORY REDEMPTION OF TRUST SECURITIES
The Preferred Securities have no stated maturity date but will be redeemed
upon the maturity of the Junior Subordinated Debt Securities or to the extent
the Junior Subordinated Debt Securities are redeemed. The Junior
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Subordinated Debt Securities will mature on , 203 , and may be redeemed,
in whole or in part, at any time on or after , 200 , or at any time, in
whole or in part, in certain circumstances upon the occurrence of a Tax Event
(as described under "Special Event Redemption or Distribution" below). See
"Description of the Junior Subordinated Debt Securities--Optional Redemption."
Upon the maturity of the Junior Subordinated Debt Securities, the proceeds of
the repayment thereof shall simultaneously be applied to redeem all outstanding
Trust Securities at the Redemption Price. Upon the redemption of the Junior
Subordinated Debt Securities, whether in whole or in part (either at the option
of the Company or pursuant to a Tax Event), the proceeds from such redemption
shall simultaneously be applied to redeem Trust Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Junior
Subordinated Debt Securities so redeemed at the Redemption Price; provided, that
holders of Trust Securities shall be given not less than 30 nor more than 60
days' notice of such redemption. In the event that fewer than all of the
outstanding Preferred Securities are to be redeemed, the Preferred Securities
will be redeemed pro rata as described under "--Book-Entry Only Issuance-- The
Depository Trust Company" below.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
"Tax Event" means that the Regular Trustees shall have received an opinion
of a nationally recognized independent tax counsel experienced in such matters
(a "Dissolution Tax Opinion") to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after the date of this Prospectus Supplement), in
either case after the date of this Prospectus Supplement, there is more than an
insubstantial risk that (i) TRV Capital would be subject to United States
federal income tax with respect to income accrued or received on the Junior
Subordinated Debt Securities, (ii) interest payable to TRV Capital on the Junior
Subordinated Debt Securities would not be deductible, in whole or in part, by
the Company for United States federal income tax purposes or (iii) TRV Capital
would be subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in practicing under the 1940 Act (as defined herein) to the effect that, as a
result of the occurrence of a change in law or regulation or a written 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 TRV Capital is or will be
considered an "investment company" which is required to be registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), which Change in
1940 Act Law becomes effective on or after the date of this Prospectus
Supplement.
If, at any time, a Tax Event or an Investment Company Event (each, as
defined above, a "Special Event") shall occur and be continuing, TRV Capital
shall, except in the limited circumstances described below, be dissolved with
the result that Junior Subordinated Debt Securities with an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the distribution rate of, and with accrued and unpaid interest
equal to accrued and unpaid distributions on, the Trust Securities outstanding
at such time would be distributed to the holders of the Trust Securities in
liquidation of such holders' interests in TRV Capital on a pro rata basis within
90 days following the occurrence of such Special Event; provided, however, that
in the case of the occurrence of a Tax Event, such dissolution and distribution
shall be conditioned on the Regular Trustees' receipt of an opinion of
nationally recognized independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on, among other things, published
revenue rulings of the Internal Revenue Service, to the effect that the holders
of the Trust Securities will not recognize any gain or loss for United States
federal income tax purposes as a result of such dissolution and distribution of
Junior Subordinated Debt Securities and, provided further, that, if at the time
there is available to the Company or TRV Capital the opportunity to eliminate,
within such 90 day period, the Special Event by taking some ministerial action,
such as filing a form or making an election, or pursuing some other similar
reasonable measure, that will have no adverse effect on TRV Capital, the
Company or the holders of the Trust Securities, the Company or TRV Capital will
pursue such measure in lieu of dissolution. Furthermore, if in the case of the
occurrence of a Tax Event, (i) the Company has received an opinion (a
"Redemption Tax Opinion") of nationally recognized independent tax counsel
experienced in such matters that, as a result of such Tax Event, there is more
than an insubstantial risk that the Company would be precluded from deducting
the interest on the Junior Subordinated Debt Securities for United States
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federal income tax purposes, even after the Junior Subordinated Debt Securities
were distributed to the holders of Trust Securities in liquidation of such
holders' interests in TRV Capital as described above, or (ii) the Regular
Trustees shall have been informed by such tax counsel that it cannot deliver a
No Recognition Opinion to the Regular Trustees, the Company shall have the
right, upon not less than 30 nor more than 60 days' notice, to redeem the Junior
Subordinated Debt Securities, in whole or in part, for cash within 90 days
following the occurrence of such Tax Event, and, following such redemption,
Trust Securities with an aggregate liquidation amount equal to the aggregate
principal amount of the Junior Subordinated Debt Securities so redeemed shall be
redeemed by TRV Capital at the Redemption Price on a pro rata basis; provided,
however, that if at the time there is available to the Company or TRV Capital
the opportunity to eliminate, within such 90-day period, the Tax Event by taking
some ministerial action, such as filing a form or making an election or pursuing
some other similar reasonable measure that will have no adverse effect on TRV
Capital, the Company or the holders of the Trust Securities, the Company or TRV
Capital will pursue such measure in lieu of redemption.
If the Junior Subordinated Debt Securities are distributed to the holders of
the Preferred Securities, the Company will use its best efforts to cause the
Junior Subordinated Debt Securities to be listed on the New York Stock Exchange
or on such other exchange as the Preferred Securities are then listed.
After the date for any distribution of Junior Subordinated Debt Securities
upon dissolution of TRV Capital, (i) the Preferred Securities will no longer be
deemed to be outstanding, (ii) the securities depositary or its nominee, as the
record holder of the Preferred Securities, will receive a registered global
certificate or certificates representing the Junior Subordinated Debt Securities
to be delivered upon such distribution, and (iii) any certificates representing
Preferred Securities not held by the Depositary or its nominee will be deemed to
represent Junior Subordinated Debt Securities having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the distribution rate of, and with accrued and unpaid interest
equal to accrued and unpaid distributions on, such Preferred Securities until
such certificates are presented to the Company or its agent for transfer or
reissuance.
There can be no assurance as to the market prices for either the Preferred
Securities or the Junior Subordinated Debt Securities that may be distributed in
exchange for the Preferred Securities if a dissolution and liquidation of TRV
Capital were to occur. Accordingly, the Preferred Securities that an investor
may purchase, whether pursuant to the offer made hereby or in the secondary
market, or the Junior Subordinated Debt Securities that an investor may receive
if a dissolution and liquidation of TRV Capital were to occur, may trade at a
discount to the price that the investor paid to purchase the Preferred
Securities offered hereby.
REDEMPTION PROCEDURES
TRV Capital may not redeem fewer than all of the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If TRV Capital gives a notice of redemption in respect of the Preferred
Securities (which notice will be irrevocable), then, by 12:00 noon, New York
City time, on the redemption date, and if the Company has paid to the
Institutional Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Junior Subordinated Debt Securities, the
Institutional Trustee will irrevocably deposit with the Depositary (as defined
in the accompanying Prospectus) funds sufficient to pay the applicable
Redemption Price and will give the Depositary irrevocable instructions and
authority to pay the Redemption Price to the holders of the Preferred
Securities. See "--Book-Entry Only Issuance--The Depository Trust Company." If
notice of redemption shall have been given and funds deposited as required,
then, immediately prior to the close of business on the date of such deposit,
distributions will cease to accrue and all rights of holders of Preferred
Securities so called for redemption will cease, except the right of the holders
of such Preferred Securities to receive the Redemption Price but without
interest on such Redemption Price. In the event that any date fixed for
redemption of Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day. In the
event that payment of the Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by TRV Capital, or by the
Company pursuant to the Guarantee, distributions on such Preferred Securities
will continue to accrue at the then applicable rate from the original redemption
date to the date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price.
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In the event that fewer than all of the outstanding Preferred Securities are
to be redeemed, the Preferred Securities will be redeemed in accordance with the
Depositary's standard procedures. See "--Book-Entry Only Issuance--The
Depository Trust Company."
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), the Company or its subsidiaries,
including, without limitation, Smith Barney, may at any time, and from time to
time, purchase outstanding Preferred Securities by tender, in the open market or
by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of TRV Capital (each a "Liquidation"), the holders of
the Preferred Securities will be entitled to receive out of the assets of TRV
Capital, after satisfaction of liabilities to creditors, distributions in an
amount equal to the aggregate of the stated liquidation amount of $25 per
Preferred Security plus accrued and unpaid distributions thereon to the date of
payment (the "Liquidation Distribution"), unless, in connection with such
Liquidation, Junior Subordinated Debt Securities in an aggregate stated
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and with accrued and unpaid
interest equal to accrued and unpaid distributions on, the Preferred Securities
outstanding at such time have been distributed on a pro rata basis to the
holders of such Preferred Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid only
in part because TRV Capital has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by TRV
Capital on the Preferred Securities shall be paid on a pro rata basis. The
holders of the Common Securities will be entitled to receive distributions upon
any such Liquidation pro rata with the holders of the Preferred Securities,
except that if a Declaration Event of Default has occurred and is continuing the
Preferred Securities shall have a preference over the Common Securities with
regard to such distributions.
Pursuant to the Declaration, TRV Capital shall terminate (i) on
, 2051, the expiration of the term of the Trust, (ii) upon the
bankruptcy of the Company or the holder of the Common Securities, (iii) upon the
filing of a certificate of dissolution or its equivalent with respect to the
holder of the Common Securities or the Company, the filing of a certificate of
cancellation with respect to TRV Capital, or the revocation of the charter of
the holder of the Common Securities or the Company and the expiration of 90 days
after the date of revocation without a reinstatement thereof, (iv) upon the
distribution of Junior Subordinated Debt Securities upon the occurrence of a
Special Event, (v) upon the entry of a decree of a judicial dissolution of the
holder of the Common Securities, the Company or TRV Capital, or (vi) upon the
redemption of all the Trust Securities.
Under the terms of the Indenture, the Company has covenanted that, for so
long as the Preferred Securities remain outstanding, it will not voluntarily
dissolve, wind-up or terminate TRV Capital except, in connection with a
distribution of Junior Subordinated Debt Securities upon a Special Event or in
connection with certain mergers, consolidations or amalgamations permitted by
the Declaration.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of Default")
constitutes an event of default under the Declaration with respect to the Trust
Securities (a "Declaration Event of Default"); provided, that pursuant to the
Declaration the holder of the Common Securities will be deemed to have waived
any Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated. Until such Declaration Events of Default
with respect to the Preferred Securities have been so cured, waived, or
otherwise eliminated, the Institutional Trustee will be deemed to be acting
solely on behalf of the holders of the Preferred Securities and only the holders
of the Preferred Securities will have the right to direct the Institutional
Trustee with respect to certain matters under the Declaration, and therefore the
Indenture. In the event that any Declaration Event of Default with respect to
the Preferred Securities is waived by the holders of the Preferred Securities as
provided in the Declaration, the holders of Common Securities pursuant to the
Declaration have agreed that such waiver also constitutes a waiver of such
Declaration Event of Default with respect to the Common Securities for all
purposes under the Declaration without any further act, vote or consent of the
holders of Common Securities. See "--Voting Rights."
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If the Institutional Trustee fails to enforce its rights under the Junior
Subordinated Debt Securities, any holder of Preferred Securities may directly
institute a legal proceeding against the Company to enforce the Institutional
Trustee's rights under the Junior Subordinated Debt Securities without first
instituting any legal proceeding against the Institutional Trustee or any other
person or entity. 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 Junior Subordinated Debt Securities on the date
such interest or principal is otherwise payable (or in the case of redemption,
the redemption date), then a holder of Preferred Securities may also directly
institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the Junior Subordinated Debt Securities having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder on or after the respective due date specified in the
Junior Subordinated Debt Securities without first (i) directing the
Institutional Trustee to enforce the terms of the Junior Subordinated Debt
Securities or (ii) instituting a legal proceeding against the Company to enforce
the Institutional Trustee's rights under the Junior Subordinated Debt
Securities. In connection with such Direct Action, the Company will be
subrogated to the rights of such holder of Preferred Securities under the
Declaration to the extent of any payment made by the Company to such holder of
Preferred Securities in such Direct Action. Consequently, the Company will be
entitled to payment of amounts that a holder of Preferred Securities receives in
respect of an unpaid distribution that resulted in the bringing of a Direct
Action to the extent that such holder receives or has already received full
payment with respect to such unpaid distribution from TRV Capital. The holders
of Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Junior Subordinated Debt Securities.
Upon the occurrence of an Indenture Event of Default, the Institutional
Trustee as the sole holder of the Junior Subordinated Debt Securities will have
the right under the Indenture to declare the principal of and interest on the
Junior Subordinated Debt Securities to be immediately due and payable. The
Company and TRV Capital are each required to file annually with the
Institutional Trustee an officers' certificate as to its compliance with all
conditions and covenants under the Declaration.
VOTING RIGHTS
Except as described in this Prospectus Supplement and in the accompanying
Prospectus under "Description of Guarantees--Modification of Guarantees;
Assignment," and except as provided under the Trust Act, the Trust Indenture Act
and as otherwise required by law and the Declaration, the holders of the
Preferred Securities will have no voting rights.
Subject to the requirement of the Institutional Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of this
paragraph, the holders of a majority in aggregate liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or direct the exercise of any trust or power conferred upon the Institutional
Trustee under the Declaration including the right to direct the Institutional
Trustee, as holder of the Junior Subordinated Debt Securities, to (i) direct the
time, method and place of conducting any proceeding for any remedy available to
the Indenture Trustee, or exercising any trust or power conferred on the
Indenture Trustee with respect to the Junior Subordinated Debt Securities, (ii)
waive any past Indenture Event of 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 Junior Subordinated Debt Securities shall be due and
payable, or (iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debt Securities where such consent shall be
required; provided, however, that, where a consent or action under the Indenture
would require the consent or act of holders of more than a majority in principal
amount of the Junior Subordinated Debt Securities (a "Super Majority") affected
thereby, only the holders of at least such Super Majority in aggregate
liquidation amount of the Preferred Securities may direct the Institutional
Trustee to give such consent or take such action. If the Institutional Trustee
fails to enforce its rights under the Junior Subordinated Debt Securities, any
record holder of Preferred Securities may directly institute a legal proceeding
against the Company to enforce the Institutional Trustee's rights under the
Junior Subordinated Debt Securities without first instituting any legal
proceeding against the Institutional Trustee or any other person or entity. The
Institutional Trustee shall notify all holders of the Preferred Securities of
any notice of default received from the Indenture Trustee with respect to the
Junior Subordinated Debt Securities. Such notice shall state that such Indenture
Event of Default also constitutes a Declaration Event of Default. Except with
respect to directing the time, method and place of conducting a proceeding for a
remedy available to the Institutional Trustee, the Institutional Trustee, as
holder of the Junior Subordinated Debentures, shall not take any of the actions
described in clauses (i), (ii), (iii) or (iv) above unless
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the Institutional Trustee has obtained an opinion of a nationally recognized
independent tax counsel experienced in such matters to the effect that, as a
result of such action, TRV Capital will not fail to be classified as a grantor
trust for United States federal income tax purposes.
In the event the consent of the Institutional Trustee, as the holder of the
Junior Subordinated Debt Securities, is required under the Indenture with
respect to any amendment, modification or termination of the Indenture, the
Institutional Trustee shall request the written direction of the holders of the
Trust Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or termination as
directed by a majority in liquidation amount of the Trust Securities voting
together as a single class; provided, however, that where any amendment,
modification or termination under the Indenture would require the consent of a
Super Majority, the Institutional Trustee may only give such consent at the
direction of the holders of at least the proportion in aggregate liquidation
amount of the Trust Securities which the relevant Super Majority represents of
the aggregate principal amount of the Junior Subordinated Debt Securities
outstanding. The Institutional Trustee shall be under no obligation to take any
such action in accordance with the directions of the holders of the Trust
Securities unless the Institutional Trustee has obtained an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that for United States federal income tax purposes TRV Capital will not
be classified as other than a grantor trust.
A waiver of an Indenture Event of Default by the Institutional Trustee at
the direction of the holders of the Preferred Securities 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 Trust Securities or pursuant to
written consent. The Regular Trustees 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
mailed to each holder of record of Preferred Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on which such holders
are entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of Preferred Securities will be required for TRV Capital to
redeem and cancel Preferred Securities or distribute Junior Subordinated Debt
Securities in accordance with the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned at such time by the Company or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, the Company, shall not be entitled to vote or consent and 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 "--Book-Entry Only Issuance--The
Depository Trust Company."
Holders of the Preferred Securities will have no rights to appoint or remove
the TRV Trustees, who may be appointed, removed or replaced solely by the
Company as the indirect or direct holder of all of the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Institutional Trustee and the
Delaware Trustee), provided, that, if any proposed amendment provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Trust
Securities, whether by way of amendment to the Declaration or otherwise or (ii)
the dissolution, winding-up or termination of TRV Capital other than pursuant to
the terms of the Declaration, then the holders of the Trust Securities voting
together as a single class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of holders of at least a majority in liquidation amount of the Trust
Securities affected thereby; provided, that, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Preferred
Securities or the Common Securities, then only holders of the affected class
will be entitled to vote on such amendment or proposal
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and such amendment or proposal shall not be effective except with the approval
of holders of a majority in liquidation amount of such class of Trust
Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause TRV Capital to
be classified for United States federal income tax purposes as other than a
grantor trust, (ii) reduce or otherwise adversely affect the powers of the
Institutional Trustee or (iii) cause TRV Capital to be deemed an "investment
company" which is required to be registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
TRV Capital may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body except as
described below. TRV Capital may, with the consent of the Regular Trustees and
without the consent of the holders of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State; provided, that (i) such successor entity either (x)
expressly assumes all of the obligations of TRV Capital under the Trust
Securities or (y) substitutes for the Preferred Securities other securities
having substantially the same terms as the Trust Securities (the "Successor
Securities"), so long as the Successor Securities rank the same as the Trust
Securities rank with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) the Company expressly acknowledges a trustee of
such successor entity possessing the same powers and duties as the Institutional
Trustee, in its capacity as the holder of the Junior Subordinated Debt
Securities, (iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with another organization on
which the Preferred Securities are then listed or quoted, (iv) such merger,
consolidation, amalgamation or replacement 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 or replacement does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities (including any
Successor Securities) in any material respect (other than with respect to any
dilution of the holders' interest in the new entity), (vi) such successor entity
has a purpose identical to that of TRV Capital, (vii) prior to such merger,
consolidation, amalgamation or replacement, TRV Capital has received an opinion
of a nationally recognized independent counsel to TRV Capital experienced in
such matters to the effect that, (A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the holders of the Trust Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the holders'
interest in the new entity), and (B) following such merger, consolidation,
amalgamation or replacement, neither TRV Capital nor such successor entity will
be required to register as an "investment company" under the 1940 Act; and
(viii) the Company guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, TRV Capital shall not, except with the consent of
holders of 100% in liquidation amount of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it, if
in the opinion of a nationally recognized independent tax counsel experienced in
such matters, such consolidation, amalgamation, merger or replacement would
cause TRV Capital or the Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes. In addition, so
long as any Preferred Securities are outstanding and are not held entirely by
the Company, TRV Capital may not voluntarily liquidate, dissolve, wind-up or
terminate except as described above under "--Special Event Redemption
Distribution."
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary for
the Preferred Securities. The Preferred Securities will be issued only as
fully-registered securities registered in the name of Cede & Co. (DTC's
nominee). One or more fully-registered global Preferred Securities certificates,
representing the total aggregate number of Preferred Securities, will be issued
and will be deposited with DTC.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in the global Preferred Securities
as represented by a global certificate.
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DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. (the
"NASD"). Access to the DTC system is also available to others, such as
securities brokers and dealers, banks and trust companies that clear
transactions through or maintain a direct or indirect custodial relationship
with a Direct Participant either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Securities and Exchange Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in the Preferred Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Preferred Securities, except in the event that
use of the book-entry system for the Preferred Securities is discontinued.
To facilitate subsequent transfers, all the Preferred Securities deposited
by Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Preferred Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Preferred Securities. DTC's records reflect
only the identity of the Direct Participants to whose accounts such Preferred
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
that may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Preferred Securities are being redeemed, DTC will reduce the amount of the
interest of each Direct Participant in such Preferred Securities in accordance
with its procedures.
Although voting with respect to the Preferred Securities is limited, in
those cases where 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 to TRV Capital as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co. consenting or voting
rights to those Direct Participants to whose accounts the Preferred Securities
are credited on the record date (identified in a listing attached to the Omnibus
Proxy). The Company and TRV Capital believe that the arrangements among DTC,
Direct and Indirect Participants, and Beneficial Owners will enable the
Beneficial Owners to exercise rights equivalent in substance to the rights that
can be directly exercised by a holder of a beneficial interest in TRV Capital.
Distribution payments on the Preferred Securities will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the account of customers in bearer form or registered in "street name," and such
payments will be the responsibility of such Participant and not of DTC, TRV
Capital or the Company, subject to any
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statutory or regulatory requirements to the contrary that may be in effect from
time to time. Payment of distributions to DTC is the responsibility of TRV
Capital, disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner in a global Preferred Security
certificate will not be entitled to receive physical delivery of Preferred
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Preferred Securities.
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
TRV Capital. Under such circumstances, in the event that a successor securities
depositary is not obtained, Preferred Securities certificates are required to be
printed and delivered. Additionally, the Regular Trustees (with the consent of
the Company) may decide to discontinue use of the system of book-entry transfers
through DTC (or any successor depositary) with respect to the Preferred
Securities. In that event, certificates for the Preferred Securities will be
printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company and TRV Capital believe to be
reliable, but neither the Company nor TRV Capital takes responsibility for the
accuracy thereof.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
The Institutional Trustee, prior to the occurrence of a default with respect
to the Trust Securities, undertakes to perform only such duties as are
specifically set forth in the Declaration and, after such a default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provisions, the Institutional
Trustee is under no obligation to exercise any of the powers vested in it by the
Declaration at the request of any holder of Preferred Securities, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. Notwithstanding the foregoing, the holders of
Preferred Securities will not be required to offer such indemnity in the event
such holders, by exercising their voting rights, direct the Institutional
Trustee to take any action following a Declaration Event of Default.
PAYING AGENT
In the event that the Preferred Securities do not remain in book-entry only
form, the following provisions will apply:
The Institutional Trustee will act as paying agent and may designate an
additional or substitute paying agent at any time.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of TRV Capital, but upon payment (with the giving of such
indemnity as TRV Capital or the Company may require) in respect of any tax or
other government charges that may be imposed in relation to it.
TRV Capital will not be required to register or cause to be registered the
transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate TRV Capital in
such a way so that TRV Capital will not be required to register as an
"investment company" under the 1940 Act or be characterized as other than a
grantor trust for United States federal income tax purposes. The Company is
authorized and directed to conduct its affairs so that the Junior Subordinated
Debt Securities will be treated as indebtedness of the Company for
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United States federal income tax purposes. In this connection, the Company and
the Regular Trustees are authorized to take any action, not inconsistent with
applicable law, the certificate of trust of TRV Capital or the certificate of
incorporation of the Company, that each of the Company and the Regular Trustees
determine in their discretion to be necessary or desirable to achieve such end,
as long as such action does not adversely affect the interests of the holders of
the Preferred Securities or vary the terms thereof.
Holders of the Preferred Securities have no preemptive rights.
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DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
Set forth below is a description of the specific terms of the Junior
Subordinated Debt Securities in which TRV Capital will invest the proceeds from
the issuance and sale of the Trust Securities. This description supplements the
description of the general terms and provisions of the Junior Subordinated Debt
Securities set forth in the accompanying Prospectus under the caption
"Description of Junior Subordinated Debt Securities." The following description
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, the description of the Junior Subordinated Debt
Securities in the accompanying Prospectus; the Indenture, dated as of ,
199 (the "Indenture"), between the Company and The Chase Manhattan Bank, as
Trustee (the "Indenture Trustee"), the form of which is filed as an exhibit to
the Registration Statement of which this Prospectus Supplement and the
accompanying Prospectus form a part; and the Trust Indenture Act. Certain
capitalized terms used herein are defined in the Indenture.
Under certain circumstances involving the dissolution of TRV Capital
following the occurrence of a Special Event, Junior Subordinated Debt Securities
may be distributed to the holders of the Trust Securities in liquidation of TRV
Capital. See "Description of the Preferred Securities--Special Event Redemption
or Distribution."
If the Junior Subordinated Debt Securities are distributed to the holders of
the Preferred Securities, the Company will use its best efforts to have the
Junior Subordinated Debt Securities listed on the New York Stock Exchange or on
such other national securities exchange or similar organization on which the
Preferred Securities are then listed or quoted.
GENERAL
The Junior Subordinated Debt Securities will be issued as unsecured debt
under the Indenture. The Junior Subordinated Debt Securities will be limited in
aggregate principal amount to approximately $ ($ if the
Underwriters exercise the over-allotment option in full), such amount being the
sum of the aggregate stated liquidation amount of the Preferred Securities and
the capital contributed by the Company to TRV Capital in exchange for the Common
Securities (the "TRV Payment").
The Junior Subordinated Debt Securities are not subject to a sinking fund
provision. The entire principal amount of the Junior Subordinated Debt
Securities will mature and become due and payable, together with any accrued and
unpaid interest thereon including Compound Interest (as defined herein) and
Additional Interest (as defined herein), if any, on , 203 .
If Junior Subordinated Debt Securities are distributed to holders of
Preferred Securities in liquidation of such holders' interests in TRV Capital,
such Junior Subordinated Debt Securities will initially be issued in the form of
one or more Global Securities (as defined under "Book-Entry and Settlement"
below). As described herein, under certain limited circumstances, Junior
Subordinated Debt Securities may be issued in certificated form in exchange for
a Global Security. See "Book-Entry and Settlement" below. In the event that
Junior Subordinated Debt Securities are issued in certificated form, such Junior
Subordinated Debt Securities will be in denominations of $25 and integral
multiples thereof and may be transferred or exchanged at the offices described
below. Payments on Junior Subordinated Debt Securities issued as a Global
Security will be made to DTC, to a successor depositary or, in the event that no
depositary is used, to a Paying Agent for the Junior Subordinated Debt
Securities. In the event Junior Subordinated Debt Securities are issued in
certificated form, principal and interest will be payable, the transfer of the
Junior Subordinated Debt Securities will be registrable and Junior Subordinated
Debt Securities will be exchangeable for Junior Subordinated Debt Securities of
other denominations of a like aggregate principal amount at the corporate trust
office of the Indenture Trustee in New York, New York; provided, that payment of
interest may be made at the option of the Company by check mailed to the address
of the persons entitled thereto.
The Company does not intend to issue and sell the Junior Subordinated Debt
Securities to any purchasers other than TRV Capital.
There are no covenants or provisions in the Indenture that would afford the
holders of the Junior Subordinated Debt Securities protection in the event of a
highly leveraged transaction, reorganization, restructuring, merger or similar
transaction involving the Company that may adversely affect such holders.
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SUBORDINATION
The Indenture provides that the Junior Subordinated Debt Securities are
subordinated and junior in right of payment to all Senior Indebtedness of the
Company. No payment of principal (including redemption payments), premium, if
any, or interest on the Junior Subordinated Debt Securities may be made if (i)
any Senior Indebtedness of the Company has not been paid when due and any
applicable grace period with respect to such default has ended and such default
has not been cured or waived or ceased to exist, or (ii) the maturity of any
Senior Indebtedness of the Company has been accelerated because of a default.
Upon any distribution of assets of the Company to creditors upon any
dissolution, winding-up, liquidation or reorganization, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings,
all principal, premium, if any, and interest due or to become due on all Senior
Indebtedness of the Company must be paid in full before the holders of Junior
Subordinated Debt Securities are entitled to receive or retain any payment. Upon
satisfaction of all claims related to all Senior Indebtedness of the Company
then outstanding, the rights of the holders of the Junior Subordinated Debt
Securities will be subrogated to the rights of the holders of Senior
Indebtedness of the Company to receive payments or distributions applicable to
Senior Indebtedness until all amounts owing on the Junior Subordinated Debt
Securities are paid in full.
The term "Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor for money borrowed and (B) indebtedness evidenced by securities, notes,
debentures, bonds or other similar instruments issued by such obligor, (ii) all
capital lease obligations of such obligor, (iii) all obligations of such obligor
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of such obligor and all obligations of such obligor under any
conditional sale or title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business), (iv) all obligations,
contingent or otherwise, of such obligor in respect of any letters of credit,
banker's acceptance, security purchase facilities or similar credit
transactions, (v) all obligations in respect of interest rate swap, cap or other
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other similar agreements, (vi) all
obligations of the type referred to in clauses (i) through (v) above of other
persons for the payment of which such obligor is responsible or liable as
obligor, guarantor or otherwise and (vii) all obligations of the type referred
to in clauses (i) through (vi) above of other persons secured by any lien on any
property or asset of such obligor (whether or not such obligation is assumed by
such obligor), except for (1) any such indebtedness that is by its terms
subordinated to or pari passu with the Junior Subordinated Debt Securities and
(2) any indebtedness between or among such obligor or its affiliates, including
all other debt securities and guarantees in respect of those debt securities,
issued to (a) any other TRV Trust or a trustee of such trust and (b) any other
trust, or a trustee of such trust, partnership or other entity affiliated with
the Company that is a financing vehicle of the Company (a "financing entity") in
connection with the issuance by such financing entity of preferred securities or
other securities that rank pari passu with, or junior to, the Preferred
Securities. Such Senior Indebtedness shall continue to be Senior Indebtedness
and be entitled to the benefits of the subordination provisions irrespective of
any amendment, modification or waiver of any term of such Senior Indebtedness.
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued by the Company.
OPTIONAL REDEMPTION
The Company shall have the right to redeem the Junior Subordinated Debt
Securities, in whole or in part, from time to time, on or after , 200 ,
or at any time in certain circumstances upon the occurrence of a Tax Event as
described under "Description of the Preferred Securities--Special Event
Redemption or Distribution," upon not less than 30 nor more than 60 days'
notice, at a redemption price equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest, including Additional Interest (as
defined herein), if any, to the redemption date. If a partial redemption of the
Preferred Securities resulting from a partial redemption of the Junior
Subordinated Debt Securities would result in the delisting of the Preferred
Securities, the Company may only redeem the Junior Subordinated Debt Securities
in whole.
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed the Proposed Legislation that
would, among other things, generally deny corporate issuers a deduction for
interest in respect of certain debt obligations, such as the Junior
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Subordinated Debt Securities, issued on or after December 7, 1995. On March 29,
1996, Senate Finance Committee Chairman William V. Roth, Jr. and House Ways and
Means Committee Chairman Bill Archer issued the Joint Statement indicating their
intent that the Proposed Legislation, if adopted by either of the tax-writing
committees of Congress, would have an effective date that is no earlier than the
date of "appropriate Congressional action." Based upon the Joint Statement, it
is expected that if the Proposed Legislation were to be enacted, such
legislation would not apply to the Junior Subordinated Debt Securities. There
can be no assurances, however, that the effective date guidance contained in the
Joint Statement will be incorporated into the Proposed Legislation, if enacted,
or that other legislation enacted after the date hereof will not otherwise
adversely affect the ability of the Company to deduct the interest payable on
the Junior Subordinated Debt Securities. Accordingly, there can be no assurance
that a Tax Event will not occur. See "Description of the Preferred
Securities--Special Event Redemption or Distribution."
INTEREST
Each Junior Subordinated Debt Security shall bear interest at the rate of
% per annum, from and including the original date of issuance, payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year (each an "Interest Payment Date"), commencing , 199 to the person in
whose name such Junior Subordinated Debt Security is registered, subject to
certain exceptions, at the close of business on the Business Day next preceding
such Interest Payment Date. In the event the Junior Subordinated Debt Securities
shall not continue to remain in book-entry only form, the Company shall have the
right to select record dates, which shall be at least 14 days but no more than
60 days prior to the Interest Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full quarterly period for which interest is computed
will be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on the Junior
Subordinated Debt Securities is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company shall have the right at any time, and from time to time, during
the term of the Junior Subordinated Debt Securities, to defer payments of
interest by extending the interest payment period for a period not exceeding 20
consecutive quarters, provided, that no Extension Period may extend beyond the
maturity of the Junior Subordinated Debt Securities, at the end of which
Extension Period, the Company shall pay all interest then accrued and unpaid
(including any Additional Interest) together with interest thereon compounded
quarterly at the rate specified for the Junior Subordinated Debt Securities to
the extent permitted by applicable law ("Compound Interest"); provided further,
that during any such Extension Period, (a) the Company shall not declare or pay
any dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
or make any guarantee payment with respect thereto (other than (i) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Company's capital stock for any other class or series of the
Company's capital stock, or (iii) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged), and (b) the
Company shall not make any payment of interest on or principal of (or premium,
if any, on), or repay, repurchase or redeem, any debt securities issued by the
Company which rank pari passu with or junior to the Junior Subordinated Debt
Securities. The foregoing, however, will not apply to any stock dividends paid
by the Company where the dividend stock is the same stock as that on which the
dividend is being paid. Prior to the termination of any Extension Period, the
Company may further defer payments of interest by extending such Extension
Period; provided, however, that such Extension Period, including all such
previous and further extensions, may not exceed 20 consecutive quarterly
interest periods (including the quarterly interest period in which notice of
such Extension Period (as described below) is given); provided further, that no
Extension Period may extend beyond the maturity of the Junior Subordinated Debt
Securities. Upon the termination of any Extension Period and the payment of all
amounts then
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due, the Company may commence a new Extension Period, subject to the terms set
forth in this section. No interest during an Extension Period, except at the end
thereof, shall be due and payable. The Company has no present intention of
exercising its right to defer payments of interest by extending the interest
payment period on the Junior Subordinated Debt Securities. If the Institutional
Trustee shall be the sole holder of the Junior Subordinated Debt Securities, the
Company shall give the Regular Trustees and the Institutional Trustee notice of
its selection of such Extension Period one Business Day prior to the earlier of
(i) the date distributions on the Preferred Securities would be payable, if not
for such Extension Period, or (ii) the date the Regular Trustees are required to
give notice to the New York Stock Exchange (or other applicable self-regulatory
organization) or to holders of the Preferred Securities of the record date or
the date such distribution would be payable, if not for such Extension Period,
but in any event one Business Day prior to such record date. The Regular
Trustees shall give notice of the Company's selection of such Extension Period
to the holders of the Preferred Securities. If the Institutional Trustee shall
not be the sole holder of the Junior Subordinated Debt Securities, the Company
shall give the holders of the Junior Subordinated Debt Securities notice of its
selection of such Extension Period ten Business Days prior to the earlier of (i)
the next succeeding Interest Payment Date or (ii) the date upon which the
Company is required to give notice to the New York Stock Exchange (or other
applicable self-regulatory organization) or to holders of the Junior
Subordinated Debt Securities of the record or payment date of such related
interest payment.
ADDITIONAL INTEREST
If at any time TRV Capital shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
such case, the Company will pay as additional interest ("Additional Interest")
on the Junior Subordinated Debt Securities such additional amounts as shall be
required so that the net amounts received and retained by TRV Capital after
paying any such taxes, duties, assessments or other governmental charges will be
not less than the amounts TRV Capital would have received had no such taxes,
duties, assessments or other governmental charges been imposed.
INDENTURE EVENTS OF DEFAULT
If any Indenture Event of Default shall occur and be continuing, the
Institutional Trustee, as the holder of the Junior Subordinated Debt Securities,
will have the right to declare the principal of and the interest on the Junior
Subordinated Debt Securities (including any Compound Interest and Additional
Interest, if any) 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 Junior Subordinated Debt Securities. See "Description of Junior
Subordinated Debt Securities--Events of Default" in the accompanying Prospectus
for a description of the Indenture Events of Default. An Indenture Event of
Default also constitutes a Declaration Event of Default. The holders of
Preferred Securities in certain circumstances have the right to direct the
Institutional Trustee to exercise its rights as the holder of the Junior
Subordinated Debt Securities. See "Description of the Preferred
Securities--Declaration Events of Default" and "--Voting Rights."
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 Junior Subordinated Debt Securities
on the date such interest or principal is otherwise payable, the Company
acknowledges that, in such event, a holder of Preferred Securities may institute
a Direct Action for payment on or after the respective due date specified in the
Junior Subordinated Debt Securities. The Company may not amend the Indenture to
remove the foregoing right to bring a Direct Action without the prior written
consent of all of the holders of Preferred Securities of TRV Capital.
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 Junior Subordinated Debt Securities
held by TRV Capital or the Institutional Trustee of TRV Capital, 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. The holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Junior Subordinated Debt Securities.
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BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of TRV Capital
as a result of the occurrence of a Special Event, the Junior Subordinated Debt
Securities will be issued in the form of one or more global certificates (each a
"Global Security") registered in the name of the depositary or its nominee.
Except under the limited circumstances described below, Junior Subordinated Debt
Securities represented by a Global Security will not be exchangeable for, and
will not otherwise be issuable as, Junior Subordinated Debt Securities in
definitive form. The Global Securities described above may not be transferred
except by the depositary to a nominee of the depositary or by a nominee of the
depositary to the depositary or another nominee of the depositary or to a
successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in such a Global Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Junior
Subordinated Debt Securities in definitive form and will not be considered the
Holders (as defined in the Indenture) thereof for any purpose under the
Indenture, and no Global Security representing Junior Subordinated Debt
Securities shall be exchangeable, except for another Global Security of like
denomination and tenor to be registered in the name of the depositary or its
nominee or to a successor depositary or its nominee. Accordingly, each
Beneficial Owner must rely on the procedures of the depositary or if such person
is not a Participant, on the procedures of the Participant through which such
person owns its interest to exercise any rights of a holder under the Indenture.
THE DEPOSITARY
If Junior Subordinated Debt Securities are distributed to holders of
Preferred Securities in liquidation of such holders' interests in TRV Capital,
DTC will act as securities depositary for the Junior Subordinated Debt
Securities. For a description of DTC and the specific terms of the depositary
arrangements, see "Description of the Preferred Securities--Book-Entry Only
Issuance--The Depository Trust Company." As of the date of this Prospectus
Supplement, 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 depositary in the event
DTC or such successor depositary is unable or unwilling to continue as a
depositary for the Global Securities.
None of the Company, TRV Capital, the Indenture Trustee, any paying agent
and any other agent of the Company or the Indenture Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
for such Junior Subordinated Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Junior Subordinated Debt
Securities registered in the names of persons other than the depositary or its
nominee only if (i) the depositary notifies the Company that it is unwilling or
unable to continue as a depositary for such Global Security and no successor
depositary shall have been appointed, (ii) the depositary, at any time, ceases
to be a clearing agency registered under the Exchange Act at which time the
depositary is required to be so registered to act as such depositary and no
successor depositary shall have been appointed, (iii) the Company, in its sole
discretion, determines that such Global Security shall be so exchangeable or
(iv) there shall have occurred an Indenture Event of Default with respect to
such Junior Subordinated Debt Securities. Any Global Security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for Junior
Subordinated Debt Securities registered in such names as the depositary shall
direct. It is expected that such instructions will be based upon directions
received by the depositary from its Participants with respect to ownership of
beneficial interests in such Global Security.
MISCELLANEOUS
The Indenture will provide that the Company will pay all fees and expenses
related to (i) the offering of the Trust Securities and the Junior Subordinated
Debt Securities, (ii) the organization, maintenance and dissolution of TRV
Capital, (iii) the retention of the TRV Trustees and (iv) the enforcement by the
Institutional Trustee of the rights of the holders of the Preferred Securities.
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DESCRIPTION OF GUARANTEE
Set forth below is a summary of information concerning the Guarantee that
will be executed and delivered by the Company for the benefit of the holders of
Preferred Securities. The Guarantee will be qualified as an indenture under the
Trust Indenture Act. The Chase Manhattan Bank will act as indenture trustee
under the Guarantee (the "Guarantee Trustee"). The terms of the Guarantee will
be those set forth in the Guarantee and those made part of the Guarantee by the
Trust Indenture Act. This description supplements the description of the general
terms and provisions of the Guarantee set forth in the accompanying Prospectus
under the caption "Description of Guarantees." The summary does not purport to
be complete and is subject in all respects to the provisions of, and is
qualified in its entirety by reference to, the form of Guarantee, which is filed
as an exhibit to the Registration Statement of which this Prospectus Supplement
forms a part, and the Trust Indenture Act. The Guarantee will be held by the
Guarantee Trustee for the benefit of the holders of the Preferred Securities.
GENERAL
Pursuant to and to the extent set forth in the Guarantee, the Company will
irrevocably and unconditionally agree to pay in full to the holders of the
Preferred Securities (except to the extent paid by TRV Capital), as and when
due, regardless of any defense, right of set-off or counterclaim which TRV
Capital may have or assert, the following payments (the "Guarantee Payments"),
without duplication: (i) any accrued and unpaid distributions that are required
to be paid on the Preferred Securities, to the extent TRV Capital has funds
available therefor, and (ii) the redemption price of $25 per Preferred Security,
plus all accrued and unpaid distributions (the "Redemption Price"), to the
extent TRV Capital has funds available therefor, with respect to any Preferred
Securities called for redemption by TRV Capital, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of TRV Capital (other than in
connection with the distribution of Junior Subordinated Debt Securities to the
holders of Preferred Securities or the redemption of all of the Preferred
Securities) the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on the Preferred Securities to the date of
payment or (b) the amount of assets of TRV Capital remaining for distribution to
holders of the Preferred Securities in liquidation of TRV Capital. 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 Preferred Securities or by
causing TRV Capital to pay such amounts to such holders.
The Guarantee will be a guarantee on a subordinated basis with respect to
the Preferred Securities from the time of issuance of the Preferred Securities
but will not apply to any payment of distributions or Redemption Price, or to
payments upon the dissolution, winding-up or termination of TRV Capital, except
to the extent TRV Capital shall have funds available therefor. If the Company
does not make interest payments on the Junior Subordinated Debt Securities, TRV
Capital will not pay distributions on the Preferred Securities and will not have
funds available therefor. See "Description of Junior Subordinated Debt
Securities." The Guarantee, when taken together with the Company's obligations
under the Junior Subordinated Debt Securities, the Indenture and the
Declaration, including its obligations to pay costs, expenses, debts and
liabilities of TRV Capital (other than with respect to Trust Securities), will
provide a full and unconditional guarantee on a subordinated basis by the
Company of payments due on the Preferred Securities.
CERTAIN COVENANTS OF THE COMPANY
In the Guarantee, the Company will covenant that, so long as any Preferred
Securities remain outstanding, if there shall have occurred any event that would
constitute an Event of Default under such Guarantee or the Declaration, then (a)
the Company shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock or make any guarantee payment with respect
thereto (other than (i) repurchases, redemptions or other acquisitions of shares
of capital stock of the Company in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of employees,
officers, directors or consultants, (ii) as a result of an exchange or
conversion of any class or series of the Company's capital stock for any other
class or series of the Company's capital stock, or (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged) and (b) the Company shall not make any payment of
interest on, or principal of (or premium, if any, on), or repay, repurchase or
redeem, any debt securities issued by the Company which rank pari passu with or
junior to the Junior Subordinated Debt Securities. The Guarantee, however, will
except from the foregoing any stock dividends paid by the Company where the
dividend stock is the same stock as that on which the dividend is being paid.
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MODIFICATION OF THE GUARANTEE; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities (in which case no vote will be required), the
Guarantee may be amended only with the prior approval of the holders of not less
than a majority in aggregate liquidation amount of the outstanding Preferred
Securities. All guarantees and agreements contained in the Guarantee shall bind
the successors, assignees, receivers, trustees and representatives of the
Company and shall inure to the benefit of the holders of the Preferred
Securities then outstanding.
EVENTS OF DEFAULT
An Event of Default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of a majority in aggregate liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the Guarantee. If the Guarantee Trustee fails to enforce
the Guarantee Trustee's rights under the Guarantee, any holder of related
Preferred Securities may directly institute a legal proceeding against the
Company to enforce the Guarantee Trustee's rights under the Guarantee without
first instituting a legal proceeding against TRV Capital, the Guarantee Trustee
or any other person or entity. A holder of Preferred Securities may also
directly institute a legal proceeding against the Company to enforce such
holder's right to receive payment under the Guarantee without first (i)
directing the Guarantee Trustee to enforce the terms of the Guarantee or (ii)
instituting a legal proceeding against TRV Capital or any other person or
entity.
The Company will be required to provide annually to the Guarantee Trustee a
statement as to the performance by the Company of certain of its obligations
under the Guarantee and as to any default in such performance.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
the Guarantee, undertakes to perform only such duties as are specifically set
forth in the Guarantee and, after default with respect to the Guarantee, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such 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 as to the Preferred Securities upon full
payment of the Redemption Price of all Preferred Securities, upon distribution
of the Junior Subordinated Debt Securities to the holders of the Preferred
Securities or upon full payment of the amounts payable in accordance with the
Declaration upon liquidation of TRV Capital. The Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of Preferred Securities must restore payment of any sums paid under the
Preferred Securities or the Guarantee.
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Company and
will rank (i) subordinate and junior in right of payment to all other
liabilities of the Company, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Company and with any guarantee
now or hereafter entered into by the Company in respect of any preferred or
preference stock of any subsidiary of the Company and (iii) senior to the
Company's common stock. The terms of the Preferred Securities provide that each
holder of Preferred Securities by acceptance thereof agrees to the subordination
provisions and other terms of the Guarantee.
The Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
the guarantor to enforce its rights under the Guarantee without instituting a
legal proceeding against any other person or entity).
GOVERNING LAW
The Guarantee will be governed by, and construed in accordance with, the
internal laws of the State of New York.
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<PAGE>
EFFECT OF OBLIGATIONS UNDER THE
JUNIOR SUBORDINATED DEBT SECURITIES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of TRV Capital is to issue
the Trust Securities evidencing undivided beneficial interests in the assets of
TRV Capital, and to invest the proceeds from such issuance and sale in the
Junior Subordinated Debt Securities.
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debt Securities, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the following
factors: (i) the aggregate principal amount of Junior Subordinated Debt
Securities will be equal to the sum of the aggregate stated liquidation amount
of the Trust Securities; (ii) the interest rate and the interest and other
payment dates on the Junior Subordinated Debt Securities will match the
distribution rate and distribution and other payment dates for the Preferred
Securities; (iii) pursuant to the Indenture, the Company shall pay, and TRV
Capital shall not be obligated to pay, directly or indirectly, all costs,
expenses, debt and obligations of TRV Capital other than with respect to the
Trust Securities; and (iv) the Declaration further provides that the TRV
Trustees shall not cause or permit TRV Capital to, among other things, engage in
any activity that is not consistent with the purposes of TRV Capital.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor are
available) are guaranteed by the Company as and to the extent set forth under
"Description of Guarantees" in the accompanying Prospectus. If the Company does
not make interest payments on the Junior Subordinated Debt Securities purchased
by TRV Capital, it is expected that TRV Capital will not have sufficient funds
to pay distributions on the Preferred Securities. The Guarantee is a guarantee
on a subordinated basis with respect to the Preferred Securities from the time
of its issuance but does not apply to any payment of distributions unless and
until TRV Capital has sufficient funds for the payment of such distributions.
The Guarantee covers the payment of distributions and other payments on the
Preferred Securities only if and to the extent that the Company has made a
payment of interest or principal or other payments on the Junior Subordinated
Debt Securities held by TRV Capital as its sole asset. The Guarantee, when taken
together with the Company's obligations under the Junior Subordinated Debt
Securities and the Indenture and its obligations under the Declaration,
including its obligations to pay costs, expenses, debts and liabilities of TRV
Capital (other than with respect to the Trust Securities), will provide a full
and unconditional guarantee of distributions, redemption payments and
liquidation payments on the Preferred Securities.
If the Company fails to make interest or other payments on the Junior
Subordinated Debt Securities when due (taking account of any Extension Period),
the Declaration provides a mechanism whereby the holders of the Preferred
Securities, using the procedures described in "Description of the Preferred
Securities--Book Entry Only Issuance--The Depository Trust Company" and
"--Voting Rights," may direct the Institutional Trustee to enforce its rights
under the Junior Subordinated Debt Securities. If the Institutional Trustee
fails to enforce its rights under the Junior Subordinated Debt Securities, any
holder of Preferred Securities may directly institute a legal proceeding against
the Company to enforce the Institutional Trustee's rights under the Junior
Subordinated Debt Securities without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity. 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
Junior Subordinated Debt Securities 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 also institute a Direct Action for payment on
or after the respective due date specified in the Junior Subordinated Debt
Securities without first (i) directing the Institutional Trustee to enforce the
terms of the Junior Subordinated Debt Securities or (ii) instituting a legal
proceeding against the Company to enforce the Institutional Trustee's rights
under the Junior Subordinated Debt Securities. In connection with such Direct
Action, the Company will be subrogated to the rights of such holder of Preferred
Securities under the Declaration to the extent of any payment made by the
Company to such holder of Preferred Securities in such Direct Action.
Consequently, the Company will be entitled to payment of amounts that a holder
of Preferred Securities receives in respect of an unpaid distribution that
resulted in the bringing of a Direct Action to the extent that such holder
receives or has already received full payment with respect to such unpaid
distribution from TRV Capital. The Company, under the Guarantee, acknowledges
that the Guarantee Trustee shall enforce the Guarantee on behalf of the holders
of the Preferred Securities. If the Company fails to make payments under the
Guarantee, the Guarantee provides a mechanism whereby the holders of the
Preferred Securities may direct the Guarantee Trustee to enforce its rights
thereunder. If the Guarantee Trustee fails to enforce the Guarantee, any holder
of
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<PAGE>
Preferred Securities may directly institute a legal proceeding against the
Company to enforce the Guarantee Trustee's rights under the Guarantee without
first instituting a legal proceeding against TRV Capital, the Guarantee Trustee,
or any other person or entity. A holder of Preferred Securities may also
directly institute a legal proceeding against the Company to enforce such
holder's right to receive payment under the Guarantee without first (i)
directing the Guarantee Trustee to enforce the terms of the Guarantee or (ii)
instituting a legal proceeding against TRV Capital or any other person or
entity.
The Company and TRV Capital believe that the above mechanisms and
obligations, taken together, are equivalent to a full and unconditional
guarantee by the Company of payments due on the Preferred Securities. See
"Description of Guarantee--General."
UNITED STATES FEDERAL INCOME TAXATION
GENERAL
The following is a summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of Preferred Securities.
Unless otherwise stated, this summary deals only with Preferred Securities held
as capital assets by holders who purchase the Preferred Securities upon original
issuance. It does not deal with special classes of holders such as banks,
thrifts, real estate investment trusts, regulated investment companies,
insurance companies, dealers in securities or currencies, tax-exempt investors,
persons that have a functional currency other than the U.S. Dollar 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. 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.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
In connection with the issuance of the Junior Subordinated Debt Securities,
Skadden, Arps, Slate, Meagher & Flom ("Skadden, Arps"), tax counsel to the
Company and TRV Capital, will render its opinion generally to the effect that,
under then current law and assuming full compliance with the terms of the
Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Junior Subordinated Debt Securities
held by TRV Capital will be classified for United States federal income tax
purposes as indebtedness of the Company.
CLASSIFICATION OF TRV CAPITAL
In connection with the issuance of the Preferred Securities, Skadden, Arps
will render its opinion generally to the effect that, under then current law and
assuming full compliance with the terms of the Declaration and the Indenture
(and certain other documents), and based on certain facts and assumptions
contained in such opinion, TRV Capital will be classified for United States
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation. Accordingly, for United States federal income tax purposes,
each holder of Preferred Securities generally will be considered the owner of an
undivided interest in the Junior Subordinated Debt Securities, and each holder
will be required to include in its gross income interest (or OID) with respect
to its allocable share of those Junior Subordinated Debt Securities.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations applicable to debt instruments
issued on or after August 13, 1996 (the "Regulations"), a "remote" contingency
that stated interest will not be timely paid will be ignored in determining
whether a debt instrument is issued with original issue discount ("OID"). The
Company believes that the likelihood of its exercising its option to defer
payments of interest is remote. Based on the foregoing, the Company believes
that the Junior Subordinated Debt Securities will not be considered to be issued
with OID at the time of their original issuance and, accordingly, a holder of
the Preferred Securities should include in gross income such holder's allocable
share of interest on the Junior Subordinated Debt Securities in accordance with
such holder's method of tax accounting.
Under the Regulations, if the Company exercised is option to defer any
payment of interest, the Junior Subordinated Debt Securities would at that
time be treated as issued with OID, and all stated interest on the Junior
Subordinated Debt Securities would thereafter be treated as OID as long as the
Junior Subordinated Debt Securities remained outstanding. In such event, all of
a holder's taxable interest income with respect to the Junior Subordinated Debt
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Securities would be accounted for as OID on an economic accrual basis
regardless of such holder's method of tax accounting, and actual distributions
of stated interest would not be reported as taxable income. Consequently, a
holder of Preferred Securities would be required to include in gross income
OID even though the Company would not make any actual cash payments during an
Extension Period.
The Regulations have not been addressed in any rulings or other
interpretations by the Internal Revenue Service (the "IRS"), and it is possible
that the IRS could take a position contrary to the interpretation herein.
Because income on the Preferred Securities will constitute interest or OID,
corporate holders of Preferred Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Preferred Securities.
RECEIPT OF JUNIOR SUBORDINATED DEBT SECURITIES OR CASH UPON LIQUIDATION OF TRV
CAPITAL
Under certain circumstances, as described under "Description of the
Preferred Securities--Special Event Redemption or Distribution," Junior
Subordinated Debt Securities may be distributed to holders in exchange for the
Preferred Securities upon the liquidation of TRV Capital. Under current law,
such a distribution, for United States federal income tax purposes, would be
treated as a non-taxable event to each holder, and each holder would receive an
aggregate tax basis in the Junior Subordinated Debt Securities equal to such
holder's aggregate tax basis in its Preferred Securities. A holder's holding
period in the Junior Subordinated Debt Securities received in liquidation of TRV
Capital would include the period during which the Preferred Securities were held
by such holder.
Under certain circumstances described herein (see "Description of the
Preferred Securities"), the Junior Subordinated Debt Securities may be redeemed
by the Company for cash and the proceeds of such redemption distributed by TRV
Capital 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 could recognize gain or loss as if it sold such redeemed Preferred
Securities for cash. See "United States Federal Income Taxation--Sales of
Preferred Securities."
SALES OF PREFERRED SECURITIES
A holder that sells Preferred Securities will be considered to have disposed
of all or part of its pro rata share of the Junior Subordinated Debt Securities
and will recognize gain or loss equal to the difference between its adjusted tax
basis in the Preferred Securities and the amount realized on the sale of such
Preferred Securities. Assuming that the Company does not exercise its option to
defer payment of interest on the Junior Subordinated Debt Securities, a holder's
adjusted tax basis in the Preferred Securities generally will be its initial
purchase price. If the Junior Subordinated Debt Securities are deemed to be
issued with OID as a result of the Company's deferral of any interest payment, a
holder's tax basis in the Preferred Securities generally will be its initial
purchase price, increased by OID previously includible in such holder's gross
income to the date of disposition and decreased by distributions or other
payments received on the Preferred Securities since and including the date of
the first Extension Period. Such gain or loss generally will be a capital gain
or loss (except to the extent of any accrued interest with respect to such
holder's pro rata share of the Junior Subordinated Debt Securities not
previously included in income) and generally will be a long-term capital gain
or loss if the Preferred Securities have been held for more than one year.
Should the Company exercise its option to defer any payment of interest
on the Junior Subordinated Debt Securities, 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 Junior Subordinated Debt
Securities. In the event of such a deferral, 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 accrued
but unpaid interest on the Junior Subordinated Debt Securities to the date of
disposition and to add such amount to its adjusted tax basis in its pro rata
share of the underlying Junior Subordinated Debt Securities 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.
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed the Proposed Legislation
that would, among other things, generally deny corporate issuers a deduction for
interest in respect of certain debt obligations, such as the Junior
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<PAGE>
Subordinated Debt Securities, issued on or after December 7, 1995. On March 29,
1996, Senate Finance Committee Chairman William V. Roth, Jr. and House Ways and
Means Committee Chairman Bill Archer issued the Joint Statement indicating their
intent that the Proposed Legislation, if adopted by either of the tax-writing
committees of Congress, would have an effective date that is no earlier than the
date of "appropriate Congressional action." Based upon the Joint Statement, it
is expected that if the Proposed Legislation were to be enacted, such
legislation would not apply to the Junior Subordinated Debt Securities. There
can be no assurances, however, that the effective date guidance contained in the
Joint Statement will be incorporated into the Proposed Legislation, if enacted,
or that other legislation enacted after the date hereof will not otherwise
adversely affect the ability of the Company to deduct the interest payable on
the Junior Subordinated Debt Securities. Accordingly, there can be no assurance
that a Tax Event will not occur. See "Description of the Preferred
Securities--Special Event Redemption or Distribution."
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 non-resident fiduciary of a foreign estate or trust.
Under present United States federal income tax law: (i) payments by TRV
Capital 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, (a) 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, (b) the beneficial owner of the Preferred Security is not a controlled
foreign corporation that is related to the Company through stock ownership, and
(c) either (A) the beneficial owner of the Preferred Security certifies to TRV
Capital or its agent, under penalties of perjury, that it is not a United States
holder and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Preferred Security in such capacity, certifies to
TRV Capital 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 TRV Capital or its
agent with a copy thereof; and (ii) a United States Alien Holder of a Preferred
Security will not be subject to United States federal withholding tax on any
gain realized upon the sale or other disposition of a Preferred Security.
INFORMATION REPORTING TO HOLDERS
Generally, income on the Preferred Securities will be reported to holders on
Forms 1099, which forms should be mailed to holders of Preferred Securities by
January 31 following each calendar year.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Preferred Securities
may be subject to a "backup" withholding tax of 31% unless the holder complies
with certain identification requirements. Any withheld amounts will be allowed
as a credit against the holder's United States federal income tax, provided the
required information is provided to the IRS on a timely basis.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL
OR OTHER TAX LAWS.
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UNDERWRITING
Under the terms and subject to the conditions of the Underwriting Agreement
dated , 199 (the "Underwriting Agreement"), each Underwriter named below
(the "Underwriters") has severally agreed to purchase from TRV Capital, and TRV
Capital has agreed to sell to such Underwriter, the number of Preferred
Securities set forth opposite the name of such Underwriter below.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS PREFERRED SECURITIES
- ------------------------------------------------------------------------------------- --------------------
<S> <C>
Smith Barney Inc. ...................................................................
-----------
Total............................................................................
-----------
-----------
</TABLE>
The Underwriters are obligated to take and pay for the total number of
Preferred Securities offered hereby if any such Preferred Securities are
purchased. In the event of default by any Underwriter, the Underwriting
Agreement provides that, in certain circumstances, purchase commitments of the
non-defaulting Underwriters may be increased or the Underwriting Agreement may
be terminated.
TRV Capital has granted to the Underwriters an option, exercisable for 30
days from the date of this Prospectus Supplement, to purchase up to an aggregate
of additional Preferred Securities at the initial public offering price
set forth on the cover page of this Prospectus Supplement. The Company will pay
Underwriters' Compensation in the amounts set forth on the cover page hereof
with respect to such additional Preferred Securities. The Underwriters may
exercise such option to purchase additional Preferred Securities solely for
the purpose of covering over-allotments, if any, incurred in connection with
the sale of the Preferred Securities offered hereby. To the extent such option
is exercised, each Underwriter will become obligated, subject to certain
conditions, to purchase approximately the same percentage of such additional
Preferred Securities as the number of Preferred Securities set forth
opposite such Underwriter's name in the preceding table bears to the total
number of Preferred Securities in such table.
The Underwriting Agreement provides that TRV Capital and the Company will
indemnify the several Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, and to make certain
contributions in respect thereof.
TRV Capital and the Company have agreed, during the period beginning on the
date of the Underwriting Agreement and continuing to and including the date that
is 60 days after the closing date for the purchase of the Preferred Securities,
not to offer, sell, contract to sell or otherwise dispose of any preferred
securities, any preferred stock or any other securities (including any backup
undertakings of such preferred stock or other securities) of the Company or of
TRV Capital, in each case that are substantially similar to the Preferred
Securities, or any securities convertible into or exchangeable for the Preferred
Securities or such substantially similar securities of either TRV Capital or the
Company, except preferred securities offered pursuant to the accompanying
Prospectus, without the prior written consent of Smith Barney.
In view of the fact that the proceeds of the sale of the Preferred
Securities will ultimately be used to purchase the Junior Subordinated Debt
Securities of the Company, the Underwriting Agreement provides that the Company
will pay as compensation to the Underwriters $ per Preferred Security for the
accounts of the several Underwriters; provided that such compensation for sales
of 10,000 or more Preferred Securities to a single purchaser will be $ per
Preferred Security. Therefore, to the extent of such sales, the actual amount of
Underwriters' Compensation will be less than the aggregate amount specified in
the preceding sentence.
The Underwriters propose to offer the Preferred Securities, in part,
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and to certain dealers at a price that
represents a concession not in excess of , provided that such concession for
sales of 10,000 or more Preferred Securities to a single person will not be in
excess of per Preferred Security. The Underwriters may allow, and such
dealers may reallow, a concession not in excess of per Preferred Security to
certain brokers and dealers. After the Preferred Securities are released for
sale to the public, the offering price and other selling terms may from time to
time be varied by the Representatives.
The Company intends to apply for listing of the Preferred Securities on the
New York Stock Exchange. Trading of the Preferred Securities on the New York
Stock Exchange is expected to commence within a 30-day period after the date of
this Prospectus Supplement.
Smith Barney is an indirect wholly owned subsidiary of the Company and an
affiliate of TRV Capital. The offering of Preferred Securities will comply with
the requirements of Rule 2720 of the Conduct Rules of the
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NASD regarding a NASD member firm's underwriting securities of an affiliate.
Certain of the Underwriters and their affiliates have in the past provided,
and may in the future provide, investment and/or commercial banking services
to the Company and its subsidiaries in the ordinary course of business.
This Prospectus Supplement together with an applicable Prospectus may also
be used by Smith Barney, in connection with offers and sales of the Preferred
Securities (subject to obtaining any necessary approval of the New York Stock
Exchange for any such offers and sales) in market-making transactions at
negotiated prices related to prevailing market prices at the time of sale. Smith
Barney may act as principal or agent in such transactions. Smith Barney has no
obligation to make a market in any of the Preferred Securities and may
discontinue any market-making activities at any time without notice, at its sole
discretion.
LEGAL MATTERS
The validity of the Preferred Securities, the Junior Subordinated Debt
Securities, the Guarantee and certain matters relating thereto and certain
United States federal income tax matters will be passed upon for the Company and
TRV Capital by Skadden, Arps, New York, New York. Certain legal matters will be
passed upon for the Underwriters by Dewey Ballantine, New York, New York. As to
matters governed by Delaware law (other than the Delaware General Corporation
Law), Dewey Ballantine will rely upon the opinion of Skadden, Arps. Kenneth J.
Bialkin, a partner of Skadden, Arps, is a director of the Company and he and
other attorneys in such firm beneficially own an aggregate of less than one
percent of the common stock of the Company.
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PROSPECTUS
TRAVELERS GROUP INC.
JUNIOR SUBORDINATED DEBT SECURITIES
-------------------
TRAVELERS CAPITAL I
TRAVELERS CAPITAL II
TRAVELERS CAPITAL III
TRAVELERS CAPITAL IV
TRAVELERS CAPITAL V
TRUST PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
TRAVELERS GROUP INC.
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Travelers Group Inc., a Delaware corporation (the "Company"), may offer,
from time to time, its unsecured junior subordinated debt securities (the
"Junior Subordinated Debt Securities"), consisting of debentures, notes or other
evidences of indebtedness, in one or more series and in amounts, at prices and
on terms to be determined at or prior to the time of any such offering. The
Company's obligations under the Junior Subordinated Debt Securities will be
subordinate and junior in right of payment to certain other indebtedness of the
Company as described herein or as may be described in an accompanying Prospectus
Supplement (the "Prospectus Supplement").
Travelers Capital I, Travelers Capital II, Travelers Capital III, Travelers
Capital IV and Travelers Capital V (each, a "TRV Trust" and, together, the "TRV
Trusts"), each a statutory business trust formed under the laws of the State of
Delaware, may offer, from time to time, trust preferred securities, representing
undivided beneficial interests in the assets of the respective TRV Trust
("Preferred Securities") with the payment of periodic cash distributions
("distributions") and payments on liquidation, redemption or otherwise of such
Preferred Securities guaranteed (each, a "Guarantee") on a subordinated basis by
the Company to the extent described herein. See "Description of Guarantees." The
Company's obligations under the Guarantees will rank pari passu with the most
senior preferred or preference stock now or hereafter issued by the Company. See
"Description of Guarantees-- Status of Guarantees." Junior Subordinated Debt
Securities may be issued and sold from time to time in one or more series by the
Company to a TRV Trust, or a trustee of such trust, in connection with the
investment of the proceeds from the offering of Preferred Securities and Common
Securities (as defined herein) of such TRV Trust, but the Company does not
intend to issue and sell the Junior Subordinated Debt Securities directly to
other purchasers, including the general public. The Junior Subordinated Debt
Securities purchased by a TRV Trust may be subsequently distributed pro rata to
holders of Preferred Securities and Common Securities in connection with the
dissolution of such TRV Trust upon the occurrence of certain events as may be
described in an accompanying Prospectus Supplement. The Guarantee, when taken
together with the Company's obligations under the Junior Subordinated Debt
Securities, the Indenture and the Declaration, including its obligations to pay
costs, expenses, debts and liabilities of such TRV Trust (other than with
respect to the Preferred Securities and the Common Securities), will provide a
full and unconditional guarantee on a subordinated basis by the Company of
payments due on Preferred Securities.
(Continued on next page)
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.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
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SMITH BARNEY INC.
, 1996
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(continued from previous page)
Specific terms of the Junior Subordinated Debt Securities of any series or
the Preferred Securities of any TRV Trust in respect of which this Prospectus is
being delivered (the "Offered Securities") will be set forth in a Prospectus
Supplement with respect to such Offered Securities, which will describe, without
limitation and where applicable, the following: (i) in the case of Junior
Subordinated Debt Securities, the specific designation, aggregate principal
amount, denomination, maturity, premium, if any, redemption or sinking fund
provisions, if any, interest rate (which may be fixed or variable), if any, the
time and method of calculating interest payments, if any, dates on which
premium, if any, and interest, if any, will be payable, the right of the
Company, if any, to defer payment of interest on the Junior Subordinated Debt
Securities and the maximum length of such deferral period, the initial public
offering price, subordination terms, and any listing on a securities exchange
and other specific terms of the offering of Junior Subordinated Debt Securities,
and (ii) in the case of Preferred Securities, the designation, number of
securities, liquidation preference per security, initial public offering price,
any listing on a securities exchange, distribution rate (or method of
calculation thereof), dates on which distributions shall be payable and dates
from which distributions shall accrue, any voting rights, any redemption or
sinking fund provisions, any other rights, preferences, privileges, limitations
or restrictions relating to the Preferred Securities and the terms upon which
the proceeds of the sale of the Preferred Securities shall be used to purchase a
specific series of Junior Subordinated Debt Securities. If so specified in the
applicable Prospectus Supplement, Offered Securities may be issued in whole or
in part in the form of one or more temporary or permanent global securities.
If as set forth in the applicable Prospectus Supplement, the Company has the
right to defer payments of interest on a series of Junior Subordinated Debt
Securities by extending the interest payment period of such series of Junior
Subordinated Debt Securities (each, an "Extension Period"), distributions on the
corresponding series of Preferred Securities will also be deferred. There could
be up to 80 Extension Periods of varying lengths throughout the term of any
series of Junior Subordinated Debt Securities.
The Offered Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering; provided, however, that the aggregate
initial public offering price of all Offered Securities shall not exceed $1
billion. Any Prospectus Supplement relating to any series of Offered Securities
will contain information concerning certain United States federal income tax
considerations, if applicable, to the Offered Securities.
The Company or any of the TRV Trusts may sell the Offered Securities
directly, through agents designated from time to time or through underwriters or
dealers. See "Plan of Distribution." If any agents of the Company, any of the
TRV Trusts or any underwriters or dealers are involved in the sale of the
Offered Securities, the names of such agents, underwriters or dealers and any
applicable commissions and discounts will be set forth in any related Prospectus
Supplement.
This Prospectus, together with an appropriate Prospectus Supplement, may be
used by Smith Barney Inc. ("Smith Barney"), an indirect wholly owned subsidiary
of the Company and an affiliate of the TRV Trusts, in connection with offers and
sales of the Offered Securities (subject to obtaining any necessary approval of
the New York Stock Exchange for any such offers and sales) in market-making
transactions at negotiated prices related to prevailing market prices at the
time of sale. Smith Barney may act as principal or agent in such transactions.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE TRV
TRUSTS, OR ANY UNDERWRITER, AGENT OR DEALER. NEITHER THE DELIVERY OF THIS
PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE THEREUNDER SHALL,
UNDER ANY CIRCUMSTANCE, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY OR ANY OF THE TRV TRUSTS SINCE THE DATE HEREOF OR
THEREOF. THIS PROSPECTUS AND ANY RELATED PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
-------------------
FOR NORTH CAROLINA INVESTORS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS SUCH
COMMISSIONER RULED UPON THE ACCURACY OR THE ADEQUACY OF THIS PROSPECTUS.
IN CONNECTION WITH THE OFFERING OF CERTAIN OF THE OFFERED SECURITIES, THE
UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICES OF SUCH OFFERED SECURITIES OR OTHER SECURITIES OF THE COMPANY
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information can 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;
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and Seven World Trade Center, New York, New York 10048. Copies of
such material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission also maintains a site on the World Wide Web, the address
of which is http://www.sec.gov, that contains reports, proxy and information
statements and other information regarding issuers, such as the Company, that
file electronically with the Commission. The Company's common stock is listed on
the New York Stock Exchange, Inc. (the "NYSE") and The Pacific Stock Exchange
Incorporated (the "PSE"), and such reports, proxy statements, and other
information can also be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005, and The Pacific Stock Exchange
Incorporated, 301 Pine Street, San Francisco, California 94104, and 233 South
Beaudry Avenue, Los Angeles, California 90012.
The Company and the TRV Trusts have filed with the Commission a Registration
Statement on Form S-3 (the "Registration Statement," which term shall include
all amendments, exhibits, annexes and schedules thereto) pursuant to the
Securities Act of 1933, as amended (the "Act"), with respect to the Offered
Securities. This Prospectus does not contain all the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company, the TRV Trusts and the Offered Securities, reference is
made to the Registration Statement and exhibits thereto. Statements contained in
this Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract or document filed as an exhibit to the Company's Registration
Statement, each such statement being qualified in all respects by such
reference.
No separate financial statements of the TRV Trusts have been included or
incorporated by reference herein. The Company does not consider that such
financial statements would be material to holders of the Preferred Securities
because (i) all of the voting securities of the TRV Trusts will be owned,
directly or indirectly, by the Company, a reporting company under the Exchange
Act, (ii) the TRV Trusts have no independent operations but exist for the sole
purpose of issuing securities representing undivided beneficial interests in
their respective assets and investing the proceeds thereof in Junior
Subordinated Debt Securities issued by the Company, and (iii) the obligations of
the TRV Trusts under the Preferred Securities are fully and unconditionally
guaranteed by the
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Company to the extent that the respective TRV Trust has funds available to meet
such obligations. See "Description of Junior Subordinated Debt Securities" and
"Description of Guarantees."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates by reference the following documents heretofore
filed with the Commission pursuant to the Exchange Act:
1. Annual Report on Form 10-K, as amended, of the Company for the
fiscal year ended December 31, 1995;
2. Quarterly Reports on Form 10-Q of the Company for the quarters ended
March 31, 1996 and June 30, 1996; and
3. Current Reports on Form 8-K of the Company, dated January 16, 1996,
January 19, 1996, as amended, April 2, 1996, as amended, April 15, 1996, and
June 7, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the later of (i) the termination of the offering of Offered Securities hereby
and (ii) the date on which Smith Barney ceases offering and selling Offered
Securities pursuant to this Prospectus shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing
of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed to constitute a part of
this Prospectus except as so modified or superseded.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference in the
Registration Statement of which this Prospectus forms a part other than exhibits
to such documents unless such exhibits are specifically incorporated by
reference into such documents. Requests should be directed to Travelers Group
Inc., 388 Greenwich Street, New York, New York 10013; Attention: Treasurer;
telephone (212) 816-8000.
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THE COMPANY
The Company is a financial services holding company engaged, through its
subsidiaries, principally in four business segments: Investment Services,
Consumer Finance Services, Life Insurance Services and Property & Casualty
Insurance Services.
The Company's Investment Services segment consists of investment banking,
asset management, brokerage and other financial services provided through Smith
Barney Holdings Inc. and its subsidiaries. The Company's Consumer Finance
Services segment includes consumer lending services and credit card and
credit-related insurance services provided through Commercial Credit Company and
its subsidiaries. The Company's Life Insurance Services segment includes
individual life insurance, annuities and pension programs which are offered
primarily through The Travelers Insurance Company, The Travelers Life and
Annuity Company and the Primerica Financial Services group of companies,
including Primerica Life Insurance Company. The Company's Property & Casualty
Insurance Services segment provides insurance products including workers'
compensation, liability, automobile, property and multiple-peril. In addition,
this segment provides commercial and personal property and casualty products
throughout the United States. Property and casualty insurance policies are
issued primarily by subsidiaries of the Company's newly formed indirect
majority-owned subsidiary Travelers/Aetna Property Casualty Corp. ("TAP") and
affiliated property-casualty insurance companies, including Gulf Insurance
Company.
In addition to its four business segments, the Company's Corporate and Other
segment consists of unallocated expenses and earnings primarily related to
interest, corporate administration, and certain corporate investments.
On April 2, 1996, TAP purchased from Aetna Life and Casualty Company all of
the outstanding capital stock of The Aetna Casualty and Surety Company and The
Standard Fire Insurance Company for $4.16 billion in cash.
The principal offices of the Company are located at 388 Greenwich Street,
New York, New York 10013 and its telephone number is (212) 816-8000.
TRV TRUSTS
Each of the TRV Trusts is a statutory business trust formed under Delaware
law pursuant to (i) a declaration of trust executed by the Company, as sponsor
for such trust (the "Sponsor"), and the trustees of such trust dated as of
September 19, 1996 and (ii) the filing of a certificate of trust with the
Secretary of State of the State of Delaware on September 19, 1996. Each such
declaration will be amended and restated in its entirety (as so amended and
restated, each a "Declaration"), and is substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Each of the TRV Trusts exists for the exclusive purposes of
(i) issuing the Preferred Securities and common securities
representing undivided beneficial interests in the assets of the Trust (the
"Common Securities" and, together with the Preferred Securities, the "Trust
Securities"), (ii) investing the gross proceeds from the sale of the Trust
Securities in the Junior Subordinated Debt Securities and (iii) engaging in only
those other activities necessary or incidental thereto. All of the Common
Securities will be directly or indirectly owned by the Company. The Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the Preferred Securities, except that, upon an event of default under the
Declaration, the rights of the holders of the Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and otherwise
will be subordinated to the rights of the holders of the Preferred Securities.
The Company will directly or indirectly acquire Common Securities in an
aggregate liquidation amount equal to 3% or more of the total capital of each
TRV Trust.
Each TRV Trust has a term of approximately 55 years but may terminate
earlier, as provided in each Declaration. Each TRV Trust's business and affairs
will be conducted by the trustees of each applicable Trust (the "TRV Trustees")
appointed by the Company as the direct or indirect holder of all the Common
Securities. The holder of the Common Securities will be entitled to appoint,
remove or replace any of, or increase or reduce the number of, the TRV Trustees
of the TRV Trusts. The duties and obligations of the TRV Trustees shall be
governed by the Declaration of such TRV Trust. Each TRV Trust will have two TRV
Trustees (the "Regular Trustees") who are employees or officers of or who are
affiliated with the Company. One TRV Trustee of each TRV Trust will be a
financial institution that is not affiliated with the Company and that has a
specified minimum amount of aggregate capital, surplus, and undivided profits of
not less than $50,000,000, which shall act as
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property trustee and as indenture trustee for the purposes of compliance with
the provisions of Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), pursuant to the terms set forth in a Prospectus Supplement (the
"Institutional Trustee"). In addition, unless the Institutional Trustee
maintains a principal place of business in the State of Delaware and otherwise
meets the requirements of applicable law, one TRV Trustee of each TRV Trust will
have a principal place of business or reside in the State of Delaware (the
"Delaware Trustee"). The Company will pay all fees and expenses related to the
TRV Trusts and the offering of the Trust Securities.
The office of the Delaware Trustee for each of the TRV Trusts is Chase
Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801. The
address for each TRV Trust is c/o the Company, the Sponsor of the TRV Trusts, at
the Company's corporate headquarters located at 388 Greenwich Street, New York,
New York 10013, telephone (212) 816-8000.
USE OF PROCEEDS
All of the net proceeds from the sale of any Preferred Securities offered
hereby will be invested by the TRV Trust in Junior Subordinated Debt Securities.
The Company will use the proceeds from the sale of the Junior Subordianted Debt
Securities to the TRV Trusts for general corporate purposes, which may include
capital contributions to subsidiaries of the Company, the redemption of shares
of the the Company's preferred stock, and/or the reduction or refinancing of
borrowings of the Company or its subsidiaries.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ---------------------------------------------
JUNE 30, 1996 1995 1994 1993 1992(1) 1991
---------------- ----- ---- ---- ------- -----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to combined fixed charges
and preferred stock dividends 2.15 2.09 2.12 2.64 2.57 1.85
</TABLE>
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(1) Included in earnings from continuing operations before income taxes (used in
this computation) is a net gain of $216.8 million from the sale of the
Company's ownership interests in Margaretten & Company, Inc., Fingerhut
Companies, Inc. and other affiliated companies. Without giving effect to
this net gain, the ratio for 1992 would have been 2.33.
The ratio of earnings to combined fixed charges and preferred stock
dividends has been computed by dividing earnings from continuing operations
before income taxes and fixed charges by the combined fixed charges and
preferred stock dividends. For purposes of these ratios, fixed charges consist
of interest expense and that portion of rentals deemed representative of the
appropriate interest factor.
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DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Junior Subordinated Debt Securities to which any Prospectus Supplement may
relate. The particular terms of the Junior Subordinated Debt Securities offered
by any Prospectus Supplement and the extent, if any, to which such general
provisions may apply to the Junior Subordinated Debt Securities so offered will
be described in the Prospectus Supplement relating to such Junior Subordinated
Debt Securities.
The Junior Subordinated Debt Securities may be issued, from time to time, in
one or more series, under an Indenture, dated as of , 199 (the
"Indenture"), between the Company and The Chase Manhattan Bank, as trustee (the
"Indenture Trustee"), the form of which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
The following summary of certain provisions of the Junior Subordinated Debt
Securities and the Indenture does not purport to be complete and is subject to,
and is qualified in its entirety by express reference to, all of the provisions
of the Indenture, including the definitions therein of certain terms. All
article and section references appearing herein are to articles and sections of
the Indenture, unless otherwise indicated, and capitalized terms which are not
otherwise defined in this Prospectus shall have the meanings specified in the
Indenture.
General. The Junior Subordinated Debt Securities will be direct, unsecured
obligations of the Company. The Indenture does not limit the amount of Junior
Subordinated Debt Securities which may be issued thereunder, and provides that
Junior Subordinated Debt Securities may be issued thereunder in series up to the
aggregate principal amount which may be authorized from time to time by the
Board of Directors of the Company. (Section 3.1)
Reference is made to the Prospectus Supplement which accompanies this
Prospectus for the following terms and other information with respect to the
Junior Subordinated Debt Securities being offered thereby: (i) the designation,
priority, aggregate principal amount and authorized denominations; (ii) the
percentage of their principal amount at which such Junior Subordinated Debt
Securities will be issued; (iii) the date on which such Junior Subordinated Debt
Securities will mature; (iv) the rate per annum at which such Junior
Subordinated Debt Securities will bear interest or the method of determination
of such rate; (v) the dates on which such interest will be payable; (vi) the
rights, if any, to defer payments of interest on the Junior Subordinated Debt
Securities by extending the interest payment period, and the maximum duration of
such extensions; (vii) the place or places where payments on such Junior
Subordinated Debt Securities shall be made; (viii) any redemption terms or
sinking fund provisions; (ix) the terms of subordination of Junior Subordinated
Debt Securities; (x) whether Debt Securities issued in fully registered form
will be represented by either a global security delivered to a depositary and
recorded in a book-entry system maintained by such depositary or by a
certificate delivered to the Holder; (xi) the restrictions, if any, applicable
to the exchange of Junior Subordinated Debt Securities of a series of one form
for another of such series and to the offer, sale and delivery of the Junior
Subordinated Debt Securities; (xii) whether and under what circumstances the
Company will pay additional amounts in the event of certain developments with
respect to United States withholding tax or information reporting laws; or
(xiii) other specific terms.
Unless otherwise specified in the applicable Prospectus Supplement, Junior
Subordinated Debt Securities will be issued in fully registered form without
coupons, will be exchangeable for other Junior Subordinated Debt Securities of
the same series, registered in the same name, for a like aggregate principal
amount in authorized denominations, and will be transferable at any time or from
time to time at the Corporate Trust Office of the Indenture Trustee or at any
other office or agency of the Company maintained for that purpose. No charge
will be made to the Holder for any such exchange or transfer except for any tax
or governmental charge incidental thereto.
Unless otherwise described in the Prospectus Supplement accompanying this
Prospectus, there are no covenants or provisions contained in the Indenture
which afford the Holders of the Junior Subordinated Debt Securities protection
in the event of a highly leveraged transaction involving the Company.
Consolidation, Merger and Sale of Assets. The Indenture provides that the
Company will not consolidate with or merge into any other corporation or convey,
transfer or lease its assets substantially as an entirety unless (a) the
successor is a corporation organized in the United States and expressly assumes
the due and punctual payment of the principal of (and premium, if any) and
interest on all Junior Subordinated Debt Securities issued
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thereunder and the performance of every other covenant of the Indenture on the
part of the Company and (b) immediately thereafter no Event of Default and no
event which, after notice or lapse of time, or both, would become an Event of
Default, shall have happened and be continuing. Upon any such consolidation,
merger, conveyance or transfer, the successor corporation shall succeed to and
be substituted for the Company under the Indenture and thereafter the
predecessor corporation shall be relieved of all obligations and covenants under
the Indenture and the Junior Subordinated Debt Securities. (Article Eight)
Events of Default. The Indenture provides that the following are Events of
Default thereunder with respect to any series of the Junior Subordinated Debt
Securities: (a) default in the payment of the principal of (or premium, if any,
on) any Junior Subordinated Debt Security of such series at its maturity; (b)
default in making a sinking fund payment, if any, when and as the same shall be
due and payable by the terms of the Junior Subordinated Debt Securities of such
series; (c) default for 30 days in the payment of any installment of interest on
any Junior Subordinated Debt Security of such series; (d) default for 90 days
after written notice in the performance of any other covenant in respect of the
Junior Subordinated Debt Securities of such series contained in the Indenture;
(e) certain events of bankruptcy, insolvency or reorganization, or court
appointment of a receiver, liquidator or trustee of the Company; (f) any other
Event of Default provided in the applicable resolution of the Board of Directors
or supplemental indenture under which the Junior Subordinated Debt Securities
are issued; and (g) in the event Junior Subordinated Debt Securities of a series
are issued and sold to a TRV Trust or a trustee of such trust in connection with
the issuance of Trust Securities by such TRV Trust, such TRV Trust shall have
voluntarily or involuntarily dissolved, wound-up its business or otherwise
terminated its existence, except in connection with (i) the distribution of
Junior Subordinated Debt Securities to holders of Trust Securities in
liquidation or redemption of their interests in such TRV Trust upon a Special
Event, (ii) the redemption of all of the outstanding Trust Securities of such
TRV Trust or (iii) certain mergers, consolidations or amalgamations, each as
permitted by the Declaration of such TRV Trust. (Section 5.1) The Indenture
Trustee may withhold notice to the Holders of the Junior Subordinated Debt
Securities of any default with respect thereto (except in the payment of
principal, premium or interest) if it considers such withholding to be in the
interests of such Holders. (Section 6.2)
If an Event of Default with respect to the Junior Subordinated Debt
Securities shall have occurred and be continuing, the Indenture Trustee or the
Holders of 25% in aggregate principal amount of the Junior Subordinated Debt
Securities may declare the principal of all the Junior Subordinated Debt
Securities to be due and payable immediately. (Section 5.2)
The Indenture contains a provision entitling the Indenture Trustee to be
indemnified by the Holders before proceeding to exercise any right or power
under the Indenture at the request of any of the Holders. (Section 6.3). The
Indenture provides that the Holders of a majority in principal amount of the
outstanding Junior Subordinated Debt Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred upon the Indenture Trustee,
with respect to the Junior Subordinated Debt Securities. (Section 5.12) The
right of a Holder to institute a proceeding with respect to the Indenture is
subject to certain conditions precedent including notice and indemnity to the
Indenture Trustee, but the Holder has an absolute right to receipt of principal,
premium, if any, and interest on the Junior Subordinated Debt Securities at the
Stated Maturity (or, in the case of redemption, on the Redemption Date) or to
institute suit for the enforcement thereof. (Sections 5.7 and 5.8)
The Holders of not less than a majority in principal amount of the
Outstanding Junior Subordinated Debt Securities may on behalf of the Holders of
all the Junior Subordinated Debt Securities waive any past defaults except (a) a
default in payment of the principal of (or premium, if any) or interest on any
Junior Subordinated Debt Security and (b) a default in respect of a covenant or
provision of the Indenture which cannot be amended or modified without the
consent of the Holder of each affected Junior Subordinated Debt Security;
provided, however, that if the Junior Subordinated Debt Securities are held by a
TRV Trust or a trustee of such trust, such waiver or modification to such waiver
shall not be effective until the holders of a majority in liquidation preference
of Trust Securities of the applicable TRV Trust shall have consented to such
waiver or modification to such waiver; provided further, that if the consent of
the Holder of each outstanding Junior Subordinated Debt Security is required,
such waiver shall not be effective until each holder of the Trust Securities of
the applicable TRV Trust shall have consented to such waiver. (Section 5.13)
The Indenture requires the Company to furnish to the Indenture Trustee an
annual statement as to defaults, if any, by the Company under the Indenture.
(Section 10.4)
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Modifications and Amendments. Modifications and amendments to the Indenture
may be made by the Company and the Indenture Trustee with the consent of the
Holders of a majority in principal amount of the Junior Subordinated Debt
Securities at the time outstanding of each series which is affected thereby,
provided, that no such modification or amendment may, without the consent of the
Holder of each Junior Subordinated Debt Security affected thereby: (i) modify
the terms of payment of principal, premium, if any, or interest; or (ii) reduce
the percentage of Holders of Junior Subordinated Debt Securities necessary to
modify or amend the Indenture or waive compliance by the Company with any
covenant or past default, provided, further, that if the Junior Subordinated
Debt Securities of such series are held by a TRV Trust or a trustee of such
trust, such supplemental indenture shall not be effective until the holders of a
majority in liquidation preference of Trust Securities of the applicable TRV
Trust shall have consented to such supplemental indenture; provided further,
that if the consent of the Holder of each outstanding Junior Subordinated Debt
Security is required, such supplemental indenture shall not be effective until
each holder of the Trust Securities of the applicable TRV Trust shall have
consented to such supplemental indenture. (Section 9.2)
Discharge and Defeasance. The Company may discharge all of its obligations
(except those set forth below) to holders of any series of Junior Subordinated
Debt Securities issued under the Indenture, which Junior Subordinated Debt
Securities have not already been delivered to the Indenture Trustee for
cancellation and which either have become due and payable or are by their terms
due and payable within one year (or are to be called for redemption within one
year) by depositing with the Indenture Trustee an amount certified to be
sufficient to pay when due the principal of and premium, if any, and interest on
all outstanding Junior Subordinated Debt Securities of such series and to make
any mandatory sinking fund payments thereon when due. (Section 4.1)
Unless otherwise specified in the applicable Prospectus Supplement with
respect to the Junior Subordinated Debt Securities of a series, the Company, at
its option, (i) will be discharged from any and all obligations in respect of
the Junior Subordinated Debt Securities of such series (except for certain
obligations to pay all expenses of the applicable TRV Trust, to register the
transfer or exchange of Junior Subordinated Debt Securities of such series, to
replace mutilated, defaced, destroyed, lost or stolen Junior Subordinated Debt
Securities of such series, and to maintain Paying Agents and hold monies for
payment in trust), or (ii) need not comply with certain covenants specified in
the applicable Prospectus Supplement with respect to the Junior Subordinated
Debt Securities of that series, and the occurrence of an event described in
clause (d) under "Events of Default" above with respect to any defeased covenant
and clause (f) of the "Events of Default" above shall no longer be an Event of
Default if, in either case, the Company deposits with the Indenture Trustee, in
trust, money or U.S. Government Obligations that through the payment of interest
thereon and principal thereof in accordance with their terms will provide money
in an amount sufficient to pay all the principal of (and premium, if any) and
any interest on the Junior Subordinated Debt Securities of such series on the
dates such payments are due (which may include one or more redemption dates
designated by the Company) in accordance with the terms of such Junior
Subordinated Debt Securities. Such a trust may only be established, if, among
other things, the Company shall have delivered an Opinion of Counsel, which, in
the case of a discharge pursuant to clause (i), must be based upon a ruling or
administrative pronouncement of the Internal Revenue Service, to the effect that
the Holders of the Junior Subordinated Debt Securities will not recognize gain
or loss for federal income tax purposes as a result of such deposit or
defeasance and will be subject to federal income tax in the same manner as if
such defeasance had not occurred. (Sections 4.2, 4.3 and 4.4) In the event the
Company omits to comply with its remaining obligations under the Indenture after
a defeasance of the Indenture with respect to the Junior Subordinated Debt
Securities of any series as described under clause (ii) above and the Junior
Subordinated Debt Securities of such series are declared due and payable because
of the occurrence of any undefeased Event of Default, the amount of money and
U.S. Government Obligations on deposit with the Indenture Trustee may be
insufficient to pay amounts due on the Junior Subordinated Debt Securities of
such series at the time of the acceleration resulting from such Event of
Default. However, the Company will remain liable in respect of such payments.
Concerning the Indenture Trustee. The Indenture Trustee has extended
substantial credit facilities (the borrowings under which constitute Senior
Indebtedness) to the Company. The Company and certain of its subsidiaries also
maintain bank accounts, borrow money and have other customary commercial banking
or investment banking relationships with the Indenture Trustee in the ordinary
course of business.
Global Securities. The Indenture provides that the registered Junior
Subordinated Debt Securities of a series may be issued in the form of one or
more fully registered Global Securities (a "Registered Global Security") that
will be deposited with a depositary (a "Depositary") or with a nominee for a
Depositary identified in the
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Prospectus Supplement relating to such series and registered in the name of the
Depositary or a nominee thereof. (Section 3.1) In such case, one or more
Registered Global Securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of
outstanding registered Junior Subordinated Debt Securities to be represented by
such Registered Global Security or Securities. Unless and until it is exchanged
in whole for Junior Subordinated Debt Securities in definitive registered form,
a Registered Global Security may not be transferred except as a whole by the
Depositary for such Registered Global Security to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor. The Depositary currently accepts only
debt securities that are payable in U.S. dollars.
The specific terms of the depositary arrangement with respect to any portion
of a series of Junior Subordinated Debt Securities to be represented by a
Registered Global Security will be described in the Prospectus Supplement
relating to such series.
Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Registered Global Security, the Depositary
for such Registered Global Security will credit, on its book-entry registration
and transfer system, the participants' accounts with the respective principal
amounts of the Debt Securities represented by such Registered Global Security
beneficially owned by such participants. The accounts to be credited shall be
designated by any dealers, underwriters or agents participating in the
distribution of such Junior Subordinated Debt Securities. Ownership of
beneficial interests in such Registered Global Security will be shown on, and
the transfer of such ownership interests will be effected only through, records
maintained by the Depositary for such Registered Global Security (with respect
to interests of participants) and on the records of participants (with respect
to interests of persons holding through participants). The laws of some states
may require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to own, transfer or pledge beneficial interests in Registered Global Securities.
So long as the Depositary for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Junior Subordinated Debt Securities represented by such Registered Global
Security for all purposes under the Indenture. Except as set forth below, owners
of beneficial interests in a Registered Global Security will not be entitled to
have the Junior Subordinated Debt Securities represented by such Registered
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of such Junior Subordinated Debt Securities in
definitive form and will not be considered the owners or holders thereof under
the Indenture. Accordingly, each person owning a beneficial interest in a
Registered Global Security must rely on the procedures of the Depositary for
such Registered Global Security and, if such person is not a participant, on the
procedures of the participant through which such person owns its interest, to
exercise any rights of a holder under the Indenture. The Company understands
that under existing industry practices, if the Company requests any action of
holders or if an owner of a beneficial interest in a Registered Global Security
desires to give or take any action which a holder is entitled to give or take
under the Indenture, the Depositary for such Registered Global Security would
authorize the participants holding the relevant beneficial interests to give or
take such action, and such participants would authorize beneficial owners owning
through such participants to give or take such action or would otherwise act
upon the instructions of beneficial owners holding through them.
Principal, premium, if any, and interest payments on Junior Subordinated
Debt Securities represented by a Registered Global Security registered in the
name of a Depositary or its nominee will be made to such Depositary or its
nominee, as the case may be, as the registered owner of such Registered Global
Security. None of the Company, the Indenture Trustee or any other agent of the
Company or agent of the Indenture Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in such Registered Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for any Junior Subordinated Debt
Securities represented by a Registered Global Security, upon receipt of any
payment of principal, premium or interest in respect of such Registered Global
Security, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in such
Registered Global Security as shown on the records of such
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Depositary. The Company also expects that payments by participants to owners of
beneficial interests in such Registered Global Security held through such
participants will be governed by standing customer instructions and customary
practices, as is now the case with the securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such participants.
If the Depositary for any Junior Subordinated Debt Securities represented by
a Registered Global Security is at any time unwilling or unable to continue as
Depositary or ceases to be a clearing agency registered under the Exchange Act,
and a successor Depositary registered as a clearing agency under the Exchange
Act is not appointed by the Company within 90 days, the Company will issue such
Junior Subordinated Debt Securities in definitive form in exchange for such
Registered Global Security. In addition, the Company may at any time and in its
sole discretion determine not to have any of the Junior Subordinated Debt
Securities of a series represented by one or more Registered Global Securities
and, in such event, will issue Junior Subordinated Debt Securities of such
series in definitive form in exchange for all of the Registered Global Security
or Securities representing such Junior Subordinated Debt Securities. Any Junior
Subordinated Debt Securities issued in definitive form in exchange for a
Registered Global Security will be registered in such name or names as the
Depositary shall instruct the relevant Trustee. It is expected that such
instructions will be based upon directions received by the Depositary from
participants with respect to ownership of beneficial interests in such
Registered Global Security.
The Junior Subordinated Debt Securities of a series may also be issued in
the form of one or more bearer global Securities (a "Bearer Global Security")
that will be deposited with a common depositary for Euro-clear and Cedel Bank,
societe anonyme, or with a nominee for such depositary identified in the
Prospectus Supplement relating to such series. The specific terms and
procedures, including the specific terms of the depositary arrangement, with
respect to any portion of a series of Junior Subordinated Debt Securities to be
represented by a Bearer Global Security will be described in the Prospectus
Supplement relating to such series.
Ranking of Junior Subordinated Debt Securities. The Junior Subordinated Debt
Securities will be subordinated and junior in right of payment to certain
indebtedness of the Company to the extent set forth in the Prospectus Supplement
that will accompany this Prospectus.
Certain Provisions Applicable to TRV Trusts. In the event Junior
Subordinated Debt Securities of a series are issued and sold to a TRV Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
such TRV Trust, such Junior Subordinated Debt Securities subsequently may be
distributed pro rata to the holders of such Trust Securities in connection with
the dissolution of such TRV Trust upon the occurrence of certain events
described in the Prospectus Supplement relating to such Trust Securities. Only
one series of Junior Subordinated Debt Securities will be issued to a TRV Trust,
or a trustee of such trust, in connection with the issuance of Trust Securities
by such TRV Trust. If Junior Subordinated Debt Securities are issued to a TRV
Trust or a trustee of such trust in connection with the issuance of Trust
Securities by such TRV Trust and (i) there shall have occurred and be continuing
an Event of Default, (ii) the Company shall be in default with respect to its
payment of any obligations under the related Guarantee, or (iii) the Company
shall have given notice of its election to defer payments of interest on such
Junior Subordinated Debt Securities by extending the interest payment period as
provided in the Indenture and such period, or any extension thereof, shall be
continuing, then (a) the Company shall not declare or pay any dividend on, make
any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make any
guarantee payment with respect thereto (other than (i) repurchases, redemptions
or other acquisitions of shares of capital stock of the Company in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers, directors or consultants, (ii) as a
result of an exchange or conversion of any class or series of the Company's
capital stock for any other class or series of the Company's capital stock, or
(iii) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged), and (b) the Company shall not make
any payment of interest on or principal of (or premium, if any, on), or repay,
repurchase or redeem any debt securities issued by the Company which rank pari
passu with or junior to such Junior Subordinated Debt Securities. The foregoing,
however, will not apply to any stock dividends paid by the Company where the
dividend stock is the same stock as that on which the dividend is being paid.
In the event Junior Subordinated Debt Securities are issued to a TRV Trust
or a trustee of such trust in connection with the issuance of Trust Securities
of such TRV Trust, for so long as such Trust Securities remain outstanding, the
Company will covenant (i) to directly or indirectly maintain 100% ownership of
the Common
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Securities of such TRV Trust; provided, however, that any permitted successor of
the Company under the Indenture may succeed to the Company's ownership of such
Common Securities, (ii) to not voluntarily dissolve, wind-up or terminate such
TRV Trust, except in connection with a distribution of Junior Subordinated Debt
Securities upon a Special Event and in connection with certain mergers,
consolidations or amalgamations permitted by the Declaration of the applicable
TRV Trust, (iii) to timely perform its duties as Sponsor of the applicable TRV
Trust and (iv) to use its reasonable efforts to cause such TRV Trust (a) to
remain a statutory business trust, except in connection with the distribution of
Junior Subordinated Debt Securities to the holders of Trust Securities in
liquidation of such TRV Trust, the redemption of all of the Trust Securities of
such TRV Trust, or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration of such TRV Trust, and (b) to otherwise continue to
be classified as a grantor trust for United States federal income tax purposes.
(Section 10.5)
DESCRIPTION OF PREFERRED SECURITIES
The following description sets forth certain general terms and provisions of
the Preferred Securities to which any Prospectus Supplement may relate. The
particular terms of the Preferred Securities offered by any Prospectus
Supplement and the extent, if any, to which such general provisions may apply to
the Preferred Securities so offered will be described in the Prospectus
Supplement relating to such Preferred Securities. The description does not
purport to be complete and is subject in all respects to the provisions of,
and is qualified in its entirety by reference to, the forms of Declarations,
which are filed as exhibits to the Registration Statement of which this
Prospectus forms a part.
Each TRV Trust may issue, from time to time, only one series of Preferred
Securities having terms described in the Prospectus Supplement relating thereto.
The Declaration of each TRV Trust authorizes the Regular Trustees of such TRV
Trust to issue on behalf of such TRV Trust one series of Preferred Securities.
Each Declaration will be qualified as an indenture under the Trust Indenture
Act. The Preferred Securities will have such terms, including distributions,
redemption, voting, liquidation rights and such other preferred, deferred or
other special rights or such restrictions as shall be set forth in the
Declaration of the TRV Trust issuing such Preferred Securities or made part of
such Declaration by the Trust Indenture Act. Reference is made to any Prospectus
Supplement relating to the Preferred Securities of a TRV Trust for specific
terms, including (i) the distinctive designation of such Preferred Securities,
(ii) the number of Preferred Securities issued by such TRV Trust, (iii) the
annual distribution rate (or method of determining such rate) for Preferred
Securities issued by such TRV Trust and the date or dates upon which such
distributions shall be payable, (iv) whether distributions on Preferred
Securities issued by such TRV Trust shall be cumulative, and, in the case of
Preferred Securities having such cumulative distribution rights, the date or
dates or method of determining the date or dates from which distributions on
Preferred Securities issued by such TRV Trust shall be cumulative, (v) the
amount or amounts which shall be paid out of the assets of such TRV Trust to the
Holders of Preferred Securities of such TRV Trust upon voluntary or involuntary
dissolution, winding-up or termination of such TRV Trust, (vi) the obligation,
if any, of such TRV Trust to purchase or redeem Preferred Securities issued by
such TRV Trust and the price or prices at which, the period or periods within
which and the terms and conditions upon which Preferred Securities issued by
such TRV Trust shall be purchased or redeemed, in whole or in part, pursuant to
such obligation, (vii) the voting rights, if any, of Preferred Securities issued
by such TRV Trust in addition to those required by law, including the number of
votes per Preferred Security and any requirement for the approval by the holders
of Preferred Securities, or of Preferred Securities issued by one or more TRV
Trusts, or of both, as a condition to specified action or amendments to the
Declaration of such TRV Trust, and (viii) any other relevant rights,
preferences, privileges, limitations or restrictions of Preferred Securities
issued by such TRV Trust consistent with the Declaration of such TRV Trust or
with applicable law. All Preferred Securities offered hereby will be guaranteed
by the Company to the extent set forth below under "Description of Guarantees."
Certain United States federal income tax considerations applicable to any
offering of Preferred Securities will be described in the Prospectus Supplement
relating thereto.
In connection with the issuance of Preferred Securities, each TRV Trust will
issue one series of Common Securities. The Declaration of each TRV Trust
authorizes the Regular Trustees of such trust to issue on behalf of such TRV
Trust one series of Common Securities having such terms including distributions,
redemption, voting, liquidation rights or such restrictions as shall be set
forth therein. The terms of the Common Securities issued by such TRV Trust will
be substantially identical to the terms of the Preferred Securities issued by
such TRV Trust and the Common Securities will rank pari passu, and payments will
be made thereon pro rata with such Preferred Securities except that, upon an
Event of Default under the Declaration of such TRV Trust, the rights of the
holders of such Common Securities to payment in respect of distributions and
payments upon liquidation,
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redemption and otherwise will be subordinated to the rights of the holders of
such Preferred Securities. Except in certain limited circumstances, the Common
Securities of a TRV Trust will also carry the right to vote and to appoint,
remove or replace any of the TRV Trustees of such TRV Trust. All of the Common
Securities of a TRV Trust will be directly or indirectly owned by the Company.
If an Event of Default with respect to a Declaration of any TRV Trust occurs
and is continuing, then the holders of Preferred Securities of such TRV Trust
would rely on the enforcement by the Institutional Trustee of its rights as a
holder of the Junior Subordinated Debt Securities against the Company. In
addition, the holders of a majority in liquidation amount of such Preferred
Securities will have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee
or to direct the exercise of any trust or power conferred upon the Institutional
Trustee under such Declaration, including the right to direct the Institutional
Trustee to exercise the remedies available to it as a holder of the Junior
Subordinated Debt Securities. If the Institutional Trustee fails to enforce its
rights under the Junior Subordinated Debt Securities, any holder of such
Preferred Securities may directly institute a legal proceeding against the
Company to enforce the Institutional Trustee's rights under the Junior
Subordinated Debt Securities without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity. If an Event of
Default with respect to the Declaration of any TRV Trust has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal on the Junior Subordinated Debt Securities 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 of such TRV Trust
may also directly institute a proceeding for enforcement of payment to such
holder of the principal of or interest on the Junior Subordinated Debt
Securities having a principal amount equal to the aggregate liquidation amount
of such Preferred Securities of such holder (a "Direct Action") on or after the
respective due date specified in the Junior Subordinated Debt Securities without
first (i) directing the Institutional Trustee to enforce the terms of the Junior
Subordinated Debt Securities or (ii) instituting a legal proceeding against the
Company to enforce the Institutional Trustee's Rights under the Junior
Subordinated Debt Securities. In connection with such Direct Action, the Company
will be subrogated to the rights of such holder of such Preferred Securities
under such Declaration to the extent of any payment made by the Company to such
holder of such Preferred Securities in such Direct Action. Consequently, the
Company will be entitled to payment of amounts that a holder of Preferred
Securities receives in respect of an unpaid distribution that resulted in the
bringing of a Direct Action to the extent that such holder receives or has
already received full payment with respect to such unpaid distribution from a
TRV Trust. The holders of Preferred Securities of a TRV Trust will not be able
to exercise directly any other remedy available to the holders of the Junior
Subordinated Debt Securities.
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DESCRIPTION OF GUARANTEES
Set forth below is a summary of information concerning the Guarantees that
will be executed and delivered by the Company for the benefit of the holders,
from time to time, of Preferred Securities. Each Guarantee will be qualified as
an indenture under the Trust Indenture Act. The Chase Manhattan Bank will act as
indenture trustee under each Guarantee (the "Guarantee Trustee"). The terms of
each Guarantee will be those set forth in such Guarantee and those made part of
such Guarantee by the Trust Indenture Act. The summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the form of Guarantee, which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part, and
the Trust Indenture Act. Each Guarantee will be held by the Guarantee Trustee
for the benefit of the holders of the Preferred Securities of a TRV Trust.
GENERAL
Pursuant to and to the extent set forth in each Guarantee, the Company will
irrevocably and unconditionally agree to pay in full to the holders of the
Preferred Securities issued by a TRV Trust (except to the extent paid by such
TRV Trust), as and when due, regardless of any defense, right of set-off or
counterclaim which such TRV Trust may have or assert, the following payments
(the "Guarantee Payments"), without duplication: (i) any accrued and unpaid
distributions that are required to be paid on such Preferred Securities, to the
extent such TRV Trust has funds available therefor, and (ii) the redemption
price of $25 per Preferred Security, plus all accrued and unpaid distributions
(the "Redemption Price"), to the extent such TRV Trust has funds available
therefor, with respect to any Preferred Securities called for redemption by such
TRV Trust, and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of such TRV Trust (other than in connection with the distribution of
Junior Subordinated Debt Securities to the holders of Preferred Securities or
the redemption of all of the Preferred Securities) the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid distributions on
such Preferred Securities to the date of payment or (b) the amount of assets of
such TRV Trust remaining for distribution to holders of such Preferred
Securities in liquidation of such TRV Trust. 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 Preferred Securities or by causing such TRV Trust
to pay such amounts to such holders.
Each Guarantee will be a guarantee on a subordinated basis with respect to
the Preferred Securities issued by a TRV Trust from the time of issuance of such
Preferred Securities but will not apply to any payment of distributions or
Redemption Price, or to payments upon the dissolution, winding-up or termination
of such TRV Trust, except to the extent such TRV Trust shall have funds
available therefor. If the Company does not make interest payments on the Junior
Subordinated Debt Securities purchased by a TRV Trust, such TRV Trust will not
pay distributions on the Preferred Securities issued by such TRV Trust and will
not have funds available therefor. See "Description of Junior Subordinated Debt
Securities." The Guarantee, when taken together with the Company's obligations
under the Junior Subordinated Debt Securities, the Indenture and the Declaration
of any TRV Trust, including its obligations to pay costs, expenses, debts and
liabilities of such TRV Trust (other than with respect to Trust Securities) will
provide a full and unconditional guarantee on a subordinated basis by the
Company of payments due on the Preferred Securities issued by such TRV Trust.
CERTAIN COVENANTS OF THE COMPANY
In each Guarantee, the Company will covenant that, so long as any Preferred
Securities issued by a TRV Trust remain outstanding, if there shall have
occurred any event that would constitute an Event of Default under such
Guarantee or the Declaration of such TRV Trust, then (a) the Company shall not
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock or make any guarantee payment with respect thereto (other than
(i) repurchases, redemptions or other acquisitions of shares of capital stock of
the Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Company's capital stock for any other class or series of the
Company's capital stock, or (iii) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged) and (b) the
Company shall not make any payment of interest on, or principal of (or
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premium, if any, on), or repay, repurchase or redeem, any debt securities issued
by the Company which rank pari passu with or junior to such Junior Subordinated
Debt Securities. Each Guarantee, however, will except from the foregoing any
stock dividends paid by the Company where the dividend stock is the same stock
as that on which the dividend is being paid.
MODIFICATION OF THE GUARANTEES; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities to which a Guarantee relates (in which case
no vote will be required), each Guarantee may be amended only with the prior
approval of the holders of not less than a majority in aggregate liquidation
amount of the outstanding related Preferred Securities issued by a TRV Trust.
The manner of obtaining any such approval of holders of such Preferred
Securities will be set forth in an accompanying Prospectus Supplement. All
guarantees and agreements contained in a Guarantee shall bind the successors,
assignees, receivers, trustees and representatives of the Company and shall
inure to the benefit of the holders of the related Preferred Securities of a TRV
Trust then outstanding.
EVENTS OF DEFAULT
An Event of Default under a 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 amount of the Preferred
Securities to which a Guarantee relates 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 Trustee's rights under a
Guarantee, any holder of related Preferred Securities may directly institute a
legal proceeding against the Company to enforce the Guarantee Trustee's rights
under such Guarantee without first instituting a legal proceeding against the
TRV Trust that issued such Preferred Securities, the Guarantee Trustee or any
other person or entity. A holder of Preferred Securities may also directly
institute a legal proceeding against the Company to enforce such holder's right
to receive payment under such Guarantee without first (i) directing the
Guarantee Trustee to enforce the terms of the Guarantee or (ii) instituting a
legal proceeding against the TRV Trust that issued such Preferred Securities or
any other person or entity.
The Company will be required to provide annually to the Guarantee Trustee a
statement as to the performance by the Company of certain of its obligations
under each of the Guarantees and as to any default in such performance.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
a Guarantee, undertakes to perform only such duties as are specifically set
forth in the Guarantee and, after default with respect to a Guarantee, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by a
Guarantee at the request of any holder of Preferred Securities to which such
Guarantee relates unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate as to the Preferred Securities issued by a TRV
Trust upon full payment of the Redemption Price of all Preferred Securities of
such TRV Trust, upon distribution of the Junior Subordinated Debt Securities
held by such TRV Trust to the holders of the Preferred Securities of such TRV
Trust or upon full payment of the amounts payable in accordance with the
Declaration of such TRV Trust upon liquidation of such TRV Trust. Each Guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any holder of related Preferred Securities issued by a TRV Trust must
restore payment of any sums paid under such Preferred Securities or such
Guarantee.
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STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Company and
will rank (i) subordinate and junior in right of payment to all other
liabilities of the Company, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Company and with any guarantee
now or hereafter entered into by the Company in respect of any preferred or
preference stock of any subsidiary of the Company and (iii) senior to the
Company's common stock. The terms of the Preferred Securities provide that each
holder of Preferred Securities issued by a TRV Trust by acceptance thereof
agrees to the subordination provisions and other terms of the applicable
Guarantee.
Each Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
the guarantor to enforce its rights under a Guarantee without instituting a
legal proceeding against any other person or entity).
GOVERNING LAW
The Guarantees will be governed by, and construed in accordance with, the
internal laws of the State of New York.
PLAN OF DISTRIBUTION
Any TRV Trust may sell Preferred Securities in one or more of the following
ways from time to time: (i) to or through underwriters or dealers, (ii) directly
to purchasers, or (iii) through agents. Any such underwriters, dealers or agents
may include Smith Barney. The Prospectus Supplement with respect to any Offered
Securities will set forth (i) the terms of the offering of the Offered
Securities, including the name or names of any underwriters, dealers or agents,
(ii) the purchase price of the Offered Securities and the proceeds to the
Company or a TRV Trust as the case may be, from such sale, (iii) any
underwriting discounts and commissions or agency fees and other items
constituting underwriters' or agents' compensation, (iv) any initial public
offering prices, (v) any discounts or concessions allowed or reallowed or paid
to dealers and (vi) any securities exchange on which such Offered Securities may
be listed. Any initial public offering price, discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Securities will be
named in the Prospectus Supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such Prospectus Supplement. Unless otherwise set forth
in the Prospectus Supplement relating thereto, the obligations of the
underwriters to purchase the Offered Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased.
If dealers are utilized in the sale of Offered Securities, the Company or
the applicable TRV Trust will sell such Offered Securities to the dealers as
principals. The dealers may then resell such Offered Securities to the public at
varying prices to be determined by such dealers at the time of resale. The names
of the dealers and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
Any series of Preferred Securities may be sold from time to time either
directly by a TRV Trust or by its designated agents. Any agent involved in the
offer or sale of the Offered Securities in respect to which this Prospectus is
delivered will be named, and any commissions payable by the Company or the
applicable TRV Trust to such agent will be set forth in the Prospectus
Supplement relating thereto. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the period
of its appointment.
The Preferred Securities may be sold directly by a TRV Trust to
institutional investors or others who may be deemed to be underwriters within
the meaning of the Securities Act with respect to any resale thereof. The terms
of any such sales will be described in the Prospectus Supplement relating
thereto.
If so indicated in the Prospectus Supplement, the Company or the applicable
TRV Trust will authorize agents, underwriters or dealers to solicit offers from
certain types of institutions to purchase Offered Securities
16
<PAGE>
from the Company or such TRV Trust at the public offering price set forth in the
Prospectus Supplement pursuant to delayed delivery contracts (the "Contracts")
providing for payment and delivery on a specified date or dates in the future.
Such Contracts will not be subject to any conditions except (a) the purchase by
an institution of the Offered Securities covered by its Contracts shall not at
the time of delivery be prohibited under the laws of any jurisdiction in the
United States to which such institution is subject and (b) if the Offered
Securities are being sold to underwriters, the Company shall have sold to such
underwriters the total principal amount of the Offered Securities less the
principal amount thereof covered by the Contracts. The Prospectus Supplement
will set forth the commission payable for solicitation of such Contracts.
Smith Barney, a member of the National Association of Securities Dealers,
Inc. (the "NASD"), a subsidiary of the Company and an affiliate of the TRV
Trusts, may participate in distributions of the Offered Securities. Accordingly,
the offerings of Offered Securities will conform with the requirements set forth
in Rule 2720 of the Conduct Rules of the NASD.
This Prospectus together with an applicable Prospectus Supplement may also
be used by Smith Barney in connection with offers and sales of the Offered
Securities (subject to obtaining any necessary approval of the NYSE for any such
offers and sales) in market-making transactions at negotiated prices related to
prevailing market prices at the time of sale. Smith Barney may act as principal
or agent in such transactions. Smith Barney has no obligation to make a market
in any of the Offered Securities and may discontinue any market-making
activities at any time without notice, at its sole discretion.
Agents, dealers and underwriters may be entitled, under agreements with the
Company or a TRV Trust, to indemnification by the Company or the applicable TRV
Trust against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments that such agents,
dealers or underwriters may be required to make in respect thereof. Agents,
dealers and underwriters may be customers of, engage in transactions with, or
perform services for the Company or a TRV Trust in the ordinary course of
business.
Each series of Offered Securities will be a new issue of securities and will
have no established trading market. Any underwriters to whom Offered Securities
are sold for public offering and sale may make a market in such Offered
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The Offered Securities
may or may not be listed on a national securities exchange. No assurance can be
given that there will be a market for the Offered Securities.
LEGAL MATTERS
The validity of the Preferred Securities, the Junior Subordinated Debt
Securities, the Guarantees and certain matters relating thereto and certain
United States federal income tax matters will be passed upon for the Company and
the TRV Trusts by Skadden, Arps, Slate, Meagher & Flom, New York, New York.
Certain legal matters will be passed upon for the Underwriters by Dewey
Ballantine, New York, New York. As to matters governed by Delaware law (other
than the Delaware General Corporation Law), Dewey Ballantine will rely upon the
opinion of Skadden, Arps, Slate, Meagher & Flom. Kenneth J. Bialkin, a partner
of Skadden, Arps, Slate, Meagher & Flom, is a director of the Company and he
and other attorneys in such firm beneficially own an aggregate of less than
one percent of the common stock of the Company.
EXPERTS
The consolidated financial statements and schedules of the Company as of
December 31, 1995 and 1994, and for each of the years in the three-year period
ended December 31, 1995, incorporated by reference or included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995, have been
incorporated by reference herein, in reliance upon the reports (also
incorporated by reference herein) of KPMG Peat Marwick LLP, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing. The reports of KPMG Peat Marwick LLP covering the
December 31, 1995 consolidated financial statements and schedules refer to
changes in the Company's methods of accounting for certain investments in debt
and equity securities in 1994 and methods of accounting for postretirement
benefits other than pensions and accounting for postemployment benefits in 1993.
The preacquisition consolidated financial statements of The Travelers
Corporation and subsidiaries as of December 31, 1993 and for the year then ended
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1995, have been incorporated by
17
<PAGE>
reference herein, in reliance upon the report which includes an explanatory
paragraph referring to changes in the method of accounting for reinsurance in
1993 (also incorporated by reference herein) of Coopers & Lybrand L.L.P.,
independent accountants, and upon the authority of said firm as experts in
accounting and auditing. The combined financial statements as of and for the
year ended December 31, 1995 and 1994 of The Aetna Casualty and Surety Company
and The Standard Fire Insurance Company and their subsidiaries included in the
Company's Current Report on Form 8-K dated April 2, 1996, as amended, have been
incorporated by reference herein, in reliance upon the report (also incorporated
by reference herein) of KPMG Peat Marwick LLP, independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing.
18
<PAGE>
===================================== ===================================
- ------------------------------------- -----------------------------------
NO DEALER, SALESPERSON OR OTHER
INDIVIDUAL HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY TRUST PREFERRED SECURITIES
REPRESENTATIONS, OTHER THAN THOSE
CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS, IN CONNECTION WITH THE
OFFER CONTAINED IN THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING TRAVELERS CAPITAL I
PROSPECTUS, AND, IF GIVEN OR MADE,
ANY SUCH INFORMATION OR REPRESEN-
TATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY TRAVELERS
GROUP INC., TRAVELERS CAPITAL I OR % TRUST PREFERRED SECURITIES
ANY UNDERWRITER, DEALER OR AGENT.
THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY GUARANTEED TO THE EXTENT
OF THE SECURITIES OFFERED HEREBY BY SET FORTH HEREIN BY
ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS TRAVELERS GROUP INC.
NOT QUALIFIED TO DO SO OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO ------------
MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT
PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN (INCLUDING PROSPECTUS
NO CHANGE IN THE AFFAIRS OF DATED , 1996
TRAVELERS GROUP INC. OR TRAVELERS
CAPITAL I SINCE THE DATE HEREOF.
-------------------
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
Summary.............................. S-4
Risk Factors......................... S-8
Use of Proceeds...................... S-12
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends............................ S-12
Accounting Treatment................. S-12
Capitalization....................... S-13
Description of the Preferred
Securities........................... S-14
Description of the Junior
Subordinated Debt Securities....... S-25
Description of Guarantee............. S-30
Effect of Obligations Under the
Junior Subordinated Debt Securities
and the Guarantee.................. S-32
United States Federal Income
Taxation............................. S-33
Underwriting......................... S-36
Legal Matters........................ S-37
PROSPECTUS
Available Information................ 3
Incorporation of Certain Documents by
Reference............................ 4
The Company.......................... 5
TRV Trusts........................... 5
Use of Proceeds...................... 6
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends............................ 6
Description of Junior Subordinated
Debt Securities...................... 7
Description of Preferred
Securities........................... 12
Description of Guarantees............ 14 SMITH BARNEY INC.
Plan of Distribution................. 16
Legal Matters........................ 17
Experts.............................. 17
===================================== ===================================
- ------------------------------------- -----------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses payable by the Company
in connection with the Securities being registered hereby. All of the fees set
forth below are estimates except for the SEC registration fee, the NASD fee and
the NYSE listing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fee........................... $ 344,828
NASD Filing Fee......................................................... 30,500
Rating Agency Fees...................................................... 400,000
Blue Sky Fees and Expenses.............................................. 20,000
Trustees' Fees and Expenses............................................. 5,000
Printing Fees and Expenses.............................................. 250,000
Accounting Fees and Expenses............................................ 75,000
New York Stock Exchange Listing Fee..................................... 170,300
Legal Fees and Expenses................................................. 100,000
Miscellaneous........................................................... 4,372
----------
Total............................................................. $1,400,000
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the Delaware General Corporation Law
("DGCL") empowers a corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that such person acted in
any of the capacities set forth above, against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification may be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to
the corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section
145, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that indemnification provided for by
Section 145 shall be deemed exclusive of any other rights to which the
indemnified party may be entitled; that indemnification provided for by Section
145 shall, unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of such person's heirs, executors and administrators; and
empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to
II-1
<PAGE>
indemnify him against such liabilities under Section 145. Section Three of
Article V of the Company's By-Laws provides that the Company shall indemnify its
directors and officers to the fullest extent permitted by the DGCL.
The Company also provides liability insurance for its directors and officers
which provides for coverage against loss from claims made against directors and
officers in their capacity as such, including, subject to certain exceptions,
liabilities under the federal securities laws. In certain employment agreements,
the Company or its subsidiaries have also agreed to indemnify certain officers
against loss from claims made against such officers in connection with the
performance of their duties under their employment agreements. Such
indemnification is generally to the same extent as provided in the Company's
By-laws.
Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director provided that such provision shall not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts of omissions
not in good faith or which involve international misconduct or a knowing
violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit.
Article Tenth of the Company's Restated Certificate of Incorporation limits the
liability of directors to the fullest extent permitted by Section 102(b)(7).
The Declaration of each TRV Trust provides that no Institutional Trustee or
any of its affiliates, Delaware Trustee or any of its affiliates, or officer,
director, shareholder, member, partner, employee, representative custodian,
nominee or agent of the Institutional Trustee or the Delaware Trustee (each a
"Fiduciary Indemnified Person"), and no Regular Trustee, affiliate of any
Regular Trustee, or any officer, director, shareholder, member, partner,
employee, representative or agent of any Regular Trustee, or any employee or
agent of such TRV Trust or its affiliates (each a "Company Indemnified Person")
shall be liable, responsible or accountable in damages or otherwise to such TRV
Trust, any Affiliate of such TRV Trust or any holder of securities issued by
such TRV Trust, or to any officer, director, shareholder, partner, member,
representative, employee or agent of such TRV Trust or its Affiliates for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Fiduciary Indemnified Person or Company Indemnified Person in
good faith on behalf of such TRV Trust and in a manner such Fiduciary
Indemnified Person or Company Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Fiduciary Indemnified Person
or Company Indemnified Person by such Declaration or by law, except that a
Fiduciary Indemnified Person or a Company Indemnified Person shall be liable for
any loss, damage or claim incurred by reason of such Fiduciary Indemnified
Person's or Company Indemnified Person's gross negligence (or in the case of a
Fiduciary Indemnified Person, negligence) or willful misconduct with respect to
such acts or omissions. The Declaration of each TRV Trust also provides that, to
the full extent permitted by law, the Company shall indemnify any Company
Indemnified Person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of such TRV Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the TRV Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Declaration of each
TRV Trust also provides that to the full extent permitted by law, the Company
shall indemnify any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of such TRV Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the TRV Trust and except that no indemnification shall be made
in respect of any claim, issue or matter as to which such Company Indemnified
Person shall have been adjudged to be liable to the TRV Trust unless and only to
the extent that the Court of Chancery of Delaware or the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
such Court of Chancery or such other court shall deem proper. The Declaration of
each TRV Trust further provides that expenses (including attorneys' fees)
incurred by a Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to in the
immediately preceding two sentences shall be paid by the Company in advance of
the final disposition of such action, suit or preceding upon
II-2
<PAGE>
receipt of an undertaking by or on behalf of such Company Indemnified Person to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Company as authorized in the Declaration. The directors
and officers of the Company and the Regular Trustees are covered by insurance
policies indemnifying them against certain liabilities, including certain
liabilities arising under the Securities Act, which might be incurred by them in
such capacities and against which they cannot be indemnified by the Company or
the TRV Trusts. Any agents, dealers or underwriters who execute any of the
agreements filed as Exhibit 1.1 to this Registration Statement will agree to
indemnify the Company's directors and their officers and the TRV Trustees who
signed the Registration Statement against certain liabilities that may arise
under the Securities Act with respect to information furnished to the Company or
any of the TRV Trusts by or on behalf of any such indemnifying party.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS.
(a) Exhibits
<TABLE>
<C> <S>
1.1 --Form of Underwriting Agreement+
4.1 --Certificate of Trust of Travelers Capital I
4.2 --Certificate of Trust of Travelers Capital II
4.3 --Certificate of Trust of Travelers Capital III
4.4 --Certificate of Trust of Travelers Capital IV
4.5 --Certificate of Trust of Travelers Capital V
4.6 --Form of Amended and Restated Declaration of Trust for Travelers Capital I
4.7 --Form of Amended and Restated Declaration of Trust for Travelers Capital II
4.8 --Form of Amended and Restated Declaration of Trust for Travelers Capital III
4.9 --Form of Amended and Restated Declaration of Trust for Travelers Capital IV
4.10 --Form of Amended and Restated Declaration of Trust for Travelers Capital V
4.11 --Form of Indenture between Travelers Group Inc. and The Chase Manhattan Bank, as Trustee
4.12 --Form of Preferred Security (included in Exhibit 4.4)
4.13 --Form of Common Security (included in Exhibit 4.4)
4.14 --Form of Guarantee with respect to the Preferred Securities of Travelers Capital I
4.15 --Form of Guarantee with respect to the Preferred Securities of Travelers Capital II
4.16 --Form of Guarantee with respect to the Preferred Securities of Travelers Capital III
4.17 --Form of Guarantee with respect to the Preferred Securities of Travelers Capital IV
4.18 --Form of Guarantee with respect to the Preferred Securities of Travelers Capital V
4.19 --Form of Junior Subordinated Debt Securities (included in Exhibit 4.4)
5.1 --Opinion of Skadden, Arps, Slate, Meagher & Flom+
8.1 --Opinion of Skadden, Arps, Slate, Meagher & Flom+
12.1 --Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends of
Travelers Group Inc.
23.1 --Consent of KPMG Peat Marwick LLP, Independent Certified Public Accountants
23.2 --Consent of Coopers & Lybrand L.L.P., Independent Accountants
23.3 --Consent of KPMG Peat Marwick LLP, Independent Certified Public Accountants
23.4 --Consent of Skadden, Arps, Slate, Meagher & Flom (included in Exhibits 5.1 and 8.1)+
24.1 --Powers of Attorney of certain directors
25.1 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Indenture+
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
25.2 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Declaration of Trust of Travelers Capital I+
25.3 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Declaration of Trust of Travelers Capital II+
25.4 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Declaration of Trust of Travelers Capital III+
25.5 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Declaration of Trust of Travelers Capital IV+
25.6 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Trustee under the Declaration of Trust of Travelers Capital V+
25.7 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Preferred Securities Guarantee of Travelers
Group Inc. for the benefit of the holders of Preferred Securities of Travelers Capital I+
25.8 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Preferred Securities Guarantee of Travelers
Group Inc. for the benefit of holders of Preferred Securities of Travelers Capital II+
25.9 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Preferred Securities Guarantee of Travelers
Group Inc. for the benefit of holders of Preferred Securities of Travelers Capital III+
25.10 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Preferred Securities Guarantee of Travelers
Group Inc. for the benefit of holders of Preferred Securities of Travelers Capital IV+
25.11 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, as Guarantee Trustee under the Preferred Securities Guarantee of Travelers
Group Inc. for the benefit of holders of Preferred Securities of Travelers Capital V+
28.1 --Information from Reports Furnished to State Insurance Regulatory Authorities. Schedule P of
the Combined Annual Statement of The Travelers Insurance Group Inc. and its affiliated
property and casualty insurers (incorporated by reference to Exhibit 28.01 of the Form 10-K
for the year ended December 31, 1995 of Travelers Group Inc.) (File No. 1-9924)
</TABLE>
- ------------
+ To be filed by amendment.
ITEM 17. UNDERTAKING.
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;
(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) that, 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 the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is
II-4
<PAGE>
contained in periodic reports filed by Travelers Group Inc. pursuant to
Section 13 or Section 15(d) of the Exchange Act of 1934, as amended (the
"Exchange Act") that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of Travelers
Group Inc.'s Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (and where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions referred to in Item 15 (other than the
insurance policies referred to therein), 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 and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrants of expenses
incurred or paid by a director, officer or controlling person of the Registrants
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities
Act each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Travelers Group
Inc. hereby certifies that it has reasonable grounds to believe that it meets
all of 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 New York, State of New York, on the 20th day of
September, 1996.
TRAVELERS GROUP INC.
By /s/ JAMES DIMON
...........................
Name: James Dimon
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 20th day of September, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------- -----------------------------------
<S> <C>
/s/ SANFORD I. WEILL Chairman of the Board and Chief
........................................... Executive Officer (Principal
Sanford I. Weill Executive Officer) and Director
/s/ HEIDI G. MILLER Senior Vice President and Chief
........................................... Financial Officer (Principal
Heidi G. Miller Financial Officer)
/s/ IRWIN ETTINGER Executive Vice President and Chief
........................................... Accounting Officer (Principal
Irwin Ettinger Accounting Officer)
........................................... Director
C. Michael Armstrong
* Director
...........................................
Kenneth J. Bialkin
* Director
...........................................
Edward H. Budd
........................................... Director
Joseph A. Califano, Jr.
........................................... Director
Douglas D. Danforth
* Director
...........................................
Robert F. Daniell
/s/ JAMES DIMON Director
...........................................
James Dimon
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------- -----------------------------------
<S> <C>
........................................... Director
Leslie B. Disharoon
........................................... Director
Gerald R. Ford
*
........................................... Director
Ann D. Jordan
* Director
...........................................
Robert I. Lipp
* Director
...........................................
Dudley C. Mecum
* Director
...........................................
Andrall E. Pearson
........................................... Director
Frank J. Tasco
* Director
...........................................
Linda J. Wachner
* Director
...........................................
Joseph R. Wright, Jr.
* Director
...........................................
Arthur Zankel
*By: /s/ JAMES DIMON
.......................................
James Dimon
Attorney-in-fact
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Travelers
Capital I, Travelers Capital II, Travelers Capital III, Travelers Capital IV and
Travelers Capital V each hereby certifies that it has reasonable grounds to
believe that it meets all of 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 New York, State of New
York, on the 20th day of September, 1996.
TRAVELERS CAPITAL I
By: /s/ HEIDI G. MILLER
..................................
Heidi G. Miller, as Trustee
By: /s/ IRWIN ETTINGER
..................................
Irwin Ettinger, as Trustee
TRAVELERS CAPITAL II
By: /s/ HEIDI G. MILLER
..................................
Heidi G. Miller, as Trustee
By: /s/ IRWIN ETTINGER
..................................
Irwin Ettinger, as Trustee
TRAVELERS CAPITAL III
By: /s/ HEIDI G. MILLER
..................................
Heidi G. Miller, as Trustee
By: /s/ IRWIN ETTINGER
..................................
Irwin Ettinger, as Trustee
TRAVELERS CAPITAL IV
By: /s/ HEIDI G. MILLER
..................................
Heidi G. Miller, as Trustee
By: /s/ IRWIN ETTINGER
..................................
Irwin Ettinger, as Trustee
TRAVELERS CAPITAL V
By: /s/ HEIDI G. MILLER
..................................
Heidi G. Miller, as Trustee
By: /s/ IRWIN ETTINGER
..................................
Irwin Ettinger, as Trustee
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ---------------------------------------------------------------------------- ----
<C> <S> <C>
1.1 Form of Underwriting Agreement+.............................................
4.1 Certificate of Trust of Travelers Capital I.................................
4.2 Certificate of Trust of Travelers Capital II................................
4.3 Certificate of Trust of Travelers Capital III...............................
4.4 Certificate of Trust of Travelers Capital IV................................
4.5 Certificate of Trust of Travelers Capital V.................................
4.6 Form of Amended and Restated Declaration of Trust for Travelers Capital I...
4.7 Form of Amended and Restated Declaration of Trust for Travelers Capital
II..........................................................................
4.8 Form of Amended and Restated Declaration of Trust for Travelers Capital
III.........................................................................
4.9 Form of Amended and Restated Declaration of Trust for Travelers Capital
IV..........................................................................
4.10 Form of Amended and Restated Declaration of Trust for Travelers Capital V...
4.11 Form of Indenture between Travelers Group Inc. and The Chase Manhattan Bank,
as Trustee..................................................................
4.12 Form of Preferred Security (included in Exhibit 4.4)........................
4.13 Form of Common Security (included in Exhibit 4.4)...........................
4.14 Form of Guarantee with respect to the Preferred Securities of Travelers
Capital I...................................................................
4.15 Form of Guarantee with respect to the Preferred Securities of Travelers
Capital II.................................................................
4.16 Form of Guarantee with respect to the Preferred Securities of Travelers
Capital III................................................................
4.17 Form of Guarantee with respect to the Preferred Securities of Travelers
Capital IV.................................................................
4.18 Form of Guarantee with respect to the Preferred Securities of Travelers
Capital V..................................................................
4.19 Form of Junior Subordinated Debt Securities (included in Exhibit 4.4).......
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom+............................
8.1 Opinion of Skadden,s Arps, Slate, Meagher & Flom+............................
12.1 Computation of Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividends of Travelers Group Inc......................................
23.1 Consent of KPMG Peat Marwick LLP, Independent Certified Public Accountants..
23.2 Consent of Coopers & Lybrand L.L.P., Independent Accountants................
23.3 Consent of KPMG Peat Marwick LLP, Independent Certified Public Accountants..
23.4 Consent of Skadden, Arps, Slate, Meagher & Flom (included in Exhibits 5.1
and 8.1)...................................................................
24.1 Powers of Attorney of certain directors.....................................
25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, as Trustee under the Indenture (bound
separately)+................................................................
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, as Trustee under the Declaration of Trust of
Travelers Capital I (bound separately)+.....................................
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, as Trustee under the Declaration of Trust of
Travelers Capital II (bound separately)+....................................
25.4 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, as Trustee under the Declaration of Trust of
Travelers Capital III (bound separately)+...................................
</TABLE>
<PAGE>
<TABLE>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ---------------------------------------------------------------------------- ----
<C> <S> <C>
25.5 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, as Trustee under the Declaration of Trust of
Travelers Capital IV+......................................................
25.6 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, as Trustee under the Declaration of Trust of
Travelers Capital V+.......................................................
25.7 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, as Guarantee Trustee under the Preferred
Securities Guarantee of Travelers Group Inc. for the benefit of the holders
of Preferred Securities of Travelers Capital I+...........................
25.8 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, as Guarantee Trustee under the Preferred
Securities Guarantee of Travelers Group Inc. for the benefit of holders of
Preferred Securities of Travelers Capital II+..............................
25.9 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, as Guarantee Trustee under the Preferred
Securities Guarantee of Travelers Group Inc. for the benefit of holders of
Preferred Securities of Travelers Capital III+.............................
25.10 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, as Guarantee Trustee under the Preferred
Securities Guarantee of Travelers Group Inc. for the benefit of holders of
Preferred Securities of Travelers Capital IV+..............................
25.11 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, as Guarantee Trustee under the Preferred
Securities Guarantee of Travelers Group Inc. for the benefit of holders of
Preferred Securities of Travelers Capital V+...............................
28.1 Information from Reports Furnished to State Insurance Regulatory
Authorities. Schedule P of the Combined Annual Statement of The Travelers
Insurance Group Inc. and its affiliated property and casualty insurers
(incorporated by reference to Exhibit 28.01 of the Form 10-K for the year
ended December 31, 1995 of Travelers Group Inc.) (File No. 1-9924).........
</TABLE>
- ------------
To be filed by amendment.
EXHIBIT 4.1
CERTIFICATE OF TRUST
The undersigned, the trustees of Travelers Capital I, desiring to
form a business trust pursuant to Delaware Business Trust Act, 12 Del. C. ss.
3810, hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "Travelers Capital I."
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is as
follows:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: September 19, 1996
/s/ Heidi G. Miller
_____________________________________________
Name: Heidi G. Miller, as Regular Trustee
/s/ Irwin Ettinger
_____________________________________________
Name: Irwin Ettinger, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE,
as Trustee
By: /s/ John Cashin
_________________________________________
Name: John Cashin
Title: Senior Trust Officer
21
EXHIBIT 4.2
CERTIFICATE OF TRUST
The undersigned, the trustees of Travelers Capital II, desiring to
form a business trust pursuant to Delaware Business Trust Act, 12 Del. C. ss.
3810, hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "Travelers Capital II."
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is as
follows:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: September 19, 1996
/s/ Heidi G. Miller
_____________________________________________
Name: Heidi G. Miller, as Regular Trustee
/s/ Irwin Ettinger
_____________________________________________
Name: Irwin Ettinger, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE,
as Trustee
By: /s/ John Cashin
_________________________________________
Name: John Cashin
Title: Senior Trust Officer
EXHIBIT 4.3
CERTIFICATE OF TRUST
The undersigned, the trustees of Travelers Capital III, desiring to
form a business trust pursuant to Delaware Business Trust Act, 12 Del. C. ss.
3810, hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "Travelers Capital III."
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is as
follows:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: September 19, 1996
/s/ Heidi G. Miller
_____________________________________________
Name: Heidi G. Miller, as Regular Trustee
/s/ Irwin Ettinger
_____________________________________________
Name: Irwin Ettinger, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE,
as Trustee
By: /s/ John Cashin
_________________________________________
Name: John Cashin
Title: Senior Trust Officer
EXHIBIT 4.4
CERTIFICATE OF TRUST
The undersigned, the trustees of Travelers
Capital IV, desiring to form a business trust pursuant to
Delaware Business Trust Act, 12 Del. C. ss. 3810, hereby
certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "Travelers Capital IV."
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is as
follows:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: September 19, 1996
/s/ Heidi G. Miller
___________________________________________
Name: Heidi G. Miller, as Regular Trustee
/s/ Irwin Ettinger
___________________________________________
Name: Irwin Ettinger, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE,
as Trustee
By: /s/ John Cashin
________________________________________
Name: John Cashin
Title: Senior Trust Officer
EXHIBIT 4.5
CERTIFICATE OF TRUST
The undersigned, the trustees of Travelers Capital V, desiring to
form a business trust pursuant to Delaware Business Trust Act, 12 Del. C. ss.
3810, hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "Travelers Capital V."
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is as
follows:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: September 19, 1996
/s/ Heidi G. Miller
_______________________________________________
Name: Heidi G. Miller, as Regular Trustee
/s/ Irwin Ettinger
_______________________________________________
Name: Irwin Ettinger, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE,
as Trustee
By: /s/ John Cashin
____________________________________________
Name: John Cashin
Title: Senior Trust Officer
EXHIBIT 4.6
==================
AMENDED AND RESTATED DECLARATION
OF TRUST
TRAVELERS CAPITAL I
Dated as of [ ], 1996
==================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.................................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............................... 7
SECTION 2.2 Lists of Holders of Securities................................. 8
SECTION 2.3 Reports by the Institutional Trustee........................... 8
SECTION 2.4 Periodic Reports to Institutional Trustee...................... 8
SECTION 2.5 Evidence of Compliance with Conditions Precedent............... 9
SECTION 2.6 Events of Default; Waiver...................................... 9
SECTION 2.7 Event of Default; Notice....................................... 10
ARTICLE III
ORGANIZATION
SECTION 3.1 Name........................................................... 11
SECTION 3.2 Office......................................................... 11
SECTION 3.3 Purpose........................................................ 12
SECTION 3.4 Authority...................................................... 12
SECTION 3.5 Title to Property of the Trust................................. 12
SECTION 3.6 Powers and Duties of the Regular Trustees...................... 12
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees........... 15
SECTION 3.8 Powers and Duties of the Institutional Trustee................. 16
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee........................................................ 18
SECTION 3.10 Certain Rights of Institutional Trustee........................ 20
SECTION 3.11 Delaware Trustee............................................... 22
SECTION 3.12 Execution of Documents......................................... 22
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities......... 22
SECTION 3.14 Duration of Trust.............................................. 22
SECTION 3.15 Mergers........................................................ 23
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities........................ 24
SECTION 4.2 Responsibilities of the Sponsor................................ 24
i
<PAGE>
Page
----
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees............................................. 25
SECTION 5.2 Delaware Trustee............................................... 26
SECTION 5.3 Institutional Trustee; Eligibility............................. 26
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally...................................................... 27
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees........ 27
SECTION 5.6 Appointment, Removal and Resignation of Trustees............... 28
SECTION 5.7 Vacancies among Trustees....................................... 29
SECTION 5.8 Effect of Vacancies............................................ 30
SECTION 5.9 Meetings....................................................... 30
SECTION 5.10 Delegation of Power............................................ 30
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business....................................................... 31
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.................................................. 31
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities........................ 31
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust........................................... 32
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities......................................... 33
SECTION 9.2 Transfer of Certificates....................................... 34
SECTION 9.3 Deemed Security Holders........................................ 34
SECTION 9.4 Book Entry Interests........................................... 35
SECTION 9.5 Notices to Clearing Agency..................................... 35
SECTION 9.6 Appointment of Successor Clearing Agency....................... 36
ii
<PAGE>
Page
----
SECTION 9.7 Definitive Preferred Security Certificates..................... 36
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.............. 37
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability...................................................... 37
SECTION 10.2 Exculpation.................................................... 38
SECTION 10.3 Fiduciary Duty................................................. 38
SECTION 10.4 Indemnification................................................ 39
SECTION 10.5 Outside Businesses............................................. 42
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.................................................... 42
SECTION 11.2 Certain Accounting Matters..................................... 42
SECTION 11.3 Banking........................................................ 43
SECTION 11.4 Withholding.................................................... 43
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments..................................................... 44
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent........................................................ 46
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee........ 47
SECTION 13.2 Representations and Warranties of Delaware Trustee............. 48
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices........................................................ 49
SECTION 14.2 Governing Law.................................................. 50
SECTION 14.3 Intention of the Parties....................................... 50
iii
<PAGE>
Page
----
SECTION 14.4 Headings....................................................... 50
SECTION 14.5 Successors and Assigns......................................... 50
SECTION 14.6 Partial Enforceability......................................... 51
SECTION 14.7 Counterparts................................................... 51
ANNEX I TERMS OF SECURITIES............................................ I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY
CERTIFICATE....................................................A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE............................A2-1
EXHIBIT B SPECIMEN OF DEBENTURE.......................................... B-1
EXHIBIT C UNDERWRITING AGREEMENT......................................... C-1
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
310(a) ............................................. 5.3(a)
310(c) ............................................. Inapplicable
311(c) ............................................. Inapplicable
312(a) ............................................. 2.2(a)
312(b) ............................................. 2.2(b)
313 ................................................ 2.3
314(a) ............................................. 2.4
314(b) ............................................. Inapplicable
314(c) ............................................. 2.5
314(d) ............................................. Inapplicable
314(f) ............................................. Inapplicable
315(a) ............................................. 3.9(b)
315(c) ............................................. 3.9(a)
315(d) ............................................. 3.9(a)
316(a) ............................................. Annex I
316(c) ............................................. 3.6(e)
- ----------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TRAVELERS CAPITAL I
[ ], 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of [ ], 1996, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Travelers Capital
I (the "Trust"), a trust under the Business Trust Act (as defined herein)
pursuant to a Declaration of Trust dated as of September 19, 1996, (the
"Original Declaration") and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on September 19, 1996, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debentures of the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
<PAGE>
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the City of New York, New York are permitted or
required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
2
<PAGE>
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means [ ], 1996.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 4 Chase MetroTech Center,
Brooklyn, New York 11245.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Travelers in its capacity as issuer of the
Debentures under the Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, N.A., as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Institutional Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"Definitive Preferred Security Certificates" has the meaning set
forth in Section 9.4.
3
<PAGE>
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Distribution" has the meaning set forth in Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of [ ], 1996,
between the Debenture Issuer and the Debenture Trustee, pursuant to which the
Debentures are to be issued.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I
hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class,
4
<PAGE>
who are the record owners of an aggregate liquidation amount representing more
than 50% of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning specified in Section 6.1.
"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.
"Preferred Securities Guarantee" means the guarantee agreement dated
as of [ ], 1996, of the Sponsor in respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such
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Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" has the meaning specified in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer or other officer of
the Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Travelers or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.6.
"Successor Entity" has the meaning set forth in Section 3.15(b).
"Successor Institutional Trustee" has the meaning set forth in
Section 5.6.
"Successor Securities" has the meaning set forth in Section 3.15(b).
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"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Travelers" means Travelers/Aetna Property Casualty Corp., a
Delaware corporation.
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of an aggregate liquidation amount representing 10% or more of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Travelers" means Travelers Group Inc., a Delaware corporation.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
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(b) The Institutional Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Institutional Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders") as of such record date, provided
that neither the Sponsor nor the Regular Trustees on behalf of the Trust shall
be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Institutional
Trustee by the Sponsor and the Regular Trustees on behalf of the Trust, and (ii)
at any other time, within 30 days of receipt by the Trust of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the Institutional Trustee. The Institutional Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity) provided that the Institutional
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Institutional Trustee shall comply with its obligations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after April 15 of each year, the Institutional
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by ss. 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by ss. 313 of the Trust Indenture Act. The Institutional
Trustee shall also comply with the requirements of ss. 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information as required by
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ss. 314 (if any) and the compliance certificate required by ss. 314 of the Trust
Indenture Act in the form, in the manner and at the times required by ss. 314 of
the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of 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 Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) is waivable only with the consent of holders of more than a
majority in principal amount of the Debentures (a "Super Majority")
affected thereby, only the Holders of at least the proportion in aggregate
liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding may waive such Event of Default in respect of the Preferred
Securities under the Declaration.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the 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 Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive
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any past Event of Default with respect to the Common Securities and its
consequences, provided that, if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) is waivable only with the consent of a Super Majority, except
where the Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided in this Section 2.6(b),
only the Holders of at least the proportion in aggregate liquidation
amount of the Common Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding
may waive such Event of Default in respect of the Common Securities under
the Declaration;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default with respect to the Preferred Securities have been so
cured, waived or otherwise eliminated, the Institutional Trustee will be deemed
to be acting solely on behalf of the Holders of the Preferred Securities and
only the Holders of the Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
the waiver of an Event of Default by the Holders of a Majority in liquidation
amount of the Common Securities, any such default shall cease to exist and any
Event of Default with respect to the Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
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SECTION 2.7 Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of (i) all defaults with
respect to the Securities actually known to a Responsible Officer of the
Institutional Trustee, unless such defaults have been cured before the giving of
such notice (the term "defaults" for the purposes of this Section 2.7(a) being
hereby defined to be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein) and (ii) any notice of default received
from the Indenture Trustee with respect to the Debentures, which notice from the
Institutional Trustee to the Holders shall state that an Event of Default under
the Indenture also constitutes an Event of Default with respect to the
Securities; provided that, except for a default in the payment of principal of
(or premium, if any) or interest on any of the Debentures or in the payment of
any sinking fund installment established for the Debentures, the Institutional
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Institutional Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders of the
Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.1(1) and 5.1(2) of the Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Travelers Capital I," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Travelers
Group Inc., 388 Greenwich Street, New York, New York 10013. On ten Business Days
written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; 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 Securities, and
the issuance of Securities shall be limited to a simultaneous issuance of
both Preferred Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
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(i) execute and file with the Commission on behalf of the
Trust a registration statement on Form S-3 or on another appropriate
form, or a registration statement under Rule 462(b) of the
Securities Act, in each case prepared by the Sponsor, including any
pre-effective or post-effective amendments thereto, relating to the
registration under the Securities Act of the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the Preferred Securities
in any State in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc., any other national
stock exchange or the Nasdaq National Market for listing upon notice
of issuance of any Preferred Securities;
(iv) execute and file with the Commission on behalf of the
Trust a registration statement on Form 8-A, prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration of the Preferred Securities under
Section 12(b) of the Exchange Act; and
(v) deliver the Underwriting Agreement providing for the sale
of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Institutional Trustee for the benefit of the
Holders of the Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Institutional Trustee
before taking or refraining from taking any Ministerial Action in relation
to a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss.316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
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(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(o) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
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(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders;
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the
Institutional Trustee) shall not, engage in any activity other than as required
or authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall promptly distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
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(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all
the Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have obtained an opinion
of nationally recognized independent tax counsel experienced in such
matters to the effect that as a result of such action, the Trust will not
fail to be classified as a grantor trust for United States federal income
tax purposes.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Institutional
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Institutional Trustee in accordance with Section 5.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Debentures held by the Institutional Trustee, deposit such funds
into the Institutional Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities from the
Institutional Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Institutional Trustee Account shall
be an
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account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness assigned by a "nationally recognized
statistical rating organization," as that term is defined for purposes of
Rule 436(g)(2) under the Securities Act, is at least equal to the rating
assigned to the Preferred Securities by a nationally recognized
statistical rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the
occurrence of certain Special Events or other specified circumstances
pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) Subject to Section 2.6, the Institutional Trustee shall take any
Legal Action which arises out of or in connection with an Event of Default of
which a Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities, this Declaration, the Business Trust Act and the Trust
Indenture Act.
(h) The Institutional Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments on
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behalf of the Trust with respect to all securities and any such Paying Agent
shall comply with ss. 317(b) of the Trust Indenture Act. Any Paying Agent may be
removed by the Institutional Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Institutional
Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in the exercise
of such rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants
or obligations shall be read into this Declaration against the
Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any
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certificates or opinions furnished to the Institutional Trustee and
conforming to the requirements of this Declaration; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Institutional
Trustee, the Institutional Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional
Trustee Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law; and
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(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of
its employees. The Institutional Trustee shall have the right at any time
to seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of
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any Holder, unless such Holder shall have provided to the Institutional
Trustee security and indemnity, reasonably satisfactory to the
Institutional Trustee, against the costs, expenses (including attorneys'
fees and expenses and the expenses of the Institutional Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Institutional Trustee provided, that,
nothing contained in this Section 3.10(a)(vi) shall be taken to relieve
the Institutional Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
and
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(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, any Regular Trustee or, if there is only one, such Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for fifty-five (55) years from the Closing
Date.
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SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Preferred Securities rank with respect to Distributions
and payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with any other
organization on which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement 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 or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, without
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if in the opinion of a nationally recognized independent tax counsel
experienced in such matters, such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust in an amount equal to 3% or more of the capital
of the Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities,
the Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
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(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 or on another appropriate form, or a
registration statement under Rule 462(b) of the Securities Act, including
any pre-effective or post-effective amendments thereto, relating to the
registration under the Securities Act of the Preferred Securities;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange, any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any pre-effective or
post-effective amendments thereto, relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing
for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities,
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural person,
shall be a person who
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is a resident of the State of Delaware or that, if not a natural person, shall
be an entity which has its principal place of business in the State of Delaware
(the "Delaware Trustee"); (2) there shall be at least one Trustee who is an
employee or officer of, or is affiliated with the Sponsor (a "Regular Trustee");
and (3) one Trustee shall be the Institutional Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee that shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-7 and to the extent Rule 3a-7 requires
a trustee having
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certain qualifications to hold title to the "eligible assets" of the
Trust, the Institutional Trustee shall possess those qualifications.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Institutional Trustee and the Holders of the Common Securities (as if
such Holders were the obligor referred to in ss. 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of ss. 310(b) of the Trust
Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be as set forth in
Section 5.5 hereof.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.
(a) The initial Regular Trustees shall be:
Heidi G. Miller
Irwin Ettinger
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
The initial Institutional Trustee shall be:
The Chase Manhattan Bank, N.A.
450 West 33rd Street - 15th Floor
New York, New York 10001
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(b) Except as expressly set forth in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees; and
(d) a Regular 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 purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee possessing
the qualifications to act as Institutional Trustee under Section 5.3 (a
"Successor Institutional Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Institutional
Trustee and delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
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(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation, the resigning Institutional Trustee or Delaware
Trustee, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
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SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
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SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such 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.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Institutional Trustee (the amount of any such payment
being a "Payment Amount"), the Institutional Trustee shall and is directed to
make a distribution (a "Distribution") of the Payment Amount to Holders.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one
class of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities"). The Trust shall issue no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
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ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of any Holder of the Common Securities or
the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to any Holder of the Common Securities or the
Sponsor; the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Holder of the Common Securities or the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of any
Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event pursuant
to which the Trust shall have been dissolved in accordance with the terms
of the Securities and all of the Debentures endorsed thereon shall have
been distributed to the Holders of Securities in exchange for all of the
Securities;
(vi) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor; or
(vii) upon the expiration of the term of the Trust set forth in
Section 3.14;
provided, that so long as any Preferred Securities are outstanding and are not
held entirely by Travelers, the Trust may not voluntarily liquidate, dissolve,
wind-up or terminate except in connection with the occurrence of a Special
Event.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
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SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole holder of
such Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered Preferred
Security Certificates (the "Definitive Preferred Security Certificates") have
been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
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SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any delay
in delivery of such instructions and each of them may conclusively rely on
and shall be protected in relying on, said instructions of the Clearing
Agency. The Definitive Preferred Security Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto
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or with any rule or regulation of any stock exchange on which Preferred
Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless.
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Preferred
Securities Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
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(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders
of the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
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the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Company Indemnified Person
did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company
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Indemnified Person against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter as
to which such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in paragraphs
(i) and (ii). Such determination shall be made (1) by the Regular Trustees by a
majority vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in a written opinion, or (3)
by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a) shall be paid by the Debenture Issuer in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by the Regular Trustees
by a majority vote of a quorum of disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written opinion
or (iii) the Common Security Holder of the Trust, that, based upon the facts
known to the Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in bad faith
or in a manner that such person
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did not believe to be in or not opposed to the best interests of the Trust, or,
with respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Regular Trustees,
independent legal counsel or Common Security Holder reasonably determine that
such person deliberately breached his duty to the Trust or its Common or
Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Debenture Issuer or Preferred
Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company Indemnified
Person who serves in such capacity at any time while this Section 10.4(a) is in
effect. Any repeal or modification of this Section 10.4(a) shall not affect any
rights or obligations then existing.
(vii) The Debenture Issuer may purchase and maintain insurance on
behalf of any person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Debenture Issuer would
have the power to indemnify him against such liability under the provisions of
this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 10.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any loss,
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liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration or the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligation to indemnify as set forth in this
Section 10.4(b) shall survive the satisfaction and discharge of this
Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the
Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the
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records of the Trust shall be examined by and reported upon as of the end of
each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over
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any amounts to any authority with respect to distributions or allocations to any
Holder, the amount withheld shall be deemed to be a distribution in the amount
of the withholding to the Holder. In the event of any claimed overwithholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Trust may reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
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(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the
Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article
V to increase or decrease the number of, and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) subject to Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government
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agency or regulatory authority which amendment does not have a material
adverse effect on the right, preferences or privileges of the Holders; and
(v) to modify, eliminate and add to any provision of the Declaration
to such extent as may be reasonably necessary to effectuate any of the
foregoing or to otherwise comply with applicable law.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of
Securities representing at least 10% in liquidation amount of such class of
Securities. Such direction shall be given by delivering to the Regular Trustees
one or more calls in a writing stating that the signing Holders of Securities
wish to call a meeting and indicating the general or specific purpose for which
the meeting is to be called. Any Holders of Securities calling a meeting shall
specify in writing the Security Certificates held by the Holders of Securities
exercising the right to call a meeting and only those Securities specified shall
be counted for purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
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(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Institutional Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Institutional Trustee's acceptance
of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a national banking association with
trust powers, duly organized, validly existing and in good standing under
the laws of the United States, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms
of, the Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the
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part of the Institutional Trustee. The Declaration has been duly executed
and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the Articles of Organization or By-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee, of the
Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under
the laws of the State of Delaware, with trust power and authority to
execute and deliver, and to carry out and perform its obligations under
the terms of, the Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the
Declaration.
(d) The Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under
the laws of the
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State of Delaware, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the
Declaration.
(e) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the
Declaration.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
TRAVELERS CAPITAL I
c/o Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Heidi G. Miller
Irwin Ettinger
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of
to the Holders of the Securities):
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) if given to the Institutional Trustee, at its Corporate Trust
Office to the attention of The Institutional Trust Group (or such other
address as the Institutional Trustee may give notice of to the Holders of
the Securities):
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(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice of to the Trust):
Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Charles O. Prince III, Secretary
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
SECTION 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
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SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
______________________________________
Heidi G. Miller, as Regular Trustee
______________________________________
Irwin Ettinger, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By:___________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A., as
Institutional Trustee
By:___________________________________
Name:
Title:
TRAVELERS GROUP INC., as Sponsor
By:___________________________________
Name:
Title:
<PAGE>
ANNEX I
TERMS OF
____% TRUST PREFERRED SECURITIES
____% TRUST COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of [ ], 1996 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. [ ] Preferred Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
eight hundred million dollars ($__________) and a liquidation amount with
respect to the assets of the Trust of $25 per preferred security, are hereby
designated for the purposes of identification only as "____% Trust Preferred
Securities" (the "Preferred Securities"). The Preferred Security Certificates
evidencing the Preferred Securities shall be substantially in the form of
Exhibit A-1 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any stock exchange on which the Preferred Securities
are listed.
(b) Common Securities. [ ] Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of
twenty-four million seven hundred forty-three thousand dollars ($__________) and
a liquidation amount with respect to the assets of the Trust of $25 per common
security, are hereby designated for the purposes of identification only as
"[ ]% Trust Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate
per annum of [ % (the "Coupon Rate") of the stated liquidation amount of $25
per Security, such rate being the rate of interest payable on the Debentures to
be held by the Institutional Trustee. Distributions in arrears beyond the first
date such Distributions are payable (or
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would be payable if not for any Extension Period (as defined below) or default
by the Debenture Issuer on the Debentures) will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from and including [ ], 1996, and will be payable quarterly in
arrears, on March 31, June 30, September 30, and December 31 of each year,
commencing on [ ], 1996. When, as and if available for payment,
Distributions will be made by the Institutional Trustee, except as otherwise
described below. The Debenture Issuer has the right under the Indenture to defer
payments of interest on the Debentures by extending the interest payment period
from time to time on the Debentures for a period not exceeding 20 consecutive
quarters (each an "Extension Period"), during which Extension Period no interest
shall be due and payable on the Debentures, provided that no Extension Period
may extend beyond the date of maturity of the Debentures. As a consequence of
the Debenture Issuer's extension of the interest payment period, Distributions
will also be deferred. Despite such deferral, quarterly Distributions will
continue to accrue with interest thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded quarterly during any such Extension Period.
In the event that the Debenture Issuer exercises its right to extend the
interest payment period, then (a) the Debenture Issuer shall not declare or pay
any dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
or make any guarantee payment with respect thereto (other than (i) repurchases,
redemptions or other acquisitions of shares of capital stock of Travelers in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of Travelers's capital stock for any other class or series of Travelers's
capital stock, or (iii) the purchase of fractional interests in shares of
Travelers's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged) and (b) the
Debenture Issuer shall not make any payment of interest on or principal of (or
premium, if any, on), or repay, repurchase or redeem, any debt securities issued
by the Debenture Issuer that rank pari passu with or junior to the Debentures.
The foregoing, however, will not apply to any stock dividends paid by Travelers
where the dividend stock is the same stock as that on which the dividend is
being paid. Prior to the termination of any such Extension Period, the Debenture
Issuer may further extend such Extension Period; provided that such Extension
Period, together with all such previous and further extensions thereof, may not
exceed 20 consecutive quarters; provided further, that no Extension Period
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may extend beyond the maturity of the Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements. The Regular Trustees will give notice to each Holder of any
Extension Period upon their receipt of notice thereof from the Debenture Issuer.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record dates. While the Preferred Securities remain in
book-entry only form, the relevant record dates shall be one Business Day prior
to the relevant payment dates which payment dates shall correspond to the
interest payment dates on the Debentures. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such payment in respect
of the Preferred Securities will be made as described under the heading
"Description of the Preferred Securities -- Book-Entry Only Issuance -- The
Depository Trust Company" in the Prospectus Supplement dated [ ],
1996, (the "Prospectus Supplement") to the Prospectus dated [ ],
1996 (together, the "Prospectus"), of the Trust included in the Registration
Statement on Form S-3 of the Sponsor, the Trust and certain other business
trusts. The relevant record dates for the Common Securities shall be the same
record date as for the Preferred Securities. If the Preferred Securities shall
not continue to remain in book-entry only form, the relevant record dates for
the Preferred Securities shall conform to the rules of any securities exchange
on which the securities are listed and, if none, shall be selected by the
Regular Trustees, which dates shall be at least 14 days but no more than 60 days
before the relevant payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Debenture Issuer having failed to make a payment under the
Debentures, will cease to be payable to the Person in whose name such Securities
are registered on the relevant record date, and such defaulted Distribution will
instead be payable to the Person in whose name such Securities are registered on
the special record date or other specified date determined in accordance with
the Indenture. If any date on which Distributions are payable on the Securities
is not a Business Day, then payment of the Distribution payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(d) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
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3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities of creditors, distributions in an
amount equal to the aggregate of the stated liquidation amount of $25 per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such dissolution, winding-up or termination, Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate equal to the Coupon Rate, and bearing accrued and unpaid interest
in an amount equal to the accrued and unpaid Distributions on, such Securities
outstanding at such time, have been distributed on a Pro Rata basis to the
Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the Debenture
Issuer or pursuant to a Special Event as described below), the proceeds from
such repayment or payment shall be simultaneously applied to redeem Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid or redeemed at a redemption price of $25 per
Security plus an amount equal to accrued and unpaid Distributions thereon at the
date of the redemption, payable in cash (the "Redemption Price"). Holders shall
be given not less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Securities will be redeemed Pro Rata and the Preferred Securities
to be redeemed will be as described in Section 4(f)(ii) below.
(c) If, at any time, a Tax Event or an Investment Company Event
(each as defined below, and each a "Special Event") shall occur and be
continuing, the Regular Trustees shall, except in certain limited circumstances
in relation to a Tax Event described in this Section 4(c), dissolve the Trust
and, after satisfaction of creditors, cause Debentures held by the Institutional
Trustee, having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate, and
with accrued and unpaid interest equal to accrued and unpaid Distributions on,
the Securities outstanding at such time, to be distributed to the Holders of the
Securities in liquidation of such Holders' interests in the Trust on a Pro Rata
basis, within 90 days following the
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occurrence of such Special Event (the "90 Day Period"); provided, however, that,
in the case of the occurrence of a Tax Event, such dissolution and distribution
shall be conditioned on the Regular Trustees' receipt of an opinion of a
nationally recognized independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue rulings of
the Internal Revenue Service, to the effect that the Holders of the Securities
will not recognize any gain or loss for United States federal income tax
purposes as a result of such dissolution and distribution of Debentures, and
provided further, that, if at the time there is available to the Debenture
Issuer or the Trust the opportunity to eliminate, within the 90 Day Period, the
Special Event by taking some ministerial action, such as filing a form or making
an election, or pursuing some other similar reasonable measure, that will have
no adverse effect on the Trust, the Debenture Issuer or the Holders of the
Securities ("Ministerial Action"), the Debenture Issuer or the Trust will pursue
such Ministerial Action in lieu of dissolution.
If in the case of the occurrence of a Tax Event, (i) the Debenture
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a result
of such Tax Event, there is more than an insubstantial risk that the Debenture
Issuer would be precluded from deducting the interest on the Debentures for
United States federal income tax purposes, even after the Debentures were
distributed to the Holders of Securities in liquidation of such Holders'
interests in the Trust as described in this Section 4(c), or (ii) the Regular
Trustees shall have been informed by such tax counsel that it cannot deliver a
No Recognition Opinion to the Regular Trustees, the Debenture Issuer 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 within 90 days following the
occurrence of such Tax Event, and, following such redemption, Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed shall be redeemed by the Trust at the Redemption Price on
a Pro Rata basis; provided, however, that if at the time there is available to
the Debenture Issuer or the Trust the opportunity to eliminate, within such 90
day period, the Tax Event by taking some Ministerial Action, the Trust or the
Debenture Issuer will pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Tax Event Opinion") to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or (b) any amendment to, or
change in, an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after the date of the Prospectus Supplement), in
either case after the date of the Prospectus Supplement, there is more than an
insubstantial risk that (i) the Trust would be subject to United States federal
income tax with respect to interest accrued or received on the Debentures, (ii)
the Trust would be subject to more than a de minimis
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amount of other taxes, duties or other governmental charges, or (iii) interest
payable to the Trust on the Debentures would not be deductible, in whole or in
part, by the Debenture Issuer for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall
have received an opinion of a nationally recognized independent counsel
experienced in practice under the Investment Company Act (an "Investment Company
Event Opinion") to the effect that, as a result of the occurrence of a change in
law or regulation or a written 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 a more than an insubstantial
risk that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which Change in 1940
Act Law becomes effective on or after the date of the Prospectus Supplement.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) DTC or its nominee (or any successor
Clearing Agency or its nominee), as the record Holder of the Preferred
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and (iii) any
certificates representing Securities, except for certificates representing
Preferred Securities held by DTC or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent beneficial interests in the
Debentures having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid Distributions on
such Securities until such certificates are presented to the Debenture Issuer or
its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Debentures are distributed to Holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use its best
efforts to have the Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed immediately prior to the
distribution of the Debentures.
(f) Redemption or Distribution procedures will be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities
to be redeemed or exchanged not fewer than 30 nor more than 60 days before
the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or
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exchange and the dates on which notices are given pursuant to this Section
4(f)(i), a Redemption/ Distribution Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail, postage prepaid,
to Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of
record by DTC or its nominee (or any successor Clearing Agency or its
nominee) or any nominee, the distribution of the proceeds of such
redemption will be made to each Clearing Agency Participant (or Person on
whose behalf such nominee holds such securities) in accordance with the
procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided, that the Debenture
Issuer has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will deposit irrevocably with DTC or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Preferred Securities and
will give DTC (or any successor Clearing Agency) irrevocable instructions
and authority to pay the Redemption Price to the Holders of the Preferred
Securities, and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, provided that the Debenture Issuer
has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will pay the relevant Redemption Price to the
Holders of such Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on the redemption
date. If a Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the close
of business on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the Securities so called
for redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such Securities
to receive the Redemption Price, but without interest on such Redemption
Price. Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Securities that
have been so called for redemption. If any date fixed for redemption
I-7
<PAGE>
of Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such date fixed
for redemption. If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not paid either by the
Institutional Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, DTC or its nominee (or any successor Clearing Agency or its
nominee) if the Global Certificates have been issued or, if Definitive
Preferred Security Certificates have been issued, to the Holder thereof,
and (B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Debenture Issuer
or its affiliates may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by
private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in aggregate liquidation amount of the Preferred
Securities, voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debentures, to (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercise any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past Event of 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,
provided, however, that, where a consent or action under the Indenture would
require the consent or act of each
I-8
<PAGE>
holder of each Debenture affected thereby, such consent or action under the
Indenture shall not be effective until each Holder of Preferred Securities shall
have consented to such action or provided such consent. The Institutional
Trustee shall not revoke any action previously authorized or approved by a vote
of the Holders of the Preferred Securities. Except with respect to directing the
time, method and place of conducting a proceeding for a remedy available to the
Institutional Trustee, the Institutional Trustee, as holder of the Debentures,
shall not take any of the actions described in clauses (i), (ii), (iii) or (iv)
above unless the Institutional Trustee has obtained an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes. If the
Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Preferred Securities may directly institute a legal proceeding against
the Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures without first instituting a legal proceeding against the
Institutional Trustee or any other Person or entity. If a Declaration Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer 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
also directly institute a proceeding for enforcement of payment to such holder
(a "Direct Action") of the principal of or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder on or after the respective due date specified in the
Debentures without first (i) directing the Institutional Trustee to enforce the
terms of the Debentures or (ii) instituting a legal proceeding directly against
the Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures. Except as provided in the preceding sentence, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures. In connection with such Direct
Action, Travelers will be subrogated to the rights of such holder of Preferred
Securities under the Declaration to the extent of any payment made by Travelers
to such holder of Preferred Securities in such Direct Action.
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 Securities in
the Trust or pursuant to written consent. The Regular Trustees 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 mailed to each Holder of record of Preferred Securities. Each
such notice will include a statement setting forth (i) the date of such meeting
or the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with this Declaration and the terms of
the Securities.
I-9
<PAGE>
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c) and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Event of Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or direct the exercise of any trust or power conferred
upon the Institutional Trustee under the Declaration, including (i) directing
the time, method, place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waiving any past default
and its consequences that is waivable under Section 5.13 of the Indenture, or
(iii) exercising any right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable, provided that, where a consent
or action under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected thereby (a
"Super Majority"), the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
shall not take any action in accordance with the directions of the Holders of
the Common Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Declaration, any Holder of Common Securities may
institute a legal proceeding directly against any Person to enforce the
Institutional Trustee's rights under the
I-10
<PAGE>
Declaration, without first instituting a legal proceeding against the
Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i) above
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
Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the holders of greater than a majority in aggregate principal
amount of the Debentures (a "Super Majority"), the Institutional Trustee may
only give such consent at the
I-11
<PAGE>
direction of the Holders of at least the proportion in liquidation amount of the
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 7(b) unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu and payment thereon shall
be made Pro Rata with the Common Securities except that, where an Event of
Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Institutional Trustee, the rights of Holders of the
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed on the New York Stock Exchange, Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee, including the subordination provisions therein and to the provisions
of the Indenture.
I-12
<PAGE>
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration or the Preferred
Securities Guarantee, and the Indenture to a Holder without charge on written
request to the Sponsor at its principal place of business.
I-13
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS PREFERRED
SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Certificate Number Number of Preferred Securities
CUSIP NO. _____________
Certificate Evidencing Preferred Securities
of
TRAVELERS CAPITAL I
____% Trust Preferred Securities)
(Liquidation Amount $25 per Preferred Security)
TRAVELERS CAPITAL I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that ___________
(the "Holder") is the registered owner of ________ (____) preferred securities
of the Trust representing undivided
A1-1
<PAGE>
beneficial interests in the assets of the Trust designated the [ ]% Trust
Preferred Securities (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, 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 provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of [ ],
1996, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Preferred Securities as set forth
in Annex I thereto. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Preferred Securities Guarantee to the extent provided therein. The Sponsor
will provide a copy of the Declaration, the Preferred Securities Guarantee and
the Indenture to a Holder without charge upon written request to the Sponsor at
its principal place of business.
The Holder of this certificate, by accepting this certificate, is
deemed to have (i) agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) and (ii) agreed to the
terms of the Preferred Securities Guarantee, including that the Preferred
Securities Guarantee is (A) subordinate and junior in right of payment to all
other liabilities of Travelers, (B) pari passu with the most senior preferred or
preference stock now or hereafter issued by Travelers and with any guarantee now
or hereafter issued by Travelers with respect to preferred or preference stock
of Travelers's affiliates and (C) senior to Travelers's common stock.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
A1-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of _______, ____.
___________________________________
Heidi G. Miller, as Trustee
___________________________________
Irwin Ettinger, as Trustee
A1-3
<PAGE>
----------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
____________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
____________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
______________________________________________________________
_______________________________________________________________
___________________________________________________________ agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate)
A1-4
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
TRAVELERS CAPITAL I
[ ]% Trust Common Securities
(Liquidation Amount $25 per Common Security)
TRAVELERS CAPITAL I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Travelers
Group Inc., a Delaware corporation, (the "Holder") is the registered owner of
__________ (________) common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the [ ]% Trust Common
Securities (the "Common Securities"). The Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for transfer
and satisfaction of the other conditions set forth in the Declaration (as
defined below), including, without limitation, Section 9.1 thereof. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of [ ], 1996, as the same may
be amended from time to time (the "Declaration"), including the designation of
the terms of the Common Securities as set forth in Annex I thereto. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Sponsor will provide a copy of the Declaration and the
Indenture to a Holder without charge upon written request to the Sponsor at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
A2-1
<PAGE>
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A2-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of _______________, _______.
___________________________________
Heidi G. Miller, as Trustee
___________________________________
Irwin Ettinger, as Trustee
A2-3
<PAGE>
----------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
____________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
____________________________________
(Insert address and zip code of assignee)
and irrevocably appoints _______________________________________________________
________________________________________________________________________________
___________________________________________________________ agent to transfer
this Common Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common
Security Certificate)
A2-4
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
EXHIBIT 4.7
=====================
AMENDED AND RESTATED DECLARATION
OF TRUST
TRAVELERS CAPITAL II
Dated as of [ ], 1996
=====================
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.................................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............................... 7
SECTION 2.2 Lists of Holders of Securities................................. 8
SECTION 2.3 Reports by the Institutional Trustee........................... 8
SECTION 2.4 Periodic Reports to Institutional Trustee...................... 8
SECTION 2.5 Evidence of Compliance with Conditions Precedent............... 9
SECTION 2.6 Events of Default; Waiver...................................... 9
SECTION 2.7 Event of Default; Notice....................................... 10
ARTICLE III
ORGANIZATION
SECTION 3.1 Name........................................................... 11
SECTION 3.2 Office......................................................... 11
SECTION 3.3 Purpose........................................................ 12
SECTION 3.4 Authority...................................................... 12
SECTION 3.5 Title to Property of the Trust................................. 12
SECTION 3.6 Powers and Duties of the Regular Trustees...................... 12
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees........... 15
SECTION 3.8 Powers and Duties of the Institutional Trustee................. 16
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee........................................................ 18
SECTION 3.10 Certain Rights of Institutional Trustee........................ 20
SECTION 3.11 Delaware Trustee............................................... 22
SECTION 3.12 Execution of Documents......................................... 22
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities......... 22
SECTION 3.14 Duration of Trust.............................................. 22
SECTION 3.15 Mergers........................................................ 23
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities........................ 24
SECTION 4.2 Responsibilities of the Sponsor................................ 24
i
<PAGE>
Page
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ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees............................................. 25
SECTION 5.2 Delaware Trustee............................................... 26
SECTION 5.3 Institutional Trustee; Eligibility............................. 26
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally...................................................... 27
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees........ 27
SECTION 5.6 Appointment, Removal and Resignation of Trustees............... 28
SECTION 5.7 Vacancies among Trustees....................................... 29
SECTION 5.8 Effect of Vacancies............................................ 30
SECTION 5.9 Meetings....................................................... 30
SECTION 5.10 Delegation of Power............................................ 30
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business....................................................... 31
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.................................................. 31
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities........................ 31
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust........................................... 32
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities......................................... 33
SECTION 9.2 Transfer of Certificates....................................... 34
SECTION 9.3 Deemed Security Holders........................................ 34
SECTION 9.4 Book Entry Interests........................................... 35
SECTION 9.5 Notices to Clearing Agency..................................... 35
SECTION 9.6 Appointment of Successor Clearing Agency....................... 36
ii
<PAGE>
Page
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SECTION 9.7 Definitive Preferred Security Certificates..................... 36
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.............. 37
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability...................................................... 37
SECTION 10.2 Exculpation.................................................... 38
SECTION 10.3 Fiduciary Duty................................................. 38
SECTION 10.4 Indemnification................................................ 39
SECTION 10.5 Outside Businesses............................................. 42
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.................................................... 42
SECTION 11.2 Certain Accounting Matters..................................... 42
SECTION 11.3 Banking........................................................ 43
SECTION 11.4 Withholding.................................................... 43
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments..................................................... 44
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent........................................................ 46
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee........ 47
SECTION 13.2 Representations and Warranties of Delaware Trustee............. 48
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices........................................................ 49
SECTION 14.2 Governing Law.................................................. 50
SECTION 14.3 Intention of the Parties....................................... 50
iii
<PAGE>
Page
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SECTION 14.4 Headings....................................................... 50
SECTION 14.5 Successors and Assigns......................................... 50
SECTION 14.6 Partial Enforceability......................................... 51
SECTION 14.7 Counterparts................................................... 51
ANNEX I TERMS OF SECURITIES............................................ I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY
CERTIFICATE....................................................A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE............................A2-1
EXHIBIT B SPECIMEN OF DEBENTURE.......................................... B-1
EXHIBIT C UNDERWRITING AGREEMENT......................................... C-1
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
310(a) ............................................. 5.3(a)
310(c) ............................................. Inapplicable
311(c) ............................................. Inapplicable
312(a) ............................................. 2.2(a)
312(b) ............................................. 2.2(b)
313 ................................................ 2.3
314(a) ............................................. 2.4
314(b) ............................................. Inapplicable
314(c) ............................................. 2.5
314(d) ............................................. Inapplicable
314(f) ............................................. Inapplicable
315(a) ............................................. 3.9(b)
315(c) ............................................. 3.9(a)
315(d) ............................................. 3.9(a)
316(a) ............................................. Annex I
316(c) ............................................. 3.6(e)
- ----------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TRAVELERS CAPITAL II
[ ], 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of [ ], 1996, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Travelers Capital
II (the "Trust"), a trust under the Business Trust Act (as defined herein)
pursuant to a Declaration of Trust dated as of September 19, 1996, (the
"Original Declaration") and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on September 19, 1996, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debentures of the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
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(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the City of New York, New York are permitted or
required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
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"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means [ ], 1996.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 4 Chase MetroTech Center,
Brooklyn, New York 11245.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Travelers Group Inc. in its capacity as
issuer of the Debentures under the Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, N.A., as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Institutional Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"Definitive Preferred Security Certificates" has the meaning set
forth in Section 9.4.
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"Delaware Trustee" has the meaning set forth in Section 5.2.
"Distribution" has the meaning set forth in Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of [ ], 1996, between the
Debenture Issuer and the Debenture Trustee, pursuant to which the Debentures are
to be issued.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I
hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class,
4
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who are the record owners of an aggregate liquidation amount representing more
than 50% of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning specified in Section 6.1.
"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.
"Preferred Securities Guarantee" means the guarantee agreement dated
as of [ ], 1996, of the Sponsor in respect of the Preferred
Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such
5
<PAGE>
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" has the meaning specified in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer or other officer of
the Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Travelers Group Inc. or any successor entity in a
merger, consolidation or amalgamation, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.6.
"Successor Entity" has the meaning set forth in Section 3.15(b).
"Successor Institutional Trustee" has the meaning set forth in
Section 5.6.
"Successor Securities" has the meaning set forth in Section 3.15(b).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
6
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"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of an aggregate liquidation amount representing 10% or more of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Travelers" means Travelers Group Inc., a Delaware corporation.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
7
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(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Institutional Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders") as of such record date, provided
that neither the Sponsor nor the Regular Trustees on behalf of the Trust shall
be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Institutional
Trustee by the Sponsor and the Regular Trustees on behalf of the Trust, and (ii)
at any other time, within 30 days of receipt by the Trust of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the Institutional Trustee. The Institutional Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity) provided that the Institutional
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Institutional Trustee shall comply with its obligations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after April 15 of each year, the Institutional
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by ss. 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by ss. 313 of the Trust Indenture Act. The Institutional
Trustee shall also comply with the requirements of ss. 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information as required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss. 314 of the Trust Indenture Act.
8
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SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of 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 Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) is waivable only with the consent of holders of more than a
majority in principal amount of the Debentures (a "Super Majority")
affected thereby, only the Holders of at least the proportion in aggregate
liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding may waive such Event of Default in respect of the Preferred
Securities under the Declaration.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the 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 Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
9
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(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) is waivable only with the consent of a Super Majority, except
where the Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided in this Section 2.6(b),
only the Holders of at least the proportion in aggregate liquidation
amount of the Common Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding
may waive such Event of Default in respect of the Common Securities under
the Declaration;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default with respect to the Preferred Securities have been so
cured, waived or otherwise eliminated, the Institutional Trustee will be deemed
to be acting solely on behalf of the Holders of the Preferred Securities and
only the Holders of the Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
the waiver of an Event of Default by the Holders of a Majority in liquidation
amount of the Common Securities, any such default shall cease to exist and any
Event of Default with respect to the Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of (i) all defaults with
respect to the Securities actually known to a
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Responsible Officer of the Institutional Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults" for the purposes of
this Section 2.7(a) being hereby defined to be an Event of Default as defined in
the Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein) and (ii) any notice
of default received from the Indenture Trustee with respect to the Debentures,
which notice from the Institutional Trustee to the Holders shall state that an
Event of Default under the Indenture also constitutes an Event of Default with
respect to the Securities; provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures or in the
payment of any sinking fund installment established for the Debentures, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.1(1) and 5.1(2) of the Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Travelers Capital II," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Travelers
Group Inc., 388 Greenwich Street, New York, New York 10013. On ten Business Days
written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; 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 Securities, and
the issuance of Securities shall be limited to a simultaneous issuance of
both Preferred Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
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(i) execute and file with the Commission on behalf of the
Trust a registration statement on Form S-3 or on another appropriate
form, or a registration statement under Rule 462(b) of the
Securities Act, in each case prepared by the Sponsor, including any
pre-effective or post-effective amendments thereto, relating to the
registration under the Securities Act of the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the Preferred Securities
in any State in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc., any other national
stock exchange or the Nasdaq National Market for listing upon notice
of issuance of any Preferred Securities;
(iv) execute and file with the Commission on behalf of the
Trust a registration statement on Form 8-A, prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration of the Preferred Securities under
Section 12(b) of the Exchange Act; and
(v) deliver the Underwriting Agreement providing for the sale
of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Institutional Trustee for the benefit of the
Holders of the Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Institutional Trustee
before taking or refraining from taking any Ministerial Action in relation
to a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss.316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
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(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(o) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
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(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders;
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the
Institutional Trustee) shall not, engage in any activity other than as required
or authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall promptly distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
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(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power conferred
upon the Debenture Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise any right to rescind
or annul any declaration that the principal of all the Debentures shall be due
and payable, or (D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required unless the
Trust shall have obtained an opinion of nationally recognized independent tax
counsel experienced in such matters to the effect that as a result of such
action, the Trust will not fail to be classified as a grantor trust for United
States federal income tax purposes.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Institutional
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Institutional Trustee in accordance with Section 5.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Debentures held by the Institutional Trustee, deposit such funds
into the Institutional Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities from the
Institutional Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Institutional Trustee Account shall
be an
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account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness assigned by a "nationally recognized
statistical rating organization," as that term is defined for purposes of
Rule 436(g)(2) under the Securities Act, is at least equal to the rating
assigned to the Preferred Securities by a nationally recognized
statistical rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the
occurrence of certain Special Events or other specified circumstances
pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) Subject to Section 2.6, the Institutional Trustee shall take any
Legal Action which arises out of or in connection with an Event of Default of
which a Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities, this Declaration, the Business Trust Act and the Trust
Indenture Act.
(h) The Institutional Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments on
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behalf of the Trust with respect to all securities and any such Paying Agent
shall comply with ss. 317(b) of the Trust Indenture Act. Any Paying Agent may be
removed by the Institutional Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Institutional
Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in the exercise
of such rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants
or obligations shall be read into this Declaration against the
Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any
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certificates or opinions furnished to the Institutional Trustee and
conforming to the requirements of this Declaration; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Institutional
Trustee, the Institutional Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional
Trustee Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law; and
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(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of
its employees. The Institutional Trustee shall have the right at any time
to seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of
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any Holder, unless such Holder shall have provided to the Institutional
Trustee security and indemnity, reasonably satisfactory to the
Institutional Trustee, against the costs, expenses (including attorneys'
fees and expenses and the expenses of the Institutional Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Institutional Trustee provided, that,
nothing contained in this Section 3.10(a)(vi) shall be taken to relieve
the Institutional Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
and
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(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, any Regular Trustee or, if there is only one, such Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for fifty-five (55) years from the Closing
Date.
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SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Preferred Securities rank with respect to Distributions
and payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with any other
organization on which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement 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 or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, without
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if in the opinion of a nationally recognized independent tax counsel
experienced in such matters, such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust in an amount equal to 3% or more of the capital
of the Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities,
the Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
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(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 or on another appropriate form, or a
registration statement under Rule 462(b) of the Securities Act, including
any pre-effective or post-effective amendments thereto, relating to the
registration under the Securities Act of the Preferred Securities;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange, any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any pre-effective or
post-effective amendments thereto, relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing
for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities,
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural person,
shall be a person who
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is a resident of the State of Delaware or that, if not a natural person, shall
be an entity which has its principal place of business in the State of Delaware
(the "Delaware Trustee"); (2) there shall be at least one Trustee who is an
employee or officer of, or is affiliated with the Sponsor (a "Regular Trustee");
and (3) one Trustee shall be the Institutional Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee that shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-7 and to the extent Rule 3a-7 requires
a trustee having
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certain qualifications to hold title to the "eligible assets" of the
Trust, the Institutional Trustee shall possess those qualifications.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Institutional Trustee and the Holders of the Common Securities (as if
such Holders were the obligor referred to in ss. 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of ss. 310(b) of the Trust
Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be as set forth in
Section 5.5 hereof.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.
(a) The initial Regular Trustees shall be:
Heidi G. Miller
Irwin Ettinger
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
The initial Institutional Trustee shall be:
The Chase Manhattan Bank, N.A.
450 West 33rd Street, - 15th Floor
New York, New York 10001
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(b) Except as expressly set forth in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees; and
(d) a Regular 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 purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee possessing
the qualifications to act as Institutional Trustee under Section 5.3 (a
"Successor Institutional Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Institutional
Trustee and delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may
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resign from office (without need for prior or subsequent accounting) by an
instrument in writing signed by the Trustee and delivered to the Sponsor and the
Trust, which resignation shall take effect upon such delivery or upon such later
date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation, the resigning Institutional Trustee or Delaware
Trustee, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by
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the Regular Trustees or, if there are more than two, a majority of the Regular
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
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(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such 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.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Institutional Trustee (the amount of any such payment
being a "Payment Amount"), the Institutional Trustee shall and is directed to
make a distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one
class of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust
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having such terms as are set forth in Annex I (the "Common Securities"). The
Trust shall issue no securities or other interests in the assets of the Trust
other than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of any Holder of the Common Securities or
the Sponsor;
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(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to any Holder of the Common Securities or the
Sponsor; the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Holder of the Common Securities or the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of any
Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event pursuant
to which the Trust shall have been dissolved in accordance with the terms
of the Securities and all of the Debentures endorsed thereon shall have
been distributed to the Holders of Securities in exchange for all of the
Securities;
(vi) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor; or
(vii) upon the expiration of the term of the Trust set forth in
Section 3.14;
provided, that so long as any Preferred Securities are outstanding and are not
held entirely by Travelers, the Trust may not voluntarily liquidate, dissolve,
wind-up or terminate except in connection with the occurrence of a Special
Event.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
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(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole holder of
such Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
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SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered Preferred
Security Certificates (the "Definitive Preferred Security Certificates") have
been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
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SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any delay
in delivery of such instructions and each of them may conclusively rely on
and shall be protected in relying on, said instructions of the Clearing
Agency. The Definitive Preferred Security Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which Preferred Securities
may be listed, or to conform to usage.
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SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless.
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Preferred
Securities Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders
of the Preferred Securities shall be entitled to the same limitation of personal
liability extended to
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stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
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the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Company Indemnified Person
did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company
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Indemnified Person against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter as
to which such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in paragraphs
(i) and (ii). Such determination shall be made (1) by the Regular Trustees by a
majority vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in a written opinion, or (3)
by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a) shall be paid by the Debenture Issuer in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by the Regular Trustees
by a majority vote of a quorum of disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written opinion
or (iii) the Common Security Holder of the Trust, that, based upon the facts
known to the Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in bad faith
or in a manner that such person
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did not believe to be in or not opposed to the best interests of the Trust, or,
with respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Regular Trustees,
independent legal counsel or Common Security Holder reasonably determine that
such person deliberately breached his duty to the Trust or its Common or
Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Debenture Issuer or Preferred
Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company Indemnified
Person who serves in such capacity at any time while this Section 10.4(a) is in
effect. Any repeal or modification of this Section 10.4(a) shall not affect any
rights or obligations then existing.
(vii) The Debenture Issuer may purchase and maintain insurance on
behalf of any person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Debenture Issuer would
have the power to indemnify him against such liability under the provisions of
this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 10.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any loss,
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liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration or the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligation to indemnify as set forth in this
Section 10.4(b) shall survive the satisfaction and discharge of this
Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the
Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the
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records of the Trust shall be examined by and reported upon as of the end of
each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over
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any amounts to any authority with respect to distributions or allocations to any
Holder, the amount withheld shall be deemed to be a distribution in the amount
of the withholding to the Holder. In the event of any claimed overwithholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Trust may reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
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(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the
Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article
V to increase or decrease the number of, and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) subject to Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government
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agency or regulatory authority which amendment does not have a material
adverse effect on the right, preferences or privileges of the Holders; and
(v) to modify, eliminate and add to any provision of the Declaration
to such extent as may be reasonably necessary to effectuate any of the
foregoing or to otherwise comply with applicable law.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of
Securities representing at least 10% in liquidation amount of such class of
Securities. Such direction shall be given by delivering to the Regular Trustees
one or more calls in a writing stating that the signing Holders of Securities
wish to call a meeting and indicating the general or specific purpose for which
the meeting is to be called. Any Holders of Securities calling a meeting shall
specify in writing the Security Certificates held by the Holders of Securities
exercising the right to call a meeting and only those Securities specified shall
be counted for purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
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(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Institutional Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Institutional Trustee's acceptance
of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a national banking association with
trust powers, duly organized, validly existing and in good standing under
the laws of the United States, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms
of, the Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the
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part of the Institutional Trustee. The Declaration has been duly executed
and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the Articles of Organization or By-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee, of the
Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under
the laws of the State of Delaware, with trust power and authority to
execute and deliver, and to carry out and perform its obligations under
the terms of, the Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the
Declaration.
(d) The Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under
the laws of the
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State of Delaware, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the
Declaration.
(e) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the
Declaration.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
TRAVELERS CAPITAL II
c/o Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Heidi G. Miller
Irwin Ettinger
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of
to the Holders of the Securities):
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) if given to the Institutional Trustee, at its Corporate Trust
Office to the attention of The Institutional Trust Group (or such other
address as the Institutional Trustee may give notice of to the Holders of
the Securities):
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(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice of to the Trust):
Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Charles O. Prince, III, Secretary
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
SECTION 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
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SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
______________________________________
Heidi G. Miller, as Regular Trustee
______________________________________
Irwin Ettinger, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE
as Delaware Trustee
By:___________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A., as
Institutional Trustee
By:___________________________________
Name:
Title:
TRAVELERS GROUP INC., as Sponsor
By:___________________________________
Name:
Title:
<PAGE>
ANNEX I
TERMS OF
[ ]% TRUST PREFERRED SECURITIES
[ ]% TRUST COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of [ ], 1996 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. __________ Preferred Securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of eight hundred million dollars ($__________) and a liquidation amount
with respect to the assets of the Trust of $25 per preferred security, are
hereby designated for the purposes of identification only as "____% Trust
Preferred Securities" (the "Preferred Securities"). The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice
or to conform to the rules of any stock exchange on which the Preferred
Securities are listed.
(b) Common Securities. __________ Common Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
twenty-four million seven hundred forty-three thousand dollars ($__________) and
a liquidation amount with respect to the assets of the Trust of $25 per common
security, are hereby designated for the purposes of identification only as "[ ]%
Trust Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate
per annum of [ ]% (the "Coupon Rate") of the stated liquidation amount of $25
per Security, such rate being the rate of interest payable on the Debentures to
be held by the Institutional Trustee. Distributions in arrears beyond the first
date such Distributions are payable (or
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would be payable if not for any Extension Period (as defined below) or default
by the Debenture Issuer on the Debentures) will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from and including [ ], 1996, and will be payable quarterly in
arrears, on March 31, June 30, September 30, and December 31 of each year,
commencing on [ ], 1996. When, as and if available for payment,
Distributions will be made by the Institutional Trustee, except as otherwise
described below. The Debenture Issuer has the right under the Indenture to defer
payments of interest on the Debentures by extending the interest payment period
from time to time on the Debentures for a period not exceeding 20 consecutive
quarters (each an "Extension Period"), during which Extension Period no interest
shall be due and payable on the Debentures, provided that no Extension Period
may extend beyond the date of maturity of the Debentures. As a consequence of
the Debenture Issuer's extension of the interest payment period, Distributions
will also be deferred. Despite such deferral, quarterly Distributions will
continue to accrue with interest thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded quarterly during any such Extension Period.
In the event that the Debenture Issuer exercises its right to extend the
interest payment period, then (a) the Debenture Issuer shall not declare or pay
any dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
or make any guarantee payment with respect thereto (other than (i) repurchases,
redemptions or other acquisitions of shares of capital stock of Travelers in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of Travelers's capital stock for any other class or series of Travelers's
capital stock, or (iii) the purchase of fractional interests in shares of
Travelers's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged) and (b) the
Debenture Issuer shall not make any payment of interest on or principal of (or
premium, if any, on), or repay, repurchase or redeem, any debt securities issued
by the Debenture Issuer that rank pari passu with or junior to the Debentures.
The foregoing, however, will not apply to any stock dividends paid by Travelers
where the dividend stock is the same stock as that on which the dividend is
being paid. Prior to the termination of any such Extension Period, the Debenture
Issuer may further extend such Extension Period; provided that such Extension
Period, together with all such previous and further extensions thereof, may not
exceed 20 consecutive quarters; provided further, that no Extension Period
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may extend beyond the maturity of the Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements. The Regular Trustees will give notice to each Holder of any
Extension Period upon their receipt of notice thereof from the Debenture Issuer.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record dates. While the Preferred Securities remain in
book-entry only form, the relevant record dates shall be one Business Day prior
to the relevant payment dates which payment dates shall correspond to the
interest payment dates on the Debentures. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such payment in respect
of the Preferred Securities will be made as described under the heading
"Description of the Preferred Securities -- Book-Entry Only Issuance -- The
Depository Trust Company" in the Prospectus Supplement dated [ ],
1996, (the "Prospectus Supplement") to the Prospectus dated [ ],
1996 (together, the "Prospectus"), of the Trust included in the Registration
Statement on Form S-3 of the Sponsor, the Trust and certain other business
trusts. The relevant record dates for the Common Securities shall be the same
record date as for the Preferred Securities. If the Preferred Securities shall
not continue to remain in book-entry only form, the relevant record dates for
the Preferred Securities shall conform to the rules of any securities exchange
on which the securities are listed and, if none, shall be selected by the
Regular Trustees, which dates shall be at least 14 days but no more than 60 days
before the relevant payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Debenture Issuer having failed to make a payment under the
Debentures, will cease to be payable to the Person in whose name such Securities
are registered on the relevant record date, and such defaulted Distribution will
instead be payable to the Person in whose name such Securities are registered on
the special record date or other specified date determined in accordance with
the Indenture. If any date on which Distributions are payable on the Securities
is not a Business Day, then payment of the Distribution payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(d) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
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3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities of creditors, distributions in an
amount equal to the aggregate of the stated liquidation amount of $25 per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such dissolution, winding-up or termination, Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate equal to the Coupon Rate, and bearing accrued and unpaid interest
in an amount equal to the accrued and unpaid Distributions on, such Securities
outstanding at such time, have been distributed on a Pro Rata basis to the
Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the Debenture
Issuer or pursuant to a Special Event as described below), the proceeds from
such repayment or payment shall be simultaneously applied to redeem Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid or redeemed at a redemption price of $25 per
Security plus an amount equal to accrued and unpaid Distributions thereon at the
date of the redemption, payable in cash (the "Redemption Price"). Holders shall
be given not less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Securities will be redeemed Pro Rata and the Preferred Securities
to be redeemed will be as described in Section 4(f)(ii) below.
(c) If, at any time, a Tax Event or an Investment Company Event
(each as defined below, and each a "Special Event") shall occur and be
continuing, the Regular Trustees shall, except in certain limited circumstances
in relation to a Tax Event described in this Section 4(c), dissolve the Trust
and, after satisfaction of creditors, cause Debentures held by the Institutional
Trustee, having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate, and
with accrued and unpaid interest equal to accrued and unpaid Distributions on,
the Securities outstanding at such time, to be distributed to the Holders of the
Securities in liquidation of such Holders' interests in the Trust on a Pro Rata
basis, within 90 days following the
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<PAGE>
occurrence of such Special Event (the "90 Day Period"); provided, however, that,
in the case of the occurrence of a Tax Event, such dissolution and distribution
shall be conditioned on the Regular Trustees' receipt of an opinion of a
nationally recognized independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue rulings of
the Internal Revenue Service, to the effect that the Holders of the Securities
will not recognize any gain or loss for United States federal income tax
purposes as a result of such dissolution and distribution of Debentures, and
provided further, that, if at the time there is available to the Debenture
Issuer or the Trust the opportunity to eliminate, within the 90 Day Period, the
Special Event by taking some ministerial action, such as filing a form or making
an election, or pursuing some other similar reasonable measure, that will have
no adverse effect on the Trust, the Debenture Issuer or the Holders of the
Securities ("Ministerial Action"), the Debenture Issuer or the Trust will pursue
such Ministerial Action in lieu of dissolution.
If in the case of the occurrence of a Tax Event, (i) the Debenture
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a result
of such Tax Event, there is more than an insubstantial risk that the Debenture
Issuer would be precluded from deducting the interest on the Debentures for
United States federal income tax purposes, even after the Debentures were
distributed to the Holders of Securities in liquidation of such Holders'
interests in the Trust as described in this Section 4(c), or (ii) the Regular
Trustees shall have been informed by such tax counsel that it cannot deliver a
No Recognition Opinion to the Regular Trustees, the Debenture Issuer 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 within 90 days following the
occurrence of such Tax Event, and, following such redemption, Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed shall be redeemed by the Trust at the Redemption Price on
a Pro Rata basis; provided, however, that if at the time there is available to
the Debenture Issuer or the Trust the opportunity to eliminate, within such 90
day period, the Tax Event by taking some Ministerial Action, the Trust or the
Debenture Issuer will pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Tax Event Opinion") to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or (b) any amendment to, or
change in, an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after the date of the Prospectus Supplement), in
either case after the date of the Prospectus Supplement, there is more than an
insubstantial risk that (i) the Trust would be subject to United States federal
income tax with respect to interest accrued or received on the Debentures, (ii)
the Trust would be subject to more than a de minimis
I-5
<PAGE>
amount of other taxes, duties or other governmental charges, or (iii) interest
payable to the Trust on the Debentures would not be deductible, in whole or in
part, by the Debenture Issuer for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall
have received an opinion of a nationally recognized independent counsel
experienced in practice under the Investment Company Act (an "Investment Company
Event Opinion") to the effect that, as a result of the occurrence of a change in
law or regulation or a written 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 a more than an insubstantial
risk that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which Change in 1940
Act Law becomes effective on or after the date of the Prospectus Supplement.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) DTC or its nominee (or any successor
Clearing Agency or its nominee), as the record Holder of the Preferred
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and (iii) any
certificates representing Securities, except for certificates representing
Preferred Securities held by DTC or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent beneficial interests in the
Debentures having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid Distributions on
such Securities until such certificates are presented to the Debenture Issuer or
its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Debentures are distributed to Holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use its best
efforts to have the Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed immediately prior to the
distribution of the Debentures.
(f) Redemption or Distribution procedures will be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities
to be redeemed or exchanged not fewer than 30 nor more than 60 days before
the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or
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exchange and the dates on which notices are given pursuant to this Section
4(f)(i), a Redemption/ Distribution Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail, postage prepaid,
to Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of
record by DTC or its nominee (or any successor Clearing Agency or its
nominee) or any nominee, the distribution of the proceeds of such
redemption will be made to each Clearing Agency Participant (or Person on
whose behalf such nominee holds such securities) in accordance with the
procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided, that the Debenture
Issuer has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will deposit irrevocably with DTC or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Preferred Securities and
will give DTC (or any successor Clearing Agency) irrevocable instructions
and authority to pay the Redemption Price to the Holders of the Preferred
Securities, and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, provided that the Debenture Issuer
has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will pay the relevant Redemption Price to the
Holders of such Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on the redemption
date. If a Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the close
of business on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the Securities so called
for redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such Securities
to receive the Redemption Price, but without interest on such Redemption
Price. Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Securities that
have been so called for redemption. If any date fixed for redemption
I-7
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of Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such date fixed
for redemption. If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not paid either by the
Institutional Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, DTC or its nominee (or any successor Clearing Agency or its
nominee) if the Global Certificates have been issued or, if Definitive
Preferred Security Certificates have been issued, to the Holder thereof,
and (B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Debenture Issuer
or its affiliates may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by
private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in aggregate liquidation amount of the Preferred
Securities, voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debentures, to (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercise any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past Event of 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,
provided, however, that, where a consent or action under the Indenture would
require the consent or act of each
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holder of each Debenture affected thereby, such consent or action under the
Indenture shall not be effective until each Holder of Preferred Securities shall
have consented to such action or provided such consent. The Institutional
Trustee shall not revoke any action previously authorized or approved by a vote
of the Holders of the Preferred Securities. Except with respect to directing the
time, method and place of conducting a proceeding for a remedy available to the
Institutional Trustee, the Institutional Trustee, as holder of the Debentures,
shall not take any of the actions described in clauses (i), (ii), (iii) or (iv)
above unless the Institutional Trustee has obtained an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes. If the
Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Preferred Securities may directly institute a legal proceeding against
the Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures without first instituting a legal proceeding against the
Institutional Trustee or any other Person or entity. If a Declaration Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer 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
also directly institute a proceeding for enforcement of payment to such holder
(a "Direct Action") of the principal of or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder on or after the respective due date specified in the
Debentures without first (i) directing the Institutional Trustee to enforce the
terms of the Debentures or (ii) instituting a legal proceeding directly against
the Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures. Except as provided in the preceding sentence, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures. In connection with such Direct
Action, Travelers will be subrogated to the rights of such holder of Preferred
Securities under the Declaration to the extent of any payment made by Travelers
to such holder of Preferred Securities in such Direct Action.
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 Securities in
the Trust or pursuant to written consent. The Regular Trustees 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 mailed to each Holder of record of Preferred Securities. Each
such notice will include a statement setting forth (i) the date of such meeting
or the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with this Declaration and the terms of
the Securities.
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Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c) and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Event of Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or direct the exercise of any trust or power conferred
upon the Institutional Trustee under the Declaration, including (i) directing
the time, method, place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waiving any past default
and its consequences that is waivable under Section 5.13 of the Indenture, or
(iii) exercising any right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable, provided that, where a consent
or action under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected thereby (a
"Super Majority"), the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
shall not take any action in accordance with the directions of the Holders of
the Common Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Declaration, any Holder of Common Securities may
institute a legal proceeding directly against any Person to enforce the
Institutional Trustee's rights under the
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Declaration, without first instituting a legal proceeding against the
Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i) above
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
Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the holders of greater than a majority in aggregate principal
amount of the Debentures (a "Super Majority"), the Institutional Trustee may
only give such consent at the
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direction of the Holders of at least the proportion in liquidation amount of the
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 7(b) unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu and payment thereon shall
be made Pro Rata with the Common Securities except that, where an Event of
Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Institutional Trustee, the rights of Holders of the
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed on the New York Stock Exchange, Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee, including the subordination provisions therein and to the provisions
of the Indenture.
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12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration or the Preferred
Securities Guarantee, and the Indenture to a Holder without charge on written
request to the Sponsor at its principal place of business.
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<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS PREFERRED
SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Certificate Number Number of Preferred Securities
CUSIP NO. _____________
Certificate Evidencing Preferred Securities
of
TRAVELERS CAPITAL II
[ ]% Trust Preferred Securities)
(Liquidation Amount $25 per Preferred Security)
TRAVELERS CAPITAL II, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that ___________
(the "Holder") is the registered owner of ________ (____) preferred securities
of the Trust representing
A1-1
<PAGE>
undivided beneficial interests in the assets of the Trust designated the [ ]%
Trust Preferred Securities (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, 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
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of [ ], 1996, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Preferred Securities Guarantee to the extent
provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Sponsor at its principal place of business.
The Holder of this certificate, by accepting this certificate, is
deemed to have (i) agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) and (ii) agreed to the
terms of the Preferred Securities Guarantee, including that the Preferred
Securities Guarantee is (A) subordinate and junior in right of payment to all
other liabilities of Travelers, (B) pari passu with the most senior preferred or
preference stock now or hereafter issued by Travelers and with any guarantee now
or hereafter issued by Travelers with respect to preferred or preference stock
of Travelers's affiliates and (C) senior to Travelers's common stock.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
A1-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of _______, ____.
___________________________________
Heidi G. Miller, as Trustee
___________________________________
Irwin Ettinger, as Trustee
A1-3
<PAGE>
----------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
____________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
____________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
______________________________________________________________
_______________________________________________________________
___________________________________________________________ agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate)
A1-4
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
TRAVELERS CAPITAL II
[ ]% Trust Common Securities
(Liquidation Amount $25 per Common Security)
TRAVELERS P&C CAPITAL I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Travelers
Group Inc., a Delaware corporation, (the "Holder") is the registered owner of
__________ (________) common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the [ ]% Trust
Common Securities (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer and satisfaction of the other conditions set forth in
the Declaration (as defined below), including, without limitation, Section 9.1
thereof. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of [ ], 1996, as
the same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Common Securities as set forth in Annex I
thereto. Capitalized terms used herein but not defined shall have the meaning
given them in the Declaration. The Sponsor will provide a copy of the
Declaration and the Indenture to a Holder without charge upon written request to
the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
A2-1
<PAGE>
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A2-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of _______, ____.
___________________________________
Heidi G. Miller, as Trustee
___________________________________
Irwin Ettinger, as Trustee
A2-3
<PAGE>
----------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
____________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
____________________________________
(Insert address and zip code of assignee)
and irrevocably appoints _______________________________________________________
________________________________________________________________________________
___________________________________________________________ agent to transfer
this Common Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common
Security Certificate)
A2-4
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
EXHIBIT 4.8
==============================
AMENDED AND RESTATED DECLARATION
OF TRUST
TRAVELERS CAPITAL III
Dated as of [ ], 1996
==============================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions................................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.............................. 7
SECTION 2.2 Lists of Holders of Securities................................ 8
SECTION 2.3 Reports by the Institutional Trustee.......................... 8
SECTION 2.4 Periodic Reports to Institutional Trustee..................... 8
SECTION 2.5 Evidence of Compliance with Conditions Precedent.............. 9
SECTION 2.6 Events of Default; Waiver..................................... 9
SECTION 2.7 Event of Default; Notice...................................... 10
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.......................................................... 11
SECTION 3.2 Office........................................................ 11
SECTION 3.3 Purpose....................................................... 12
SECTION 3.4 Authority..................................................... 12
SECTION 3.5 Title to Property of the Trust................................ 12
SECTION 3.6 Powers and Duties of the Regular Trustees..................... 12
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.......... 15
SECTION 3.8 Powers and Duties of the Institutional Trustee................ 16
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee....................................................... 18
SECTION 3.10 Certain Rights of Institutional Trustee....................... 20
SECTION 3.11 Delaware Trustee.............................................. 22
SECTION 3.12 Execution of Documents........................................ 22
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities........ 22
SECTION 3.14 Duration of Trust............................................. 22
SECTION 3.15 Mergers....................................................... 23
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities....................... 24
SECTION 4.2 Responsibilities of the Sponsor............................... 24
i
<PAGE>
Page
----
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees............................................ 25
SECTION 5.2 Delaware Trustee.............................................. 26
SECTION 5.3 Institutional Trustee; Eligibility............................ 26
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally.................................................... 27
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees....... 27
SECTION 5.6 Appointment, Removal and Resignation of Trustees.............. 28
SECTION 5.7 Vacancies among Trustees...................................... 29
SECTION 5.8 Effect of Vacancies........................................... 30
SECTION 5.9 Meetings...................................................... 30
SECTION 5.10 Delegation of Power........................................... 30
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business...................................................... 31
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions................................................. 31
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities....................... 31
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.......................................... 32
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities........................................ 33
SECTION 9.2 Transfer of Certificates...................................... 34
SECTION 9.3 Deemed Security Holders....................................... 34
SECTION 9.4 Book Entry Interests.......................................... 35
SECTION 9.5 Notices to Clearing Agency.................................... 35
SECTION 9.6 Appointment of Successor Clearing Agency...................... 36
ii
<PAGE>
Page
----
SECTION 9.7 Definitive Preferred Security Certificates.................... 36
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates............. 37
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability..................................................... 37
SECTION 10.2 Exculpation................................................... 38
SECTION 10.3 Fiduciary Duty................................................ 38
SECTION 10.4 Indemnification............................................... 39
SECTION 10.5 Outside Businesses............................................ 42
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year................................................... 42
SECTION 11.2 Certain Accounting Matters.................................... 42
SECTION 11.3 Banking....................................................... 43
SECTION 11.4 Withholding................................................... 43
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.................................................... 44
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent....................................................... 46
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee....... 47
SECTION 13.2 Representations and Warranties of Delaware Trustee............ 48
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices....................................................... 49
SECTION 14.2 Governing Law................................................. 50
SECTION 14.3 Intention of the Parties...................................... 50
iii
<PAGE>
Page
----
SECTION 14.4 Headings...................................................... 50
SECTION 14.5 Successors and Assigns........................................ 50
SECTION 14.6 Partial Enforceability........................................ 51
SECTION 14.7 Counterparts.................................................. 51
ANNEX I TERMS OF SECURITIES...........................................I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY
CERTIFICATE.................................................A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE..........................A2-1
EXHIBIT B SPECIMEN OF DEBENTURE.........................................B-1
EXHIBIT C UNDERWRITING AGREEMENT........................................C-1
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
310(a)............................................. 5.3(a)
310(c)............................................. Inapplicable
311(c)............................................. Inapplicable
312(a)............................................. 2.2(a)
312(b)............................................. 2.2(b)
313................................................ 2.3
314(a)............................................. 2.4
314(b)............................................. Inapplicable
314(c)............................................. 2.5
314(d)............................................. Inapplicable
314(f)............................................. Inapplicable
315(a)............................................. 3.9(b)
315(c)............................................. 3.9(a)
315(d)............................................. 3.9(a)
316(a)............................................. Annex I
316(c)............................................. 3.6(e)
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TRAVELERS CAPITAL III
[______], 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of [______], 1996, by the Trustees (as defined herein), the Sponsor
(as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Travelers Capital
III (the "Trust"), a trust under the Business Trust Act (as defined herein)
pursuant to a Declaration of Trust dated as of September 19, 1996, (the
"Original Declaration") and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on September 19, 1996, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debentures of the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
<PAGE>
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the City of New York, New York are permitted or
required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
2
<PAGE>
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means [ ], 1996.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 4 Chase MetroTech Center,
Brooklyn, New York 11245.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Travelers Group Inc. in its capacity as
issuer of the Debentures under the Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, N.A., as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Institutional Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"Definitive Preferred Security Certificates" has the meaning set
forth in Section 9.4.
3
<PAGE>
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Distribution" has the meaning set forth in Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of [ ], 1996, between the
Debenture Issuer and the Debenture Trustee, pursuant to which the Debentures are
to be issued.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I
hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class,
4
<PAGE>
who are the record owners of an aggregate liquidation amount representing more
than 50% of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning specified in Section 6.1.
"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.
"Preferred Securities Guarantee" means the guarantee agreement dated
as of [______], 1996, of the Sponsor in respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such
5
<PAGE>
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" has the meaning specified in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer or other officer of
the Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Travelers Group Inc. or any successor entity in a
merger, consolidation or amalgamation, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.6.
"Successor Entity" has the meaning set forth in Section 3.15(b).
"Successor Institutional Trustee" has the meaning set forth in
Section 5.6.
"Successor Securities" has the meaning set forth in Section 3.15(b).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
6
<PAGE>
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of an aggregate liquidation amount representing 10% or more of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Travelers" means Travelers Group Inc., a Delaware corporation.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
7
<PAGE>
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Institutional Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders") as of such record date, provided
that neither the Sponsor nor the Regular Trustees on behalf of the Trust shall
be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Institutional
Trustee by the Sponsor and the Regular Trustees on behalf of the Trust, and (ii)
at any other time, within 30 days of receipt by the Trust of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the Institutional Trustee. The Institutional Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity) provided that the Institutional
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Institutional Trustee shall comply with its obligations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after April 15 of each year, the Institutional
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by ss. 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by ss. 313 of the Trust Indenture Act. The Institutional
Trustee shall also comply with the requirements of ss. 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information as required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss. 314 of the Trust Indenture Act.
8
<PAGE>
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of 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 Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) is waivable only with the consent of holders of more than a
majority in principal amount of the Debentures (a "Super Majority")
affected thereby, only the Holders of at least the proportion in aggregate
liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding may waive such Event of Default in respect of the Preferred
Securities under the Declaration.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the 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 Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
9
<PAGE>
(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 in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) is waivable only with the consent of a Super Majority, except
where the Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided in this Section 2.6(b),
only the Holders of at least the proportion in aggregate liquidation
amount of the Common Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding
may waive such Event of Default in respect of the Common Securities under
the Declaration;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default with respect to the Preferred Securities have been so
cured, waived or otherwise eliminated, the Institutional Trustee will be deemed
to be acting solely on behalf of the Holders of the Preferred Securities and
only the Holders of the Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
the waiver of an Event of Default by the Holders of a Majority in liquidation
amount of the Common Securities, any such default shall cease to exist and any
Event of Default with respect to the Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of (i) all defaults with
respect to the Securities actually known to a
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Responsible Officer of the Institutional Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults" for the purposes of
this Section 2.7(a) being hereby defined to be an Event of Default as defined in
the Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein) and (ii) any notice
of default received from the Indenture Trustee with respect to the Debentures,
which notice from the Institutional Trustee to the Holders shall state that an
Event of Default under the Indenture also constitutes an Event of Default with
respect to the Securities; provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures or in the
payment of any sinking fund installment established for the Debentures, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.1(1) and 5.1(2) of the Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Travelers Capital III," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Travelers
Group Inc., 388 Greenwich Street, New York, New York 10013. On ten Business Days
written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; 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 Securities, and
the issuance of Securities shall be limited to a simultaneous issuance of
both Preferred Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
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(i) execute and file with the Commission on behalf of the
Trust a registration statement on Form S-3 or on another appropriate
form, or a registration statement under Rule 462(b) of the
Securities Act, in each case prepared by the Sponsor, including any
pre-effective or post-effective amendments thereto, relating to the
registration under the Securities Act of the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the Preferred Securities
in any State in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc., any other national
stock exchange or the Nasdaq National Market for listing upon notice
of issuance of any Preferred Securities;
(iv) execute and file with the Commission on behalf of the
Trust a registration statement on Form 8-A, prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration of the Preferred Securities under
Section 12(b) of the Exchange Act; and
(v) deliver the Underwriting Agreement providing for the
sale of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Institutional Trustee for the benefit of the
Holders of the Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Institutional Trustee
before taking or refraining from taking any Ministerial Action in relation
to a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss.316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
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(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(o) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
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(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that
the Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders;
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the
Institutional Trustee) shall not, engage in any activity other than as required
or authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall promptly distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
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(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power conferred
upon the Debenture Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise any right to rescind
or annul any declaration that the principal of all the Debentures shall be due
and payable, or (D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required unless the
Trust shall have obtained an opinion of nationally recognized independent tax
counsel experienced in such matters to the effect that as a result of such
action, the Trust will not fail to be classified as a grantor trust for United
States federal income tax purposes.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Institutional
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Institutional Trustee in accordance with Section 5.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Debentures held by the Institutional Trustee, deposit such funds
into the Institutional Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities from the
Institutional Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Institutional Trustee Account shall
be an
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account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness assigned by a "nationally recognized
statistical rating organization," as that term is defined for purposes of
Rule 436(g)(2) under the Securities Act, is at least equal to the rating
assigned to the Preferred Securities by a nationally recognized
statistical rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the
occurrence of certain Special Events or other specified circumstances
pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) Subject to Section 2.6, the Institutional Trustee shall take any
Legal Action which arises out of or in connection with an Event of Default of
which a Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities, this Declaration, the Business Trust Act and the Trust
Indenture Act.
(h) The Institutional Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments on
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behalf of the Trust with respect to all securities and any such Paying Agent
shall comply with ss. 317(b) of the Trust Indenture Act. Any Paying Agent may be
removed by the Institutional Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Institutional
Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in the exercise
of such rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants
or obligations shall be read into this Declaration against the
Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any
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certificates or opinions furnished to the Institutional Trustee and
conforming to the requirements of this Declaration; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Institutional
Trustee, the Institutional Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional
Trustee Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law; and
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(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of
its employees. The Institutional Trustee shall have the right at any time
to seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of
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any Holder, unless such Holder shall have provided to the Institutional
Trustee security and indemnity, reasonably satisfactory to the
Institutional Trustee, against the costs, expenses (including attorneys'
fees and expenses and the expenses of the Institutional Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Institutional Trustee provided, that,
nothing contained in this Section 3.10(a)(vi) shall be taken to relieve
the Institutional Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
and
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(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, any Regular Trustee or, if there is only one, such Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for fifty-five (55) years from the Closing
Date.
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SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Preferred Securities rank with respect to Distributions
and payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with any other
organization on which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement 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 or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, without
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if in the opinion of a nationally recognized independent tax counsel
experienced in such matters, such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust in an amount equal to 3% or more of the capital
of the Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities,
the Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
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(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 or on another appropriate form, or a
registration statement under Rule 462(b) of the Securities Act, including
any pre-effective or post-effective amendments thereto, relating to the
registration under the Securities Act of the Preferred Securities;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange, any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any pre-effective or
post-effective amendments thereto, relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing
for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities,
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural person,
shall be a person who
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is a resident of the State of Delaware or that, if not a natural person, shall
be an entity which has its principal place of business in the State of Delaware
(the "Delaware Trustee"); (2) there shall be at least one Trustee who is an
employee or officer of, or is affiliated with the Sponsor (a "Regular Trustee");
and (3) one Trustee shall be the Institutional Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee that shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-7 and to the extent Rule 3a-7 requires
a trustee having
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certain qualifications to hold title to the "eligible assets" of the
Trust, the Institutional Trustee shall possess those qualifications.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Institutional Trustee and the Holders of the Common Securities (as if
such Holders were the obligor referred to in ss. 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of ss. 310(b) of the Trust
Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be as set forth in
Section 5.5 hereof.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.
(a) The initial Regular Trustees shall be:
Heidi G. Miller
Irwin Ettinger
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
The initial Institutional Trustee shall be:
The Chase Manhattan Bank, N.A.
450 West 33rd Street - 15th Floor
New York, New York 10001
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(b) Except as expressly set forth in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees; and
(d) a Regular 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 purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee possessing
the qualifications to act as Institutional Trustee under Section 5.3 (a
"Successor Institutional Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Institutional
Trustee and delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may
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resign from office (without need for prior or subsequent accounting) by an
instrument in writing signed by the Trustee and delivered to the Sponsor and the
Trust, which resignation shall take effect upon such delivery or upon such later
date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been
appointed and has accepted such appointment by instrument executed
by such Successor Institutional Trustee and delivered to the Trust,
the Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation, the resigning Institutional Trustee or Delaware
Trustee, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by
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the Regular Trustees or, if there are more than two, a majority of the Regular
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
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(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such 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.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Institutional Trustee (the amount of any such payment
being a "Payment Amount"), the Institutional Trustee shall and is directed to
make a distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one
class of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust
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having such terms as are set forth in Annex I (the "Common Securities"). The
Trust shall issue no securities or other interests in the assets of the Trust
other than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of any Holder of the Common Securities or
the Sponsor;
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(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to any Holder of the Common Securities or the
Sponsor; the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Holder of the Common Securities or the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of any
Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event pursuant
to which the Trust shall have been dissolved in accordance with the terms
of the Securities and all of the Debentures endorsed thereon shall have
been distributed to the Holders of Securities in exchange for all of the
Securities;
(vi) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor; or
(vii) upon the expiration of the term of the Trust set forth in
Section 3.14;
provided, that so long as any Preferred Securities are outstanding and are not
held entirely by Travelers, the Trust may not voluntarily liquidate, dissolve,
wind-up or terminate except in connection with the occurrence of a Special
Event.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
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(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole holder of
such Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
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SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered Preferred
Security Certificates (the "Definitive Preferred Security Certificates") have
been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
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SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any delay
in delivery of such instructions and each of them may conclusively rely on
and shall be protected in relying on, said instructions of the Clearing
Agency. The Definitive Preferred Security Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which Preferred Securities
may be listed, or to conform to usage.
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SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless.
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Preferred
Securities Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders
of the Preferred Securities shall be entitled to the same limitation of personal
liability extended to
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stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
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the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Company Indemnified Person
did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company
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Indemnified Person against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter as
to which such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in paragraphs
(i) and (ii). Such determination shall be made (1) by the Regular Trustees by a
majority vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in a written opinion, or (3)
by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a) shall be paid by the Debenture Issuer in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by the Regular Trustees
by a majority vote of a quorum of disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written opinion
or (iii) the Common Security Holder of the Trust, that, based upon the facts
known to the Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in bad faith
or in a manner that such person
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did not believe to be in or not opposed to the best interests of the Trust, or,
with respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Regular Trustees,
independent legal counsel or Common Security Holder reasonably determine that
such person deliberately breached his duty to the Trust or its Common or
Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Debenture Issuer or Preferred
Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company Indemnified
Person who serves in such capacity at any time while this Section 10.4(a) is in
effect. Any repeal or modification of this Section 10.4(a) shall not affect any
rights or obligations then existing.
(vii) The Debenture Issuer may purchase and maintain insurance on
behalf of any person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Debenture Issuer would
have the power to indemnify him against such liability under the provisions of
this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 10.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any loss,
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liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration or the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligation to indemnify as set forth in this
Section 10.4(b) shall survive the satisfaction and discharge of this
Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the
Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the
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records of the Trust shall be examined by and reported upon as of the end of
each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over
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any amounts to any authority with respect to distributions or allocations to any
Holder, the amount withheld shall be deemed to be a distribution in the amount
of the withholding to the Holder. In the event of any claimed overwithholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Trust may reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
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(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the
Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article
V to increase or decrease the number of, and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) subject to Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government
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agency or regulatory authority which amendment does not have a material
adverse effect on the right, preferences or privileges of the Holders; and
(v) to modify, eliminate and add to any provision of the Declaration
to such extent as may be reasonably necessary to effectuate any of the
foregoing or to otherwise comply with applicable law.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of
Securities representing at least 10% in liquidation amount of such class of
Securities. Such direction shall be given by delivering to the Regular Trustees
one or more calls in a writing stating that the signing Holders of Securities
wish to call a meeting and indicating the general or specific purpose for which
the meeting is to be called. Any Holders of Securities calling a meeting shall
specify in writing the Security Certificates held by the Holders of Securities
exercising the right to call a meeting and only those Securities specified shall
be counted for purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
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(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Institutional Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Institutional Trustee's acceptance
of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a national banking association with
trust powers, duly organized, validly existing and in good standing under
the laws of the United States, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms
of, the Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the
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part of the Institutional Trustee. The Declaration has been duly executed
and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the Articles of Organization or By-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee, of the
Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under
the laws of the State of Delaware, with trust power and authority to
execute and deliver, and to carry out and perform its obligations under
the terms of, the Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the
Declaration.
(d) The Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under
the laws of the
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State of Delaware, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the
Declaration.
(e) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the
Declaration.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
TRAVELERS CAPITAL III
c/o Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Heidi G. Miller
Irwin Ettinger
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of
to the Holders of the Securities):
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) if given to the Institutional Trustee, at its Corporate Trust
Office to the attention of The Institutional Trust Group (or such other
address as the Institutional Trustee may give notice of to the Holders of
the Securities):
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(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice of to the Trust):
Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Charles O. Prince III, Secretary
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
SECTION 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
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SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
_______________________________
Heidi G. Miller, as Regular Trustee
_______________________________
Irwin Ettinger, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By:____________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A., as
Institutional Trustee
By:____________________________
Name:
Title:
TRAVELERS GROUP INC., as Sponsor
By:____________________________
Name:
Title:
<PAGE>
ANNEX I
TERMS OF
[ ]% TRUST PREFERRED SECURITIES
[ ]% TRUST COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of April 30, 1996 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. __________ Preferred Securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of eight hundred million dollars ($__________) and a liquidation amount
with respect to the assets of the Trust of $25 per preferred security, are
hereby designated for the purposes of identification only as "[ ]% Trust
Preferred Securities" (the "Preferred Securities"). The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice
or to conform to the rules of any stock exchange on which the Preferred
Securities are listed.
(b) Common Securities. __________ Common Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
twenty-four million seven hundred forty-three thousand dollars ($__________) and
a liquidation amount with respect to the assets of the Trust of $25 per common
security, are hereby designated for the purposes of identification only as "[ ]%
Trust Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate
per annum of [ ]% (the "Coupon Rate") of the stated liquidation amount of $25
per Security, such rate being the rate of interest payable on the Debentures to
be held by the Institutional Trustee. Distributions in arrears beyond the first
date such Distributions are payable (or
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would be payable if not for any Extension Period (as defined below) or default
by the Debenture Issuer on the Debentures) will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from and including [______], 1996, and will be payable quarterly in arrears, on
March 31, June 30, September 30, and December 31 of each year, commencing on [
], 1996. When, as and if available for payment, Distributions will be made by
the Institutional Trustee, except as otherwise described below. The Debenture
Issuer has the right under the Indenture to defer payments of interest on the
Debentures by extending the interest payment period from time to time on the
Debentures for a period not exceeding 20 consecutive quarters (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures, provided that no Extension Period may extend beyond
the date of maturity of the Debentures. As a consequence of the Debenture
Issuer's extension of the interest payment period, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at the Coupon
Rate compounded quarterly during any such Extension Period. In the event that
the Debenture Issuer exercises its right to extend the interest payment period,
then (a) the Debenture Issuer shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make any
guarantee payment with respect thereto (other than (i) repurchases, redemptions
or other acquisitions of shares of capital stock of Travelers in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of employees, officers, directors or consultants, (ii) as a result
of an exchange or conversion of any class or series of Travelers's capital stock
for any other class or series of Travelers's capital stock, or (iii) the
purchase of fractional interests in shares of Travelers's capital stock pursuant
to the conversion or exchange provisions of such capital stock or the security
being converted or exchanged) and (b) the Debenture Issuer shall not make any
payment of interest on or principal of (or premium, if any, on), or repay,
repurchase or redeem, any debt securities issued by the Debenture Issuer that
rank pari passu with or junior to the Debentures. The foregoing, however, will
not apply to any stock dividends paid by Travelers where the dividend stock is
the same stock as that on which the dividend is being paid. Prior to the
termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period, together with
all such previous and further extensions thereof, may not exceed 20 consecutive
quarters; provided further, that no Extension Period
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may extend beyond the maturity of the Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements. The Regular Trustees will give notice to each Holder of any
Extension Period upon their receipt of notice thereof from the Debenture Issuer.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record dates. While the Preferred Securities remain in
book-entry only form, the relevant record dates shall be one Business Day prior
to the relevant payment dates which payment dates shall correspond to the
interest payment dates on the Debentures. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such payment in respect
of the Preferred Securities will be made as described under the heading
"Description of the Preferred Securities -- Book-Entry Only Issuance -- The
Depository Trust Company" in the Prospectus Supplement dated [______], 1996,
(the "Prospectus Supplement") to the Prospectus dated [_______], 1996 (together,
the "Prospectus"), of the Trust included in the Registration Statement on Form
S-3 of the Sponsor, the Trust and certain other business trusts. The relevant
record dates for the Common Securities shall be the same record date as for the
Preferred Securities. If the Preferred Securities shall not continue to remain
in book-entry only form, the relevant record dates for the Preferred Securities
shall conform to the rules of any securities exchange on which the securities
are listed and, if none, shall be selected by the Regular Trustees, which dates
shall be at least 14 days but no more than 60 days before the relevant payment
dates, which payment dates shall correspond to the interest payment dates on the
Debentures. Distributions payable on any Securities that are not punctually paid
on any Distribution payment date, as a result of the Debenture Issuer having
failed to make a payment under the Debentures, will cease to be payable to the
Person in whose name such Securities are registered on the relevant record date,
and such defaulted Distribution will instead be payable to the Person in whose
name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distribution payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
(d) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
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3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities of creditors, distributions in an
amount equal to the aggregate of the stated liquidation amount of $25 per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such dissolution, winding-up or termination, Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate equal to the Coupon Rate, and bearing accrued and unpaid interest
in an amount equal to the accrued and unpaid Distributions on, such Securities
outstanding at such time, have been distributed on a Pro Rata basis to the
Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the Debenture
Issuer or pursuant to a Special Event as described below), the proceeds from
such repayment or payment shall be simultaneously applied to redeem Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid or redeemed at a redemption price of $25 per
Security plus an amount equal to accrued and unpaid Distributions thereon at the
date of the redemption, payable in cash (the "Redemption Price"). Holders shall
be given not less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Securities will be redeemed Pro Rata and the Preferred Securities
to be redeemed will be as described in Section 4(f)(ii) below.
(c) If, at any time, a Tax Event or an Investment Company Event
(each as defined below, and each a "Special Event") shall occur and be
continuing, the Regular Trustees shall, except in certain limited circumstances
in relation to a Tax Event described in this Section 4(c), dissolve the Trust
and, after satisfaction of creditors, cause Debentures held by the Institutional
Trustee, having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate, and
with accrued and unpaid interest equal to accrued and unpaid Distributions on,
the Securities outstanding at such time, to be distributed to the Holders of the
Securities in liquidation of such Holders' interests in the Trust on a Pro Rata
basis, within 90 days following the
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occurrence of such Special Event (the "90 Day Period"); provided, however, that,
in the case of the occurrence of a Tax Event, such dissolution and distribution
shall be conditioned on the Regular Trustees' receipt of an opinion of a
nationally recognized independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue rulings of
the Internal Revenue Service, to the effect that the Holders of the Securities
will not recognize any gain or loss for United States federal income tax
purposes as a result of such dissolution and distribution of Debentures, and
provided further, that, if at the time there is available to the Debenture
Issuer or the Trust the opportunity to eliminate, within the 90 Day Period, the
Special Event by taking some ministerial action, such as filing a form or making
an election, or pursuing some other similar reasonable measure, that will have
no adverse effect on the Trust, the Debenture Issuer or the Holders of the
Securities ("Ministerial Action"), the Debenture Issuer or the Trust will pursue
such Ministerial Action in lieu of dissolution.
If in the case of the occurrence of a Tax Event, (i) the Debenture
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a result
of such Tax Event, there is more than an insubstantial risk that the Debenture
Issuer would be precluded from deducting the interest on the Debentures for
United States federal income tax purposes, even after the Debentures were
distributed to the Holders of Securities in liquidation of such Holders'
interests in the Trust as described in this Section 4(c), or (ii) the Regular
Trustees shall have been informed by such tax counsel that it cannot deliver a
No Recognition Opinion to the Regular Trustees, the Debenture Issuer 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 within 90 days following the
occurrence of such Tax Event, and, following such redemption, Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed shall be redeemed by the Trust at the Redemption Price on
a Pro Rata basis; provided, however, that if at the time there is available to
the Debenture Issuer or the Trust the opportunity to eliminate, within such 90
day period, the Tax Event by taking some Ministerial Action, the Trust or the
Debenture Issuer will pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Tax Event Opinion") to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or (b) any amendment to, or
change in, an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after the date of the Prospectus Supplement), in
either case after the date of the Prospectus Supplement, there is more than an
insubstantial risk that (i) the Trust would be subject to United States federal
income tax with respect to interest accrued or received on the Debentures, (ii)
the Trust would be subject to more than a de minimis
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amount of other taxes, duties or other governmental charges, or (iii) interest
payable to the Trust on the Debentures would not be deductible, in whole or in
part, by the Debenture Issuer for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall
have received an opinion of a nationally recognized independent counsel
experienced in practice under the Investment Company Act (an "Investment Company
Event Opinion") to the effect that, as a result of the occurrence of a change in
law or regulation or a written 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 a more than an insubstantial
risk that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which Change in 1940
Act Law becomes effective on or after the date of the Prospectus Supplement.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) DTC or its nominee (or any successor
Clearing Agency or its nominee), as the record Holder of the Preferred
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and (iii) any
certificates representing Securities, except for certificates representing
Preferred Securities held by DTC or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent beneficial interests in the
Debentures having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid Distributions on
such Securities until such certificates are presented to the Debenture Issuer or
its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Debentures are distributed to Holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use its best
efforts to have the Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed immediately prior to the
distribution of the Debentures.
(f) Redemption or Distribution procedures will be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities
to be redeemed or exchanged not fewer than 30 nor more than 60 days before
the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or
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exchange and the dates on which notices are given pursuant to this Section
4(f)(i), a Redemption/ Distribution Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail, postage prepaid,
to Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of
record by DTC or its nominee (or any successor Clearing Agency or its
nominee) or any nominee, the distribution of the proceeds of such
redemption will be made to each Clearing Agency Participant (or Person on
whose behalf such nominee holds such securities) in accordance with the
procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided, that the Debenture
Issuer has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will deposit irrevocably with DTC or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Preferred Securities and
will give DTC (or any successor Clearing Agency) irrevocable instructions
and authority to pay the Redemption Price to the Holders of the Preferred
Securities, and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, provided that the Debenture Issuer
has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will pay the relevant Redemption Price to the
Holders of such Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on the redemption
date. If a Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the close
of business on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the Securities so called
for redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such Securities
to receive the Redemption Price, but without interest on such Redemption
Price. Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Securities that
have been so called for redemption. If any date fixed for redemption
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of Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such date fixed
for redemption. If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not paid either by the
Institutional Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, DTC or its nominee (or any successor Clearing Agency or its
nominee) if the Global Certificates have been issued or, if Definitive
Preferred Security Certificates have been issued, to the Holder thereof,
and (B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Debenture Issuer
or its affiliates may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by
private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in aggregate liquidation amount of the Preferred
Securities, voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debentures, to (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercise any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past Event of 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,
provided, however, that, where a consent or action under the Indenture would
require the consent or act of each
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holder of each Debenture affected thereby, such consent or action under the
Indenture shall not be effective until each Holder of Preferred Securities shall
have consented to such action or provided such consent. The Institutional
Trustee shall not revoke any action previously authorized or approved by a vote
of the Holders of the Preferred Securities. Except with respect to directing the
time, method and place of conducting a proceeding for a remedy available to the
Institutional Trustee, the Institutional Trustee, as holder of the Debentures,
shall not take any of the actions described in clauses (i), (ii), (iii) or (iv)
above unless the Institutional Trustee has obtained an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes. If the
Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Preferred Securities may directly institute a legal proceeding against
the Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures without first instituting a legal proceeding against the
Institutional Trustee or any other Person or entity. If a Declaration Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer 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
also directly institute a proceeding for enforcement of payment to such holder
(a "Direct Action") of the principal of or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder on or after the respective due date specified in the
Debentures without first (i) directing the Institutional Trustee to enforce the
terms of the Debentures or (ii) instituting a legal proceeding directly against
the Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures. Except as provided in the preceding sentence, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures. In connection with such Direct
Action, Travelers will be subrogated to the rights of such holder of Preferred
Securities under the Declaration to the extent of any payment made by Travelers
to such holder of Preferred Securities in such Direct Action.
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 Securities in
the Trust or pursuant to written consent. The Regular Trustees 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 mailed to each Holder of record of Preferred Securities. Each
such notice will include a statement setting forth (i) the date of such meeting
or the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with this Declaration and the terms of
the Securities.
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Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c) and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Event of Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or direct the exercise of any trust or power conferred
upon the Institutional Trustee under the Declaration, including (i) directing
the time, method, place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waiving any past default
and its consequences that is waivable under Section 5.13 of the Indenture, or
(iii) exercising any right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable, provided that, where a consent
or action under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected thereby (a
"Super Majority"), the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
shall not take any action in accordance with the directions of the Holders of
the Common Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Declaration, any Holder of Common Securities may
institute a legal proceeding directly against any Person to enforce the
Institutional Trustee's rights under the
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Declaration, without first instituting a legal proceeding against the
Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i) above
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
Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the holders of greater than a majority in aggregate principal
amount of the Debentures (a "Super Majority"), the Institutional Trustee may
only give such consent at the
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direction of the Holders of at least the proportion in liquidation amount of the
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 7(b) unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu and payment thereon shall
be made Pro Rata with the Common Securities except that, where an Event of
Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Institutional Trustee, the rights of Holders of the
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed on the New York Stock Exchange, Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee, including the subordination provisions therein and to the provisions
of the Indenture.
I-12
<PAGE>
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration or the Preferred
Securities Guarantee, and the Indenture to a Holder without charge on written
request to the Sponsor at its principal place of business.
I-13
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS PREFERRED
SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Certificate Number Number of Preferred Securities
CUSIP NO. _____________________
Certificate Evidencing Preferred Securities
of
TRAVELERS CAPITAL III
[ ]% Trust Preferred Securities)
(Liquidation Amount $25 per Preferred Security)
TRAVELERS CAPITAL III, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that ___________
(the "Holder") is the registered owner of ________ (____) preferred securities
of the Trust representing
A1-1
<PAGE>
undivided beneficial interests in the assets of the Trust designated the [ ]%
Trust Preferred Securities (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, 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
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of [______], 1996, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Preferred Securities Guarantee to the extent
provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Sponsor at its principal place of business.
The Holder of this certificate, by accepting this certificate, is
deemed to have (i) agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) and (ii) agreed to the
terms of the Preferred Securities Guarantee, including that the Preferred
Securities Guarantee is (A) subordinate and junior in right of payment to all
other liabilities of Travelers, (B) pari passu with the most senior preferred or
preference stock now or hereafter issued by Travelers and with any guarantee now
or hereafter issued by Travelers with respect to preferred or preference stock
of Travelers's affiliates and (C) senior to Travelers's common stock.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
A1-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of _______, ____.
___________________________________
Heigi G. Miller, as Trustee
___________________________________
Irwin Ettinger, as Trustee
A1-3
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
____________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
____________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________ agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
A1-4
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
TRAVELERS CAPITAL III
[ ]% Trust Common Securities
(Liquidation Amount $25 per Common Security)
TRAVELERS CAPITAL III, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Travelers
Group Inc., a Delaware corporation, (the "Holder") is the registered owner of
__________ (________) common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the [ ]% Trust Common
Securities (the "Common Securities"). The Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for transfer
and satisfaction of the other conditions set forth in the Declaration (as
defined below), including, without limitation, Section 9.1 thereof. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of [______], 1996, as the same may be
amended from time to time (the "Declaration"), including the designation of the
terms of the Common Securities as set forth in Annex I thereto. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Sponsor will provide a copy of the Declaration and the
Indenture to a Holder without charge upon written request to the Sponsor at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
A2-1
<PAGE>
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A2-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of _________, ____.
___________________________________
Heidi G. Miller, as Trustee
___________________________________
Irwin Ettinger, as Trustee
A2-3
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
_______________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_______________________________________
(Insert address and zip code of assignee)
and irrevocably appoints _______________________________________________
______________________________________________________________________________
_________________________________ agent to transfer this Common Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-4
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
EXHIBIT 4.9
=========================
AMENDED AND RESTATED DECLARATION OF TRUST
TRAVELERS CAPITAL IV
Dated as of [ ], 1996
=========================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions ................................................ 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application ........................... 7
SECTION 2.2 Lists of Holders of Securities ............................. 8
SECTION 2.3 Reports by the Institutional Trustee ....................... 8
SECTION 2.4 Periodic Reports to Institutional Trustee .................. 8
SECTION 2.5 Evidence of Compliance with Conditions Precedent ........... 9
SECTION 2.6 Events of Default; Waiver .................................. 9
SECTION 2.7 Event of Default; Notice ................................... 10
ARTICLE III
ORGANIZATION
SECTION 3.1 Name ....................................................... 11
SECTION 3.2 Office ..................................................... 11
SECTION 3.3 Purpose .................................................... 12
SECTION 3.4 Authority .................................................. 12
SECTION 3.5 Title to Property of the Trust ............................. 12
SECTION 3.6 Powers and Duties of the Regular Trustees .................. 12
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees ....... 15
SECTION 3.8 Powers and Duties of the Institutional Trustee ............. 16
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee .................................................... 18
SECTION 3.10 Certain Rights of Institutional Trustee .................... 20
SECTION 3.11 Delaware Trustee ........................................... 22
SECTION 3.12 Execution of Documents ..................................... 22
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities ..... 22
SECTION 3.14 Duration of Trust .......................................... 22
SECTION 3.15 Mergers .................................................... 23
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities .................... 24
SECTION 4.2 Responsibilities of the Sponsor ............................ 24
i
<PAGE>
Page
----
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees .......................................... 25
SECTION 5.2 Delaware Trustee ............................................ 26
SECTION 5.3 Institutional Trustee; Eligibility .......................... 26
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally ................................................... 27
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees ..... 27
SECTION 5.6 Appointment, Removal and Resignation of Trustees ............ 28
SECTION 5.7 Vacancies among Trustees .................................... 29
SECTION 5.8 Effect of Vacancies ......................................... 30
SECTION 5.9 Meetings .................................................... 30
SECTION 5.10 Delegation of Power ......................................... 30
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business .................................................... 31
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions ............................................... 31
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities ..................... 31
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust ........................................ 32
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities ...................................... 33
SECTION 9.2 Transfer of Certificates .................................... 34
SECTION 9.3 Deemed Security Holders ..................................... 34
SECTION 9.4 Book Entry Interests ........................................ 35
SECTION 9.5 Notices to Clearing Agency .................................. 35
SECTION 9.6 Appointment of Successor Clearing Agency .................... 36
ii
<PAGE>
Page
----
SECTION 9.7 Definitive Preferred Security Certificates ................. 36
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates .......... 37
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability .................................................. 37
SECTION 10.2 Exculpation ................................................ 38
SECTION 10.3 Fiduciary Duty ............................................. 38
SECTION 10.4 Indemnification ............................................ 39
SECTION 10.5 Outside Businesses ......................................... 42
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year ................................................ 42
SECTION 11.2 Certain Accounting Matters ................................. 42
SECTION 11.3 Banking .................................................... 43
SECTION 11.4 Withholding ................................................ 43
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments ................................................. 44
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent .................................................... 46
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee .... 47
SECTION 13.2 Representations and Warranties of Delaware Trustee ......... 48
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices .................................................... 49
SECTION 14.2 Governing Law .............................................. 50
SECTION 14.3 Intention of the Parties ................................... 50
iii
<PAGE>
Page
----
SECTION 14.4 Headings .............................................. 50
SECTION 14.5 Successors and Assigns ................................ 50
SECTION 14.6 Partial Enforceability ................................ 51
SECTION 14.7 Counterparts .......................................... 51
ANNEX I TERMS OF SECURITIES ................................. I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY
CERTIFICATE ......................................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE ................. A2-1
EXHIBIT B SPECIMEN OF DEBENTURE ............................... B-1
EXHIBIT C UNDERWRITING AGREEMENT .............................. C-1
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939 as amended Declaration
- ------------------ -----------
310(a) .................................................... 5.3(a)
310(c) .................................................... Inapplicable
311(c) .................................................... Inapplicable
312(a) .................................................... 2.2(a)
312(b) .................................................... 2.2(b)
313 ....................................................... 2.3
314(a) .................................................... 2.4
314(b) .................................................... Inapplicable
314(c) .................................................... 2.5
314(d) .................................................... Inapplicable
314(f) .................................................... Inapplicable
315(a) .................................................... 3.9(b)
315(c) .................................................... 3.9(a)
315(d) .................................................... 3.9(a)
316(a) .................................................... Annex I
316(c) .................................................... 3.6(e)
- ----------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TRAVELERS CAPITAL IV
[ ], 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of [_____], 1996, by the Trustees (as defined herein), the Sponsor
(as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Travelers Capital
IV (the "Trust"), a trust under the Business Trust Act (as defined herein)
pursuant to a Declaration of Trust dated as of September 19, 1996, (the
"Original Declaration") and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on September 19, 1996, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debentures of the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
<PAGE>
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the City of New York, New York are permitted or
required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
2
<PAGE>
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means [_______], 1996.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 4 Chase MetroTech Center,
Brooklyn, New York 11245.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Travelers Group Inc. in its capacity as
issuer of the Debentures under the Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, N.A., as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Institutional Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"Definitive Preferred Security Certificates" has the meaning set
forth in Section 9.4.
3
<PAGE>
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Distribution" has the meaning set forth in Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of April 30, 1996, between
the Debenture Issuer and the Debenture Trustee, pursuant to which the Debentures
are to be issued.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I
hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class,
4
<PAGE>
who are the record owners of an aggregate liquidation amount representing more
than 50% of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning specified in Section 6.1.
"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.
"Preferred Securities Guarantee" means the guarantee agreement dated
as of [_____], 1996, of the Sponsor in respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such
5
<PAGE>
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Ouorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" has the meaning specified in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer or other officer of
the Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Travelers Group Inc. or any successor entity in a
merger, consolidation or amalgamation, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.6.
"Successor Entity" has the meaning set forth in Section 3.15(b).
"Successor Institutional Trustee" has the meaning set forth in
Section 5.6.
"Successor Securities" has the meaning set forth in Section 3.15(b).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
6
<PAGE>
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of an aggregate liquidation amount representing 10% or more of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Travelers" means Travelers Group Inc., a Delaware corporation.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
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(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Institutional Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders") as of such record date, provided
that neither the Sponsor nor the Regular Trustees on behalf of the Trust shall
be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Institutional
Trustee by the Sponsor and the Regular Trustees on behalf of the Trust, and (ii)
at any other time, within 30 days of receipt by the Trust of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the Institutional Trustee. The Institutional Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity) provided that the Institutional
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Institutional Trustee shall comply with its obligations
underss.ss.311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after April 15 of each year, the Institutional
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by ss. 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by ss. 313 of the Trust Indenture Act. The Institutional
Trustee shall also comply with the requirements of ss. 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information as required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss. 314 of the Trust Indenture Act.
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SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default: Waiver.
(a) The Holders of a Majority in liquidation amount of 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 Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) is waivable only with the consent of holders of more than a
majority in principal amount of the Debentures (a "Super Majority")
affected thereby, only the Holders of at least the proportion in aggregate
liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding may waive such Event of Default in respect of the Preferred
Securities under the Declaration.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(l)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the 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 Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
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(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) is waivable only with the consent of a Super Majority, except
where the Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided in this Section 2.6(b),
only the Holders of at least the proportion in aggregate liquidation
amount of the Common Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding
may waive such Event of Default in respect of the Common Securities under
the Declaration;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default with respect to the Preferred Securities have been so
cured, waived or otherwise eliminated, the Institutional Trustee will be deemed
to be acting solely on behalf of the Holders of the Preferred Securities and
only the Holders of the Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of ss.ss.
316(a)(1)(A) and 316(a)(l)(B) of the Trust Indenture Act and such ss.ss. 3
16(a)(1)(A) and 3 16(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
the waiver of an Event of Default by the Holders of a Majority in liquidation
amount of the Common Securities, any such default shall cease to exist and any
Event of Default with respect to the Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default: Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of (i) all defaults with
respect to the Securities actually known to a
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Responsible Officer of the Institutional Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults" for the purposes of
this Section 2.7(a) being hereby defined to be an Event of Default as defined in
the Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein) and (ii) any notice
of default received from the Indenture Trustee with respect to the Debentures,
which notice from the Institutional Trustee to the Holders shall state that an
Event of Default under the Indenture also constitutes an Event of Default with
respect to the Securities; provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures or in the
payment of any sinking fund installment established for the Debentures, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.1(1) and 5.1(2) of the Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Travelers Capital IV," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is do Travelers
Group Inc., 388 Greenwich Street, New York, New York 10013. On ten Business Days
written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; 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 Securities, and
the issuance of Securities shall be limited to a simultaneous issuance of
both Preferred Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
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(i) execute and file with the Commission on behalf of the
Trust a registration statement on Form S-3 or on another appropriate
form, or a registration statement under Rule 462(b) of the
Securities Act, in each case prepared by the Sponsor, including any
pre-effective or post-effective amendments thereto, relating to the
registration under the Securities Act of the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the Preferred Securities
in any State in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc., any other national
stock exchange or the Nasdaq National Market for listing upon notice
of issuance of any Preferred Securities;
(iv) execute and file with the Commission on behalf of the
Trust a registration statement on Form 8-A, prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration of the Preferred Securities under
Section 12(b) of the Exchange Act; and
(v) deliver the Underwriting Agreement providing for the sale
of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Institutional Trustee for the benefit of the
Holders of the Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Institutional Trustee
before taking or refraining from taking any Ministerial Action in relation
to a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss.316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
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(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss.314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(o) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
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(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders;
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the
Institutional Trustee) shall not, engage in any activity other than as required
or authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall promptly distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
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(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all
the Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have obtained an opinion
of nationally recognized independent tax counsel experienced in such
matters to the effect that as a result of such action, the Trust will not
fail to be classified as a grantor trust for United States federal income
tax purposes.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Institutional
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Institutional Trustee in accordance with Section 5.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Debentures held by the Institutional Trustee, deposit such funds
into the Institutional Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities from the
Institutional Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Institutional Trustee Account shall
be an
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account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness assigned by a "nationally recognized
statistical rating organization," as that term is defined for purposes of
Rule 436(g)(2) under the Securities Act, is at least equal to the rating
assigned to the Preferred Securities by a nationally recognized
statistical rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the
occurrence of certain Special Events or other specified circumstances
pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) Subject to Section 2.6, the Institutional Trustee shall take any
Legal Action which arises out of or in connection with an Event of Default of
which a Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities, this Declaration, the Business Trust Act and the Trust
Indenture Act.
(h) The Institutional Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments on
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behalf of the Trust with respect to all securities and any such Paying Agent
shall comply with ss. 317(b) of the Trust Indenture Act. Any Paying Agent may be
removed by the Institutional Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Institutional
Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in the exercise
of such rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants
or obligations shall be read into this Declaration against the
Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any
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certificates or opinions furnished to the Institutional Trustee and
conforming to the requirements of this Declaration; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Institutional
Trustee, the Institutional Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional
Trustee Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law; and
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(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of
its employees. The Institutional Trustee shall have the right at any time
to seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of
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any Holder, unless such Holder shall have provided to the Institutional
Trustee security and indemnity, reasonably satisfactory to the
Institutional Trustee, against the costs, expenses (including attorneys'
fees and expenses and the expenses of the Institutional Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Institutional Trustee provided, that,
nothing contained in this Section 3.10(a)(vi) shall be taken to relieve
the Institutional Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
and
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(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, any Regular Trustee or, if there is only one, such Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for fifty-five (55) years from the Closing
Date.
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SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Preferred Securities rank with respect to Distributions
and payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with any other
organization on which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement 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 or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, without
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if in the opinion of a nationally recognized independent tax counsel
experienced in such matters, such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust in an amount equal to 3% or more of the capital
of the Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities,
the Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
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(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 or on another appropriate form, or a
registration statement under Rule 462(b) of the Securities Act, including
any pre-effective or post-effective amendments thereto, relating to the
registration under the Securities Act of the Preferred Securities;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange, any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any pre-effective or
post-effective amendments thereto, relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing
for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities,
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural person,
shall be a person who
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is a resident of the State of Delaware or that, if not a natural person, shall
be an entity which has its principal place of business in the State of Delaware
(the "Delaware Trustee"); (2) there shall be at least one Trustee who is an
employee or officer of, or is affiliated with the Sponsor (a "Regular Trustee");
and (3) one Trustee shall be the Institutional Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
SECTION 5.3 Institutional Trustee: Eligibility.
(a) There shall at all times be one Trustee that shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-7 and to the extent Rule 3a-7 requires
a trustee having
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certain qualifications to hold title to the "eligible assets" of the
Trust, the Institutional Trustee shall possess those qualifications.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Institutional Trustee and the Holders of the Common Securities (as if
such Holders were the obligor referred to in ss. 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of ss. 310(b) of the Trust
Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be as set forth in
Section 5.5 hereof.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees: Additional Powers of Regular Trustees.
(a) The initial Regular Trustees shall be:
Heidi G. Miller
Irwin Ettinger
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
The initial Institutional Trustee shall be:
The Chase Manhattan Bank, N.A.
450 West 33rd Street - 15th Floor
New York, New York 10001
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(b) Except as expressly set forth in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees; and
(d) a Regular 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 purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Appointment Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee possessing
the qualifications to act as Institutional Trustee under Section 5.3 (a
"Successor Institutional Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Institutional
Trustee and delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor. A
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may
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resign from office (without need for prior or subsequent accounting) by an
instrument in writing signed by the Trustee and delivered to the Sponsor and the
Trust, which resignation shall take effect upon such delivery or upon such later
date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation, the resigning Institutional Trustee or Delaware
Trustee, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by
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the Regular Trustees or, if there are more than two, a majority of the Regular
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
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(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 5.11 Merger, Conversion Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such 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.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Institutional Trustee (the amount of any such payment
being a "Payment Amount"), the Institutional Trustee shall and is directed to
make a distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one
class of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust
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having such terms as are set forth in Annex I (the "Common Securities"). The
Trust shall issue no securities or other interests in the assets of the Trust
other than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of any Holder of the Common Securities or
the Sponsor;
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(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to any Holder of the Common Securities or the
Sponsor; the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Holder of the Common Securities or the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of any
Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event pursuant
to which the Trust shall have been dissolved in accordance with the terms
of the Securities and all of the Debentures endorsed thereon shall have
been distributed to the Holders of Securities in exchange for all of the
Securities;
(vi) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor; or
(vii) upon the expiration of the term of the Trust set forth in
Section 3.14;
provided, that so long as any Preferred Securities are outstanding and are not
held entirely by Travelers, the Trust may not voluntarily liquidate, dissolve,
wind-up or terminate except in connection with the occurrence of a Special
Event.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
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(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole holder of
such Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
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SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered Preferred
Security Certificates (the "Definitive Preferred Security Certificates") have
been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
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SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any delay
in delivery of such instructions and each of them may conclusively rely on
and shall be protected in relying on, said instructions of the Clearing
Agency. The Definitive Preferred Security Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which Preferred Securities
may be listed, or to conform to usage.
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SECTION 9.8 Mutilated. Destroyed. Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless.
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Preferred
Securities Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders
of the Preferred Securities shall be entitled to the same limitation of personal
liability extended to
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stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
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the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Company Indemnified Person
did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company
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Indemnified Person against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter as
to which such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in paragraphs
(i) and (ii). Such determination shall be made (1) by the Regular Trustees by a
majority vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in a written opinion, or (3)
by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a) shall be paid by the Debenture Issuer in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by the Regular Trustees
by a majority vote of a quorum of disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written opinion
or (iii) the Common Security Holder of the Trust, that, based upon the facts
known to the Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in bad faith
or in a manner that such person
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did not believe to be in or not opposed to the best interests of the Trust, or,
with respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Regular Trustees,
independent legal counsel or Common Security Holder reasonably determine that
such person deliberately breached his duty to the Trust or its Common or
Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Debenture Issuer or Preferred
Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company Indemnified
Person who serves in such capacity at any time while this Section 10.4(a) is in
effect. Any repeal or modification of this Section 10.4(a) shall not affect any
rights or obligations then existing.
(vii) The Debenture Issuer may purchase and maintain insurance on
behalf of any person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Debenture Issuer would
have the power to indemnify him against such liability under the provisions of
this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 10.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any loss,
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liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration or the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligation to indemnify as set forth in this
Section 10.4(b) shall survive the satisfaction and discharge of this
Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the
Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the
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records of the Trust shall be examined by and reported upon as of the end of
each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over
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any amounts to any authority with respect to distributions or allocations to any
Holder, the amount withheld shall be deemed to be a distribution in the amount
of the withholding to the Holder. In the event of any claimed overwithholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Trust may reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
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(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the
Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article
V to increase or decrease the number of, and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) subject to Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government
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agency or regulatory authority which amendment does not have a material
adverse effect on the right, preferences or privileges of the Holders; and
(v) to modify, eliminate and add to any provision of the Declaration
to such extent as may be reasonably necessary to effectuate any of the
foregoing or to otherwise comply with applicable law.
SECTION 12.2 Meetings of the Holders of Securities: Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of
Securities representing at least 10% in liquidation amount of such class of
Securities. Such direction shall be given by delivering to the Regular Trustees
one or more calls in a writing stating that the signing Holders of Securities
wish to call a meeting and indicating the general or specific purpose for which
the meeting is to be called. Any Holders of Securities calling a meeting shall
specify in writing the Security Certificates held by the Holders of Securities
exercising the right to call a meeting and only those Securities specified shall
be counted for purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
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(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Institutional Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Institutional Trustee's acceptance
of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a national banking association with
trust powers, duly organized, validly existing and in good standing under
the laws of the United States, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms
of, the Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the
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part of the Institutional Trustee. The Declaration has been duly executed
and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the Articles of Organization or By-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee, of the
Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under
the laws of the State of Delaware, with trust power and authority to
execute and deliver, and to carry out and perform its obligations under
the terms of, the Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the
Declaration.
(d) The Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under
the laws of the
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State of Delaware, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the
Declaration.
(e) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the
Declaration.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
TRAVELERS CAPITAL IV
do Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Heidi G. Miller
Irwin Ettinger
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of
to the Holders of the Securities):
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) if given to the Institutional Trustee, at its Corporate Trust
Office to the attention of The Institutional Trust Group (or such other
address as the Institutional Trustee may give notice of to the Holders of
the Securities):
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(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice of to the Trust):
Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Charles 0. Prince III, Secretary
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
SECTION 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
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SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
___________________________________
Heidi G. Miller, as Regular Trustee
__________________________________
Irwin Ettinger, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By:_______________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A., as
Institutional Trustee
By:______________
Name:
Title:
TRAVELERS GROUP INC., as Sponsor
By:_______________
Name:
Title:
<PAGE>
ANNEX I
TERMS OF
[ ]% TRUST PREFERRED SECURITIES
[ ]% TRUST COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of [______], 1996 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. [______] Preferred Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
eight hundred million dollars ($_________) and a liquidation amount with respect
to the assets of the Trust of $25 per preferred security, are hereby designated
for the purposes of identification only as "[ ]% Trust Preferred Securities"
(the "Preferred Securities"). The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the: form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange on which the Preferred Securities are listed.
(b) Common Securities. _________ Common Securities of the Trust with
an aggregate liquidation amount with respect to the assets of the Trust of
twenty-four million seven hundred forty-three thousand dollars ($________) and a
liquidation amount with respect to the assets of the Trust of $25 per common
security, are hereby designated for the purposes of identification only as [ ]%
Trust Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the
form of Exhibit A-2 to the Declaration, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate
per annum of [ ]% (the "Coupon Rate") of the stated liquidation amount of $25
per Security, such rate being the rate of interest payable on the Debentures to
be held by the Institutional Trustee. Distributions in arrears beyond the first
date such Distributions are payable (or
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would be payable if not for any Extension Period (as defined below) or default
by the Debenture Issuer on the Debentures) will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from and including [______], 1996, and will be payable quarterly in arrears, on
March 31, June 30, September 30, and December 31 of each year, commencing on
[______] 1996. When, as and if available for payment, Distributions will be made
by the Institutional Trustee, except as otherwise described below. The Debenture
Issuer has the right under the Indenture to defer payments of interest on the
Debentures by extending the interest payment period from time to time on the
Debentures for a period not exceeding 20 consecutive quarters (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures, provided that no Extension Period may extend beyond
the date of maturity of the Debentures. As a consequence of the Debenture
Issuer's extension of the interest payment period, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at the Coupon
Rate compounded quarterly during any such Extension Period. In the event that
the Debenture Issuer exercises its right to extend the interest payment period,
then (a) the Debenture Issuer shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make any
guarantee payment with respect thereto (other than (i) repurchases, redemptions
or other acquisitions of shares of capital stock of Travelers in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of employees, officers, directors or consultants, (ii) as a result
of an exchange or conversion of any class or series of Travelers's capital stock
for any other class or series of Travelers's capital stock, or (iii) the
purchase of fractional interests in shares of Travelers's capital stock pursuant
to the conversion or exchange provisions of such capital stock or the security
being converted or exchanged) and (b) the Debenture Issuer shall not make any
payment of interest on or principal of (or premium, if any, on), or repay,
repurchase or redeem, any debt securities issued by the Debenture Issuer that
rank pan passu with or junior to the Debentures. The foregoing, however, will
not apply to any stock dividends paid by Travelers where the dividend stock is
the same stock as that on which the dividend is being paid. Prior to the
termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period, together with
all such previous and further extensions thereof, may not exceed 20 consecutive
quarters; provided ft(further, that no Extension Period
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may extend beyond the maturity of the Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements. The Regular Trustees will give notice to each Holder of any
Extension Period upon their receipt of notice thereof from the Debenture Issuer.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record dates. While the Preferred Securities remain in
book-entry only form, the relevant record dates shall be one Business Day prior
to the relevant payment dates which payment dates shall correspond to the
interest payment dates on the Debentures. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such payment in respect
of the Preferred Securities will be made as described under the heading
"Description of the Preferred Securities -- Book-Entry Only Issuance -- The
Depository Trust Company" in the Prospectus Supplement dated [______], 1996,
(the "Prospectus Supplement") to the Prospectus dated [______], 1996 (together,
the "Prospectus"), of the Trust included in the Registration Statement on Form
S-3 of the Sponsor, the Trust and certain other business trusts. The relevant
record dates for the Common Securities shall be the same record date as for the
Preferred Securities. If the Preferred Securities shall not continue to remain
in book-entry only form, the relevant record dates for the Preferred Securities
shall conform to the rules of any securities exchange on which the securities
are listed and, if none, shall be selected by the Regular Trustees, which dates
shall be at least 14 days but no more than 60 days before the relevant payment
dates, which payment dates shall correspond to the interest payment dates on the
Debentures. Distributions payable on any Securities that are not punctually paid
on any Distribution payment date, as a result of the Debenture Issuer having
failed to make a payment under the Debentures, will cease to be payable to the
Person in whose name such Securities are registered on the relevant record date,
and such defaulted Distribution will instead be payable to the Person in whose
name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distribution payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
(d) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
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3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities of creditors, distributions in an
amount equal to the aggregate of the stated liquidation amount of $25 per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such dissolution, winding-up or termination, Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate equal to the Coupon Rate, and bearing accrued and unpaid interest
in an amount equal to the accrued and unpaid Distributions on, such Securities
outstanding at such time, have been distributed on a Pro Rata basis to the
Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the Debenture
Issuer or pursuant to a Special Event as described below), the proceeds from
such repayment or payment shall be simultaneously applied to redeem Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid or redeemed at a redemption price of $25 per
Security plus an amount equal to accrued and unpaid Distributions thereon at the
date of the redemption, payable in cash (the "Redemption Price"). Holders shall
be given not less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Securities will be redeemed Pro Rata and the Preferred Securities
to be redeemed will be as described in Section 4(f)(ii) below.
(c) If, at any time, a Tax Event or an Investment Company Event
(each as defined below, and each a "Special Event") shall occur and be
continuing, the Regular Trustees shall, except in certain limited circumstances
in relation to a Tax Event described in this Section 4(c), dissolve the Trust
and, after satisfaction of creditors, cause Debentures held by the Institutional
Trustee, having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate, and
with accrued and unpaid interest equal to accrued and unpaid Distributions on,
the Securities outstanding at such time, to be distributed to the Holders of the
Securities in liquidation of such Holders' interests in the Trust on a Pro Rata
basis, within 90 days following the
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occurrence of such Special Event (the "90 Day Period"); provided, however, that,
in the case of the occurrence of a Tax Event, such dissolution and distribution
shall be conditioned on the Regular Trustees' receipt of an opinion of a
nationally recognized independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue rulings of
the Internal Revenue Service, to the effect that the Holders of the Securities
will not recognize any gain or loss for United States federal income tax
purposes as a result of such dissolution and distribution of Debentures, and
provided further, that, if at the time there is available to the Debenture
Issuer or the Trust the opportunity to eliminate, within the 90 Day Period, the
Special Event by taking some ministerial action, such as filing a form or making
an election, or pursuing some other similar reasonable measure, that will have
no adverse effect on the Trust, the Debenture Issuer or the Holders of the
Securities ("Ministerial Action"), the Debenture Issuer or the Trust will pursue
such Ministerial Action in lieu of dissolution.
If in the case of the occurrence of a Tax Event, (i) the Debenture
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a result
of such Tax Event, there is more than an insubstantial risk that the Debenture
Issuer would be precluded from deducting the interest on the Debentures for
United States federal income tax purposes, even after the Debentures were
distributed to the Holders of Securities in liquidation of such Holders'
interests in the Trust as described in this Section 4(c), or (ii) the Regular
Trustees shall have been informed by such tax counsel that it cannot deliver a
No Recognition Opinion to the Regular Trustees, the Debenture Issuer 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 within 90 days following the
occurrence of such Tax Event, and, following such redemption, Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed shall be redeemed by the Trust at the Redemption Price on
a Pro Rata basis; provided, however, that if at the time there is available to
the Debenture Issuer or the Trust the opportunity to eliminate, within such 90
day period, the Tax Event by taking some Ministerial Action, the Trust or the
Debenture Issuer will pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Tax Event Opinion") to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or (b) any amendment to, or
change in, an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after the date of the Prospectus Supplement), in
either case after the date of the Prospectus Supplement, there is more than an
insubstantial risk that (i) the Trust would be subject to United States federal
income tax with respect to interest accrued or received on the Debentures, (ii)
the Trust would be subject to more than a de minimis
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amount of other taxes, duties or other governmental charges, or (iii) interest
payable to the Trust on the Debentures would not be deductible, in whole or in
part, by the Debenture Issuer for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall
have received an opinion of a nationally recognized independent counsel
experienced in practice under the Investment Company Act (an "Investment Company
Event Opinion") to the effect that, as a result of the occurrence of a change in
law or regulation or a written 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 a more than an insubstantial
risk that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which Change in 1940
Act Law becomes effective on or after the date of the Prospectus Supplement.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) DTC or its nominee (or any successor
Clearing Agency or its nominee), as the record Holder of the Preferred
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and (iii) any
certificates representing Securities, except for certificates representing
Preferred Securities held by DTC or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent beneficial interests in the
Debentures having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid Distributions on
such Securities until such certificates are presented to the Debenture Issuer or
its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Debentures are distributed to Holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use its best
efforts to have the Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed immediately prior to the
distribution of the Debentures.
(f) Redemption or Distribution procedures will be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities
to be redeemed or exchanged not fewer than 30 nor more than 60 days before
the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or
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exchange and the dates on which notices are given pursuant to this Section
4(f)(i), a Redemption Distribution Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail, postage prepaid,
to Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of
record by DTC or its nominee (or any successor Clearing Agency or its
nominee) or any nominee, the distribution of the proceeds of such
redemption will be made to each Clearing Agency Participant (or Person on
whose behalf such nominee holds such securities) in accordance with the
procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided, that the Debenture
Issuer has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will deposit irrevocably with DTC or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Preferred Securities and
will give DTC (or any successor Clearing Agency) irrevocable instructions
and authority to pay the Redemption Price to the Holders of the Preferred
Securities, and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, provided that the Debenture Issuer
has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will pay the relevant Redemption Price to the
Holders of such Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on the redemption
date. If a Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the close
of business on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the Securities so called
for redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such Securities
to receive the Redemption Price, but without interest on such Redemption
Price. Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Securities that
have been so called for redemption. If any date fixed for redemption
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of Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such date fixed
for redemption. If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not paid either by the
Institutional Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, DTC or its nominee (or any successor Clearing Agency or its
nominee) if the Global Certificates have been issued or, if Definitive
Preferred Security Certificates have been issued, to the Holder thereof,
and (B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Debenture Issuer
or its affiliates may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by
private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in aggregate liquidation amount of the Preferred
Securities, voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debentures, to (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercise any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past Event of 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,
provided, however, that, where a consent or action under the Indenture would
require the consent or act of each
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<PAGE>
holder of each Debenture affected thereby, such consent or action under the
Indenture shall not be effective until each Holder of Preferred Securities shall
have consented to such action or provided such consent. The Institutional
Trustee shall not revoke any action previously authorized or approved by a vote
of the Holders of the Preferred Securities. Except with respect to directing the
time, method and place of conducting a proceeding for a remedy available to the
Institutional Trustee, the Institutional Trustee, as holder of the Debentures,
shall not take any of the actions described in clauses (i), (ii), (iii) or (iv)
above unless the Institutional Trustee has obtained an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes. If the
Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Preferred Securities may directly institute a legal proceeding against
the Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures without first instituting a legal proceeding against the
Institutional Trustee or any other Person or entity. If a Declaration Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer 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
also directly institute a proceeding for enforcement of payment to such holder
(a "Direct Action") of the principal of or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder on or after the respective due date specified in the
Debentures without first (i) directing the Institutional Trustee to enforce the
terms of the Debentures or (ii) instituting a legal proceeding directly against
the Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures. Except as provided in the preceding sentence, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures. In connection with such Direct
Action, Travelers will be subrogated to the rights of such holder of Preferred
Securities under the Declaration to the extent of any payment made by Travelers
to such holder of Preferred Securities in such Direct Action.
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 Securities in
the Trust or pursuant to written consent. The Regular Trustees 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 mailed to each Holder of record of Preferred Securities. Each
such notice will include a statement setting forth (i) the date of such meeting
or the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with this Declaration and the terms of
the Securities.
I-9
<PAGE>
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c) and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Event of Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or direct the exercise of any trust or power conferred
upon the Institutional Trustee under the Declaration, including (i) directing
the time, method, place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waiving any past default
and its consequences that is waivable under Section 5.13 of the Indenture, or
(iii) exercising any right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable, provided that, where a consent
or action under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected thereby (a
"Super Majority"), the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
shall not take any action in accordance with the directions of the Holders of
the Common Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the
I-10
<PAGE>
Declaration, any Holder of Common Securities may institute a legal proceeding
directly against any Person to enforce the Institutional Trustee's rights under
the without first instituting a legal proceeding against the Institutional
Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i) above
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
Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the holders of greater than a majority in aggregate principal
amount of the Debentures (a "Super Majority"), the Institutional Trustee may
only give such consent at the
I-11
<PAGE>
direction of the Holders of at least the proportion in liquidation amount of the
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 7(b) unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pan passu and payment thereon shall be
made Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Debentures held
by the Institutional Trustee, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed on the New York Stock Exchange, Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee, including the subordination provisions therein and to the provisions
of the Indenture.
I-12
<PAGE>
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration or the Preferred
Securities Guarantee, and the Indenture to a Holder without charge on written
request to the Sponsor at its principal place of business.
I-13
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS PREFERRED
SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Certificate Number Number of Preferred Securities
CUSIP NO. _________
Certificate Evidencing Preferred Securities
of
TRAVELERS CAPITAL IV
[ ]% Trust Preferred Securities)
(Liquidation Amount $25 per Preferred Security)
TRAVELERS CAPITAL IV, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that _____________
(the "Holder") is the registered owner of _________ (___) preferred securities
of the Trust representing
I-1
<PAGE>
undivided beneficial interests in the assets of the Trust designated the [ ]%
Trust Preferred Securities (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, 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
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of [______], 1996, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Preferred Securities Guarantee to the extent
provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Sponsor at its principal place of business.
The Holder of this certificate, by accepting this certificate, is
deemed to have (i) agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) and (ii) agreed to the
terms of the Preferred Securities Guarantee, including that the Preferred
Securities Guarantee is (A) subordinate and junior in right of payment to all
other liabilities of Travelers, (B) pan passu with the most senior preferred or
preference stock now or hereafter issued by Travelers and with any guarantee now
or hereafter issued by Travelers with respect to preferred or preference stock
of Travelers's affiliates and (C) senior to Travelers's common stock.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
A1-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this day
of _______, ____.
___________________________
Heidi G. Miller, as Trustee
__________________________
Irwin Ettinger, as Trustee
A1-3
<PAGE>
------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
__________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
_____________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________________ agent to
transfer this Preferred Security Certificate on the books of the Trust. The
agent may substitute another to act for him or her.
Date: ________________________
Signature: ___________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
A1-4
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
TRAVELERS CAPITAL IV
[ ]% Trust Common Securities
(Liquidation Amount $25 per Common Security)
TRAVELERS CAPITAL IV, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Travelers
Group Inc., a Delaware corporation, (the "Holder") is the registered owner of
___________ (______) common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the [ ]% Trust Common
Securities (the "Common Securities"). The Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for transfer
and satisfaction of the other conditions set forth in the Declaration (as
defined below), including, without limitation, Section 9.1 thereof. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of [______], 1996, as the same may be
amended from time to time (the "Declaration"), including the designation of the
terms of the Common Securities as set forth in Annex I thereto. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Sponsor will provide a copy of the Declaration and the
Indenture to a Holder without charge upon written request to the Sponsor at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
A2-1
<PAGE>
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A2-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this day
of
_______________________________________
Heidi G. Miller, as Trustee
________________________________________
Irwin Ettinger, as Trustee
A2-3
<PAGE>
--------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
_________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints______________________________________________________
________________________________________________________________________________
______________________________________ agent to transfer this Common Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date: ________________________
Signature: ___________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-4
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
EXHIBIT 4.10
============================
AMENDED AND RESTATED DECLARATION
OF TRUST
TRAVELERS CAPITAL V
Dated as of [ ], 1996
============================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.................................................. 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............................. 7
SECTION 2.2 Lists of Holders of Securities............................... 8
SECTION 2.3 Reports by the Institutional Trustee......................... 8
SECTION 2.4 Periodic Reports to Institutional Trustee.................... 8
SECTION 2.5 Evidence of Compliance with Conditions Precedent............. 9
SECTION 2.6 Events of Default; Waiver.................................... 9
SECTION 2.7 Event of Default; Notice..................................... 10
ARTICLE III
ORGANIZATION
SECTION 3.1 Name......................................................... 11
SECTION 3.2 Office....................................................... 11
SECTION 3.3 Purpose...................................................... 12
SECTION 3.4 Authority.................................................... 12
SECTION 3.5 Title to Property of the Trust............................... 12
SECTION 3.6 Powers and Duties of the Regular Trustees.................... 12
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees......... 15
SECTION 3.8 Powers and Duties of the Institutional Trustee............... 16
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee...................................................... 18
SECTION 3.10 Certain Rights of Institutional Trustee...................... 20
SECTION 3.11 Delaware Trustee............................................. 22
SECTION 3.12 Execution of Documents....................................... 22
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities....... 22
SECTION 3.14 Duration of Trust............................................ 22
SECTION 3.15 Mergers...................................................... 23
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities...................... 24
SECTION 4.2 Responsibilities of the Sponsor.............................. 24
i
<PAGE>
Page
----
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees........................................... 25
SECTION 5.2 Delaware Trustee............................................. 26
SECTION 5.3 Institutional Trustee; Eligibility........................... 26
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally.................................................... 27
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees...... 27
SECTION 5.6 Appointment, Removal and Resignation of Trustees............. 28
SECTION 5.7 Vacancies among Trustees..................................... 29
SECTION 5.8 Effect of Vacancies.......................................... 30
SECTION 5.9 Meetings..................................................... 30
SECTION 5.10 Delegation of Power.......................................... 30
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business..................................................... 31
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions................................................ 31
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities...................... 31
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust......................................... 32
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities....................................... 33
SECTION 9.2 Transfer of Certificates..................................... 34
SECTION 9.3 Deemed Security Holders...................................... 34
SECTION 9.4 Book Entry Interests......................................... 35
SECTION 9.5 Notices to Clearing Agency................................... 35
SECTION 9.6 Appointment of Successor Clearing Agency..................... 36
ii
<PAGE>
Page
----
SECTION 9.7 Definitive Preferred Security Certificates................... 36
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates............ 37
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.................................................... 37
SECTION 10.2 Exculpation.................................................. 38
SECTION 10.3 Fiduciary Duty............................................... 38
SECTION 10.4 Indemnification.............................................. 39
SECTION 10.5 Outside Businesses........................................... 42
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.................................................. 42
SECTION 11.2 Certain Accounting Matters................................... 42
SECTION 11.3 Banking...................................................... 43
SECTION 11.4 Withholding.................................................. 43
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments................................................... 44
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent...................................................... 46
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee...... 47
SECTION 13.2 Representations and Warranties of Delaware Trustee........... 48
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices...................................................... 49
SECTION 14.2 Governing Law................................................ 50
SECTION 14.3 Intention of the Parties..................................... 50
iii
<PAGE>
Page
----
SECTION 14.4 Headings..................................................... 50
SECTION 14.5 Successors and Assigns....................................... 50
SECTION 14.6 Partial Enforceability....................................... 51
SECTION 14.7 Counterparts................................................. 51
ANNEX I TERMS OF SECURITIES..........................................I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY
CERTIFICATE.................................................A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE.........................A2-1
EXHIBIT B SPECIMEN OF DEBENTURE........................................B-1
EXHIBIT C UNDERWRITING AGREEMENT.......................................C-1
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
310(a)............................................. 5.3(a)
310(c)............................................. Inapplicable
311(c)............................................. Inapplicable
312(a)............................................. 2.2(a)
312(b)............................................. 2.2(b)
313................................................ 2.3
314(a)............................................. 2.4
314(b)............................................. Inapplicable
314(c)............................................. 2.5
314(d)............................................. Inapplicable
314(f)............................................. Inapplicable
315(a)............................................. 3.9(b)
315(c)............................................. 3.9(a)
315(d)............................................. 3.9(a)
316(a)............................................. Annex I
316(c)............................................. 3.6(e)
- ----------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TRAVELERS CAPITAL V
[ ], 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of April 30, 1996, by the Trustees (as defined herein),
the Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established Travelers Capital
V (the "Trust"), a trust under the Business Trust Act (as defined herein)
pursuant to a Declaration of Trust dated as of September 19, 1996, (the
"Original Declaration") and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on September 19, 1996, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debentures of the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
<PAGE>
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the City of New York, New York are permitted or
required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
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"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means [ ], 1996.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 4 Chase MetroTech Center,
Brooklyn, New York 11245.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Travelers Group Inc. in its capacity as
issuer of the Debentures under the Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, N.A., as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Institutional Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"Definitive Preferred Security Certificates" has the meaning set
forth in Section 9.4.
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"Delaware Trustee" has the meaning set forth in Section 5.2.
"Distribution" has the meaning set forth in Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of April 30, 1996, between
the Debenture Issuer and the Debenture Trustee, pursuant to which the Debentures
are to be issued.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I
hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class,
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who are the record owners of an aggregate liquidation amount representing more
than 50% of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning specified in Section 6.1.
"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.
"Preferred Securities Guarantee" means the guarantee agreement dated
as of [ ], 1996, of the Sponsor in respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such
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Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" has the meaning specified in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer or other officer of
the Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Travelers Group Inc. or any successor entity in a
merger, consolidation or amalgamation, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.6.
"Successor Entity" has the meaning set forth in Section 3.15(b).
"Successor Institutional Trustee" has the meaning set forth in
Section 5.6.
"Successor Securities" has the meaning set forth in Section 3.15(b).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
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"Travelers" means Travelers/Aetna Property Casualty Corp., a
Delaware corporation.
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of an aggregate liquidation amount representing 10% or more of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
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(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Institutional Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders") as of such record date, provided
that neither the Sponsor nor the Regular Trustees on behalf of the Trust shall
be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Institutional
Trustee by the Sponsor and the Regular Trustees on behalf of the Trust, and (ii)
at any other time, within 30 days of receipt by the Trust of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the Institutional Trustee. The Institutional Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity) provided that the Institutional
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Institutional Trustee shall comply with its obligations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after April 15 of each year, the Institutional
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by ss. 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by ss. 313 of the Trust Indenture Act. The Institutional
Trustee shall also comply with the requirements of ss. 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information as required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss. 314 of the Trust Indenture Act.
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SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of 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 Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) is waivable only with the consent of holders of more than a
majority in principal amount of the Debentures (a "Super Majority")
affected thereby, only the Holders of at least the proportion in aggregate
liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding may waive such Event of Default in respect of the Preferred
Securities under the Declaration.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the 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 Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
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(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) is waivable only with the consent of a Super Majority, except
where the Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided in this Section 2.6(b),
only the Holders of at least the proportion in aggregate liquidation
amount of the Common Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding
may waive such Event of Default in respect of the Common Securities under
the Declaration;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default with respect to the Preferred Securities have been so
cured, waived or otherwise eliminated, the Institutional Trustee will be deemed
to be acting solely on behalf of the Holders of the Preferred Securities and
only the Holders of the Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
the waiver of an Event of Default by the Holders of a Majority in liquidation
amount of the Common Securities, any such default shall cease to exist and any
Event of Default with respect to the Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of (i) all defaults with
respect to the Securities actually known to a
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Responsible Officer of the Institutional Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults" for the purposes of
this Section 2.7(a) being hereby defined to be an Event of Default as defined in
the Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein) and (ii) any notice
of default received from the Indenture Trustee with respect to the Debentures,
which notice from the Institutional Trustee to the Holders shall state that an
Event of Default under the Indenture also constitutes an Event of Default with
respect to the Securities; provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures or in the
payment of any sinking fund installment established for the Debentures, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.1(1) and 5.1(2) of the Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Travelers Capital V," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Travelers
Group Inc., 388 Greenwich Street, New York, New York 10013. On ten Business Days
written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; 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 Securities, and
the issuance of Securities shall be limited to a simultaneous issuance of
both Preferred Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
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(i) execute and file with the Commission on behalf of the
Trust a registration statement on Form S-3 or on another appropriate
form, or a registration statement under Rule 462(b) of the
Securities Act, in each case prepared by the Sponsor, including any
pre-effective or post-effective amendments thereto, relating to the
registration under the Securities Act of the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the Preferred Securities
in any State in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc., any other national
stock exchange or the Nasdaq National Market for listing upon notice
of issuance of any Preferred Securities;
(iv) execute and file with the Commission on behalf of the
Trust a registration statement on Form 8-A, prepared by the Sponsor,
including any pre-effective or post-effective amendments thereto,
relating to the registration of the Preferred Securities under
Section 12(b) of the Exchange Act; and
(v) deliver the Underwriting Agreement providing for the sale
of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Institutional Trustee for the benefit of the
Holders of the Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Institutional Trustee
before taking or refraining from taking any Ministerial Action in relation
to a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of ss.316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
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(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(o) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
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(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders;
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the
Institutional Trustee) shall not, engage in any activity other than as required
or authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall promptly distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
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(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power conferred
upon the Debenture Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise any right to rescind
or annul any declaration that the principal of all the Debentures shall be due
and payable, or (D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required unless the
Trust shall have obtained an opinion of nationally recognized independent tax
counsel experienced in such matters to the effect that as a result of such
action, the Trust will not fail to be classified as a grantor trust for United
States federal income tax purposes.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Institutional
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Institutional Trustee in accordance with Section 5.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Debentures held by the Institutional Trustee, deposit such funds
into the Institutional Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities from the
Institutional Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Institutional Trustee Account shall
be an
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account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness assigned by a "nationally recognized
statistical rating organization," as that term is defined for purposes of
Rule 436(g)(2) under the Securities Act, is at least equal to the rating
assigned to the Preferred Securities by a nationally recognized
statistical rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the
occurrence of certain Special Events or other specified circumstances
pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) Subject to Section 2.6, the Institutional Trustee shall take any
Legal Action which arises out of or in connection with an Event of Default of
which a Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities, this Declaration, the Business Trust Act and the Trust
Indenture Act.
(h) The Institutional Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments on
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behalf of the Trust with respect to all securities and any such Paying Agent
shall comply with ss. 317(b) of the Trust Indenture Act. Any Paying Agent may be
removed by the Institutional Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Institutional
Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in the exercise
of such rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants
or obligations shall be read into this Declaration against the
Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any
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certificates or opinions furnished to the Institutional Trustee and
conforming to the requirements of this Declaration; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Institutional
Trustee, the Institutional Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional
Trustee Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law; and
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(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of
its employees. The Institutional Trustee shall have the right at any time
to seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of
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any Holder, unless such Holder shall have provided to the Institutional
Trustee security and indemnity, reasonably satisfactory to the
Institutional Trustee, against the costs, expenses (including attorneys'
fees and expenses and the expenses of the Institutional Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Institutional Trustee provided, that,
nothing contained in this Section 3.10(a)(vi) shall be taken to relieve
the Institutional Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
and
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(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, any Regular Trustee or, if there is only one, such Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for fifty-five (55) years from the Closing
Date.
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SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Preferred Securities rank with respect to Distributions
and payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with any other
organization on which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement 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 or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
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(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, without
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if in the opinion of a nationally recognized independent tax counsel
experienced in such matters, such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust in an amount equal to 3% or more of the capital
of the Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities,
the Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
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(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 or on another appropriate form, or a
registration statement under Rule 462(b) of the Securities Act, including
any pre-effective or post-effective amendments thereto, relating to the
registration under the Securities Act of the Preferred Securities;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange, any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any pre-effective or
post-effective amendments thereto, relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing
for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities,
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural person,
shall be a person who
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is a resident of the State of Delaware or that, if not a natural person, shall
be an entity which has its principal place of business in the State of Delaware
(the "Delaware Trustee"); (2) there shall be at least one Trustee who is an
employee or officer of, or is affiliated with the Sponsor (a "Regular Trustee");
and (3) one Trustee shall be the Institutional Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee that shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-7 and to the extent Rule 3a-7 requires
a trustee having
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certain qualifications to hold title to the "eligible assets" of the
Trust, the Institutional Trustee shall possess those qualifications.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Institutional Trustee and the Holders of the Common Securities (as if
such Holders were the obligor referred to in ss. 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of ss. 310(b) of the Trust
Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be as set forth in
Section 5.5 hereof.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.
(a) The initial Regular Trustees shall be:
Heidi G. Miller
Irwin Ettinger
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
The initial Institutional Trustee shall be:
The Chase Manhattan Bank, N.A.
450 West 33rd Street - 15th Floor
New York, New York 10001
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(b) Except as expressly set forth in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees; and
(d) a Regular 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 purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee possessing
the qualifications to act as Institutional Trustee under Section 5.3 (a
"Successor Institutional Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Institutional
Trustee and delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may
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resign from office (without need for prior or subsequent accounting) by an
instrument in writing signed by the Trustee and delivered to the Sponsor and the
Trust, which resignation shall take effect upon such delivery or upon such later
date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation, the resigning Institutional Trustee or Delaware
Trustee, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by
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the Regular Trustees or, if there are more than two, a majority of the Regular
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
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(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such 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.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Institutional Trustee (the amount of any such payment
being a "Payment Amount"), the Institutional Trustee shall and is directed to
make a distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one
class of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust
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having such terms as are set forth in Annex I (the "Common Securities"). The
Trust shall issue no securities or other interests in the assets of the Trust
other than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of any Holder of the Common Securities or
the Sponsor;
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(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to any Holder of the Common Securities or the
Sponsor; the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Holder of the Common Securities or the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of any
Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event pursuant
to which the Trust shall have been dissolved in accordance with the terms
of the Securities and all of the Debentures endorsed thereon shall have
been distributed to the Holders of Securities in exchange for all of the
Securities;
(vi) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor; or
(vii) upon the expiration of the term of the Trust set forth in
Section 3.14;
provided, that so long as any Preferred Securities are outstanding and are not
held entirely by Travelers, the Trust may not voluntarily liquidate, dissolve,
wind-up or terminate except in connection with the occurrence of a Special
Event.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
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(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole holder of
such Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
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SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered Preferred
Security Certificates (the "Definitive Preferred Security Certificates") have
been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
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SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any delay
in delivery of such instructions and each of them may conclusively rely on
and shall be protected in relying on, said instructions of the Clearing
Agency. The Definitive Preferred Security Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which Preferred Securities
may be listed, or to conform to usage.
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SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless.
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Preferred
Securities Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders
of the Preferred Securities shall be entitled to the same limitation of personal
liability extended to
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stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
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the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Company Indemnified Person
did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company
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Indemnified Person against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter as
to which such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in paragraphs
(i) and (ii). Such determination shall be made (1) by the Regular Trustees by a
majority vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in a written opinion, or (3)
by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a) shall be paid by the Debenture Issuer in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by the Regular Trustees
by a majority vote of a quorum of disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written opinion
or (iii) the Common Security Holder of the Trust, that, based upon the facts
known to the Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in bad faith
or in a manner that such person
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did not believe to be in or not opposed to the best interests of the Trust, or,
with respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Regular Trustees,
independent legal counsel or Common Security Holder reasonably determine that
such person deliberately breached his duty to the Trust or its Common or
Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Debenture Issuer or Preferred
Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company Indemnified
Person who serves in such capacity at any time while this Section 10.4(a) is in
effect. Any repeal or modification of this Section 10.4(a) shall not affect any
rights or obligations then existing.
(vii) The Debenture Issuer may purchase and maintain insurance on
behalf of any person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Debenture Issuer would
have the power to indemnify him against such liability under the provisions of
this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 10.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any loss,
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liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration or the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligation to indemnify as set forth in this
Section 10.4(b) shall survive the satisfaction and discharge of this
Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the
Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the
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records of the Trust shall be examined by and reported upon as of the end of
each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over
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any amounts to any authority with respect to distributions or allocations to any
Holder, the amount withheld shall be deemed to be a distribution in the amount
of the withholding to the Holder. In the event of any claimed overwithholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Trust may reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
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(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the
Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article
V to increase or decrease the number of, and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) subject to Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government
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agency or regulatory authority which amendment does not have a material
adverse effect on the right, preferences or privileges of the Holders; and
(v) to modify, eliminate and add to any provision of the Declaration
to such extent as may be reasonably necessary to effectuate any of the
foregoing or to otherwise comply with applicable law.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of
Securities representing at least 10% in liquidation amount of such class of
Securities. Such direction shall be given by delivering to the Regular Trustees
one or more calls in a writing stating that the signing Holders of Securities
wish to call a meeting and indicating the general or specific purpose for which
the meeting is to be called. Any Holders of Securities calling a meeting shall
specify in writing the Security Certificates held by the Holders of Securities
exercising the right to call a meeting and only those Securities specified shall
be counted for purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
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(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Institutional Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Institutional Trustee's acceptance
of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a national banking association with
trust powers, duly organized, validly existing and in good standing under
the laws of the United States, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms
of, the Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the
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part of the Institutional Trustee. The Declaration has been duly executed
and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the Articles of Organization or By-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee, of the
Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under
the laws of the State of Delaware, with trust power and authority to
execute and deliver, and to carry out and perform its obligations under
the terms of, the Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the
Declaration.
(d) The Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under
the laws of the
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State of Delaware, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the
Declaration.
(e) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the
Declaration.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
TRAVELERS CAPITAL V
c/o Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Heidi G. Miller
Irwin Ettinger
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of
to the Holders of the Securities):
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
(c) if given to the Institutional Trustee, at its Corporate Trust
Office to the attention of The Institutional Trust Group (or such other
address as the Institutional Trustee may give notice of to the Holders of
the Securities):
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(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice of to the Trust):
Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Charles O. Prince, III, Secretary
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
SECTION 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
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SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
______________________________________
Heidi G. Miller, as Regular Trustee
______________________________________
Irwin Ettinger, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By:___________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A., as
Institutional Trustee
By:___________________________________
Name:
Title:
TRAVELERS GROUP INC., as Sponsor
By:___________________________________
Name:
Title:
<PAGE>
ANNEX I
TERMS OF
[ ]% TRUST PREFERRED SECURITIES
[ ]% TRUST COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of [ ], 1996 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. [_____] Preferred Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
eight hundred million dollars ($[_____]) and a liquidation amount with respect
to the assets of the Trust of $25 per preferred security, are hereby designated
for the purposes of identification only as "[ ]% Trust Preferred Securities"
(the "Preferred Securities"). The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange on which the Preferred Securities are listed.
(b) Common Securities. [_____] Common Securities of the Trust with
an aggregate liquidation amount with respect to the assets of the Trust of
twenty-four million seven hundred forty-three thousand dollars ($[_____]) and a
liquidation amount with respect to the assets of the Trust of $25 per common
security, are hereby designated for the purposes of identification only as "[ ]%
Trust Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate
per annum of [ ]% (the "Coupon Rate") of the stated liquidation amount of $25
per Security, such rate being the rate of interest payable on the Debentures to
be held by the Institutional Trustee. Distributions in arrears beyond the first
date such Distributions are payable (or
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would be payable if not for any Extension Period (as defined below) or default
by the Debenture Issuer on the Debentures) will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from and including [_____], 1996, and will be payable quarterly in arrears, on
March 31, June 30, September 30, and December 31 of each year, commencing on [
], 1996. When, as and if available for payment, Distributions will be made by
the Institutional Trustee, except as otherwise described below. The Debenture
Issuer has the right under the Indenture to defer payments of interest on the
Debentures by extending the interest payment period from time to time on the
Debentures for a period not exceeding 20 consecutive quarters (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures, provided that no Extension Period may extend beyond
the date of maturity of the Debentures. As a consequence of the Debenture
Issuer's extension of the interest payment period, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at the Coupon
Rate compounded quarterly during any such Extension Period. In the event that
the Debenture Issuer exercises its right to extend the interest payment period,
then (a) the Debenture Issuer shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make any
guarantee payment with respect thereto (other than (i) repurchases, redemptions
or other acquisitions of shares of capital stock of Travelers in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of employees, officers, directors or consultants, (ii) as a result
of an exchange or conversion of any class or series of Travelers's capital stock
for any other class or series of Travelers's capital stock, or (iii) the
purchase of fractional interests in shares of Travelers's capital stock pursuant
to the conversion or exchange provisions of such capital stock or the security
being converted or exchanged) and (b) the Debenture Issuer shall not make any
payment of interest on or principal of (or premium, if any, on), or repay,
repurchase or redeem, any debt securities issued by the Debenture Issuer that
rank pari passu with or junior to the Debentures. The foregoing, however, will
not apply to any stock dividends paid by Travelers where the dividend stock is
the same stock as that on which the dividend is being paid. Prior to the
termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period, together with
all such previous and further extensions thereof, may not exceed 20 consecutive
quarters; provided further, that no Extension Period
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may extend beyond the maturity of the Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements. The Regular Trustees will give notice to each Holder of any
Extension Period upon their receipt of notice thereof from the Debenture Issuer.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record dates. While the Preferred Securities remain in
book-entry only form, the relevant record dates shall be one Business Day prior
to the relevant payment dates which payment dates shall correspond to the
interest payment dates on the Debentures. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such payment in respect
of the Preferred Securities will be made as described under the heading
"Description of the Preferred Securities -- Book-Entry Only Issuance -- The
Depository Trust Company" in the Prospectus Supplement dated [_____], 1996, (the
"Prospectus Supplement") to the Prospectus dated [_____], 1996 (together, the
"Prospectus"), of the Trust included in the Registration Statement on Form S-3
of the Sponsor, the Trust and certain other business trusts. The relevant record
dates for the Common Securities shall be the same record date as for the
Preferred Securities. If the Preferred Securities shall not continue to remain
in book-entry only form, the relevant record dates for the Preferred Securities
shall conform to the rules of any securities exchange on which the securities
are listed and, if none, shall be selected by the Regular Trustees, which dates
shall be at least 14 days but no more than 60 days before the relevant payment
dates, which payment dates shall correspond to the interest payment dates on the
Debentures. Distributions payable on any Securities that are not punctually paid
on any Distribution payment date, as a result of the Debenture Issuer having
failed to make a payment under the Debentures, will cease to be payable to the
Person in whose name such Securities are registered on the relevant record date,
and such defaulted Distribution will instead be payable to the Person in whose
name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distribution payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
(d) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
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3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities of creditors, distributions in an
amount equal to the aggregate of the stated liquidation amount of $25 per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such dissolution, winding-up or termination, Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate equal to the Coupon Rate, and bearing accrued and unpaid interest
in an amount equal to the accrued and unpaid Distributions on, such Securities
outstanding at such time, have been distributed on a Pro Rata basis to the
Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the Debenture
Issuer or pursuant to a Special Event as described below), the proceeds from
such repayment or payment shall be simultaneously applied to redeem Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid or redeemed at a redemption price of $25 per
Security plus an amount equal to accrued and unpaid Distributions thereon at the
date of the redemption, payable in cash (the "Redemption Price"). Holders shall
be given not less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Securities will be redeemed Pro Rata and the Preferred Securities
to be redeemed will be as described in Section 4(f)(ii) below.
(c) If, at any time, a Tax Event or an Investment Company Event
(each as defined below, and each a "Special Event") shall occur and be
continuing, the Regular Trustees shall, except in certain limited circumstances
in relation to a Tax Event described in this Section 4(c), dissolve the Trust
and, after satisfaction of creditors, cause Debentures held by the Institutional
Trustee, having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate, and
with accrued and unpaid interest equal to accrued and unpaid Distributions on,
the Securities outstanding at such time, to be distributed to the Holders of the
Securities in liquidation of such Holders' interests in the Trust on a Pro Rata
basis, within 90 days following the
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occurrence of such Special Event (the "90 Day Period"); provided, however, that,
in the case of the occurrence of a Tax Event, such dissolution and distribution
shall be conditioned on the Regular Trustees' receipt of an opinion of a
nationally recognized independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue rulings of
the Internal Revenue Service, to the effect that the Holders of the Securities
will not recognize any gain or loss for United States federal income tax
purposes as a result of such dissolution and distribution of Debentures, and
provided further, that, if at the time there is available to the Debenture
Issuer or the Trust the opportunity to eliminate, within the 90 Day Period, the
Special Event by taking some ministerial action, such as filing a form or making
an election, or pursuing some other similar reasonable measure, that will have
no adverse effect on the Trust, the Debenture Issuer or the Holders of the
Securities ("Ministerial Action"), the Debenture Issuer or the Trust will pursue
such Ministerial Action in lieu of dissolution.
If in the case of the occurrence of a Tax Event, (i) the Debenture
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a result
of such Tax Event, there is more than an insubstantial risk that the Debenture
Issuer would be precluded from deducting the interest on the Debentures for
United States federal income tax purposes, even after the Debentures were
distributed to the Holders of Securities in liquidation of such Holders'
interests in the Trust as described in this Section 4(c), or (ii) the Regular
Trustees shall have been informed by such tax counsel that it cannot deliver a
No Recognition Opinion to the Regular Trustees, the Debenture Issuer 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 within 90 days following the
occurrence of such Tax Event, and, following such redemption, Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed shall be redeemed by the Trust at the Redemption Price on
a Pro Rata basis; provided, however, that if at the time there is available to
the Debenture Issuer or the Trust the opportunity to eliminate, within such 90
day period, the Tax Event by taking some Ministerial Action, the Trust or the
Debenture Issuer will pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Tax Event Opinion") to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or (b) any amendment to, or
change in, an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after the date of the Prospectus Supplement), in
either case after the date of the Prospectus Supplement, there is more than an
insubstantial risk that (i) the Trust would be subject to United States federal
income tax with respect to interest accrued or received on the Debentures, (ii)
the Trust would be subject to more than a de minimis
I-5
<PAGE>
amount of other taxes, duties or other governmental charges, or (iii) interest
payable to the Trust on the Debentures would not be deductible, in whole or in
part, by the Debenture Issuer for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall
have received an opinion of a nationally recognized independent counsel
experienced in practice under the Investment Company Act (an "Investment Company
Event Opinion") to the effect that, as a result of the occurrence of a change in
law or regulation or a written 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 a more than an insubstantial
risk that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which Change in 1940
Act Law becomes effective on or after the date of the Prospectus Supplement.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) DTC or its nominee (or any successor
Clearing Agency or its nominee), as the record Holder of the Preferred
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and (iii) any
certificates representing Securities, except for certificates representing
Preferred Securities held by DTC or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent beneficial interests in the
Debentures having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid Distributions on
such Securities until such certificates are presented to the Debenture Issuer or
its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Debentures are distributed to Holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use its best
efforts to have the Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed immediately prior to the
distribution of the Debentures.
(f) Redemption or Distribution procedures will be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities
to be redeemed or exchanged not fewer than 30 nor more than 60 days before
the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or
I-6
<PAGE>
exchange and the dates on which notices are given pursuant to this Section
4(f)(i), a Redemption/ Distribution Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail, postage prepaid,
to Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of
record by DTC or its nominee (or any successor Clearing Agency or its
nominee) or any nominee, the distribution of the proceeds of such
redemption will be made to each Clearing Agency Participant (or Person on
whose behalf such nominee holds such securities) in accordance with the
procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided, that the Debenture
Issuer has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will deposit irrevocably with DTC or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Preferred Securities and
will give DTC (or any successor Clearing Agency) irrevocable instructions
and authority to pay the Redemption Price to the Holders of the Preferred
Securities, and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, provided that the Debenture Issuer
has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will pay the relevant Redemption Price to the
Holders of such Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on the redemption
date. If a Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the close
of business on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the Securities so called
for redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such Securities
to receive the Redemption Price, but without interest on such Redemption
Price. Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Securities that
have been so called for redemption. If any date fixed for redemption
I-7
<PAGE>
of Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such date fixed
for redemption. If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not paid either by the
Institutional Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, DTC or its nominee (or any successor Clearing Agency or its
nominee) if the Global Certificates have been issued or, if Definitive
Preferred Security Certificates have been issued, to the Holder thereof,
and (B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Debenture Issuer
or its affiliates may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by
private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in aggregate liquidation amount of the Preferred
Securities, voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debentures, to (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercise any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past Event of 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,
provided, however, that, where a consent or action under the Indenture would
require the consent or act of each
I-8
<PAGE>
holder of each Debenture affected thereby, such consent or action under the
Indenture shall not be effective until each Holder of Preferred Securities shall
have consented to such action or provided such consent. The Institutional
Trustee shall not revoke any action previously authorized or approved by a vote
of the Holders of the Preferred Securities. Except with respect to directing the
time, method and place of conducting a proceeding for a remedy available to the
Institutional Trustee, the Institutional Trustee, as holder of the Debentures,
shall not take any of the actions described in clauses (i), (ii), (iii) or (iv)
above unless the Institutional Trustee has obtained an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes. If the
Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Preferred Securities may directly institute a legal proceeding against
the Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures without first instituting a legal proceeding against the
Institutional Trustee or any other Person or entity. If a Declaration Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer 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
also directly institute a proceeding for enforcement of payment to such holder
(a "Direct Action") of the principal of or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder on or after the respective due date specified in the
Debentures without first (i) directing the Institutional Trustee to enforce the
terms of the Debentures or (ii) instituting a legal proceeding directly against
the Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures. Except as provided in the preceding sentence, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures. In connection with such Direct
Action, Travelers will be subrogated to the rights of such holder of Preferred
Securities under the Declaration to the extent of any payment made by Travelers
to such holder of Preferred Securities in such Direct Action.
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 Securities in
the Trust or pursuant to written consent. The Regular Trustees 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 mailed to each Holder of record of Preferred Securities. Each
such notice will include a statement setting forth (i) the date of such meeting
or the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with this Declaration and the terms of
the Securities.
I-9
<PAGE>
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c) and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Event of Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or direct the exercise of any trust or power conferred
upon the Institutional Trustee under the Declaration, including (i) directing
the time, method, place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waiving any past default
and its consequences that is waivable under Section 5.13 of the Indenture, or
(iii) exercising any right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable, provided that, where a consent
or action under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected thereby (a
"Super Majority"), the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
shall not take any action in accordance with the directions of the Holders of
the Common Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Declaration, any Holder of Common Securities may
institute a legal proceeding directly against any Person to enforce the
Institutional Trustee's rights under the
I-10
<PAGE>
Declaration, without first instituting a legal proceeding against the
Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i) above
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
Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the holders of greater than a majority in aggregate principal
amount of the Debentures (a "Super Majority"), the Institutional Trustee may
only give such consent at the
I-11
<PAGE>
direction of the Holders of at least the proportion in liquidation amount of the
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 7(b) unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu and payment thereon shall
be made Pro Rata with the Common Securities except that, where an Event of
Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Institutional Trustee, the rights of Holders of the
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed on the New York Stock Exchange, Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee, including the subordination provisions therein and to the provisions
of the Indenture.
I-12
<PAGE>
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration or the Preferred
Securities Guarantee, and the Indenture to a Holder without charge on written
request to the Sponsor at its principal place of business.
I-13
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS PREFERRED
SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Certificate Number Number of Preferred Securities
CUSIP NO. _____________
Certificate Evidencing Preferred Securities
of
TRAVELERS CAPITAL V
[ ]% Trust Preferred Securities)
(Liquidation Amount $25 per Preferred Security)
TRAVELERS CAPITAL V, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that ___________
(the "Holder") is the registered owner of ________ (____) preferred securities
of the Trust representing
A1-1
<PAGE>
undivided beneficial interests in the assets of the Trust designated the [ ]%
Trust Preferred Securities (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, 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
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of [_____], 1996, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Preferred Securities Guarantee to the extent
provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Sponsor at its principal place of business.
The Holder of this certificate, by accepting this certificate, is
deemed to have (i) agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) and (ii) agreed to the
terms of the Preferred Securities Guarantee, including that the Preferred
Securities Guarantee is (A) subordinate and junior in right of payment to all
other liabilities of Travelers, (B) pari passu with the most senior preferred or
preference stock now or hereafter issued by Travelers and with any guarantee now
or hereafter issued by Travelers with respect to preferred or preference stock
of Travelers's affiliates and (C) senior to Travelers's common stock.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
A1-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of _______, ____.
___________________________________
Heidi G. Miller, as Trustee
___________________________________
Irwin Ettinger, as Trustee
A1-3
<PAGE>
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
____________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________ agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
A1-4
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
TRAVELERS CAPITAL V
[ ]% Trust Common Securities
(Liquidation Amount $25 per Common Security)
TRAVELERS CAPITAL V, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Travelers
Group Inc., a Delaware corporation, (the "Holder") is the registered owner of
__________ (________) common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the [ ]% Trust Common
Securities (the "Common Securities"). The Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for transfer
and satisfaction of the other conditions set forth in the Declaration (as
defined below), including, without limitation, Section 9.1 thereof. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of [_____], 1996, as the same may be
amended from time to time (the "Declaration"), including the designation of the
terms of the Common Securities as set forth in Annex I thereto. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Sponsor will provide a copy of the Declaration and the
Indenture to a Holder without charge upon written request to the Sponsor at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
A2-1
<PAGE>
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A2-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day
of _________, ____.
___________________________________
Heidi G. Miller, as Trustee
___________________________________
Irwin Ettinger, as Trustee
A2-3
<PAGE>
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints _______________________________________________________
________________________________________________________________________________
_________________________________ agent to transfer this Common Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-4
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
EXHIBIT 4.11
================================================================================
TRAVELERS GROUP INC.
TO
THE CHASE MANHATTAN BANK, N.A.
Trustee
_______________
INDENTURE
Dated as of [ ], 1996
_______________
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
PARTIES................................................................1
RECITALS OF THE COMPANY................................................1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions...................................... 1
Act ..................................................... 2
Additional Interest...................................... 2
Affiliate................................................ 2
Authenticating Agent..................................... 2
Board of Directors....................................... 2
Board Resolution......................................... 2
Book Entry Interest...................................... 2
Business Day............................................. 2
Commission............................................... 2
Common Securities........................................ 3
Company ................................................. 3
Company Request.......................................... 3
Company Order............................................ 3
Compounded Interest...................................... 3
Corporate Trust Office................................... 3
Coupon Rate.............................................. 3
Covenant Defeasance...................................... 3
Declaration.............................................. 3
Defaulted Interest....................................... 3
Defeasance............................................... 3
Deferred Interest........................................ 3
Delaware Trustee......................................... 3
Depositary............................................... 3
Direct Action............................................ 3
Dissolution Event........................................ 4
Distributions............................................ 4
Event of Default......................................... 4
Exchange Act............................................. 4
Extended Interest Payment Period......................... 4
Floating or Adjustable Rate Provision.................... 4
Floating or Adjustable Rate Security..................... 4
Global Security.......................................... 4
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Holder ................................................. 4
Indenture................................................ 4
Institutional Trustee.................................... 4
Interest Payment Date.................................... 4
Maturity................................................. 4
Non Book-Entry Preferred Securities...................... 5
No Recognition Opinion................................... 5
Officers' Certificate.................................... 5
Opinion of Counsel....................................... 5
Outstanding.............................................. 5
Paying Agent............................................. 6
Person ................................................. 6
Place of Payment......................................... 6
Predecessor Security..................................... 6
Preferred Securities..................................... 6
Preferred Security Certificate........................... 6
Redemption Date.......................................... 6
Redemption Option Date................................... 6
Redemption Price......................................... 6
Redemption Tax Opinion................................... 6
Regular Record Date...................................... 7
Regular Trustees......................................... 7
Responsible Officer...................................... 7
Securities............................................... 7
Security Beneficial Owner................................ 7
Security Register........................................ 7
Security Registrar....................................... 7
Senior Indebtedness...................................... 7
Special Event............................................ 8
Special Record Date...................................... 8
Stated Maturity.......................................... 8
Travelers Trust.......................................... 8
Tax Event................................................ 8
Tax Event Opinion........................................ 8
Trust Indenture Act...................................... 8
Trust Securities......................................... 8
Trustee ................................................. 8
Underwriting Agreement................................... 8
U.S. Government Obligations.............................. 8
Vice President........................................... 9
SECTION 1.2. Compliance Certificates and Opinions............. 9
SECTION 1.3. Form of Documents Delivered to Trustee........... 9
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SECTION 1.4. Acts of Holders; Record Dates.................... 10
SECTION 1.5. Notices, Etc., to Trustee and Company............ 11
SECTION 1.6. Notice to Holders; Waiver........................ 11
SECTION 1.7. Conflict with Trust Indenture Act................ 11
SECTION 1.8. Effect of Headings and Table of Contents......... 12
SECTION 1.9. Successors and Assigns........................... 12
SECTION 1.10. Separability Clause.............................. 12
SECTION 1.11. Benefits of Indenture............................ 12
SECTION 1.12. Governing Law.................................... 12
SECTION 1.13. Legal Holidays................................... 12
SECTION 1.14. Tax Characterization............................. 13
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.................................. 13
SECTION 2.2. Form of Face of Security......................... 13
SECTION 2.3. Form of Reverse of Security...................... 16
SECTION 2.4. Form of Trustee's Certificate of Authentication.. 20
ARTICLE III
THE SECURITIES
SECTION 3.1. Amount Unlimited; Issuable in Series............. 20
SECTION 3.2. Denominations.................................... 22
SECTION 3.3. Execution, Authentication, Delivery and Dating... 22
SECTION 3.4. Temporary Securities............................. 23
SECTION 3.5. Registration, Registration of Transfer and
Exchange ..................................... 24
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities. 25
SECTION 3.7. Payment of Interest; Interest Rights Preserved... 26
SECTION 3.8. Persons Deemed Owners............................ 27
SECTION 3.9. Cancellation..................................... 27
SECTION 3.10. Interest......................................... 28
SECTION 3.11. Form and Payment................................. 29
SECTION 3.12. Global Securities................................ 29
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ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 4.1. Satisfaction and Discharge of Indenture.......... 30
SECTION 4.2. Defeasance and Discharge......................... 32
SECTION 4.3. Covenant Defeasance.............................. 32
SECTION 4.4. Conditions to Defeasance or Covenant Defeasance.. 33
SECTION 4.5. Application of Trust Money....................... 34
SECTION 4.6. Indemnity for U.S. Government Obligations........ 34
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default................................ 34
SECTION 5.2. Acceleration of Maturity; Rescission and
Annulment ...................................... 36
SECTION 5.3. Collection of Indebtedness and Suits for
Enforcement by Trustee ......................... 37
SECTION 5.4. Trustee May File Proofs of Claim................. 38
SECTION 5.5. Trustee May Enforce Claims Without Possession
of Securities .................................. 39
SECTION 5.6. Application of Money Collected................... 39
SECTION 5.7. Limitation on Suits.............................. 39
SECTION 5.8. Unconditional Right of Holders to Receive
Principal, Premium and Interest................. 40
SECTION 5.9. Restoration of Rights and Remedies............... 40
SECTION 5.10. Rights and Remedies Cumulative................... 40
SECTION 5.11. Delay or Omission Not Waiver..................... 41
SECTION 5.12. Control by Holders............................... 41
SECTION 5.13. Waiver of Past Defaults.......................... 41
SECTION 5.14. Undertaking for Costs............................ 42
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.............. 42
SECTION 6.2. Notice of Defaults............................... 43
SECTION 6.3. Certain Rights of Trustee........................ 44
SECTION 6.4. Not Responsible for Recitals or Issuance
of Securities .................................. 45
SECTION 6.5. May Hold Securities.............................. 45
SECTION 6.6. Money Held in Trust.............................. 45
SECTION 6.7. Compensation and Reimbursement................... 45
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SECTION 6.8. Disqualification; Conflicting Interests.......... 46
SECTION 6.9. Corporate Trustee Required; Eligibility.......... 51
SECTION 6.10. Resignation and Removal; Appointment of
Successor ...................................... 51
SECTION 6.11. Acceptance of Appointment by Successor........... 53
SECTION 6.12. Merger, Conversion, Consolidation or Succession
to Business .................................... 54
SECTION 6.13. Preferential Collection of Claims Against Company 54
SECTION 6.14. Appointment of Authenticating Agent.............. 58
ARTICLE VII
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses
of Holders ..................................... 60
SECTION 7.2. Preservation of Information; Communications
to Holders ..................................... 60
SECTION 7.3. Reports by Trustee............................... 61
SECTION 7.4. Reports by Company............................... 62
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., Only on
Certain Terms .................................. 63
SECTION 8.2. Successor Corporation Substituted................ 64
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent
of Holders ..................................... 64
SECTION 9.2. Supplemental Indentures with Consent of Holders.. 65
SECTION 9.3. Execution of Supplemental Indentures............. 66
SECTION 9.4. Effect of Supplemental Indentures................ 67
SECTION 9.5. Conformity with Trust Indenture Act.............. 67
SECTION 9.6. Reference in Securities to Supplemental
Indentures ..................................... 67
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest....... 67
SECTION 10.2. Maintenance of Office or Agency.................. 67
SECTION 10.3. Money for Securities Payments to Be Held in Trust 68
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SECTION 10.4. Statement by Officers as to Default.............. 69
SECTION 10.5. Covenants as to Travelers Trusts................. 69
SECTION 10.6. Payment of Expenses.............................. 70
SECTION 10.7. Listing on an Exchange........................... 71
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of Article......................... 71
SECTION 11.2. Election to Redeem; Notice to Trustee............ 71
SECTION 11.3. Selection by Trustee of Securities to Be Redeemed 72
SECTION 11.4. Notice of Redemption............................. 72
SECTION 11.5. Deposit of Redemption Price...................... 73
SECTION 11.6. Securities Payable on Redemption Date............ 73
SECTION 11.7. Securities Redeemed in Part...................... 73
SECTION 11.8. Tax Event Redemption............................. 74
ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article......................... 74
SECTION 12.2. Satisfaction of Sinking Fund Payments
with Securities ................................ 75
SECTION 12.3. Redemption of Securities for Sinking Fund........ 75
ARTICLE XIII
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 13.1. Extension of Interest Payment Period............. 75
SECTION 13.2. Notice of Extension.............................. 76
SECTION 13.3. Limitation of Transactions....................... 77
ARTICLE XIV
SUBORDINATION OF SECURITIES
SECTION 14.1. Agreement to Subordinate......................... 77
SECTION 14.2. Default on Senior Indebtedness................... 78
SECTION 14.3. Liquidation; Dissolution; Bankruptcy............. 78
SECTION 14.4. Subrogation...................................... 80
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SECTION 14.5. Trustee to Effectuate Subordination.............. 81
SECTION 14.6. Notice by the Company............................ 81
SECTION 14.7. Rights of the Trustee; Holders of Senior
Indebtedness ................................... 82
SECTION 14.8. Subordination May Not Be Impaired................ 82
ARTICLE XV
MISCELLANEOUS
SECTION 15.1. Acknowledgement of Rights........................ 83
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Travelers Group Inc.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of April 30, 1996
Trust Indenture
Act Section..................................Indenture Section
ss. 310 (a)(1)..................................... 6.9
(a)(2)........................................ 6.9
(a)(3)........................................ Not Applicable
(a)(4)........................................ Not Applicable
(b)........................................... 6.8
........................................... 6.10
ss. 311 (a)...................................... 6.13(a)
(b)........................................... 6.13(b)
(b)(2)........................................ 7.3(a)(2)
........................................... 7.3(b)
ss. 312 (a)...................................... 7.1
........................................... 7.2(a)
(b)........................................... 7.2(b)
(c)........................................... 7.2(c)
ss. 313 (a)...................................... 7.3(a)
(b)........................................... 7.3(b)
(c)........................................... 7.3(a), 7.3(b)
(d)........................................... 7.3(c)
ss. 314 (a)...................................... 7.4
(b)........................................... Not Applicable
(c)(1)........................................ 1.2
(c)(2)........................................ 1.2
(c)(3)........................................ Not Applicable
(d)........................................... Not Applicable
(e)........................................... 1.2
ss. 315 (a)...................................... 6.1(a)
(b)........................................... 6.2
........................................... 7.3(a)(6)
(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
ss. 316 (a)...................................... 1.1
(a)(1)(A)..................................... 5.2
........................................... 5.12
(a)(1)(B)..................................... 5.13
(a)(2)........................................ Not Applicable
(b)........................................... 5.8
ss. 317 (a)(1)................................... 5.3
(a)(2)........................................ 5.4
(b)........................................... 10.3
ss. 318 (a)...................................... 1.7
- ----------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
viii
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INDENTURE, dated as of [ ], 1996, between TRAVELERS GROUP INC., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at 388 Greenwich
Street, New York, New York 10013, and THE CHASE MANHATTAN BANK, N.A., a national
banking association duly organized and existing under the laws of the United
States of America, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness (herein called
the "Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of series
thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting
<PAGE>
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted
at the date of such computation; and
(4) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act," when used with respect to any Holder, has the meaning specified in
Section 1.4.
"Additional Interest" has the meaning specified in Section 3.10(c).
"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. 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.
"Authenticating Agent" means any Person authorized by the Trustee to act
on behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book Entry Interest" means a beneficial interest in a Global Security,
ownership of which shall be maintained and transfers of which shall be made
through book entries by the Depositary.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in New York, New York are authorized or
obligated by any applicable law to close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
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"Common Securities" means undivided beneficial interests in the assets of
a Travelers Trust which rank, except upon the occurrence and continuation of an
Event of Default, pari passu with Preferred Securities issued by such Travelers
Trust.
"Company" means the Person named as the "Company' in the first paragraph
of this instrument until a successor corporation shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman or Vice Chairman of the Board,
its President, a Vice President, its Chief Financial Officer or its Chief
Accounting Officer, and by its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary, and delivered to the Trustee.
"Compounded Interest" has the meaning specified in Section 12.1.
"Corporate Trust Office" means the principal office of the Trustee in the
City of New York, New York at which at any particular time its corporate trust
business shall be principally administered, which at the date hereof is located
at 4 Chase MetroTech Center, Brooklyn, New York 11245.
"Coupon Rate" has the meaning specified in Section 3.10.
"Covenant Defeasance" has the meaning specified in Section 4.3.
"Declaration" means, with respect to a Travelers Trust, the amended and
restated declaration of trust or any other governing instrument of such
Travelers Trust.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Defeasance" has the meaning specified in Section 4.2.
"Deferred Interest" has the meaning specified in Section 12.1.
"Delaware Trustee" has the meaning specified in the Declaration of the
applicable Travelers Trust.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 3.1.
"Direct Action" has the meaning specified in Section 14.1.
3
<PAGE>
"Dissolution Event" means, with respect to a Travelers Trust, that as a
result of the occurrence and continuation of a Special Event with respect to
such Travelers Trust, such Travelers Trust is to be dissolved in accordance with
its Declaration.
"Distributions" on Trust Securities of a Travelers Trust has the meaning
set forth in the Declaration of such Travelers Trust.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor legislation.
"Extended Interest Payment Period" has the meaning specified in Section
12.1.
"Floating or Adjustable Rate Provision" means a formula or provision,
specified in a Board Resolution or an indenture supplemental hereto, providing
for the determination, whether pursuant to objective factors or pursuant to the
sole discretion of any Person (including the Company), and periodic adjustment
of the interest rate per annum borne by a Floating or Adjustable Rate Security.
"Floating or Adjustable Rate Security" means any Security which provides
for interest to be payable thereon at a rate per annum that may vary from time
to time over the term thereof in accordance with a Floating or Adjustable Rate
Provision.
"Global Security" means a Security that evidences all or part of the
Securities of any series and is authenticated and delivered to, and registered
in the name of, the Depositary for such Securities or a nominee thereof.
"Holder" means a Person in whose name a Security is registered in the
Security 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 and shall
include the terms of particular series of Securities established as contemplated
by Section 3.1.
"Institutional Trustee" has the meaning set forth in the Declaration of
the applicable Travelers Trust.
"Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or
4
<PAGE>
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Non Book-Entry Preferred Securities" has the meaning specified in Section
3.12(a).
"No Recognition Opinion," with respect to a Travelers Trust, has the
meaning specified in the Declaration of such Travelers Trust.
"Officers' Certificate" means a certificate signed by the Chairman or Vice
Chairman of the Board, the President, a Vice President, the Chief Financial
Officer or the Chief Accounting Officer, and by the Treasurer, an Assistant
Treasurer, 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.
"Outstanding," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made; and
(iii) Securities which have been paid pursuant to Section 3.6 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided that in determining whether the Holders of the requisite principal
amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding; provided, however, that, in determining whether the Trustee shall
be protected in relying, upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer of the Trustee actually knows to be so owned shall be so disregarded and
provided, further, that Securities held by the Institutional
5
<PAGE>
Trustee for the benefit of the holders of the Trust Securities shall not be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (or premium, if any) or interest on any Securities 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.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that series are payable as specified as
contemplated by Section 3.1.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Preferred Securities" means undivided beneficial interests in the assets
of a Travelers Trust which rank, except upon the occurrence and continuation of
an Event of Default, pari passu with Common Securities issued by such Travelers
Trust.
"Preferred Security Certificate" has the meaning specified in the
Declaration of the applicable Travelers Trust.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Option Date" means, with respect to a series of Securities,
the date specified as contemplated by Section 3.1 on or after which, from time
to time, the Company, at its option, may redeem such series of Securities in
whole or in part.
"Redemption Price," when used with respect to any Security to be redeemed,
means such percentage of the principal amount of such Security that is specified
pursuant to Section 3.1 plus any accrued and unpaid interest thereon to the date
of redemption.
"Redemption Tax Opinion," with respect to a Travelers Trust, has the
meaning set forth in the Declaration of the applicable Travelers Trust.
6
<PAGE>
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified as such pursuant
to Section 3.1.
"Regular Trustees" has the meaning set forth in the Declaration of the
applicable Travelers Trust.
"Responsible Officer" means, with respect to the Trustee, any officer
within the Corporate Trust Office of the Trustee, including any vice-president,
any assistant vice-president, any assistant secretary, the treasurer, any
assistant treasurer or other officer of the Corporate Trust Office of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Security Beneficial Owner" means, with respect to a Book Entry Interest,
a person who is the beneficial owner of such Book Entry Interest, as reflected
on the books of the Depositary, or on the books of a Person maintaining an
account with such Depositary (directly as a Depositary participant or as an
indirect participant, in each case in accordance with the rules of the
Depositary).
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.5.
"Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor for money borrowed and (B) indebtedness evidenced by securities, notes,
debentures, bonds or other similar instruments issued by such obligor; (ii) all
capital lease obligations of such obligor; (iii) all obligations of such obligor
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of such obligor and all obligations of such obligor under any
conditional sale or title retention agreement (but excluding trade accounts
payable in the ordinary course of business); (iv) all obligations, contingent or
otherwise, of such obligor in respect of any letters of credit, banker's
acceptance, security purchase facilities or similar credit transactions; (v) all
obligations in respect of interest rate swap, cap or other agreements, interest
rate future or option contracts, currency swap agreements, currency future or
option contracts and other similar agreements; (vi) all obligations of the type
referred to in clauses (i) through (v) of other Persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise; and
(vii) all obligations of the type referred to in clauses (i) through (vi) of
other Persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1) any
such indebtedness that is by its terms subordinated to or pari passu with the
Securities, and (2) any indebtedness between or among such obligor and its
Affiliates, including all other debt securities and guarantees in respect of
those debt securities, issued to (x)
7
<PAGE>
any Travelers Trust or (y) any other trust, or a trustee of such trust,
partnership or other entity affiliated with the Company which is a financing
vehicle of the Company (a "Financing Entity") in connection with the issuance by
such Financial Entity of preferred securities or other securities which rank
pari passu with, or junior to, the Preferred Securities.
"Special Event," with respect to a Travelers Trust, has the meaning
specified in the Declaration of such Travelers Trust.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Travelers Trust" means each of Travelers Capital I, Travelers Capital II,
Travelers Capital III, Travelers Capital IV and Travelers Capital V, each a
Delaware statutory business trust, or any other similar trust created for the
purpose of issuing preferred securities in connection with the issuances of
Securities under this Indenture.
"Tax Event," with respect to a Travelers Trust, has the meaning set forth
in the Declaration of the applicable Travelers Trust.
"Tax Event Opinion," with respect to a Travelers Trust, has the meaning
set forth in the Declaration of the applicable Travelers Trust.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as in force
at the date as of which this instrument was executed, except as provided in
Section 9.5.
"Trust Securities" means Common Securities and Preferred Securities of any
Travelers Trust.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a Trustee hereunder, and if at any time there
is more than one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series.
"Underwriting Agreement" has the meaning set forth in the Declaration of
the applicable Travelers Trust.
"U.S. Government Obligations" has the meaning specified in Section 4.4.
8
<PAGE>
"Vice President," when used with respect to the Company or the Trustee,
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 Certificates 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 Officer's Certificate stating that all conditions 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, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include,
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. Form 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
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opinion or representations with respect to the 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; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders shall 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 are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by 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 the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every 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 Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
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SECTION 1.5. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder 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,
Attention: Institutional Trust Group; provided, however, that such
instrument will be considered properly given if submitted in an electronic
format, i.e., by facsimile, E-Mail or otherwise, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) 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; provided,
however, that such instrument will be considered properly given if
submitted in an electronic format, i.e., by facsimile, E-Mail or
otherwise.
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 his address as it appears in the Security Register, not later
than the latest date and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
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.
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SECTION 1.7. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control.
SECTION 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law.
This Indenture and the Securities shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York, and all
rights and remedies shall be governed by such laws without regard for the
principles of its conflicts of laws.
SECTION 1.13. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment 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, Redemption Date
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or Stated Maturity, as the case may be, 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.
SECTION 1.14. Tax Characterization.
The Company, the Trustee and each Holder of a Security (by acceptance
thereof) agrees to treat the Securities as debt instruments for United States
federal, state and local income and franchise tax purposes and agrees not to
take any contrary position before any taxing authority or on any tax return
unless otherwise required by law.
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of such Securities. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 3.3 for the
authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be in substantially the
form set forth in this Article.
The definitive Securities may be produced in any manner as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 2.2. Form of Face of Security.
[IF THE SECURITY IS TO BE A GLOBAL SECURITY, INSERT - This
Security is a Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depositary or a nominee of a
Depositary. This Security is exchangeable for Securities registered in the name
of a person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this
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Security (other than a transfer of this Security as a whole by the Depositary to
a nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary) may be registered except in limited
circumstances.
Unless this Security is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any Security
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.]
No. _________________
TRAVELERS GROUP INC.
[INSERT TITLE OF SERIES OF SECURITY]
TRAVELERS GROUP INC., a Delaware corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ______________ or registered
assigns, the principal sum of _____________ Dollars ($___________) on _________,
____, and to pay interest on said principal sum from ____________, ____, or from
the most recent interest payment date (each such date, an "Interest Payment
Date") to which interest has been paid or duly provided for, [quarterly]
[(subject to deferral as set forth herein)] in arrears on [___________,
___________, ___________ and ___________] of each year commencing ________,
____, at [If the Security is to bear interest at a fixed rate, insert -a rate of
..% per annum,] [If the Security is a Floating or Adjustable Rate Security,
insert -a rate per annum [computed-determined] in accordance with the [insert
defined name of Floating or Adjustable Rate Provision] set forth below] until
the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum compounded [quarterly]. The
amount of interest payable on any Interest Payment Date shall be computed on the
basis of a 360-day year of twelve 30-day months. In the event that any date on
which interest is payable on this Security is not a Business Day, then payment
of interest payable on such date will be made on the next succeeding day that is
a Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities, as defined
in said Indenture) is registered at the close of business on the regular record
date for such interest installment, which shall be the
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close of business on the Business Day next preceding such Interest Payment Date.
[IF PURSUANT TO THE PROVISIONS OF THE INDENTURE THE SECURITIES ARE NO LONGER
REPRESENTED BY A GLOBAL SECURITY -- which shall be the close of business on the
____ Business Day next preceding such Interest Payment Date.] Any such interest
installment not punctually paid or duly provided for shall forthwith cease to be
payable to the registered Holders on such regular record date and may be paid to
the Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered Holders of this series of Securities not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. Payments on this
Global Security will be made to the Depository Trust Company, or to a successor
Depositary. [IF PURSUANT TO THE PROVISIONS OF THE INDENTURE THE SECURITIES ARE
NO LONGER REPRESENTED BY A GLOBAL SECURITY --The principal of (and premium, if
any) and the interest on this Security shall be payable at the office or agency
of the Trustee maintained for that purpose in any coin or currency of the United
States of America that at the time of payment is legal tender for payment of
public and private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the registered Holder at
such address as shall appear in the Security Register. Notwithstanding the
foregoing, so long as the Holder of this Security is the Institutional Trustee
of a Travelers Trust, the payment of the principal of (and premium, if any) and
interest on this Security will be made at such place and to such account as may
be designated by such Institutional Trustee.]
[At this point in the Security Form of any series of Floating or
Adjustable Rate Securities, the text of the Floating or Adjustable Rate
Provision relating thereto should be inserted.]
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness of the Company, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be bound by, such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness of the Company, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
This Security shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
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The provisions of this Security are continued on the reverse side hereof
and such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
Dated: _______________
TRAVELERS GROUP INC.
By:_________________________
Name:
Title:
By:_______________________
Name:
Title:
SECTION 2.3. Form of Reverse of Security.
This Security is one of a duly authorized series of securities of the
Company (herein sometimes referred to as the "Securities"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of [ ], 1996 (the "Indenture"), duly executed and
delivered between the Company and The Chase Manhattan Bank, N.A., as Trustee
(the "Trustee"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the respective rights, limitations
of rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Securities. By the terms of the Indenture, the
Securities are issuable in series that may vary as to amount, date of maturity,
rate of interest and in other respects as provided in the Indenture. This series
of Securities is limited in aggregate principal amount to $ _________.
Because of the occurrence and continuation of a Tax Event, in certain
circumstances, this Security may become due and payable at [specify redemption
prices]% of the principal amount thereof, together with any interest accrued
thereon (the "Redemption Price"). The Redemption Price shall be paid prior to
12:00 noon, New York City time, on the date of such redemption or at such
earlier time as the Company determines. The Company shall
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have the right to redeem this Security at the option of the Company, without
premium or penalty, in whole or in part at any time on or after ________, ____
(an "Optional Redemption"), or at any time in certain circumstances upon the
occurrence of a Tax Event, at a redemption price equal to [specify redemption
prices]% of the principal amount thereof, plus any accrued but unpaid interest
to the date of such redemption (the "Optional Redemption Price"). Any redemption
pursuant to this paragraph will be made upon not less than 30 days nor more than
60 days notice, at the Optional Redemption Price. If the Securities are only
partially redeemed by the Company pursuant to an Optional Redemption, the
Securities will be redeemed pro rata or by lot or by any other method utilized
by the Trustee; provided that if, at the time of redemption, the Securities are
registered as a Global Security, the Depositary shall determine the principal
amount of such Securities held by each Security Beneficial Owner to be redeemed
in accordance with its procedures.
[The Securities of this series are subject to redemption upon not less
than 30 days' nor more than 60 days' notice by mail, (1) on _________ in any
year commencing with the year ____ and ending with the year _____ through
operation of the sinking fund for this series at a Redemption Price of _____,
(2) at any time [on or after ________, 199__, as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [on or before ________, ___%,
and if redeemed during the 12-month period beginning ___________ of the years
indicated, and thereafter at a Redemption Price equal to ____% of the principal
amount, together in the case of any such redemption (whether through operation
of the sinking fund or otherwise) with accrued interest to the Redemption Date,
but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to ______,
redeem any Securities of this series as contemplated by Clause (2) of the
preceding paragraph as a part of, or in anticipation of, any refunding operation
by the application, directly or indirectly, of monies borrowed having an
interest cost to the Company (calculated in accordance with generally accepted
financial practice) of less than ____% per annum.]
[The sinking fund for this series provides for the redemption on _______
in each year beginning with the year _______ and ending with the year________ of
[not less than] $_________ ("mandatory sinking fund") and not more than
$__________ aggregate principal amount of Securities of this series. Securities
of this series acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made in the [inverse] order in
which they become due.]
In the event of redemption of this Security in part only, a new Security
or Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
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In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Securities of any series, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
premium payable upon the redemption thereof, without the consent of the Holder
of each Security so affected, or (ii) reduce the aforesaid percentage of
Securities, the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holders of each Security then
outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Securities of any series at the time outstanding affected thereby, on behalf of
all of the Holders of the Securities of such series, to waive any past default
in the performance of any of the covenants contained in the Indenture, or
established pursuant to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal of or premium, if
any, or interest on any of the Securities of such series. Any such consent or
waiver by the registered Holder of this Security (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Security and of any Security issued in
exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Security at the time and place and at the rate and in the money
herein prescribed.
The Company shall have the right at any time during the term of the
Securities and from time to time to extend the interest payment period of such
Securities for up to 20 consecutive quarters (an "Extended Interest Payment
Period"), at the end of which period the Company shall pay all interest then
accrued and unpaid (together with interest thereon at the rate specified for the
Securities to the extent that payment of such interest is enforceable under
applicable law); provided, that no such Extended Interest Payment Period shall
extend beyond the maturity of the Securities; and provided further that during
any such Extended Interest Payment Period (a) the Company shall not declare or
pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or make any guarantee payment with respect thereto (other
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than (i) repurchases, redemptions or other acquisitions of shares of capital
stock of the Company in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of employees, officers,
directors or consultants, (ii) as a result of an exchange or conversion of any
class or series of the Company's capital stock for any other class or series of
the Company's capital stock, or (iii) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged),
and (b) the Company shall not make any payment of interest on or principal of
(or premium, if any, on), or repay, repurchase or redeem, any debt securities
issued by the Company which rank pari passu with or junior to the Securities.
The foregoing, however, will not apply to any stock dividends paid by the
Company where the dividend stock is the same stock as that on which the dividend
is being paid. Before the termination of any such Extended Interest Payment
Period, the Company may further extend such Extended Interest Payment Period,
provided that such Extended Interest Payment Period together with all such
further extensions thereof shall not exceed 20 consecutive quarters. At the
termination of any such Extended Interest Payment Period and upon the payment of
all accrued and unpaid interest and any additional amounts then due, the Company
may commence a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Security is transferable by the registered Holder hereof on the
Security Register of the Company, upon surrender of this Security for
registration of transfer at the office or agency of the Trustee in the City and
State of New York accompanied by a written instrument or instruments of transfer
in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Security,
the Company, the Trustee, any paying agent and the Security Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Security shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Security Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and neither
the Company nor the Trustee nor any paying agent nor any Security Registrar
shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Security, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or
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penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released.
[The Securities of this series are issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof.]
[This Global Security is exchangeable for Securities in definitive form only
under certain limited circumstances set forth in the Indenture. Securities of
this series so issued are issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof.] As provided in the
Indenture and subject to certain limitations [herein and] therein set forth,
Securities of this series [so issued] are exchangeable for a like aggregate
principal amount of Securities of this series of a different authorized
denomination, as requested by the Holder surrendering the same.
All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
SECTION 2.4. Form of Trustee's Certificate of Authentication.
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series of Securities described in the
within-mentioned Indenture.
THE CHASE MANHATTAN BANK, N.A.,
as Trustee
By:__________________
Authorized Signatory
ARTICLE III
THE SECURITIES
SECTION 3.1. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series,
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(1) the title of the Securities of the series (which shall distinguish the
Securities of the series from all Securities of any other series);
(2) the date or dates on which the principal of the Securities of the
series is payable, and, if applicable to the series, the terms of any sinking
fund obligations with respect to such series;
(3) the rate or rates at which the Securities of the series shall bear
interest or the Floating or Adjustable Rate Provision pursuant to which such
rates shall be determined, the date or dates from which any such interest shall
accrue, the Interest Payment Dates on which any such interest shall be payable
and the Regular Record Date for the interest payable on any Interest Payment
Date (if such Interest Payment Dates or Regular Record Dates differ from those
provided herein);
(4) the place or places where the principal of (and any premium, if any)
and interest on Securities of the series shall be payable;
(5) in addition to the redemption rights provided herein, the period or
periods within which (including the Redemption Option Date for the series) and
the price or prices at which any Securities of the series may be redeemed, in
whole or in part, at the option of the Company;
(6) if other than denominations of $25 and any integral multiple thereof,
the denominations in which Securities of the series shall be issuable;
(7) any other event or events of default applicable with respect to the
Securities of the series in addition to those provided in Section 5.1(1) through
(7);
(8) any other covenant or warranty included for the benefit of Securities
of the series in addition to (and not inconsistent with) those included in this
Indenture for the benefit of Securities of all series, or any other covenant or
warranty included for the benefit of Securities of the series in lieu of any
covenant or warranty included in this Indenture for the benefit of Securities of
all series, or any provision that any covenant or warranty included in this
Indenture for the benefit of Securities of all series shall not be for the
benefit of Securities of the series, or any combination of such covenants,
warranties or provisions;
(9) the subordination terms of the Securities of the series;
(10) the provisions of this Indenture, if any, that shall not apply to the
series; and
(11) any other terms of the series (which additional terms shall not be
inconsistent with the provisions of this Indenture).
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All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to
such Board Resolution and set forth, or determined in the manner provided, in
the Officers' Certificate referred to above or in any such indenture
supplemental hereto.
If any of the terms of the Securities of a series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the Securities of such series.
SECTION 3.2. Denominations.
The Securities of each series shall be issuable in registered form without
coupons and in such denominations as shall be specified as contemplated by
Section 3.1. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $25 and any integral multiple thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
or Vice Chairman of the Board, its President, a Vice President, the Chief
Financial Officer or the Chief Accounting Officer, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established in or
pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive at the time of the initial delivery by the Company of
Securities of such series to the Trustee for authentication, and (subject to
Section 6.1) shall be fully protected in relying upon, an Opinion of Counsel
stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 2.1, that such form
has been established in conformity with the provisions of this Indenture;
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(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 3.1, that such terms
have been established in conformity with the provisions of this Indenture;
and
(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, reorganization, and other
laws of general applicability relating to or affecting the enforcement or
creditors' rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon receipt of a Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the directors or officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for Securities of that
series, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like aggregate
principal amount of definitive Securities of the same series and of like tenor
of authorized denominations. Until so exchanged, the temporary Securities of
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any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series.
SECTION 3.5. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities, or of Securities of a particular series, and of
transfers of Securities or of Securities of such series. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Subject to Section 3.11, upon surrender for registration of transfer of
any Security of any series at the office or agency of the Company in a Place of
Payment for Securities of that series, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of like tenor of the same series, of
any authorized denominations and of a like aggregate principal amount.
Subject to Section 3.11, at the option of the Holder, Securities of any
series may be exchanged for other Securities of like tenor of the same series,
of any authorized denominations and of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security 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 Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of
or exchange any Security of any series during a period beginning at the opening
of business 15 days before the
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day of the mailing of a notice of redemption of Securities of such series
selected for redemption under Section 11.3 and ending at the close of business
on the day of such mailing, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its written request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or
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more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest.
Interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series 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
Securities of such series at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date. Notice
of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be paid
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange, if,
after written notice given by the Company to the Trustee of the proposed
payment pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee in its sole discretion.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
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For the purposes of determining the Holders who are entitled to
participate in any distribution on the Securities in respect of which a Regular
Record Date or a Special Record Date is not otherwise provided for in this
Indenture, or for the purpose of any other action (unless provided for pursuant
to Section 3.1), the Company may from time to time fix a date, not more than 90
days prior to the date of the payment of distribution or other action, as the
case may be, as a record date for the determination of the identity of the
Holders of record for such purposes.
SECTION 3.8. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 3.7) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. Unless otherwise directed by a Company Order, delivery of
which must be delivered in a timely manner to prevent such destruction, all
cancelled Securities held by the Trustee shall be destroyed by it, and the
Trustee shall deliver a certificate of such destruction to the Company.
SECTION 3.10. Interest.
(a) Each Security will bear interest at the rate established for the
series of Securities of which such Security is a part pursuant to Section 3.1
(the "Coupon Rate") from and including the original date of issuance of such
Security until the principal thereof becomes due and payable, and on any overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the Coupon Rate,
compounded quarterly, payable (subject to the provisions of Article Four)
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year (or in such other periodic installments on such other dates established as
payment dates for the series of Securities of which such Security is a part
pursuant to Section 3.1) (each, an "Interest Payment Date") commencing on the
date established for the series of Securities of which such Security is a part
pursuant to Section 3.1, to the Person in whose name such Security or any
Predecessor Security is
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registered, at the close of business on the Regular Record Date for such
interest installment, which, in respect of any Securities of which the
Institutional Trustee of any Travelers Trust is the Holder or a Global Security,
shall be the close of business on the Business Day next preceding that Interest
Payment Date. Notwithstanding the foregoing sentence, if the Preferred
Securities of a Travelers Trust are no longer in book-entry only form or, except
if the Securities originally issued to such Travelers Trust are held by the
Institutional Trustee of such Travelers Trust, the Securities of any series are
not represented by a Global Security, the Company may select a Regular Record
Date for such interest installment on such series of Securities which shall be
any date more than 14 days but less than 60 days before an Interest Payment
Date.
(b) The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months and will include the first day
but exclude the last day of such period. Except as provided in the following
sentence, the amount of interest payable for any period shorter than a full
quarterly period for which interest is computed, will be computed on the basis
of the actual number of days elapsed in each 30-day month. In the event that any
date on which interest is payable on the Securities of any series is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(c) If, at any time while the Institutional Trustee of a Travelers Trust
is the Holder of Securities of any series, such Travelers Trust or such
Institutional Trustee is required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States, or any other taxing authority, then, in any case, the
Company will pay as additional interest ("Additional Interest") on the
Securities of such series, such additional amounts as shall be required so that
the net amounts received and retained by such Travelers Trust and/or such
Institutional Trustee, as the case may be, after paying such taxes, duties,
assessments or other governmental charges will be equal to the amounts such
Travelers Trust and/or such Institutional Trustee, as the case may be, would
have received had no such taxes, duties, assessments or other government charges
been imposed.
SECTION 3.11. Form and Payment.
Except as provided in Section 3.12, the Securities of each series shall be
issued in fully registered certificated form without interest coupons. Principal
and interest on the Securities issued in certificated form will be payable, the
transfer of such Securities will be registrable, and such Securities will be
exchangeable, for Securities of the same series bearing identical terms and
provisions at the office or agency of the Trustee; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the Holders of such Securities at such address as shall appear in the Security
Register. Notwithstanding the foregoing, so long as the Holder of all Securities
of any series is the Institutional Trustee of any Travelers Trust, the payment
of the principal of and interest (including Compounded Interest and
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Additional Interest, if any) on Securities of such series will be made at such
place and to such account as may be designated by the Institutional Trustee.
SECTION 3.12. Global Securities.
(a) In connection with a Dissolution Event with respect to any
Travelers Trust,
(i) the Securities in non book-entry certificated form held by such
Travelers Trust, or its Institutional Trustee, will be presented to the
Trustee by the Institutional Trustee of such Travelers Trust in exchange
for a Global Security in an aggregate principal amount equal to the
aggregate principal amount of all outstanding Securities of the series
issued to such Travelers Trust, to be registered in the name of the
Depositary, or its nominee, and delivered by the Trustee to the Depositary
for crediting to the accounts of its participants pursuant to the
instructions of the Regular Trustees of the relevant Travelers Trust. The
Company upon any such presentation shall execute a Global Security in such
aggregate principal amount and deliver the same to the Trustee for
authentication and delivery in accordance with this Indenture. Payments on
any Securities issued as a Global Security will be made to the Depositary;
and
(ii) if any Preferred Securities of a Travelers Trust are held in
non book-entry certificated form, the Securities in non book-entry
certificated form held by such Travelers Trust, or its Institutional
Trustee, may be presented to the Trustee by the Institutional Trustee of
such Travelers Trust and any Preferred Security Certificate which
represents Preferred Securities of such Travelers Trust other than
Preferred Securities held by the Depositary or its nominee ("Non
Book-Entry Preferred Securities") will be deemed to represent Securities
presented to the Trustee by such Institutional 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 Security Registrar for transfer or reissuance at
which time such Preferred Security Certificates will be cancelled and a
Security, 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
cancelled, will be executed by the Company and delivered to the Trustee
for authentication and delivery in accordance with this Indenture. On
issue of such Securities, Securities with an equivalent aggregate
principal amount that were presented by the Institutional Trustee to the
Trustee will be deemed to have been cancelled.
(b) A Global Security may be transferred, in whole but not in part,
only to another nominee of the Depositary, or to a successor Depositary selected
or approved by the Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for any series of Securities or if
at any time the Depositary for such series shall no longer be registered or in
good standing under the Exchange Act, or other
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applicable statute or regulation, and a successor Depositary for such series is
not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition, as the case may be, the Company will
execute, and, subject to this Article III, the Trustee, upon written notice from
the Company, will authenticate and deliver the Securities of such series in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global
Security in exchange for such Global Security. In addition, the Company may at
any time determine that the Securities of any series shall no longer be
represented by a Global Security. In such event the Company will execute, and
subject to Section 3.5, the Trustee, upon receipt of an Officers Certificate
evidencing such determination by the Company, will authenticate and deliver the
Securities of such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security for such series in exchange for such
Global Security. Upon the exchange of the Global Security for such Securities in
definitive registered form without coupons, in authorized denominations, the
Global Security shall be cancelled by the Trustee. Such Securities in definitive
registered form issued in exchange for the Global Security shall be registered
in such names and in such authorized denominations as the Depositary, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the
Depositary, for delivery to the Persons in whose names such Securities are so
registered.
ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.6 and (ii) Securities
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section 10.3) have
been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
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(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds
in trust for the purpose an amount sufficient to pay and discharge
the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any)
and interest to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the Company's
obligation to pay the expenses of any Travelers Trust under Section 10.6 (except
upon the application of subclauses 1(A) or 1(B)(i) above), the obligations of
the Trustee to any Authenticating Agent under Section 6.14, and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.
SECTION 4.2. Defeasance and Discharge.
The following provisions shall apply to the Securities of each series
unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto provided pursuant to Section 3.1.
In addition to discharge of this Indenture pursuant to Sections 4.1 and 4.3, in
the case of any series of Securities with respect to which an amount sufficient
to pay and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and premium, if any)
and interest, as certified pursuant to subparagraph (a) of Section 4.4 can be
determined at the time of making the deposit referred to in such subparagraph
(a), the Company shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of such a series as provided in this Section
on and after the date the conditions set forth in Section 4.4 are satisfied, and
the
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provisions of this Indenture with respect to the Securities of such series shall
no longer be in effect (except as to (i) rights of registration of transfer and
exchange of Securities of such series, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities of such series, (iii) rights of Holders of
Securities of such series to receive, solely from the trust fund described in
subparagraph (a) of Section 4.4, payments of principal thereof and interest, if
any, thereon upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders of Securities of such series
to receive mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v) this Section
4.2, (vi) the rights of the Holders of Securities of such series as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them) and (vii) the Company's obligation to pay the
expenses of any Travelers Trust under Section 10.6) (hereinafter called
"Defeasance"), and the Trustee at the cost and expense of the Company, shall
execute proper instruments acknowledging the same.
SECTION 4.3. Covenant Defeasance.
In the case of any series of Securities with respect to which an amount
sufficient to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal (and
premium, if any) and interest, as certified pursuant to subparagraph (a) of
Section 4.4 can be determined at the time of making the deposit referred to in
such subparagraph (a), (i) the Company shall be released from its obligations
under any covenants specified in or pursuant to this Indenture (except as to (A)
rights of registration of transfer and exchange of Securities of such series,
(B) substitution of mutilated, defaced, destroyed, lost or stolen Securities of
such series, (C) rights of Holders of Securities of such series to receive, from
the Company pursuant to Section 10.1, payments of principal thereof and
interest, if any, thereon upon the original stated due dates therefor (but not
upon acceleration), the Holders of Securities of such series to receive
mandatory sinking fund payments, if any, (D) the rights, obligations, duties and
immunities of the Trustee hereunder, (E) the rights of the Holders of Securities
of such series as beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them and (F) the Company's obligation
to pay the expenses of any Travelers Trust under Section 10.6), and (ii) the
occurrence of any event specified in Sections 5.1(4) (with respect to any of the
covenants specified in or pursuant to this Indenture) and 5.1(8) shall be deemed
not to be or result in an Event of Default, in each case with respect to the
Outstanding Securities of such series as provided in this Section on and after
the date the conditions set forth in Section 4.4 are satisfied (hereinafter
called "Covenant Defeasance"), and the Trustee, at the cost and expense of the
Company, shall execute proper instruments acknowledging the same. For this
purpose, such Covenant Defeasance means that the Company may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such covenant (to the extent so specified in the case of Section
5.1(4)), whether directly or indirectly by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document, but the remainder of
this Indenture and the Securities of such series shall be unaffected thereby.
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SECTION 4.4. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 4.2
or 4.3 to the Outstanding Securities:
(a) with reference to Section 4.2 or 4.3, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such
series (i) cash in an amount, or (ii) direct obligations of the United
States of America, backed by its full faith and credit ("U.S. Government
Obligations"), maturing as to principal and interest, if any, at such
times and in such amounts as will insure the availability of cash, or
(iii) a combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and
discharge (A) the principal of and interest, if any, on all Securities of
such series on each date that such principal or interest, if any, is due
and payable, and (B) any mandatory sinking fund payments on the dates on
which such payments are due and payable in accordance with the terms of
this Indenture and the Securities of such series;
(b) in the case of Defeasance under Section 4.2, the Company has
delivered to the Trustee an Opinion of Counsel based on the fact that (x)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (y), since the date hereof, there has
been a change in the applicable United States federal income tax law, in
either case to the effect that, and such opinion shall confirm that, the
Holders of the Securities of such series will not recognize income, gain
or loss for United States federal income tax purposes as a result of such
deposit, Defeasance and discharge and will be subject to United States
federal income tax on the same amount and in the same manner and at the
same times, as would have been the case if such deposit, Defeasance and
discharge had not occurred;
(c) in the case of Covenant Defeasance under Section 4.3, the
Company has delivered to the Trustee an Opinion of Counsel to the effect
that, and such opinion shall confirm that, the Holders of the Securities
of such series will not recognize income, gain or loss for United States
federal income tax purposes as a result of such deposit and Covenant
Defeasance and will be subject to United States federal income tax on the
same amount and in the same manner and at the same times, as would have
been the case if such deposit and Covenant Defeasance had not occurred;
(d) such Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any agreement or
instrument to which the Company is a party or by which it is bound; and
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(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent contemplated by this provision have been complied with.
SECTION 4.5. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all money
and U.S. Government Obligations deposited with the Trustee pursuant to Section
4.4 shall be held in trust, and such money and all money from such U.S.
Government Obligations shall be applied by it, in accordance with the provisions
of the Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money and U.S. Government
Obligations has been deposited with the Trustee.
SECTION 4.6. Indemnity for U.S. Government Obligations.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 4.4 or the principal or interest received in
respect of such obligations other than any such tax, fee or other charge that by
law is for the account of the Holders of Outstanding Securities.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default," wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of interest upon any Security of that
series when it becomes due and payable, and continuance of such default
for a period of 30 days; it being understood that the occurrence of an
Extended Interest Payment Period in accordance with the terms of such
Security will not constitute such a default; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
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(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or which has expressly been included
in this Indenture solely for the benefit of Securities of any series other
than that series), and continuance of such default or breach for a period
of 90 days after there has been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Securities
of that series a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable Federal
or State law, or appointing a custodian, 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 for relief or any such other decree or order unstayed and in effect
for a period of 90 consecutive days; or
(6) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company 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, or the taking of corporate action by
the Company in furtherance of any such action; or
(7) in the event Securities of a series are issued and sold to a
Travelers Trust or a trustee of such trust in connection with the issuance
of Trust Securities by such Travelers Trust, such Travelers Trust shall
have voluntarily or involuntarily dissolved, wound-up its business or
otherwise terminated its existence except in connection with (i) the
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distribution of Securities to holders of Trust Securities in liquidation
or redemption of their interests in such Travelers Trust upon a Special
Event with respect to such Travelers Trust, (ii) the redemption of all of
the outstanding Trust Securities of such Travelers Trust or (iii) certain
mergers, consolidations or amalgamations, each as permitted by the
Declaration of such Travelers Trust; or
(8) any other Event of Default provided with respect to Securities
of that series.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee,
if the Trustee has actual knowledge thereof, or the Holders of not less than 25%
in principal amount of the Outstanding Securities of that series may, but shall
not be obligated to, declare the principal amount of all of the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such principal amount (or specified amount) shall become immediately due and
payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of Securities representing a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities
of that series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or
rates prescribed therefor in such Securities,
(C) all overdue sinking fund payments with respect to
Securities of that series and interest thereon at the rate or rates
prescribed therefor in such Securities;
(D) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(E) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel (including reasonable legal fees and
expenses);
and
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(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for
a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof, or
(3) default is made in the deposit of any sinking fund payment, when
and as due by the terms of a Security of any series;
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and for any sinking
fund payment and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal (and premium, if any), on any
overdue interest and on any overdue sinking fund payment, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
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 unpaid, may, in its
discretion, prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
and collect the monies adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default, of which a Responsible Officer of the Trustee has
actual knowledge, with respect to Securities of any series occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
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SECTION 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of any of the
Securities 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 interest or any sinking
fund payment) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any), and interest and sinking fund payments owing and unpaid
in respect of the Securities and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and 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 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 it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of an Holder in any such proceeding.
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
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SECTION 5.6. Application of Money Collected.
Subject to Article Fourteen, any money collected by the Trustee 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 on account
of principal (or premium, if any), interest or sinking fund payments, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.7; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any), and interest on, and sinking fund
payments with respect to, the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Securities for principal (and premium, it any), and
interest and sinking fund payments, respectively.
SECTION 5.7. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity,
reasonably satisfactory to the Trustee, against the costs, expenses
(including reasonable legal fees and expenses) and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of all Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain
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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 of 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
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 3.7)
interest on such Security on the Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
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, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall 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 with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities 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 any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders 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.
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SECTION 5.12. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to the
Securities of such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any), or
interest on, any Security of such series, or in the payment of any sinking
fund installment with respect to the Securities, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected;
provided, however, that if the Securities of such series are held by a Travelers
Trust or a trustee of such trust, such waiver or modification to such waiver
shall not be effective until the holders of Trust Securities representing a
majority in liquidation preference of Trust Securities of the applicable
Travelers Trust shall have consented to such waiver or modification to such
waiver; provided further, that if the consent of the Holder of each Outstanding
Securities is required, such waiver shall not be effective until each holder of
the Trust Securities of the applicable Travelers Trust 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 Event of Default or impair any right consequent thereon.
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SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of (or premium,
if any) or interest on any Security on or after the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default;
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to any series of Securities,
of which a Responsible Officer of the Trustee has actual knowledge, 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 man 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 wilful misconduct, except that
(1) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series determined as provided in Section
5.12, relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture with respect to the
Securities of such series; and
(4) 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 it shall have reasonable grounds for believing
that repayment of such funds or indemnity, reasonably satisfactory to it,
against such risk or liability is not reasonably assured to it.
(d) 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 the occurrence of any default hereunder with respect
to Securities of any series, the Trustee shall transmit by mail to all Holders
of Securities of such series, as their names and addresses appear in the
Security Register, notice of such default hereunder actually known to a
Responsible Officer of the Trustee, unless such default shall have been cured or
waived; provided that, except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any Security of such series or
in the payment of any sinking fund installment with respect to Securities of
such series, the Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of Securities of
such series; and provided, further, that in the case of any default of the
character specified in Section 5.1(4) with respect to Securities of such series,
no such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Securities of such series.
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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, 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) 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;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, 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 security or indemnity,
reasonably satisfactory to it, against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
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The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided herein, 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, nominees, custodians and counsel), except
any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by
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the Trustee as such, except funds held in trust for the benefit of Holders of
particular Securities. The obligations of the Company under this Section shall
survive the satisfaction and discharge of this Indenture.
SECTION 6.8. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, with respect to the Securities of any series, it shall,
within 90 days after a Responsible Officer of the Trustee ascertains that it has
such conflicting interest, either eliminate such conflicting interest or resign
with respect to the Securities of that series in the manner and with the effect
hereinafter specified in this Article.
(b) In the event that the Trustee shall fail to comply with the provisions
of subsection (a) of this Section with respect to the Securities of any series,
the Trustee shall, within 10 days after the expiration of such 90-day period,
transmit by mail to all Holders of Securities of that series, as their names and
addresses appear in the Security Register, notice of such failure.
(c) For the purposes of this Section, the Trustee shall be deemed to have
a conflicting interest with respect to the Securities of any series if:
(1) the Trustee is trustee under this Indenture with respect to the
Outstanding Securities of any series other than that series or is trustee
under another indenture under which any other securities, or certificates
of interest or participation in any other securities, of the Company are
outstanding, unless such other indenture is a collateral trust indenture
under which the only collateral consists of Securities issued under this
Indenture, provided that there shall be excluded from the operation of
this paragraph this Indenture with respect to the Securities of any series
other than that series or any indenture or indentures under which other
securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if
(i) this Indenture and such other indenture or indentures are
wholly unsecured and such other indenture or indentures are
hereafter qualified under the Trust Indenture Act, unless the
Commission shall have found and declared by order pursuant to
Section 305(b) or Section 307(c) of the Trust Indenture Act that
differences exist between the provisions of this Indenture with
respect to Securities of that series and one or more other series or
the provisions of such other indenture or indentures which are so
likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of investors
to disqualify the Trustee from acting as such under this Indenture
with respect to the Securities of that series and such other series
or under such other indenture or indentures, or
(ii) the Company shall have sustained the burden of proving,
on application to the Commission and after opportunity for hearing
thereon, that
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trusteeship under this Indenture with respect to the Securities of
that series and such other series or such other indenture or
indentures is not so likely to involve a material conflict of
interest as to make it necessary in the public interest or for the
protection of investors to disqualify the Trustee from acting as
such under this Indenture with respect to the Securities of that
series and such other series or under such other indenture or
indentures;
(2) the Trustee or any of its directors or executive officers is an
obligor upon the Securities or an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control
with the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of the
Company, or of an underwriter (other than the Trustee itself) for the
Company who is currently engaged in the business of underwriting, except
that (i) one individual may be a director or an executive officer, or
both, of the Trustee and a director or an executive officer, or both, of
the Company but may not be at the same time an executive officer of both
the Trustee and the Company; (ii) if and so long as the number of
directors of the Trustee in office is more than nine, one additional
individual may be a director or an executive officer, or both, of the
Trustee and a director of the Company; and (iii) the Trustee may be
designated by the Company or by any underwriter for the Company to act in
the capacity of transfer agent, registrar, custodian, paying agent, fiscal
agent, escrow agent or depositary, or in any other similar capacity, or,
subject to the provisions of paragraph (1) of this subsection, to act as
trustee, whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner or
executive officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such persons; or
10% or more of the voting securities of the Trustee is beneficially owned
either by an underwriter for the Company or by any director, partner or
executive officer thereof, or is beneficially owned, collectively, by any
two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
subsection defined), (i) 5% or more of the voting securities, or 10% or
more of any other class of security, of the Company not including the
Securities issued under this Indenture and securities issued under any
other indenture under which the Trustee is also trustee, or (ii) 10% or
more of any class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
subsection defined), 5% or more of the
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voting securities of any person who, to the actual knowledge of a
Responsible Officer of the Trustee, owns 10% or more of the voting
securities of, or controls directly or indirectly or is under direct or
indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
subsection defined), 10% or more of any class of security of any person
who, to the actual knowledge of a Responsible Officer of the Trustee, owns
50% or more of the voting securities of the Company; or
(9) the Trustee owns, on May 15 in any calendar year, in the
capacity of executor, administrator, testamentary or inter vivos trustee,
guardian, committee or conservator, or in any other similar capacity, an
aggregate of 25% or more of the voting securities, or of any class of
security, of any person, the beneficial ownership of a specified
percentage of which would have constituted a conflicting interest under
paragraph (6), (7) or (8) of this subsection. As to any such securities of
which the Trustee acquired ownership through becoming executor,
administrator or testamentary trustee of an estate which included them,
the provisions of the preceding sentence shall not apply, for a period of
two years from the date of such acquisition, to the extent that such
securities included in such estate do not exceed 25% of such voting
securities or 25% of any such class of security. Promptly after May 15 in
each calendar year, the Trustee shall make a check of its holdings of such
securities in any of the above-mentioned capacities as of such May 15. If
the Company fails to make payment in full of the principal of (or premium,
if any) or interest on any of the Securities when and as the same becomes
due and payable, and such failure continues for 30 days thereafter, the
Trustee shall make a prompt check of its holdings of such securities in
any of the above-mentioned capacities as of the date of the expiration of
such 30-day period, and after such date, notwithstanding the foregoing
provisions of this paragraph, all such securities so held by the Trustee,
with sole or joint control over such securities vested in it, shall, but
only so long as such failure shall continue, be considered as though
beneficially owned by the Trustee for the purposes of paragraphs (6), (7)
and (8) of this subsection.
The specification of percentages in paragraphs (5) to (9), inclusive, of
this subsection shall not be construed as indicating that the ownership of such
percentages of the securities of a person is or is not necessary or sufficient
to constitute direct or indirect control for the purposes of paragraph (3) or
(7) of this subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this subsection
only, (i) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not include
any note or other evidence of indebtedness issued to evidence an obligation to
repay monies lent to a person by one or more banks, trust companies or banking
firms, or any certificate of interest or participation in any such note or
evidence of indebtedness; (ii) an obligation shall be deemed to be "in default"
when a default in payment of principal shall have continued for 30 days or more
and shall not have been cured; and (iii) the Trustee shall not be deemed to be
the owner or holder of (A) any security which it holds as collateral
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security, as trustee or otherwise, for an obligation which is not in default as
defined in clause (ii) above, or (B) any security which it holds as collateral
security under this Indenture, irrespective of any default hereunder, or (C) any
security which it holds as agent for collection, or as custodian, escrow agent
or depositary, or in any similar representative capacity.
(d) For the purposes of this Section:
(1) The term "underwriter," when used with reference to the Company,
means every person who, within three years prior to the time as of which
the determination is made, has purchased from the Company with a view to,
or has offered or sold for the Company in connection with, the
distribution of any security of the Company outstanding at such time, or
has participated or has had a direct or indirect participation in any such
undertaking, or has participated or has had a participation in the direct
or indirect underwriting of any such undertaking, but such term shall not
include a person whose interest was limited to a commission from an
underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" means any director of a corporation or any
individual performing similar functions with respect to any organization,
whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership. an association, a joint-stock company, a trust, an
unincorporated organization or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" means any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of the affairs
of a person.
(5) The term "Company" means any obligor upon the Securities.
(6) The term "executive officer" means the president, every vice
president, every trust officer, the cashier, the secretary and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the board of
directors.
(e) The percentages of voting securities and other securities specified in
this Section shall be calculated in accordance with the following provisions:
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(1) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this Section (each of whom
is referred to as a "person" in this paragraph) means such amount of the
outstanding voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the affairs of such
person.
(2) A specified percentage of a class of securities of a person
means such percentage of the aggregate amount of securities of the class
outstanding.
(3) The term "amount," when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares and the number of units if relating
to any other kind of security.
(4) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating
to another class of securities of the issuer, if the obligation
evidenced by such other class of securities is not in default as to
principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as security for
an obligation of the issuer not in default as to principal or
interest or otherwise; and
(iv) securities held in escrow if placed in escrow by the
issuer thereof;
provided that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to exercise
the voting rights thereof.
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided that, in the case
of secured evidences of indebtedness, all of which are issued under a
single indenture, differences in the interest rates or maturity dates of
various series thereof shall not be deemed sufficient to constitute such
series different classes and provided further that, in the case of
unsecured evidences of indebtedness, differences in the interest rates or
maturity dates thereof shall not be deemed sufficient to constitute them
securities of different classes, whether or not they are issued under a
single indenture.
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SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and 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 said supervision or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
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 in accordance with the
applicable requirements of Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 6.11 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8(a) after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
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then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee with respect to all Securities, or (ii) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 6.11. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.11, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
required by Section 6.11, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of
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the retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to the Securities of all
series for which it is the Trustee hereunder, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
(e) The Trustee shall not be liable for the acts or omissions to act of
any successor Trustee.
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
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which the Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 6.13. Preferential Collection of Claims Against Company.
(a) Subject to subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of the
Company within four months prior to a default, as defined in subsection (c) of
this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities, as defined in
subsection (c) of this Section:
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such four months' period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (2) of this subsection, or from the exercise of any right of
set-off which the Trustee could have exercised if a petition in bankruptcy
had been filed by or against the Company upon the date of such default;
and
(2) all property received by the Trustee in respect of any claims as
such creditor, either as security therefor, or in satisfaction or
composition thereof. or otherwise, after the beginning of such four
months' period, or an amount equal to the proceeds of any such property,
if disposed of, subject, however, to the rights, if any, of the Company
and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of
any such claim by any Person (other than the Company) who is liable
thereon, (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third Person, and (iii) distributions made in cash,
securities or other property in respect of claims filed against the
Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Federal Bankruptcy Act or applicable State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such four months' period;
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(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such four
months' period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default, as defined in
subsection (c) of this Section, would occur within four months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such claim
as provided in paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such four months' period for property held as security at
the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property held
in such special account and the proceeds thereof shall be apportioned among the
Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on account
of the receipt by it from the Company of the funds and property in such special
account and before crediting to the respective claims of the Trustee and the
Holders and the holders of other indenture securities dividends on claims filed
against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
from the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, whether such distribution is made in cash, securities or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion among the Trustee, the Holders and the holders of
other indenture securities, in accordance with the provisions of this paragraph,
the funds and property held in such special account and proceeds thereof, or
(ii) in lieu of such apportionment, in whole or in part, to give to the
provisions of this paragraph due consideration in determining the fairness of
the distributions to be made to
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the Trustee and the Holders and the holders of other indenture securities with
respect to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held in
such special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee which has resigned or been removed after the beginning of such
four months' period shall be subject to the provisions of this subsection as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the beginning of such four months' period, it shall be
subject to the provisions of this subsection if and only if the following
conditions exist:
(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such four months' period; and
(ii) such receipt of property or reduction of claim occurred within
four months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of this
Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Holders at the time and in the manner
provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction, as defined in subsection (c) of
this Section;
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(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve
Act, as amended, which is directly or indirectly a creditor of the
Company; and
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within
the classification of self-liquidating paper, as defined in subsection (c)
of this Section.
(c) For the purposes of this Section only:
(1) the term "default" means any failure to make payment in full of
the principal of or interest on any of the Securities or upon the other
indenture securities when and as such principal or interest becomes due
and payable;
(2) the term "other indenture securities" means securities upon
which the Company is an obligor outstanding under any other indenture (i)
under which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this Section, and (iii) under
which a default exists at the time of the apportionment of the funds and
property held in such special account;
(3) the term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation;
(5) the term "Company" means any obligor upon the Securities; and
(6) the term "Federal Bankruptcy Act" means the Bankruptcy Act or
Title 11 of the United States Code.
SECTION 6.14. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee may
appoint an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be
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authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 3.6, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed 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, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
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 the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, 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 by first-class mail, postage prepaid, to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve, as
their names and addresses appear in the Security Register. 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 provisions of
this Section.
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The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 6.7.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon an
alternative certificate of authentication in the following form:
"This is one of the Securities of the series designated herein referred to
in the within- mentioned Indenture.
THE CHASE MANHATTAN BANK, N.A.,
As Trustee
By_____________________________
As Authenticating Agent
By_____________________________
Authorized Officer"
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ARTICLE VII
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually not more than 15 days after each Regular Record
Date a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Securities of such series as of the
preceding March 1 or September 1, or as of such Regular Record Date, as
the case may be, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
provided that if and so long as the Trustee shall be the Security Registrar for
such series, such list shall not be required to be 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 Security
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) If three or more Holders of Securities of the same series (herein
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security of such
series for a period of at least six months preceding the date of such
application, and such application states that the applicants' desire to
communicate with other Holders of such series with respect to their rights under
this Indenture or under the Securities of such series and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall, within five business days after the receipt
of such application, at its election, either
(i) afford such applicants access to the information with respect to
the Holders of such series preserved at the time by the Trustee in
accordance with Section 7.2(a), or
(ii) inform such applicants as to the approximate number of Holders
of such series whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section 7.2(a),
and as to the approximate cost of mailing to such Holders the form of
proxy or other communication, if any, specified in such application.
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If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of such series whose name and address appear in the
information preserved at the time by the Trustee in accordance with Section
7.2(a) a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interest of the Holders of such series or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such Holders
with reasonable promptness after the entry of such order and the renewal of such
tender; otherwise the Trustee shall be relieved of any obligation or duty to
such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 7.2(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 7.2(b).
SECTION 7.3. Reports by Trustee.
(a) Within 60 days after April 15 of each year commencing with the year
1997, the Trustee shall transmit by mail to all Holders of Securities for which
it is Trustee hereunder, as their names and addresses appear in the Security
Register, a brief report dated as of such April 15 with respect to:
(1) its eligibility under Section 6.9 and its qualifications under
Section 6.8, or in lieu thereof, if to the best of its knowledge it has
continued to be eligible and qualified under said Sections, a written
statement to such effect;
(2) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or
charge, prior to that of such Securities, on any property or funds held or
collected by it as Trustee, except that the Trustee shall not be required
(but may elect) to report such advances if such advances so remaining
unpaid aggregate not more
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than 1/2 of 1% of the principal amount of such Securities Outstanding on
the date of such report;
(3) the amount, interest rate and maturity date of all other
indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 6.13(b)(2), (3),
(4) or (6);
(4) the property and funds, if any, physically in the possession of
the Trustee as such on the date of such report;
(5) any additional issue of Securities for which it is Trustee
hereunder which the Trustee has not previously reported; and
(6) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects such Securities, except action in respect of a default,
notice of which has been or is to be withheld by the Trustee in accordance
with Section 6.2.
(b) The Trustee shall transmit by mail to all Holders of Securities for
which it is Trustee hereunder, as their names and addresses appear in the
Security Register, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as such) since the date of
the last report transmitted pursuant to subsection (a) of this Section (or if no
such report has yet been so transmitted, since the date of execution of this
instrument) for the reimbursement of which it claims or may claim a lien or
charge, prior to that of such Securities, on property or funds held or collected
by it as Trustee and which it has not previously reported pursuant to this
subsection, except that the Trustee shall not be required (but may elect) to
report such advances if such advances remaining unpaid at any time aggregate 10%
or less of the principal amount of such Securities Outstanding at such time,
such report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission to
such Holders, be filed by the Trustee with each securities exchange upon which
any such Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any such Securities are listed on any
securities exchange.
SECTION 7.4. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information,
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documents and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934; or, if the Company is not required to file information, documents or
reports pursuant to either of said Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary
and periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of 1934 in respect
of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance
by the Company with the conditions and covenants of this Indenture as may
be required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (1) and (2) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, unless:
(1) 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 corporation organized and existing under the laws
of the United States of America, any State thereof 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 on all the Securities and the performance of every
covenant of this Indenture on the part of the Company to be performed or
observed;
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(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and such supplemental
indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.
SECTION 8.2. Successor Corporation Substituted.
Upon any consolidation of the Company with, or merger of the Company into,
any other corporation or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety 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 thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company
contained herein and in the Securities, pursuant to Article VIII; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of one
or more specified series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default; or
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(4) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision; or
(5) to secure the Securities; or
(6) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 3.1; or
(7) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 6.11(b); or
(8) 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 such action shall not adversely affect the
interests of the Holders of Securities of any series in any material
respect.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon (including any
change in the Floating or Adjustable Rate Provision pursuant to which such
rate is determined that would reduce that rate for any period) or any
premium payable upon the redemption thereof, or change any Place of
Payment where, or the coin or currency in which, any Security or any
premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or modify the provisions of this Indenture with respect
to the subordination of the Securities in a manner adverse to the Holders,
or
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(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section or Section 5.13,
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 Outstanding Security affected thereby;
provided that this clause shall not be deemed to require the consent of
any Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section or the deletion of this proviso, in
accordance with the requirements of Sections 6.11(b) and 9.1(8), or
[(4) remove or impair the rights of any Holder of Securities to
bring a Direct Action in certain circumstances, as provided in Section
14.1;]
provided, further, that if the Securities of such series are held by a Travelers
Trust or a trustee of such trust, such supplemental indenture shall not be
effective until the holders of a majority in liquidation preference of Trust
Securities of the applicable Travelers Trust shall have consented to such
supplemental indenture; provided further, that if the consent of the Holder of
each Outstanding Securities is required, such supplemental indenture shall not
be effective until each holder of the Trust Securities of the applicable
Travelers Trust shall have consented to such supplemental indenture.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. 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.
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SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby to the extent provided therein.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
Securities of any series 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 Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of the Securities of such series and this Indenture, and will duly comply
with all other terms, agreements and conditions contained in, or made in the
Indenture for the benefit of, the Securities of such series.
SECTION 10.2. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with
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the address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 10.3. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of (and premium,
if any) or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities of that series in trust
for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on the Securities
of that series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
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The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Security of any series and remaining unclaimed for three
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the Borough of Manhattan, The City of New York, New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 10.4. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of Sections 10.1 to 10.3, inclusive, and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 10.5. Covenants as to Travelers Trusts.
For so long as any Trust Securities of a Travelers Trust remain
outstanding, the Company will (i) maintain 100% direct or indirect ownership of
the Common Securities of such Travelers Trust; provided, however, that any
permitted successor of the Company hereunder may succeed to the Company's
ownership of such Common Securities, (ii) not voluntarily dissolve, wind up or
terminate such Travelers Trust, except in connection with a distribution of
Securities upon a Special Event, and in connection with certain mergers,
consolidations or amalgamations permitted by the Declaration of the applicable
Travelers Trust, (iii) timely perform its duties as Sponsor of the applicable
Travelers Trust, (iv) use its reasonable efforts to cause such Travelers Trust
to (a) remain a business trust, except in connection with a distribution of
Securities to the holders of Trust Securities as provided in the Declaration of
such Travelers Trust, the
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redemption of all of the Trust Securities and in connection with certain
mergers, consolidations or amalgamations permitted by the Declaration of such
Travelers Trust, and (b) otherwise continue to be classified as a grantor trust
for United States federal income tax purposes and (v) not knowingly take any
action that would cause such Travelers Trust to not be classified as a grantor
trust for United States federal income tax purposes.
SECTION 10.6. Payment of Expenses.
(a) In connection with the offering, sale and issuance of each series of
Securities to the Institutional Trustee of a Travelers Trust and in connection
with the sale of Trust Securities by such Travelers Trust, the Company, in its
capacity as borrower with respect to such Securities, shall:
(i) pay all costs and expenses relating to the offering, sale and
issuance of such Securities, including commissions to the underwriters
payable pursuant to the applicable Underwriting Agreement and compensation
of the Trustee under this Indenture in accordance with the provisions of
Section 6.7;
(ii) pay all costs and expenses of such Travelers Trust (including,
but not limited to, costs and expenses relating to the organization of the
trust, the offering, sale and issuance of the Trust Securities of such
Travelers Trust (including commissions to the underwriters in connection
therewith), the fees and expenses of the Institutional Trustee, the
Regular Trustees and the Delaware Trustee of such Travelers Trust, the
costs and expenses relating to the operation, maintenance and dissolution
of such Travelers Trust and the enforcement by such Institutional Trustee
of the rights of the holders of the Preferred Securities of such Travelers
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 assets of
such Travelers Trust);
(iii) be primarily liable for any indemnification obligations
arising with respect to the Declaration of such Travelers Trust;
(iv) pay any and all taxes (other than United States withholding
taxes in respect of amounts paid on the Securities held by such Travelers
Trust) and all liabilities, costs and expenses with respect to such taxes
of such Travelers Trust.
(b) Upon termination of this Indenture or any series of Securities or the
removal or resignation of the Trustee pursuant to Section 6.10, the Company
shall pay to the Trustee all amounts accrued and owing to the Trustee to the
date of such termination, removal or resignation. Upon termination of the
Declaration of any Travelers Trust or the removal or resignation of the Delaware
Trustee or the Institutional Trustee, as the case may be, pursuant to Section
5.6 of the Declaration of such Travelers Trust, the Company shall pay to such
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Delaware Trustee or such Institutional Trustee, as the case may be, all amounts
accrued and owing to such Delaware Trustee or such Institutional Trustee, as the
case may be, to the date of such termination, removal or resignation.
SECTION 10.7. Listing on an Exchange.
If Securities of any series are to be issued as a Global Security in
connection with the distribution of such Securities to the holders of the
Preferred Securities of a Travelers Trust upon a Dissolution Event with respect
to such Travelers Trust, the Company will use its best efforts to list such
series of Securities on the New York Stock Exchange, Inc. or on such other
securities exchange as the Preferred Securities of such Travelers Trust are then
listed.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of Article.
Securities of each series are redeemable before their respective Stated
Maturities in accordance with their respective terms and (except as otherwise
specified as contemplated by Section 3.1 for Securities of any series) in
accordance with this Article.
SECTION 11.2. Election to Redeem; Notice to Trustee.
(a) Subject to the provisions of Section 11.2(b) and to the other
provisions of this Article XI, except as otherwise may be specified in this
Indenture or, with respect to any series of Securities, as otherwise specified
as contemplated by Section 3.1 for the Securities of such series, the Company
shall have the right to redeem any series of Securities, in whole or in part,
from time to time, on or after the Redemption Option Date for such series at the
Redemption Price. The election of the Company to redeem any Securities
redeemable at the election of the Company shall be evidenced by a Board
Resolution. In case of any redemption at the election of the Company of less
than all the Securities of any series, the Company shall, at least 30 days, but
not more than 60 days, prior to the Redemption Date fixed by the Company, notify
the Trustee of such Redemption Date and of the principal amount of Securities of
such series to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
(b) If a partial redemption of any series of Securities would result in
the delisting of the
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Preferred Securities of the Travelers Trust that purchased such Securities from
any national securities exchange or other organization on which the Preferred
Securities of such Travelers Trust are then listed, the Company shall not be
permitted to effect such partial redemption and may only redeem such series of
Securities in whole.
SECTION 11.3. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series; provided, that if at the
time of redemption such Securities are registered as a Global Security, the
Depositary shall determine, in accordance with its procedures, the principal
amount of such Securities held by each Security Beneficial Owner to be redeemed.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities of such series to be
redeemed,
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(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.5. Deposit of Redemption Price.
Prior to 10:00 a.m., New York City time, on any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.3) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date.
SECTION 11.6. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in the
Security.
The Redemption Price shall be paid prior to 12:00 noon, New York City
time, on the date of such redemption or such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Redemption Price by 10:00 a.m., New York City time, on the
date such Redemption Price is to be paid.
SECTION 11.7. Securities Redeemed in Part.
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Any Security which is to be redeemed only in part shall be surrendered at
a Place of Payment for Securities of that series (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company duly executed by, the Holder thereof or his
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series, of like tenor
and of any authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.
SECTION 11.8. Tax Event Redemption.
If a Tax Event with respect to any Travelers Trust has occurred and is
continuing and:
(a) the Company has received a Redemption Tax Opinion with respect
to such Travelers Trust; or
(b) after receiving a Tax Event Opinion, the Regular Trustees of
such Travelers Trust shall have been informed by tax counsel rendering the
Tax Event Opinion that a No Recognition Opinion cannot be delivered to
such Travelers Trust,
then, notwithstanding Section 11.2(a) but subject to Section 11.2(b), the
Company shall have the right upon not less than 30 days nor more than 60 days
notice to the Holders of Securities of the series issued to such Travelers
Trust, or to its Institutional Trustee, to redeem such Securities, in whole or
in part, for cash within 90 days following the occurrence of such Tax Event at
the Redemption Price, provided that if at the time there is available to the
Company or such Travelers Trust the opportunity to eliminate, within such 90 day
period, the Tax Event by taking some ministerial action ("Ministerial Action"),
such as filing a form or making an election, or pursuing some other similar
reasonable measure which has no adverse effect on the Company, the Trust or the
holders of the Trust Securities of such Travelers Trust, the Company or such
Travelers Trust shall pursue such Ministerial Action in lieu of redemption, and,
provided further that the Company shall have no right to redeem such Securities
while the Company or such Travelers Trust is pursuing any Ministerial Action
pursuant to its obligations under the Declaration of such Travelers Trust.
ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 3.1 for the Securities of such series.
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The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 12.2. Each sinking fund payment shall be applied to the redemption of
Securities as provided for by the terms of Securities of such series.
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.
Unless the form or terms of any series of Securities shall provide
otherwise, the Company (1) may deliver to the Trustee Outstanding Securities of
a series (other than any previously called for redemption) and (2) may apply as
a credit Securities of a series which have been redeemed either at the election
of the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms of
such Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to any Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
Securities; provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
SECTION 12.3. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 12.2 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 45 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 11.3 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 11.4. The Company shall deposit the
amount of cash, if any, required for such sinking fund payment with the Trustee
in the manner provided in Section 11.5. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 11.6 and 11.7.
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ARTICLE XIII
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 13.1. Extension of Interest Payment Period.
The Company shall have the right, at any time and from time to time during
the term of the Securities of any series, to defer payments of interest by
extending the interest payment period of all Securities of such series for a
period not exceeding 20 consecutive quarters (the "Extended Interest Payment
Period"), during which Extended Interest Payment Period no interest shall be due
and payable on Securities of such series; provided that no Extended Interest
Payment Period may extend beyond the Maturity of such Securities. To the extent
permitted by applicable law, interest, the payment of which has been deferred
because of the extension of the interest payment period pursuant to this Section
13.1, will bear interest thereon at the Coupon Rate compounded quarterly for
each quarter of the Extended Interest Payment Period ("Compounded Interest"). At
the end of any Extended Interest Payment Period with respect to any series of
Securities, the Company shall pay all interest accrued and unpaid on such
Securities, including any Additional Interest and Compounded Interest (together,
"Deferred Interest") that shall be payable to the Holders of Securities of such
Series in whose names such Securities are registered in the Security Register on
the first record date after the end of such Extended Interest Payment Period.
Before the termination of any Extended Interest Payment Period, the Company may
further extend such period; provided that such period, together with all such
further extensions thereof, shall not exceed 20 consecutive quarters; and
provided further that no prepayment of interest during an Extended Interest
Payment Period shall allow the Company to extend such Extended Interest Payment
Period beyond 20 consecutive quarters. Upon the termination of any Extended
Interest Payment Period with respect to any series of Securities and upon the
payment of all Deferred Interest then due, the Company may commence a new
Extended Interest Payment Period with respect to such series of Securities,
subject to the foregoing requirements. No interest on a series of Securities
shall be due and payable during an Extended Interest Payment Period with respect
thereto, except at the end thereof, provided the Company may prepay at any time
all or any portion of the interest accrued during any Extended Interest Payment
Period.
SECTION 13.2. Notice of Extension.
(a) If the Institutional Trustee of a Travelers Trust is the only Holder
of Securities of a series at the time the Company selects an Extended Interest
Payment Period with respect thereto, the Company shall give written notice to
the Regular Trustees and the Institutional Trustee of such Travelers Trust and
to the Trustee of its selection of such Extended Interest Payment Period one
Business Day before the earlier of (i) the next succeeding date on which
Distributions on the Trust Securities issued by such Travelers Trust would be
payable, if not for such Extended Interest Payment Period, or (ii) the date such
Travelers Trust is required to give notice of the record date, or the date such
Distributions are payable, to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of the Preferred Securities issued by
such Travelers Trust, but in any event at least one Business Day before such
record date.
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(b) If the Institutional Trustee of a Travelers Trust is not the only
Holder of Securities of a series at the time the Company selects an Extended
Interest Payment Period with respect thereto, the Company shall give written
notice to the Holders of Securities of such series and the Trustee of its
selection of such Extended Interest Payment Period 10 Business Days before the
earlier of (i) the next succeeding Interest Payment Date, or (ii) the date the
Company is required to give notice of the record or payment date of such
interest payment to the New York Stock Exchange or other applicable
self-regulatory organization or to Holders of Securities of such series.
(c) The quarter in which any notice is given pursuant to paragraphs (a) or
(b) of this Section 13.2 shall be counted as one of the 20 quarters permitted in
the maximum Extended Interest Payment Period with respect to any series of
Securities permitted under Section 1.3.
SECTION 13.3. Limitation of Transactions.
If with respect to any series of Securities (i) the Company shall exercise
its right to defer payments of interest thereon as provided in Section 13.1 or
(ii) there shall have occurred any Event of Default, then (a) the Company shall
not declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock or make any guarantee payment with respect thereto (other than
(i) repurchases, redemptions or other acquisitions of shares of capital stock of
the Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Company's capital stock for any other class or series of the
Company's capital stock, or (iii) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged), and (b) the
Company shall not make any payment of interest on, principal of or premium, if
any, on, or repay, repurchase or redeem, any debt securities issued by the
Company which rank pari passu with or junior to the Securities of such series
(including the Securities of any other series); provided, however, the Company
may declare and pay a stock dividend where the dividend stock is the same stock
as that on which the dividend is being paid.
ARTICLE XIV
SUBORDINATION OF SECURITIES
SECTION 14.1. Agreement to Subordinate.
The Company covenants and agrees, and each Holder of Securities issued
hereunder by such Holder's acceptance thereof likewise covenants and agrees,
that all Securities shall be issued subject to the provisions of this Article
Fourteen; and each Holder of a Security, whether upon
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original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest on all Securities issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
the prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article Fourteen shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 14.2. Default on Senior Indebtedness.
In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness of the Company, as the case may be, or in the event that the
maturity of any Senior Indebtedness of the Company, as the case may be, has been
accelerated because of a default, then, in either case, no payment shall be made
by the Company with respect to the principal (including redemption payments) of,
or premium, if any, or interest on, the Securities or to acquire any of the
Securities (except sinking fund payments made in Securities acquired by the
Company prior to such default).
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee, by any Holder or by any Paying Agent (or, if the
Company is acting as its own Paying Agent, money for any such payment is
segregated and held in trust) when such payment is prohibited by the preceding
paragraph of this Section 14.2, before all Senior Indebtedness of the Company is
paid in full, or provision is made for such payment in money in accordance with
its terms, such payment shall be held in trust for the benefit of, and shall be
paid over or delivered to, the holders of Senior Indebtedness of the Company or
their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, ratably according to the
aggregate amount remaining unpaid on account of the principal, premium, interest
or any other payment due on the Senior Indebtedness held or represented by each,
for application to the payment of all Senior Indebtedness of the Company, as the
case may be, remaining unpaid to the extent necessary to pay such Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the benefit of the holders
of such Senior Indebtedness, but only to the extent that the holders of the
Senior Indebtedness (or their representative or representatives or a trustee)
notify the Trustee in writing within 90 days of such payment of the amounts then
due and owing on the Senior Indebtedness and only the amounts specified in such
notice to the Trustee shall be paid to the holders of Senior Indebtedness.
SECTION 14.3. Liquidation; Dissolution; Bankruptcy.
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Upon any payment by the Company or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding-up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company on
account of the principal (and premium, if any) or interest on the Securities;
and upon any such dissolution or winding-up or liquidation or reorganization,
any payment by the Company, or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the Holders of
the Securities or the Trustee would be entitled to receive, except for the
provisions of this Article Fourteen, shall be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders of the Securities or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness in
full, in money or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of Securities or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee, by any Holder or by any Paying Agent (or, if the Company is acting as
its own Paying Agent, money for any such payment is segregated and held in
trust) before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, ratably according to the
aggregate amount remaining unpaid on account of the principal, premium, interest
or any other payment due on the Senior Indebtedness held or represented by each,
as calculated by the Company, for application to the payment of all Senior
Indebtedness of the Company, as the case may be, remaining unpaid to the extent
necessary to pay such Senior Indebtedness in full in money in accordance with
its terms, after giving effect to any concurrent payment or distribution to or
for the benefit of the holders of such Senior Indebtedness.
For purposes of this Article Fourteen, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article
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Fourteen with respect to the Securities to the payment of all Senior
Indebtedness of the Company, as the case may be, that may at the time be
outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for in
Article VIII shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 14.3 if such other corporation
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article VIII. Nothing in Section 14.2 or in this
Section 14.3 shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 6.7.
SECTION 14.4. Subrogation.
Subject to the payment in full of all Senior Indebtedness of the Company,
the rights of the Holders of the Securities shall be subrogated to the rights of
the holders of such indebtedness to receive payments or distributions of cash,
property or securities of the Company, as the case may be, applicable to such
Senior Indebtedness until the principal of (and premium, if any) and interest on
the Securities shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to the holders of such Senior Indebtedness of any
cash, property or securities to which the Holders of the Securities or the
Trustee would be entitled except for the provisions of this Article Fourteen,
and no payment over pursuant to the provisions of this Article Fourteen to or
for the benefit of the holders of such Senior Indebtedness by Holders of the
Securities or the Trustee, shall, as between the Company, its creditors other
than Holders of Senior Indebtedness of the Company, and the holders of the
Securities, be deemed to be a payment by the Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article
Fourteen are and are intended solely for the purposes of defining the relative
rights of the Holders of the Securities, on the one hand, and the holders of
such Senior Indebtedness on the other hand.
Nothing contained in this Article Fourteen or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness of the Company, and the
Holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of (and
premium, if any) and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Company, as the case may be, other than the holders of Senior
Indebtedness of the Company, as the case may be, nor shall anything herein or
therein prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under the Indenture,
subject to the rights, if any, under this Article Fourteen of the holders of
such Senior Indebtedness in respect
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of cash, property or securities of the Company, as the case may be, received
upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article Fourteen, the Trustee, subject to the provisions of Section 6.1,
and the Holders of the Securities shall be entitled to conclusively rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purposes of ascertaining
the Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article Fourteen.
SECTION 14.5. Trustee to Effectuate Subordination.
Each Holder of Securities by such Holder's acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Fourteen and appoints the Trustee such Holder's attorney-in-fact for any
and all such purposes.
SECTION 14.6. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article Fourteen. Notwithstanding the provisions of
this Article Fourteen or any other provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any facts that would
prohibit the making of any payment of monies to or by the Trustee in respect of
the Securities pursuant to the provisions of this Article Fourteen, unless and
until a Responsible Officer of the Trustee shall have received written notice
thereof from the Company or a holder or holders of Senior Indebtedness or their
representative or representatives or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 6.1, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section 14.6 at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 6.1, shall be entitled
to conclusively rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior
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Indebtedness of the Company, as the case may be (or a trustee on behalf of such
holder), to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article Fourteen,
the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Fourteen, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 14.7. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article Fourteen in respect of any Senior Indebtedness at any
time held by it, to the same extent as any other holder of Senior Indebtedness,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Fourteen, and no
implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of such Senior
Indebtedness and, subject to the provisions of Section 6.1, the Trustee shall
not be liable to any holder of such Senior Indebtedness if it shall pay over or
deliver to Holders of Securities, the Company or any other Person money or
assets to which any holder of such Senior Indebtedness shall be entitled by
virtue of this Article Fourteen or otherwise.
SECTION 14.8. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior Indebtedness of the
Company to enforce subordination as herein provided shall at any time in any way
be prejudiced or impaired by any act or failure to act on the part of the
Company, as the case may be, or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Company, as the case may be,
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof that any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness of the Company may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
Fourteen or the obligations hereunder of the Holders of the Securities
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to the holders of such Senior Indebtedness, do any one or more of the following:
(i) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, such Senior Indebtedness, or otherwise amend or
supplement in any manner such Senior Indebtedness or any instrument evidencing
the same or any agreement under which such Senior Indebtedness is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing such Senior Indebtedness; (iii) release any
Person liable in any manner for the collection of such Senior Indebtedness; and
(iv) exercise or refrain from exercising any rights against the Company, as the
case may be, and any other Person.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1. Acknowledgement of Rights.
The Company acknowledges that, with respect to any Securities held by a
Travelers Trust or a trustee of such Trust, if the Institutional Trustee of such
Travelers Trust fails to enforce its rights under this Indenture as the Holder
of the series of Securities held as the assets of such Travelers Trust, any
holder of Preferred Securities of such Travelers Trust may institute legal
proceedings directly against the Company to enforce such Institutional Trustee's
rights under this Indenture without first instituting any legal proceedings
against such Institutional Trustee or any other person or entity.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal on the applicable series of Securities on the date such
interest or principal is otherwise payable (or in the case of redemption, on the
redemption date), the Company acknowledges that a holder of Trust Securities
issued by the Travelers Trust which is, or the Institutional Trustee of which
is, the Holder of such Securities may directly institute a proceeding for
enforcement of payment to such holder of the principal of or interest on the
applicable series of Securities having a principal amount equal to the aggregate
liquidation amount of the Trust Securities of such holder (a "Direct Action") on
or after the respective due date specified of such holder on or after the
respective due date specified in the applicable series of Securities.
Notwithstanding any payments made to such holder of Trust Securities by the
Company in connection with a Direct Action, the Company shall remain obligated
to pay the principal of or interest on the series of Securities held by a
Travelers Trust or the Institutional Trustee of a Travelers Trust, and the
Company shall be subrogated to the rights of the holder of such Trust Securities
to the extent of any payments made by the Company to such holder in any Direct
Action.
* * * *
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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.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
TRAVELERS GROUP INC.
By________________________________
Name:
Title:
Attest:
___________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.,
As Trustee
By_________________________________
Name:
Title:
Attest:
_____________________________
Name:
Title:
<PAGE>
STATE OF NEW YORK )
COUNTY OF NEW YORK ) ss:
On the ___ day of __________, 1996, before me personally came
______________, to me known, who, being by me duly sworn, did depose and say
that he is a _____________ of TRAVELERS GROUP INC., one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
__________________________
Notary
STATE OF NEW YORK )
COUNTY OF NEW YORK ) ss:
On the ____ day of __________, 1996, before me personally came __________,
to me known, who, being by me duly sworn, did depose and say that he is a
_______________ of THE CHASE MANHATTAN BANK, N.A., one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
__________________________
Notary
EXHIBIT 4.14
============================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Travelers Capital I
Dated as of [ ], 1996
============================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation........................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application......................... 4
SECTION 2.2 Lists of Holders of Securities........................... 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee............... 5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee.......... 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent......... 5
SECTION 2.6 Events of Default; Waiver................................ 6
SECTION 2.7 Event of Default; Notice................................. 6
SECTION 2.8 Conflicting Interests.................................... 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee..... 6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee............ 8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee.... 10
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility................. 10
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustees....................................... 11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee................................................ 12
SECTION 5.2 Waiver of Notice and Demand.............................. 12
SECTION 5.3 Obligations Not Affected................................. 12
SECTION 5.4 Rights of Holders........................................ 13
SECTION 5.5 Guarantee of Payment..................................... 13
<PAGE>
Page
----
SECTION 5.6 Subrogation.............................................. 14
SECTION 5.7 Independent Obligations.................................. 14
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions............................... 14
SECTION 6.2 Ranking.................................................. 15
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.............................................. 15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.............................................. 15
SECTION 8.2 Indemnification.......................................... 16
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns................................... 16
SECTION 9.2 Amendments............................................... 16
SECTION 9.3 Notices.................................................. 16
SECTION 9.4 Benefit.................................................. 17
SECTION 9.5 Governing Law............................................ 17
ii
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of [ ], 1996, is executed and delivered by Travelers Group Inc., a
Delaware corporation (the "Guarantor"), and The Chase Manhattan Bank, N.A., as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Travelers Capital I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of [ ], 1996, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof [ ] preferred securities, having an aggregate
liquidation amount of $[ ], designated the [ ]% Trust Preferred
Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
<PAGE>
(c) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred
Securities Guarantee as modified, supplemented or amended from
time to time;
(d) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Preferred Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the City of New York, New York are permitted or
required by any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities
of the Guarantor designated the [ ]% Junior Subordinated Deferrable Interest
Debentures due [ ], 2036 held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer:
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(i) any accrued and unpaid Distributions (as defined in Annex I to the
Declaration) that are required to be paid on the Preferred Securities, to the
extent the Issuer has funds available therefor, (ii) the redemption price of $25
per Preferred Security, plus all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Preferred Securities
as provided in the Declaration or the redemption of all of the Preferred
Securities upon the maturity or redemption of all of the Debentures as provided
in the Declaration) the lesser of (a) the aggregate of the liquidation amount of
$25 per Preferred Security and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, or (b) the amount of assets of the
Issuer remaining for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution").
"Holder" shall mean 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 or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of [_____], 1996, among the
Guarantor and The Chase Manhattan Bank, N.A., as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
Institutional Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s), voting separately as a
class, holding Preferred Securities representing more than 50% of the aggregate
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
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(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.
"Preferred Guarantee Trustee" means The Chase Manhattan Bank, N.A.,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice-president, any assistant vice-president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
4
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(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with
a list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders ("List of Holders") as of such date,
(i) within one Business Day after January 1 and June 30 of each year, and (ii)
at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Preferred Guarantee Trustee provided, that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after April 15 of each year, the Preferred 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 Preferred Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
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SECTION 2.6 Events of Default; Waiver
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 and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, that, the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders, and the Preferred
Guarantee Trustee shall not transfer its right, title and interest in this
Preferred Securities Guarantee to any Person except a Holder exercising his or
her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing
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documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(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 Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall
be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
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(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
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(v) The Preferred Guarantee Trustee may consult with counsel, and
the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Preferred Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
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(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are received,
and (iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not assume
any responsibility for their correctness. The Preferred Guarantee Trustee makes
no representation as to the validity or sufficiency of this Preferred Securities
Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed
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to be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall
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pay to the Preferred Guarantee Trustee all amounts accrued and owing to such
Preferred Guarantee Trustee to the date of such termination, removal or
resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments, as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by 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, 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;
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(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 to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce its rights
under this Preferred Securities Guarantee, any Holder may directly institute a
legal proceeding against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other Person or entity.
(c) A Holder of Preferred Securities may also directly institute a
legal proceeding against the Guarantor to enforce such Holder's right to receive
payment under this Preferred Securities Guarantee without first (i) directing
the Preferred Guarantee Trustee to enforce the terms of this Preferred
Securities Guarantee or (ii) instituting a legal proceeding directly against the
Issuer or any other Person or entity.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
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SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. 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 Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there
shall have occurred any event that would constitute an Event of Default or an
event of default under the Declaration, then (a) the Guarantor shall not declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or make any guarantee payment with respect thereto (other than (i)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Guarantor in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Guarantor's capital stock for any other class or series of the
Guarantor's capital stock, or (iii) the purchase of fractional interests in
shares of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged)
and (b) the Guarantor shall not make any payment of interest on, or principal of
(or premium, if any, on), or repay, repurchase or redeem, any debt securities
issued by the Guarantor which rank pari passu with or junior to the Debentures;
provided, however, the Guarantor may declare and pay a stock dividend where the
dividend stock is the same stock as that on which the dividend is being paid.
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SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) the
distribution of the Debentures to the Holders of all of the Preferred Securities
or (iii) full payment of the amounts payable in accordance with the Declaration
upon liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee 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
under the Preferred Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts
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pertinent to the existence and amount of assets from which Distributions to
Holders might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may be amended only with the prior approval of
the Holders of not less than a Majority in aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders):
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The Chase Manhattan Bank, N.A.
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Sheik Wiltshire
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders):
Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Charles O. Prince III, Secretary
(c) If given to any Holder, at the address set forth on the books
and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD FOR
THE PRINCIPLES OF ITS CONFLICTS OF LAWS.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
TRAVELERS GROUP INC.,
as Guarantor
By:_________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A., as
Preferred Guarantee Trustee
By:_________________________________
Name:
Title:
EXHIBIT 4.15
==========================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Travelers Capital II
Dated as of [ ], 1996
==========================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation........................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application......................... 4
SECTION 2.2 Lists of Holders of Securities........................... 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee............... 5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee.......... 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent......... 5
SECTION 2.6 Events of Default; Waiver................................ 6
SECTION 2.7 Event of Default; Notice................................. 6
SECTION 2.8 Conflicting Interests.................................... 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee..... 6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee............ 8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee.... 10
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility................. 10
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustees....................................... 11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee................................................ 12
SECTION 5.2 Waiver of Notice and Demand.............................. 12
SECTION 5.3 Obligations Not Affected................................. 12
SECTION 5.4 Rights of Holders........................................ 13
SECTION 5.5 Guarantee of Payment..................................... 13
<PAGE>
Page
----
SECTION 5.6 Subrogation.............................................. 14
SECTION 5.7 Independent Obligations.................................. 14
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions............................... 14
SECTION 6.2 Ranking.................................................. 15
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.............................................. 15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.............................................. 15
SECTION 8.2 Indemnification.......................................... 16
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns................................... 16
SECTION 9.2 Amendments............................................... 16
SECTION 9.3 Notices.................................................. 16
SECTION 9.4 Benefit.................................................. 17
SECTION 9.5 Governing Law............................................ 17
ii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of [_____], 1996, is executed and delivered by Travelers Group Inc., a
Delaware corporation (the "Guarantor"), and The Chase Manhattan Bank, N.A., as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Travelers Capital II, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of [_____], 1996, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof [_____] preferred securities, having an aggregate
liquidation amount of $[_____], designated the [ ]% Trust Preferred Securities
(the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
<PAGE>
(c) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred
Securities Guarantee as modified, supplemented or amended from
time to time;
(d) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Preferred Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the City of New York, New York are permitted or
required by any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities
of the Guarantor designated the [ ]% Junior Subordinated Deferrable Interest
Debentures due [_____], 2036 held by the Institutional Trustee (as defined in
the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer:
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(i) any accrued and unpaid Distributions (as defined in Annex I to the
Declaration) that are required to be paid on the Preferred Securities, to the
extent the Issuer has funds available therefor, (ii) the redemption price of $25
per Preferred Security, plus all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Preferred Securities
as provided in the Declaration or the redemption of all of the Preferred
Securities upon the maturity or redemption of all of the Debentures as provided
in the Declaration) the lesser of (a) the aggregate of the liquidation amount of
$25 per Preferred Security and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, or (b) the amount of assets of the
Issuer remaining for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution").
"Holder" shall mean 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 or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of [_____], 1996, among the
Guarantor and The Chase Manhattan Bank, N.A., as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
Institutional Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s), voting separately as a
class, holding Preferred Securities representing more than 50% of the aggregate
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
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(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.
"Preferred Guarantee Trustee" means The Chase Manhattan Bank, N.A.,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice-president, any assistant vice-president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
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(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with
a list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders ("List of Holders") as of such date,
(i) within one Business Day after January 1 and June 30 of each year, and (ii)
at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Preferred Guarantee Trustee provided, that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after April 15 of each year, the Preferred 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 Preferred Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
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SECTION 2.6 Events of Default; Waiver
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 and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, that, the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders, and the Preferred
Guarantee Trustee shall not transfer its right, title and interest in this
Preferred Securities Guarantee to any Person except a Holder exercising his or
her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing
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documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(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 Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall
be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
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(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
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(v) The Preferred Guarantee Trustee may consult with counsel, and
the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Preferred Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
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(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are received,
and (iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not assume
any responsibility for their correctness. The Preferred Guarantee Trustee makes
no representation as to the validity or sufficiency of this Preferred Securities
Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed
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to be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall
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pay to the Preferred Guarantee Trustee all amounts accrued and owing to such
Preferred Guarantee Trustee to the date of such termination, removal or
resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments, as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by 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, 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;
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(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 to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce its rights
under this Preferred Securities Guarantee, any Holder may directly institute a
legal proceeding against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other Person or entity.
(c) A Holder of Preferred Securities may also directly institute a
legal proceeding against the Guarantor to enforce such Holder's right to receive
payment under this Preferred Securities Guarantee without first (i) directing
the Preferred Guarantee Trustee to enforce the terms of this Preferred
Securities Guarantee or (ii) instituting a legal proceeding directly against the
Issuer or any other Person or entity.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
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SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. 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 Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there
shall have occurred any event that would constitute an Event of Default or an
event of default under the Declaration, then (a) the Guarantor shall not declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or make any guarantee payment with respect thereto (other than (i)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Guarantor in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Guarantor's capital stock for any other class or series of the
Guarantor's capital stock, or (iii) the purchase of fractional interests in
shares of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged)
and (b) the Guarantor shall not make any payment of interest on, or principal of
(or premium, if any, on), or repay, repurchase or redeem, any debt securities
issued by the Guarantor which rank pari passu with or junior to the Debentures;
provided, however, the Guarantor may declare and pay a stock dividend where the
dividend stock is the same stock as that on which the dividend is being paid.
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SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) the
distribution of the Debentures to the Holders of all of the Preferred Securities
or (iii) full payment of the amounts payable in accordance with the Declaration
upon liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee 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
under the Preferred Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts
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pertinent to the existence and amount of assets from which Distributions to
Holders might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may be amended only with the prior approval of
the Holders of not less than a Majority in aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders):
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The Chase Manhattan Bank, N.A.
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Sheik Wiltshire
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders):
Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Charles O. Prince III, Secretary
(c) If given to any Holder, at the address set forth on the books
and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD FOR
THE PRINCIPLES OF ITS CONFLICTS OF LAWS.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
TRAVELERS GROUP INC.,
as Guarantor
By:_________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A., as
Preferred Guarantee Trustee
By:_________________________________
Name:
Title:
EXHIBIT 4.16
===========================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Travelers Capital III
Dated as of [ ], 1996
===========================
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.......................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application........................ 4
SECTION 2.2 Lists of Holders of Securities.......................... 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee.............. 5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee......... 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent........ 5
SECTION 2.6 Events of Default; Waiver............................... 6
SECTION 2.7 Event of Default; Notice................................ 6
SECTION 2.8 Conflicting Interests................................... 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee.... 6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee........... 8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee... 10
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility................ 10
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustees...................................... 11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee............................................... 12
SECTION 5.2 Waiver of Notice and Demand............................. 12
SECTION 5.3 Obligations Not Affected................................ 12
SECTION 5.4 Rights of Holders....................................... 13
SECTION 5.5 Guarantee of Payment.................................... 13
<PAGE>
Page
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SECTION 5.6 Subrogation............................................. 14
SECTION 5.7 Independent Obligations................................. 14
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.............................. 14
SECTION 6.2 Ranking................................................. 15
ARTICLE VII
TERMINATION
SECTION 7.1 Termination............................................. 15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation............................................. 15
SECTION 8.2 Indemnification......................................... 16
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.................................. 16
SECTION 9.2 Amendments.............................................. 16
SECTION 9.3 Notices................................................. 16
SECTION 9.4 Benefit................................................. 17
SECTION 9.5 Governing Law........................................... 17
ii
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of [_____], 1996, is executed and delivered by Travelers Group Inc., a
Delaware corporation (the "Guarantor"), and The Chase Manhattan Bank, N.A., as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Travelers Capital III, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of [_____], 1996, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof [_____] preferred securities, having an aggregate
liquidation amount of $[_____], designated the [ ]% Trust Preferred Securities
(the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
<PAGE>
(c) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred
Securities Guarantee as modified, supplemented or amended from
time to time;
(d) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Preferred Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the City of New York, New York are permitted or
required by any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities
of the Guarantor designated the [ ]% Junior Subordinated Deferrable Interest
Debentures due [_____], 2036 held by the Institutional Trustee (as defined in
the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer:
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(i) any accrued and unpaid Distributions (as defined in Annex I to the
Declaration) that are required to be paid on the Preferred Securities, to the
extent the Issuer has funds available therefor, (ii) the redemption price of $25
per Preferred Security, plus all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Preferred Securities
as provided in the Declaration or the redemption of all of the Preferred
Securities upon the maturity or redemption of all of the Debentures as provided
in the Declaration) the lesser of (a) the aggregate of the liquidation amount of
$25 per Preferred Security and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, or (b) the amount of assets of the
Issuer remaining for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution").
"Holder" shall mean 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 or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of [_____], 1996, among the
Guarantor and The Chase Manhattan Bank, N.A., as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
Institutional Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s), voting separately as a
class, holding Preferred Securities representing more than 50% of the aggregate
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
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(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.
"Preferred Guarantee Trustee" means The Chase Manhattan Bank, N.A.,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice-president, any assistant vice-president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
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(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with
a list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders ("List of Holders") as of such date,
(i) within one Business Day after January 1 and June 30 of each year, and (ii)
at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Preferred Guarantee Trustee provided, that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after April 15 of each year, the Preferred 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 Preferred Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
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SECTION 2.6 Events of Default; Waiver
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 and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, that, the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders, and the Preferred
Guarantee Trustee shall not transfer its right, title and interest in this
Preferred Securities Guarantee to any Person except a Holder exercising his or
her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing
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documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(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 Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall
be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
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(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
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(v) The Preferred Guarantee Trustee may consult with counsel, and
the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Preferred Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
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(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are received,
and (iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not assume
any responsibility for their correctness. The Preferred Guarantee Trustee makes
no representation as to the validity or sufficiency of this Preferred Securities
Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed
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to be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall
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pay to the Preferred Guarantee Trustee all amounts accrued and owing to such
Preferred Guarantee Trustee to the date of such termination, removal or
resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments, as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by 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, 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;
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(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 to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce its rights
under this Preferred Securities Guarantee, any Holder may directly institute a
legal proceeding against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other Person or entity.
(c) A Holder of Preferred Securities may also directly institute a
legal proceeding against the Guarantor to enforce such Holder's right to receive
payment under this Preferred Securities Guarantee without first (i) directing
the Preferred Guarantee Trustee to enforce the terms of this Preferred
Securities Guarantee or (ii) instituting a legal proceeding directly against the
Issuer or any other Person or entity.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
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SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. 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 Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there
shall have occurred any event that would constitute an Event of Default or an
event of default under the Declaration, then (a) the Guarantor shall not declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or make any guarantee payment with respect thereto (other than (i)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Guarantor in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Guarantor's capital stock for any other class or series of the
Guarantor's capital stock, or (iii) the purchase of fractional interests in
shares of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged)
and (b) the Guarantor shall not make any payment of interest on, or principal of
(or premium, if any, on), or repay, repurchase or redeem, any debt securities
issued by the Guarantor which rank pari passu with or junior to the Debentures;
provided, however, the Guarantor may declare and pay a stock dividend where the
dividend stock is the same stock as that on which the dividend is being paid.
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SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) the
distribution of the Debentures to the Holders of all of the Preferred Securities
or (iii) full payment of the amounts payable in accordance with the Declaration
upon liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee 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
under the Preferred Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts
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pertinent to the existence and amount of assets from which Distributions to
Holders might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may be amended only with the prior approval of
the Holders of not less than a Majority in aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders):
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The Chase Manhattan Bank, N.A.
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Sheik Wiltshire
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders):
Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Charles O. Prince III, Secretary
(c) If given to any Holder, at the address set forth on the books
and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD FOR
THE PRINCIPLES OF ITS CONFLICTS OF LAWS.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
TRAVELERS GROUP INC.,
as Guarantor
By:__________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A., as
Preferred Guarantee Trustee
By:__________________________________
Name:
Title:
EXHIBIT 4.17
============================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Travelers Capital IV
Dated as of [ ], 1996
============================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation....................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application..................... 4
SECTION 2.2 Lists of Holders of Securities....................... 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee........... 5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee...... 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent..... 5
SECTION 2.6 Events of Default; Waiver............................ 6
SECTION 2.7 Event of Default; Notice............................. 6
SECTION 2.8 Conflicting Interests................................ 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee. 6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee........ 8
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee 10
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility............. 10
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustees................................... 11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee............................................ 12
SECTION 5.2 Waiver of Notice and Demand.......................... 12
SECTION 5.3 Obligations Not Affected............................. 12
SECTION 5.4 Rights of Holders.................................... 13
SECTION 5.5 Guarantee of Payment................................. 13
<PAGE>
Page
----
SECTION 5.6 Subrogation.......................................... 14
SECTION 5.7 Independent Obligations.............................. 14
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions........................... 14
SECTION 6.2 Ranking.............................................. 15
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.......................................... 15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.......................................... 15
SECTION 8.2 Indemnification...................................... 16
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns............................... 16
SECTION 9.2 Amendments........................................... 16
SECTION 9.3 Notices.............................................. 16
SECTION 9.4 Benefit.............................................. 17
SECTION 9.5 Governing Law........................................ 17
ii
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of [ ], 1996, is executed and delivered by Travelers Group Inc.,
a Delaware corporation (the "Guarantor"), and The Chase Manhattan Bank, N.A., as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Travelers Capital IV, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of [ ], 1996, among the trustees of
the Issuer named therein, the Guarantor, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof [ ] preferred securities, having
an aggregate liquidation amount of $[ ], designated the [ ]% Trust
Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
<PAGE>
(c) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred
Securities Guarantee as modified, supplemented or amended from
time to time;
(d) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Preferred Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the City of New York, New York are permitted or
required by any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities
of the Guarantor designated the [ ]% Junior Subordinated Deferrable Interest
Debentures due [ ], 2036 held by the Institutional Trustee (as
defined in the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer:
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(i) any accrued and unpaid Distributions (as defined in Annex I to the
Declaration) that are required to be paid on the Preferred Securities, to the
extent the Issuer has funds available therefor, (ii) the redemption price of $25
per Preferred Security, plus all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Preferred Securities
as provided in the Declaration or the redemption of all of the Preferred
Securities upon the maturity or redemption of all of the Debentures as provided
in the Declaration) the lesser of (a) the aggregate of the liquidation amount of
$25 per Preferred Security and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, or (b) the amount of assets of the
Issuer remaining for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution").
"Holder" shall mean 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 or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of [ ], 1996, among the
Guarantor and The Chase Manhattan Bank, N.A., as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
Institutional Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s), voting separately as a
class, holding Preferred Securities representing more than 50% of the aggregate
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
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(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.
"Preferred Guarantee Trustee" means The Chase Manhattan Bank, N.A.,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice-president, any assistant vice-president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
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(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with
a list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders ("List of Holders") as of such date,
(i) within one Business Day after January 1 and June 30 of each year, and (ii)
at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Preferred Guarantee Trustee provided, that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after April 15 of each year, the Preferred 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 Preferred Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
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SECTION 2.6 Events of Default; Waiver
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 and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, that, the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders, and the Preferred
Guarantee Trustee shall not transfer its right, title and interest in this
Preferred Securities Guarantee to any Person except a Holder exercising his or
her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing
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documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(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 Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall
be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
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(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
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(v) The Preferred Guarantee Trustee may consult with counsel, and
the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Preferred Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
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(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are received,
and (iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not assume
any responsibility for their correctness. The Preferred Guarantee Trustee makes
no representation as to the validity or sufficiency of this Preferred Securities
Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed
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to be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall
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pay to the Preferred Guarantee Trustee all amounts accrued and owing to such
Preferred Guarantee Trustee to the date of such termination, removal or
resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments, as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by 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, 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;
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(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 to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce its rights
under this Preferred Securities Guarantee, any Holder may directly institute a
legal proceeding against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other Person or entity.
(c) A Holder of Preferred Securities may also directly institute a
legal proceeding against the Guarantor to enforce such Holder's right to receive
payment under this Preferred Securities Guarantee without first (i) directing
the Preferred Guarantee Trustee to enforce the terms of this Preferred
Securities Guarantee or (ii) instituting a legal proceeding directly against the
Issuer or any other Person or entity.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
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SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. 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 Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there
shall have occurred any event that would constitute an Event of Default or an
event of default under the Declaration, then (a) the Guarantor shall not declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or make any guarantee payment with respect thereto (other than (i)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Guarantor in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Guarantor's capital stock for any other class or series of the
Guarantor's capital stock, or (iii) the purchase of fractional interests in
shares of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged)
and (b) the Guarantor shall not make any payment of interest on, or principal of
(or premium, if any, on), or repay, repurchase or redeem, any debt securities
issued by the Guarantor which rank pari passu with or junior to the Debentures;
provided, however, the Guarantor may declare and pay a stock dividend where the
dividend stock is the same stock as that on which the dividend is being paid.
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SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) the
distribution of the Debentures to the Holders of all of the Preferred Securities
or (iii) full payment of the amounts payable in accordance with the Declaration
upon liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee 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
under the Preferred Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts
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pertinent to the existence and amount of assets from which Distributions to
Holders might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may be amended only with the prior approval of
the Holders of not less than a Majority in aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders):
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The Chase Manhattan Bank, N.A.
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Sheik Wiltshire
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders):
Travelers Group Inc,
388 Greenwich Street
New York, New York 10013
Attention: Charles O. Prince III, Secretary
(c) If given to any Holder, at the address set forth on the books
and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD FOR
THE PRINCIPLES OF ITS CONFLICTS OF LAWS.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
TRAVELERS GROUP INC,.
as Guarantor
By:________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A., as
Preferred Guarantee Trustee
By:________________________________
Name:
Title:
EXHIBIT 4.18
=========================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Travelers Capital V
Dated as of [ ], 1996
=========================
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.......................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application........................ 4
SECTION 2.2 Lists of Holders of Securities.......................... 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee.............. 5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee......... 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent........ 5
SECTION 2.6 Events of Default; Waiver............................... 6
SECTION 2.7 Event of Default; Notice................................ 6
SECTION 2.8 Conflicting Interests................................... 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee.... 6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee........... 8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee... 10
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility................ 10
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustees...................................... 11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee............................................... 12
SECTION 5.2 Waiver of Notice and Demand............................. 12
SECTION 5.3 Obligations Not Affected................................ 12
SECTION 5.4 Rights of Holders....................................... 13
SECTION 5.5 Guarantee of Payment.................................... 13
<PAGE>
Page
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SECTION 5.6 Subrogation............................................. 14
SECTION 5.7 Independent Obligations................................. 14
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.............................. 14
SECTION 6.2 Ranking................................................. 15
ARTICLE VII
TERMINATION
SECTION 7.1 Termination............................................. 15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation............................................. 15
SECTION 8.2 Indemnification......................................... 16
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.................................. 16
SECTION 9.2 Amendments.............................................. 16
SECTION 9.3 Notices................................................. 16
SECTION 9.4 Benefit................................................. 17
SECTION 9.5 Governing Law........................................... 17
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of [_____], 1996, is executed and delivered by Travelers Group, Inc., a
Delaware corporation (the "Guarantor"), and The Chase Manhattan Bank, N.A., as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Travelers Capital V, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of [_____], 1996, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof [_____] preferred securities, having an aggregate
liquidation amount of $[_____], designated the [ ]% Trust Preferred Securities
(the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
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(c) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred
Securities Guarantee as modified, supplemented or amended from
time to time;
(d) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Preferred Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the City of New York, New York are permitted or
required by any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 450 West 33rd Street - 15th
Floor, New York, New York 10001.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities
of the Guarantor designated the [ ]% Junior Subordinated Deferrable Interest
Debentures due [_____], 2036 held by the Institutional Trustee (as defined in
the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer:
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(i) any accrued and unpaid Distributions (as defined in Annex I to the
Declaration) that are required to be paid on the Preferred Securities, to the
extent the Issuer has funds available therefor, (ii) the redemption price of $25
per Preferred Security, plus all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Preferred Securities
as provided in the Declaration or the redemption of all of the Preferred
Securities upon the maturity or redemption of all of the Debentures as provided
in the Declaration) the lesser of (a) the aggregate of the liquidation amount of
$25 per Preferred Security and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, or (b) the amount of assets of the
Issuer remaining for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution").
"Holder" shall mean 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 or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of [_____], 1996, among the
Guarantor and The Chase Manhattan Bank, N.A., as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
Institutional Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s), voting separately as a
class, holding Preferred Securities representing more than 50% of the aggregate
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
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(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.
"Preferred Guarantee Trustee" means The Chase Manhattan Bank, N.A.,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice-president, any assistant vice-president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
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(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with
a list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders ("List of Holders") as of such date,
(i) within one Business Day after January 1 and June 30 of each year, and (ii)
at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Preferred Guarantee Trustee provided, that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after April 15 of each year, the Preferred 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 Preferred Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
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SECTION 2.6 Events of Default; Waiver
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 and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, that, the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders, and the Preferred
Guarantee Trustee shall not transfer its right, title and interest in this
Preferred Securities Guarantee to any Person except a Holder exercising his or
her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing
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documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(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 Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall
be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
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(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
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(v) The Preferred Guarantee Trustee may consult with counsel, and
the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Preferred Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
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(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are received,
and (iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not assume
any responsibility for their correctness. The Preferred Guarantee Trustee makes
no representation as to the validity or sufficiency of this Preferred Securities
Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed
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to be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall
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pay to the Preferred Guarantee Trustee all amounts accrued and owing to such
Preferred Guarantee Trustee to the date of such termination, removal or
resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments, as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by 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, 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;
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(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 to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce its rights
under this Preferred Securities Guarantee, any Holder may directly institute a
legal proceeding against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other Person or entity.
(c) A Holder of Preferred Securities may also directly institute a
legal proceeding against the Guarantor to enforce such Holder's right to receive
payment under this Preferred Securities Guarantee without first (i) directing
the Preferred Guarantee Trustee to enforce the terms of this Preferred
Securities Guarantee or (ii) instituting a legal proceeding directly against the
Issuer or any other Person or entity.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
13
<PAGE>
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. 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 Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there
shall have occurred any event that would constitute an Event of Default or an
event of default under the Declaration, then (a) the Guarantor shall not declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or make any guarantee payment with respect thereto (other than (i)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Guarantor in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Guarantor's capital stock for any other class or series of the
Guarantor's capital stock, or (iii) the purchase of fractional interests in
shares of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged)
and (b) the Guarantor shall not make any payment of interest on, or principal of
(or premium, if any, on), or repay, repurchase or redeem, any debt securities
issued by the Guarantor which rank pari passu with or junior to the Debentures;
provided, however, the Guarantor may declare and pay a stock dividend where the
dividend stock is the same stock as that on which the dividend is being paid.
14
<PAGE>
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) the
distribution of the Debentures to the Holders of all of the Preferred Securities
or (iii) full payment of the amounts payable in accordance with the Declaration
upon liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee 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
under the Preferred Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts
15
<PAGE>
pertinent to the existence and amount of assets from which Distributions to
Holders might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may be amended only with the prior approval of
the Holders of not less than a Majority in aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders):
16
<PAGE>
The Chase Manhattan Bank, N.A.
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Sheik Wiltshire
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders):
Travelers Group Inc.,
388 Greenwich Street
New York, New York 10013
Attention: Charles O. Prince III, Secretary
(c) If given to any Holder, at the address set forth on the books
and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD FOR
THE PRINCIPLES OF ITS CONFLICTS OF LAWS.
17
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
TRAVELERS GROUP INC.,
as Guarantor
By:__________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A., as
Preferred Guarantee Trustee
By:__________________________________
Name:
Title:
<TABLE>
<CAPTION>
Exhibit 12.1
TRAVELERS GROUP INC. and SUBSIDIARIES
(in million of dollars, except for ratio)
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------- --------------------------------------------------------
1996 1995 1994 1993 1992 1991
---------- ---------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Pre tax income from continuing operations $1,413.0 $2,521.0 $1,874.0 $1,523.0 $1,188.0 $791.0
Undistributed earnings of equity investee (116.0) (26.0) (5.0)
Pre tax minority interest (32.0)
Fixed charges:
Interest 1,060.0 1,956.0 1,284.0 707.0 674.0 876.0
Interest portion of rentals 53.0 104.0 134.0 61.0 38.0 46.0
-------- -------- --------- -------- -------- --------
Total fixed charges 1,113.0 2,060.0 1,418.0 768.0 712.0 922.0
-------- -------- --------- -------- -------- --------
Earnings available for fixed charges $2,526.0 $4,581.0 $3,292.0 $2,143.0 $1,874.0 $1,708.0
-------- -------- --------- -------- -------- --------
Total preferred dividend requirement $46.6 $84.0 $82.9 $27.2 $10.3 $0.0
Effective tax rate 25.5% 35.4% 38.3% 36.1% 36.4% 36.3%
Total preferred dividend grossed up $62.9 $130.1 $134.3 $42.6 $16.2 $0.0
Total fixed charges and preferred dividends $1,175.9 $2,190.1 $1,552.3 $810.6 $728.2 $922.0
-------- -------- -------- -------- -------- --------
Ratio of earnings to combined fixed charges
and preferred stock dividends 2.15 2.09 2.12 2.64 2.57 1.85
-------- -------- -------- -------- -------- -------
-------- -------- -------- -------- -------- -------
</TABLE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Travelers Group Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-3 of our reports dated January 16, 1996 which are incorporated by
reference or included in the 1995 Annual Report on Form 10-K of Travelers Group
Inc. incorporated herein by reference, and to the reference to our firm under
the heading "Experts" in the registration statement. Our reports refer to
changes in the Company's method of accounting for certain investments in debt
and equity securities in 1994, and methods of accounting for postretirement
benefits other than pensions and accounting for postemployment benefits in 1993.
/s/ KPMG PEAT MARWICK LLP
New York, New York
September 20, 1996
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
To Board of Directors
Travelers Group Inc.:
We consent to the incorporation by reference in the Registration Statement of
Travelers Group Inc. (the "Company") on Form S-3, of our report dated January
24, 1994, relating to our audit of the preacquisition consolidated statements
of operations and retained earnings and cash flows for the year ended December
31, 1993 of The Travelers Corporation and Subsidiaries, (the preacquisition
consolidated financial statements), which report is included in the Annual
Report on Form 10-K of the Company for the fiscal year ended December 31, 1995,
and includes an explanatory paragraph referring to changes in the method of
accounting for reinsurance in 1993. We also consent to the reference to our
Firm under the caption "Experts".
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
September 20, 1996
EXHIBIT 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Aetna Services, Inc. (formerly "Aetna Life and Casualty Company"):
We consent to the incorporation by reference in the registration statement on
Form S-3 filed by Travelers Group Inc. of our report dated February 28, 1996 on
the combined financial statements of The Aetna Casualty and Surety Company and
The Standard Fire Insurance Company and their subsidiaries which is included in
the Current Report on Form 8-K/A-1 of Travelers Group Inc. dated April 2, 1996
incorporated herein by reference, and to the reference to our firm under the
heading "Experts" in the registration statement.
/s/ KPMG PEAT MARWICK LLP
Hartford, Connecticut
September 20, 1996
EXHIBIT 24.1
POWER OF ATTORNEY
(Form S-3)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
Travelers Group Inc., a Delaware corporation (the "Company"), does hereby
constitute and appoint Sanford I. Weill, James Dimon and Charles O. Prince, III,
and each of them, the true and lawful attorneys-in-fact and agents of the
undersigned, to do or cause to be done any and all acts and things and to
execute any and all instruments and documents which said attorneys-in-fact and
agents, or any of them, may deem advisable or necessary to enable the Company to
comply with the Securities Act of 1933, as amended (the "Securities Act"), and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of junior subordinated debt securities, guarantees of trust
preferred securities and certain back-up obligations, in each case of the
Company, and the trust preferred securities of certain related trusts
(collectively, the "Securities"), including specifically, but without limiting
the generality of the foregoing, power and authority to sign, in the name and on
behalf of the undersigned as a director of the Company, a Registration Statement
on Form S-3, a registration statement under Rule 462(b) of the Securities Act,
or another appropriate form in respect of the registration of the Securities and
any and all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the same
with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the undersigned
which said attorneys-in-fact and agents, or any of them, deem advisable in order
to qualify or register the Securities under the securities laws of any of the
several States; and the undersigned does hereby ratify all that said attorneys-
in-fact or agents, or any of them, shall do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
18th day of September, 1996.
- ----
/s/ Kenneth J. Bialkin
----------------------------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
(Form S-3)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
Travelers Group Inc., a Delaware corporation (the "Company"), does hereby
constitute and appoint Sanford I. Weill, James Dimon and Charles O. Prince, III,
and each of them, the true and lawful attorneys-in-fact and agents of the
undersigned, to do or cause to be done any and all acts and things and to
execute any and all instruments and documents which said attorneys-in-fact and
agents, or any of them, may deem advisable or necessary to enable the Company to
comply with the Securities Act of 1933, as amended (the "Securities Act"), and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of junior subordinated debt securities, guarantees of trust
preferred securities and certain back-up obligations, in each case of the
Company, and the trust preferred securities of certain related trusts
(collectively, the "Securities"), including specifically, but without limiting
the generality of the foregoing, power and authority to sign, in the name and on
behalf of the undersigned as a director of the Company, a Registration Statement
on Form S-3, a registration statement under Rule 462(b) of the Securities Act,
or another appropriate form in respect of the registration of the Securities and
any and all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the same
with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the undersigned
which said attorneys-in-fact and agents, or any of them, deem advisable in order
to qualify or register the Securities under the securities laws of any of the
several States; and the undersigned does hereby ratify all that said attorneys-
in-fact or agents, or any of them, shall do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
19th day of September, 1996.
- ----
/s/ Edward H. Budd
--------------------------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
(Form S-3)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
Travelers Group Inc., a Delaware corporation (the "Company"), does hereby
constitute and appoint Sanford I. Weill, James Dimon and Charles O. Prince, III,
and each of them, the true and lawful attorneys-in-fact and agents of the
undersigned, to do or cause to be done any and all acts and things and to
execute any and all instruments and documents which said attorneys-in-fact and
agents, or any of them, may deem advisable or necessary to enable the Company to
comply with the Securities Act of 1933, as amended (the "Securities Act"), and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of junior subordinated debt securities, guarantees of trust
preferred securities and certain back-up obligations, in each case of the
Company, and the trust preferred securities of certain related trusts
(collectively, the "Securities"), including specifically, but without limiting
the generality of the foregoing, power and authority to sign, in the name and on
behalf of the undersigned as a director of the Company, a Registration Statement
on Form S-3, a registration statement under Rule 462(b) of the Securities Act,
or another appropriate form in respect of the registration of the Securities and
any and all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the same
with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the undersigned
which said attorneys-in-fact and agents, or any of them, deem advisable in order
to qualify or register the Securities under the securities laws of any of the
several States; and the undersigned does hereby ratify all that said attorneys-
in-fact or agents, or any of them, shall do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
19th day of September, 1996.
- ----
/s/ Robert F. Daniell
---------------------------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
(Form S-3)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
Travelers Group Inc., a Delaware corporation (the "Company"), does hereby
constitute and appoint Sanford I. Weill, James Dimon and Charles O. Prince, III,
and each of them, the true and lawful attorneys-in-fact and agents of the
undersigned, to do or cause to be done any and all acts and things and to
execute any and all instruments and documents which said attorneys-in-fact and
agents, or any of them, may deem advisable or necessary to enable the Company to
comply with the Securities Act of 1933, as amended (the "Securities Act"), and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of junior subordinated debt securities, guarantees of trust
preferred securities and certain back-up obligations, in each case of the
Company, and the trust preferred securities of certain related trusts
(collectively, the "Securities"), including specifically, but without limiting
the generality of the foregoing, power and authority to sign, in the name and on
behalf of the undersigned as a director of the Company, a Registration Statement
on Form S-3, a registration statement under Rule 462(b) of the Securities Act,
or another appropriate form in respect of the registration of the Securities and
any and all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the same
with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the undersigned
which said attorneys-in-fact and agents, or any of them, deem advisable in order
to qualify or register the Securities under the securities laws of any of the
several States; and the undersigned does hereby ratify all that said attorneys-
in-fact or agents, or any of them, shall do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
20th day of September, 1996.
- ----
/s/ Ann D. Jordan
-------------------------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
(Form S-3)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
Travelers Group Inc., a Delaware corporation (the "Company"), does hereby
constitute and appoint Sanford I. Weill, James Dimon and Charles O. Prince, III,
and each of them, the true and lawful attorneys-in-fact and agents of the
undersigned, to do or cause to be done any and all acts and things and to
execute any and all instruments and documents which said attorneys-in-fact and
agents, or any of them, may deem advisable or necessary to enable the Company to
comply with the Securities Act of 1933, as amended (the "Securities Act"), and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of junior subordinated debt securities, guarantees of trust
preferred securities and certain back-up obligations, in each case of the
Company, and the trust preferred securities of certain related trusts
(collectively, the "Securities"), including specifically, but without limiting
the generality of the foregoing, power and authority to sign, in the name and on
behalf of the undersigned as a director of the Company, a Registration Statement
on Form S-3, a registration statement under Rule 462(b) of the Securities Act,
or another appropriate form in respect of the registration of the Securities and
any and all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the same
with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the undersigned
which said attorneys-in-fact and agents, or any of them, deem advisable in order
to qualify or register the Securities under the securities laws of any of the
several States; and the undersigned does hereby ratify all that said attorneys-
in-fact or agents, or any of them, shall do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
20th day of September, 1996.
- ----
/s/ Robert I. Lipp
-------------------------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
(Form S-3)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
Travelers Group Inc., a Delaware corporation (the "Company"), does hereby
constitute and appoint Sanford I. Weill, James Dimon and Charles O. Prince, III,
and each of them, the true and lawful attorneys-in-fact and agents of the
undersigned, to do or cause to be done any and all acts and things and to
execute any and all instruments and documents which said attorneys-in-fact and
agents, or any of them, may deem advisable or necessary to enable the Company to
comply with the Securities Act of 1933, as amended (the "Securities Act"), and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of junior subordinated debt securities, guarantees of trust
preferred securities and certain back-up obligations, in each case of the
Company, and the trust preferred securities of certain related trusts
(collectively, the "Securities"), including specifically, but without limiting
the generality of the foregoing, power and authority to sign, in the name and on
behalf of the undersigned as a director of the Company, a Registration Statement
on Form S-3, a registration statement under Rule 462(b) of the Securities Act,
or another appropriate form in respect of the registration of the Securities and
any and all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the same
with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the undersigned
which said attorneys-in-fact and agents, or any of them, deem advisable in order
to qualify or register the Securities under the securities laws of any of the
several States; and the undersigned does hereby ratify all that said attorneys-
in-fact or agents, or any of them, shall do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
19th day of September, 1996.
- ----
/s/ Dudley C. Mecum
-------------------------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
(Form S-3)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
Travelers Group Inc., a Delaware corporation (the "Company"), does hereby
constitute and appoint Sanford I. Weill, James Dimon and Charles O. Prince, III,
and each of them, the true and lawful attorneys-in-fact and agents of the
undersigned, to do or cause to be done any and all acts and things and to
execute any and all instruments and documents which said attorneys-in-fact and
agents, or any of them, may deem advisable or necessary to enable the Company to
comply with the Securities Act of 1933, as amended (the "Securities Act"), and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of junior subordinated debt securities, guarantees of trust
preferred securities and certain back-up obligations, in each case of the
Company, and the trust preferred securities of certain related trusts
(collectively, the "Securities"), including specifically, but without limiting
the generality of the foregoing, power and authority to sign, in the name and on
behalf of the undersigned as a director of the Company, a Registration Statement
on Form S-3, a registration statement under Rule 462(b) of the Securities Act,
or another appropriate form in respect of the registration of the Securities and
any and all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the same
with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the undersigned
which said attorneys-in-fact and agents, or any of them, deem advisable in order
to qualify or register the Securities under the securities laws of any of the
several States; and the undersigned does hereby ratify all that said attorneys-
in-fact or agents, or any of them, shall do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
20th day of September, 1996.
- ----
/s/ Andrall E. Pearson
---------------------------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
(Form S-3)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
Travelers Group Inc., a Delaware corporation (the "Company"), does hereby
constitute and appoint Sanford I. Weill, James Dimon and Charles O. Prince, III,
and each of them, the true and lawful attorneys-in-fact and agents of the
undersigned, to do or cause to be done any and all acts and things and to
execute any and all instruments and documents which said attorneys-in-fact and
agents, or any of them, may deem advisable or necessary to enable the Company to
comply with the Securities Act of 1933, as amended (the "Securities Act"), and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of junior subordinated debt securities, guarantees of trust
preferred securities and certain back-up obligations, in each case of the
Company, and the trust preferred securities of certain related trusts
(collectively, the "Securities"), including specifically, but without limiting
the generality of the foregoing, power and authority to sign, in the name and on
behalf of the undersigned as a director of the Company, a Registration Statement
on Form S-3, a registration statement under Rule 462(b) of the Securities Act,
or another appropriate form in respect of the registration of the Securities and
any and all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the same
with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the undersigned
which said attorneys-in-fact and agents, or any of them, deem advisable in order
to qualify or register the Securities under the securities laws of any of the
several States; and the undersigned does hereby ratify all that said attorneys-
in-fact or agents, or any of them, shall do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
20th day of September, 1996.
- ----
/s/ Linda J. Wachner
-------------------------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
(Form S-3)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
Travelers Group Inc., a Delaware corporation (the "Company"), does hereby
constitute and appoint Sanford I. Weill, James Dimon and Charles O. Prince, III,
and each of them, the true and lawful attorneys-in-fact and agents of the
undersigned, to do or cause to be done any and all acts and things and to
execute any and all instruments and documents which said attorneys-in-fact and
agents, or any of them, may deem advisable or necessary to enable the Company to
comply with the Securities Act of 1933, as amended (the "Securities Act"), and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of junior subordinated debt securities, guarantees of trust
preferred securities and certain back-up obligations, in each case of the
Company, and the trust preferred securities of certain related trusts
(collectively, the "Securities"), including specifically, but without limiting
the generality of the foregoing, power and authority to sign, in the name and on
behalf of the undersigned as a director of the Company, a Registration Statement
on Form S-3, a registration statement under Rule 462(b) of the Securities Act,
or another appropriate form in respect of the registration of the Securities and
any and all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the same
with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the undersigned
which said attorneys-in-fact and agents, or any of them, deem advisable in order
to qualify or register the Securities under the securities laws of any of the
several States; and the undersigned does hereby ratify all that said attorneys-
in-fact or agents, or any of them, shall do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
18th day of September, 1996.
- ----
/s/ Joseph R. Wright, Jr.
-----------------------------------------
(Signature)
<PAGE>
POWER OF ATTORNEY
(Form S-3)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director of
Travelers Group Inc., a Delaware corporation (the "Company"), does hereby
constitute and appoint Sanford I. Weill, James Dimon and Charles O. Prince, III,
and each of them, the true and lawful attorneys-in-fact and agents of the
undersigned, to do or cause to be done any and all acts and things and to
execute any and all instruments and documents which said attorneys-in-fact and
agents, or any of them, may deem advisable or necessary to enable the Company to
comply with the Securities Act of 1933, as amended (the "Securities Act"), and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of junior subordinated debt securities, guarantees of trust
preferred securities and certain back-up obligations, in each case of the
Company, and the trust preferred securities of certain related trusts
(collectively, the "Securities"), including specifically, but without limiting
the generality of the foregoing, power and authority to sign, in the name and on
behalf of the undersigned as a director of the Company, a Registration Statement
on Form S-3, a registration statement under Rule 462(b) of the Securities Act,
or another appropriate form in respect of the registration of the Securities and
any and all amendments thereto, including post-effective amendments, and any
instruments, contracts, documents or other writings of which the originals or
copies thereof are to be filed as a part of, or in connection with, any such
Registration Statement or amendments, and to file or cause to be filed the same
with the Securities and Exchange Commission, and to effect any and all
applications and other instruments in the name and on behalf of the undersigned
which said attorneys-in-fact and agents, or any of them, deem advisable in order
to qualify or register the Securities under the securities laws of any of the
several States; and the undersigned does hereby ratify all that said attorneys-
in-fact or agents, or any of them, shall do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
20th day of September, 1996.
- ----
/s/ Arthur Zankel
---------------------------------
(Signature)
