<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 8, 1999
REGISTRATION NOS. 333-76619 AND 333-76619-01
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C>
KEYCORP KEYCORP CAPITAL III
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter)
OHIO DELAWARE
(State or other jurisdiction of incorporation or (State or other jurisdiction of incorporation or
organization) organization)
34-6542451 34-1891371
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
C/O KEYCORP
127 PUBLIC SQUARE 127 PUBLIC SQUARE
CLEVELAND, OHIO 44114-1306 CLEVELAND, OHIO 44114-1306
(216) 689-6300 (216) 689-6300
(Address, including zip code, and telephone number, (Address, including zip code, and telephone number,
including area code, of registrant's principal executive including area code, of registrant's principal executive
offices) offices)
</TABLE>
---------------------------
DANIEL R. STOLZER, ESQ.
VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL
KEYCORP
127 PUBLIC SQUARE
CLEVELAND, OHIO 44114-1306
(216) 689-6300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
<TABLE>
<S> <C>
CAROLYN E. CHEVERINE, ESQ. MITCHELL S. EITEL, ESQ.
VICE PRESIDENT & SENIOR COUNSEL SULLIVAN & CROMWELL
KEYBANK NATIONAL ASSOCIATION 125 BROAD STREET
127 PUBLIC SQUARE NEW YORK, NEW YORK 10004
CLEVELAND, OHIO 44114-1306 (212) 558-4000
(216) 689-6300
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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<TABLE>
TITLE OF EACH CLASS OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE(2)
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<S> <C> <C> <C> <C>
Junior Subordinated
Deferrable Interest
Debentures of
KeyCorp(3)(4).......... $250,000,000 $1,000 $250,000,000 N/A
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Capital Securities of
KeyCorp Capital III.... 250,000 $1,000 $250,000,000 $69,500
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KeyCorp Guarantee with
respect to Capital
Securities(4).......... N/A N/A N/A N/A
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Total.................... $250,000,000 100% $250,000,000(5) $69,500
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</TABLE>
(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457.
(2) A fee of $278 was previously paid in connection with the filing of this
Registration Statement on April 20, 1999. The remaining fee of $69,222 is
paid herewith.
(3) The Junior Subordinated Deferrable Interest Debentures will be purchased by
KeyCorp Capital III with the proceeds of the sale of the Capital Securities.
(4) This Registration Statement is deemed to cover the Junior Subordinated
Deferrable Interest Debentures of KeyCorp, the rights of holders of Junior
Subordinated Deferrable Interest Debentures of KeyCorp under the Indenture,
the rights of holders of Capital Securities of KeyCorp Capital III under the
Trust Agreement, the rights of holders of the Capital Securities under the
Guarantee of KeyCorp and the Expense Agreement to be entered into by
KeyCorp, which taken together, fully, irrevocably and unconditionally
guarantee all of the obligations of KeyCorp Capital III under the Capital
Securities. No separate consideration will be received for the KeyCorp
Guarantee.
(5) Such amount represents the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at their principal amount and the
issue price rather than the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at an original issue discount. Such
amount also represents the initial public offering price of the Capital
Securities.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
[KEYCORP LOGO]
$250,000,000
KEYCORP CAPITAL III
% Capital Securities
Guaranteed by
KEYCORP
------------------
The capital securities represent undivided interests in KeyCorp Capital
III, a Delaware trust created by us, KeyCorp, for the sole purpose of issuing
the capital securities. The trust will hold our junior debentures as its only
asset. We will fully, irrevocably and unconditionally guarantee the capital
securities as described in this prospectus.
The trust will pay semi-annual distributions on the capital securities at
the annual rate of $ per capital security and may defer distributions for up to
10 consecutive semi-annual periods. The capital securities may be redeemed at
any time for any reason, and at other times for the reasons described in this
prospectus.
INVESTING IN THE CAPITAL SECURITIES INVOLVES RISKS. SEE "RISK FACTORS" ON
PAGE 8.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS THE TRUST
--------- ------------- -----------
<S> <C> <C> <C>
Per capital security................................. $ (2) $
Total................................................ $ (2) $
</TABLE>
(1) Plus accumulated distributions, if any, from June , 1999.
(2) Since the trust will use the proceeds from the sale of the capital
securities to purchase our junior debentures, we have agreed to pay an
underwriting commission of $ per capital security, or a total of
$ for the sale of the capital securities.
Delivery of the capital securities in book-entry form only will be made on
or about June , 1999.
These securities are not deposits or other obligations of a bank and are
not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other governmental agency.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
CREDIT SUISSE FIRST BOSTON
MCDONALD INVESTMENTS
A KEYCORP COMPANY
J.P. MORGAN & CO.
SALOMON SMITH BARNEY
The date of this prospectus is June , 1999.
<PAGE> 3
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FORWARD-LOOKING STATEMENTS.......... 3
SUMMARY OF OFFERING................. 4
RATIOS OF EARNINGS TO FIXED
CHARGES........................... 7
RISK FACTORS........................ 8
KEYCORP............................. 11
KEYCORP CAPITAL III................. 14
SELECTED CONSOLIDATED FINANCIAL
DATA.............................. 15
USE OF PROCEEDS..................... 17
ACCOUNTING TREATMENT................ 17
CAPITALIZATION...................... 18
DESCRIPTION OF CAPITAL SECURITIES... 20
DESCRIPTION OF JUNIOR DEBENTURES.... 32
DESCRIPTION OF THE GUARANTEE AND THE
EXPENSE AGREEMENT................. 38
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
RELATIONSHIP AMONG THE CAPITAL
SECURITIES, THE JUNIOR DEBENTURES,
THE GUARANTEE AND THE EXPENSE
AGREEMENT......................... 40
BOOK-ENTRY ISSUANCE................. 42
U.S. FEDERAL INCOME TAX
CONSIDERATIONS.................... 45
ERISA CONSIDERATIONS................ 47
UNDERWRITING........................ 49
NOTICE TO CANADIAN RESIDENTS........ 50
VALIDITY OF SECURITIES.............. 52
EXPERTS............................. 52
WHERE YOU CAN FIND MORE
INFORMATION....................... 53
</TABLE>
------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. NEITHER WE, THE TRUST NOR ANY UNDERWRITER HAS
AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS
DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL TO SELL THESE SECURITIES. THE
INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE ON THE DATE OF THIS DOCUMENT.
2
<PAGE> 4
FORWARD-LOOKING STATEMENTS
This prospectus, and the information incorporated by reference in this
prospectus, contains statements that plan for or anticipate the future.
Forward-looking statements include statements about the future financial
performance, business plans and strategies of KeyCorp and the trust and most
other statements that are not historical in nature. Because forward-looking
statements involve future risks and uncertainties, there are factors that could
cause actual results to differ materially from those expressed or implied.
Besides the specified risk factors identified beginning on page 8, some of the
uncertainties that could effect the accuracy of forward-looking statements
include:
-- sharp or rapid changes in interest rates;
-- significant changes in the economy that could materially change
anticipated credit quality trends and the ability to generate loans;
-- failure of the capital markets to function consistent with customary
levels;
-- significant delay in or inability to execute strategic initiatives
designed to grow revenues or manage expenses;
-- consummation of significant business combinations or divestitures;
-- unforeseen business risks related to Year 2000 computer systems
issues; and
-- significant changes in accounting, tax or regulatory practices or
requirements.
3
<PAGE> 5
SUMMARY OF OFFERING
This summary highlights information contained in this prospectus. This
summary is not complete and does not contain all the information that you should
consider before investing in the capital securities. You should read the entire
prospectus carefully, especially the risk of investing in capital securities
discussed under the "Risk Factors" section beginning on page 8.
KEYCORP.................... We are a bank holding company engaged primarily in
the business of commercial and retail banking. We
are one of the nation's largest bank holding
companies, with consolidated total assets of $80.0
billion at March 31, 1999. Our subsidiaries provide
a wide range of banking, equipment leasing,
fiduciary and other financial services to
corporate, individual and institutional customers
through four businesses: Key Corporate Capital, Key
Consumer Finance, Key Community Bank and Key
Capital Partners. These services are provided
across much of the country through full-service
banking offices in 13 states, a 24-hour telephone
banking call center services group and nearly 2,600
ATMs at March 31, 1999.
Our principal office and mailing address is at 127
Public Square, Cleveland, Ohio 44114-1306. Our
telephone number is (216) 689-6300.
KEYCORP CAPITAL III........ KeyCorp Capital III is a Delaware statutory
business trust created solely for the purpose of
issuing capital securities to investors and common
securities to us and investing the proceeds in an
equivalent amount of our junior debentures. The
junior debentures will be the sole assets of the
trust.
The trust has its principal office and mailing
address at c/o KeyCorp, 127 Public Square,
Cleveland, Ohio, 44114-1306. Its telephone number
is (216) 689-6300.
CAPITAL SECURITIES
OFFERED.................... $250,000,000 aggregate liquidation amount of %
Capital Securities.
LIQUIDATION AMOUNT......... $1,000 per capital security.
OFFERING PRICE............. $ per capital security, plus accumulated
distributions, if any, from June , 1999.
DISTRIBUTION AMOUNT........ Each capital security will pay distributions
totaling $ per year, or % of the
liquidation amount of the capital security.
DISTRIBUTION DATES......... and of each year,
beginning on , 1999, subject to any
deferral.
JUNIOR DEBENTURES.......... We will issue and sell to the trust $
aggregate principal amount of our % Junior
Subordinated Deferrable Interest Debentures due
, 20 .
DEFERRAL OF
DISTRIBUTIONS.............. We may defer interest payments on the junior
debentures for up to 10 consecutive semi-annual
periods. If we defer interest payments, the trust
also will defer the payment of distributions on the
capital securities. During any deferral period,
distributions will continue to accumulate on the
capital securities and additional distributions
will accumulate on these deferred distributions at
the annual rate of $ per capital security.
During any deferral period, you will be required to
accrue interest income and include it in your gross
income for U.S. federal income tax purposes, even
if you are a cash basis taxpayer.
4
<PAGE> 6
RANKING.................... The capital securities will rank equally with the
common securities. Except in cases of default,
distributions will be made simultaneously and
proportionately on the capital securities and
common securities. In case of default, holders of
capital securities will have priority in right of
payment over holders of common securities.
The junior debentures are not secured by any of our
property or assets and will rank junior in priority
of payment to all of our senior indebtedness.
REDEMPTION................. The trust must redeem the capital securities and
common securities:
(1) in whole but not in part when we repay the
principal on the junior debentures at their
maturity;
(2) if we elect to redeem the junior debentures in
whole but not in part at any time upon the
occurrence of (a) changes in U.S. federal
income tax laws or regulations that could have
adverse tax consequences for us or the trust
or (b) changes that could prevent us from
treating an amount equal to the liquidation
amount of the capital securities as "Tier 1"
capital for purposes of the applicable Federal
Reserve capital adequacy guidelines; and
(3) if we elect to redeem the junior debentures in
whole or in part at any time.
The redemption price will be calculated pursuant to
the applicable formula specified in this
prospectus. The applicable formula will depend upon
which redemption right we exercise.
LIQUIDATION DISTRIBUTION... We may dissolve the trust at any time with the
prior approval of the Federal Reserve, if then
required. If we dissolve the trust, the trust will
distribute the junior debentures to you in exchange
for the capital securities. If the exchange is not
practical, the trust will distribute an amount
equal to $1,000 per capital security plus any
accumulated and unpaid distributions. In all cases,
however, distributions will be made only to the
extent of the trust's assets that are available
after satisfaction of all liabilities to creditors.
GUARANTEE.................. We will guarantee payments on the capital
securities, but only to the extent that the trust
has funds available on hand to make those payments.
Our obligations under the guarantee agreement will
rank junior in right of payment to all of our
senior indebtedness.
MATURITY................... The junior debentures will mature on
, 20 , at which date the trust must
redeem the capital securities at a price equal to
$1,000 per capital security plus all accrued and
unpaid distributions.
USE OF PROCEEDS............ The trust will use the proceeds from this offering
to purchase the junior debentures issued by us. We
expect to use the net proceeds from the sale of the
junior debentures to the trust for general
corporate purposes, which may include (1)
investments in, or extensions of credit to, our
subsidiaries, (2) repurchases or redemptions of our
capital stock and (3) financing possible future
acquisitions including, without limitation, the
acquisition of banking and nonbanking companies and
financial assets and liabilities.
We have not specifically allocated any of the
proceeds to these purposes, although our management
has determined that funds should be borrowed
5
<PAGE> 7
at this time. The precise amount and timing of
investments in, or extensions of credit to, our
subsidiaries will depend on our subsidiaries'
funding requirements and the availability of other
funds. We may temporarily invest the net proceeds
or apply the net proceeds to the reduction of
short-term indebtedness.
BOOK-ENTRY ISSUANCE ONLY... The capital securities will be represented by a
global security that will be deposited with and
registered in the name of The Depository Trust
Company or its nominee. This means that, except in
limited circumstances, you will not receive a
certificate for the capital securities.
6
<PAGE> 8
RATIOS OF EARNINGS TO FIXED CHARGES
The following table shows our consolidated ratios of earnings to fixed
charges and preferred stock dividends for each of the years in the five-year
period ended December 31, 1998 and for each of the quarterly periods ended March
31, 1999 and 1998.
For the purpose of calculating the ratio of earnings to fixed charges and
preferred stock dividends, we divided consolidated income, before income taxes
and extraordinary item, plus fixed charges by fixed charges. Fixed charges
consist of:
-- consolidated interest expense, excluding or including interest on
deposits, as the case may be; and
-- that portion of rental expense which is deemed representative of the
interest factor, net of income from subleases.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------ ------------------------------------
1999 1998 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
RATIO OF EARNINGS TO FIXED CHARGES
Excluding deposit interest............. 2.09x 2.01x 1.97x 2.24x 2.41x 2.42x 3.50x
Including deposit interest............. 1.62x 1.50x 1.51x 1.53x 1.50x 1.46x 1.70x
RATIO OF EARNINGS TO FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
Excluding deposit interest............. 2.09x 2.01x 1.97x 2.24x 2.38x 2.35x 3.34x
Including deposit interest............. 1.62x 1.50x 1.51x 1.53x 1.49x 1.45x 1.68x
</TABLE>
7
<PAGE> 9
RISK FACTORS
An investment in the capital securities involves a number or risks, some of
which relate to the terms of the capital securities or the junior debentures and
others of which relate to KeyCorp and its business. You should carefully review
the following information about these risks together with other information
contained in this prospectus and in documents incorporated by reference in this
prospectus before deciding whether this investment is suitable for you.
YOU ARE MAKING AN INVESTMENT DECISION WITH REGARD TO THE JUNIOR DEBENTURES AS
WELL AS THE CAPITAL SECURITIES.
The trust will rely on the payments it receives on the junior debentures to
fund all payments on the capital securities. In addition, the trust may
distribute the junior debentures in exchange for the capital securities upon
liquidation of the trust. Accordingly, you should carefully review the
information in this prospectus regarding both of these securities.
PAYMENTS ON THE CAPITAL SECURITIES ARE DEPENDENT ON OUR PAYMENTS ON THE JUNIOR
DEBENTURES.
The ability of the trust timely to pay distributions on the capital
securities and to pay the liquidation amount is dependent upon us making the
related payments on the junior debentures when due.
If we default on our obligation to pay principal of or interest on the
junior debentures, the trust will not have sufficient funds to pay distributions
or the liquidation amount. As a result, you will not be able to rely upon the
guarantee for payment of these amounts. You or the property trustee of the trust
may, however, sue us to enforce the rights of the trust under the junior
debentures. For more information, please refer to "Description of Capital
Securities -- Enforcement rights" and "Relationship Among Capital Securities,
Junior Debentures, the Guarantee and the Expense Agreement -- Enforcement rights
of holders of capital securities".
OUR OBLIGATIONS WILL BE DEEPLY SUBORDINATED AND WE WILL PAY OUR OTHER DEBT
OBLIGATIONS BEFORE WE PAY YOU.
Our obligations under the guarantee and under the junior debentures are
unsecured and rank subordinate and junior in right of payment to all of our
senior indebtedness, which includes nearly all of our existing indebtedness,
other than a total of $1.25 billion debentures previously issued to our other
subsidiary trusts as of March 31, 1999. For further information regarding our
existing indebtedness, see "Description of Guarantee -- Status of the guarantee"
and "Description of Junior Debentures -- Subordination."
Because we are a holding company, our right to participate in any
distribution of the assets of our banking or nonbanking subsidiaries, upon a
subsidiary's dissolution, winding-up, liquidation or reorganization or
otherwise, and thus your ability to benefit indirectly from such distribution,
is subject to the prior claims of creditors of that subsidiary, except to the
extent that we may be a creditor of that subsidiary and our claims are
recognized. There are legal limitations on the extent to which some of our
subsidiaries may extend credit, pay dividends or otherwise supply funds to, or
engage in transactions with, us or some of our other subsidiaries. Accordingly,
the junior debentures and the guarantee will be effectively subordinated to all
existing and future liabilities of our subsidiaries, and holders of junior
debentures and the guarantee should look only to our assets for payments on the
junior debentures and the guarantee.
Neither the indenture governing the junior debentures nor the amended trust
agreement and the guarantee relating to the capital securities place any
limitation on the nature or amount of additional indebtedness that we, or our
subsidiaries, may incur in the future.
YOU WILL NOT RECEIVE TIMELY DISTRIBUTIONS IF WE ELECT TO DEFER PAYMENTS.
We may defer the payment of interest on the junior debentures at any time
up to 10 consecutive semi-annual periods, provided that (1) no deferral period
may extend beyond the stated maturity date and (2) we are not in default under
the indenture governing the junior debentures. If there is a deferral, the trust
also will
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<PAGE> 10
defer distributions on the capital securities. During a deferral period, your
distributions will continue to accrue, and interest on the unpaid distributions
will compound semi-annually.
At the end of any deferral period and the payment of all interest then
accrued and unpaid, we may elect to begin a new deferral period. There is no
limitation on the number of deferral periods. For further information on our
option to defer payments, see "Description of Capital
Securities -- Distributions -- Deferral period," and "Description of Junior
Debentures -- Interest".
IF WE ELECT TO DEFER INTEREST PAYMENTS, YOU WILL HAVE TO INCLUDE INTEREST IN
YOUR TAXABLE INCOME BEFORE YOU RECEIVE THE MONEY.
During a deferral period, you will be required to accrue interest income
for U.S. federal income tax purposes on your proportionate share of the junior
debentures held by the trust, even if you are a cash basis taxpayer. As a
result, you need to include this income in your gross income for U.S. federal
income tax purposes in advance of the receipt of cash. You also will not receive
the cash related to any accrued and unpaid interest income from the trust if you
dispose of the capital securities prior to the record date for the payment of
distributions. For further information, see "Federal Income Tax
Considerations -- Interest income and original issue discount" and "-- Sale or
redemption of capital securities".
THE MARKET PRICE OF THE CAPITAL SECURITIES MAY NOT REFLECT UNPAID INTEREST AND
YOU MAY SUFFER A LOSS IF YOU SELL THEM WHILE INTEREST REMAINS UNPAID.
Because of our right to defer interest payments on the junior debentures,
the market price of the capital securities may be more volatile than the market
prices of similar securities that do not have this feature. If we exercise our
right to defer, the market price of the capital securities may decline.
Accordingly, the capital securities that you purchase, whether in this offering
or in the secondary market, or the junior debentures that you may receive on
liquidation of the trust, may trade at a discount to the price that you paid.
If you dispose of your capital securities before the record date for the
payment of a distribution, then you will not receive that distribution. However,
you will be required to include accrued but unpaid interest on the junior
debentures through the date of the sale as ordinary income for U.S. federal
income tax purposes and to add the amount of the accrued but unpaid interest to
your tax basis in the capital securities. Your increased tax basis in the
capital securities will increase the amount of any capital loss that you may
have otherwise realized on the sale. In general, an individual taxpayer may only
offset $3,000 of capital losses against regular income during any year. For
further information on tax consequences, see "U.S. Federal Income Tax
Considerations -- Sale or redemption of capital securities".
WE MAY REDEEM THE JUNIOR DEBENTURES AT ANY TIME OR UPON THE OCCURRENCE OF
SPECIFIED TAX OR REGULATORY EVENTS.
We may redeem the junior debentures at any time in whole or in part. In
addition, we may redeem the junior debentures within 90 days following the
occurrence of specified tax or regulatory events, including:
-- any change in tax laws or regulations that poses a substantial risk
that the capital securities might lose their special tax treatment;
and
-- any change in laws or regulations that poses a substantial risk that
we will not be able to treat the capital securities as "Tier 1"
capital for purposes of the Federal Reserve capital adequacy
guidelines.
If we redeem the junior debentures, the trust will be required to redeem
the capital securities. The calculation of the redemption price will depend upon
which redemption option we have exercised.
We will need the prior approval of the Federal Reserve to make a
redemption, if then required under applicable Federal Reserve capital guidelines
or policies. For further information on redemption, see "Description of Capital
Securities -- Redemption".
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<PAGE> 11
THE TRUST MAY DISTRIBUTE THE JUNIOR DEBENTURES IN EXCHANGE FOR THE CAPITAL
SECURITIES, WHICH COULD AFFECT THE MARKET PRICE AND COULD BE A TAXABLE EVENT.
We may dissolve the trust at any time. After satisfying its liabilities to
its creditors, the trust may distribute the junior debentures to the holders of
the capital securities and common securities. We will not dissolve the trust
without the prior approval of the Federal Reserve, if then required under
applicable Federal Reserve capital guidelines or policies. For further
information, see "Description of Capital Securities -- Liquidation distribution
upon termination".
We cannot predict the market prices for capital securities or for junior
debentures that may be distributed in exchange for capital securities.
Accordingly, the capital securities, or the junior debentures that you may
receive on liquidation of the trust, may trade at a discount to the price that
you paid to purchase the capital securities.
Under current U.S. federal income tax law and assuming, as we expect, that
the trust will not be classified as an association taxable as a corporation, you
should not be taxed if we dissolve the trust and the trust distributes junior
debentures to you. However, if the trust were to become taxed on the income
received or accrued on the junior debentures due to a tax event, both you and
the trust might be taxed on a distribution of the junior debentures by the
trust. For further information, see "U.S. Federal Income Tax
Considerations -- Distribution of junior debentures to holders of capital
securities upon liquidation of the trust".
INVESTORS WILL NOT CONTROL THE ADMINISTRATION OF THE TRUST AND WILL HAVE LIMITED
VOTING RIGHTS.
We will hold all the common securities of the trust. These securities give
us the right to control nearly all aspects of the administration, operation or
management of the trust, including selection and removal of the administrative
trustees. The capital securities, on the other hand, will generally have no
voting rights. You will be able to vote only on matters relating to the
modification of the terms of the capital securities or the junior debentures,
the acceleration of payments and other matters described in this prospectus. For
further information, see "Description of Capital Securities -- Voting rights".
THE TRADING CHARACTERISTICS OF THE CAPITAL SECURITIES MAY ADVERSELY AFFECT THEIR
LIQUIDITY.
The capital securities have not been listed on a national securities
exchange or the NASDAQ Stock Market. The absence of such a listing for the
capital securities could adversely affect the liquidity of the capital
securities.
YEAR 2000 ISSUE MAY CAUSE COMPUTER PROBLEMS.
Many existing computer programs use only two digits to identify a year in a
data field. These programs were designed and developed without considering the
upcoming end of the century. If not corrected, many computer applications could
fail or create erroneous results by or at the year 2000. The Year 2000 issue
affects us because the financial services industry depends heavily on computer
applications. For information regarding our efforts in handling the Year 2000
issue, see "KeyCorp -- Our Year 2000 efforts".
10
<PAGE> 12
KEYCORP
OVERVIEW
KeyCorp, incorporated in 1958 under the laws of the State of Ohio and
registered under the Bank Holding Company Act of 1956, is headquartered in
Cleveland, Ohio. We are engaged primarily in the business of commercial and
retail banking. At March 31, 1999, we were one of the nation's largest bank
holding companies with consolidated total assets of $80.0 billion. Our
subsidiaries provide a wide range of banking, equipment leasing, fiduciary and
other financial services to corporate, individual and institutional customers
through four businesses: (1) Key Corporate Capital; (2) Key Consumer Finance;
(3) Key Community Bank; and (4) Key Capital Partners.
As of March 31, 1999, these services were provided across much of the
country through subsidiaries operating 969 full-service banking offices in 13
states, a 24-hour telephone banking call center services group and nearly 2,600
ATMs. At March 31, 1999, we, together with our subsidiaries, had 25,650
full-time equivalent employees.
We are a legal entity separate and distinct from our banking and other
subsidiaries. Accordingly, our rights and the rights of our security holders and
creditors to participate in any distribution of the assets or earnings of our
banking and other subsidiaries is necessarily subject to the prior claims of the
respective creditors of our banking and other subsidiaries, except to the extent
that our claims in our capacity as a creditor of our banking and other
subsidiaries may be recognized.
Our principal executive office is located at 127 Public Square, Cleveland,
Ohio 44114-1306. Our telephone number is (216) 689-6300.
OUR SUBSIDIARIES
Our largest banking subsidiaries are:
-- KeyBank National Association, headquartered in Cleveland, Ohio -- the
12th largest bank in the United States at December 31, 1998, based on
asset size. KeyBank had $72.9 billion in total assets and 969
full-service banking offices in Alaska, Colorado, Idaho, Indiana,
Maine, Michigan, New Hampshire, New York, Ohio, Oregon, Utah, Vermont
and Washington at March 31, 1999; and
-- Key Bank USA, National Association, headquartered in Cleveland, Ohio,
with total assets of $5.4 billion at March 31, 1999. Key Bank USA is
involved in consumer loan activities.
In addition to the customary banking services of accepting deposits and
making loans, our subsidiaries provide specialized services, including personal
and corporate trust services, personal financial services, customer access to
mutual funds, cash management services, investment banking and capital markets
products, and international banking services. Through our subsidiary banks,
trust companies and registered investment adviser subsidiaries, we provide
investment management services to institutional and individual clients,
including large corporate and public retirement plans, foundations and
endowments, high net worth individuals and Taft-Hartley plans - multiemployer
trust funds providing pension, vacation, or other benefits to employees. In
addition, our investment management subsidiaries serve as investment advisers to
our proprietary mutual funds.
OUR MAJOR LINES OF BUSINESS
Key Corporate Capital. We offer a complete range of financing, transaction
processing and financial advisory services to corporations throughout the
country through Key Corporate Capital. This line of business also operates one
of the largest bank-affiliated equipment leasing companies with operations
conducted both domestically and throughout Europe and Asia. Key Corporate
Capital's business units are organized around specialized industry client
segments, inclusive of commercial real estate, lease financing, structured
finance, healthcare and media/telecommunications.
In serving these targeted segments, Key Corporate Capital provides a number
of specialized services, including international banking, and corporate finance
advisory services, and, based on transaction volume, is a leading provider of
cash management services. Key Corporate Capital also provides investment
banking, capital markets, 401(k) and trust custody products through Key Capital
Partners.
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<PAGE> 13
Key Consumer Finance. Key Consumer Finance is responsible for our indirect,
non-branch-based consumer loan products. This line of business specializes in
automobile loans and leases, home equity loans, education loans, marine and
recreational vehicle loans, and credit cards. As of December 31, 1998, based on
the volume of loans generated, Key Consumer Finance was one of the: (1) five
largest education lenders in the nation, (2) top ten in retail automobile
financing and (3) leading providers of financing for consumer purchases of
marine and recreational vehicles.
Key Community Bank. Key Community Bank is responsible for delivering a
complete line of branch-based financial products and services to small
businesses, consumers, and commercial banking businesses. The delivery of these
products and services is accomplished through 969 KeyCenters, a 24-hour
telephone banking call center services group, nearly 2,600 ATMs that access 14
different networks and comprise one of the largest ATM networks in the United
States, and a core team of relationship management professionals.
Key Capital Partners. Key Capital Partners provides clients with asset
management, investment banking, capital markets, insurance and brokerage
expertise. It also plays a major role in generating fee income through its broad
range of investment choices and customized products. Key Capital Partners is
comprised of two major business groups. One group, operating under the name
"McDonald Investments", includes retail and institutional brokerage, equity and
fixed income trading and underwriting, investment banking, capital markets
products, loan syndication and trading, public finance and clearing operations.
The second major business group includes asset management, mutual funds,
institutional asset services, venture capital, mezzanine finance, alliance
funds, wealth management and insurance. Leveraging our corporate and community
banking distribution channels and client relationships is and will continue to
be an essential factor in ensuring Key Capital Partners' future growth and
success.
We provide other financial services both inside and outside of our primary
banking markets through our nonbank subsidiaries. These services include
accident and health insurance on loans made by banking subsidiaries, venture
capital, community development financing, securities underwriting and brokerage,
automobile financing and other financial services. We are also an equity
participant in a joint venture with Key Merchant Services, L.L.C., which
provides merchant services to businesses.
RECENT DEVELOPMENTS
Electronic Payment Services, Inc. On February 28, 1999, Electronic Payment
Services, Inc., an electronic funds transfer processor in which we held a 20%
ownership interest, merged with a wholly owned subsidiary of Concord EFS, Inc.,
a Delaware corporation. We received approximately 5.9 million shares of Concord
EFS stock and recognized a gain of $134 million, or $85 million after taxes, on
the transaction. The gain was recorded in gains from divestitures on our income
statement.
Long Island District Sale. On May 26, 1999, we reached a definitive
agreement for the sale of our Long Island District to The Dime Savings Bank of
New York, FSB. Our Long Island District includes 28 branches with approximately
$1.3 billion in deposits. Completion of the sale, which is subject to regulatory
approval, is expected in the third quarter of 1999.
OUR YEAR 2000 EFFORTS
The Year 2000 issue refers to the fact that many computer systems were
originally programmed using two digits rather than four digits to identify the
applicable year. Therefore, when the year 2000 occurs, these systems could
interpret the year as 1900 rather than 2000. Unless hardware, system software
and applications are corrected to be Year 2000 compliant, computers and the
devices they control could generate miscalculations and create operational
problems. Various systems could be affected ranging from complex computer
systems to telephone systems, ATMs and elevators.
To address this issue, we developed an extensive plan in 1995, including
the formation of a team consisting of internal resources and third-party
experts. The plan has been in implementation since that time and consists of
five major phases:
-- awareness -- ensuring a common understanding of the issue throughout
the KeyCorp organization;
-- assessment -- identifying and prioritizing the systems and third
parties with whom we have exposure to Year 2000 issues;
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<PAGE> 14
-- renovation -- enhancing, replacing or retiring hardware, software and
system applications;
-- validation -- testing modifications made; and
-- implementation -- certifying Year 2000 compliance and user
understanding and acceptance.
We have completed the awareness and assessment phases. The remaining phases
are substantially complete and final testing and refinement will be addressed in
1999. As of March 31, 1999, we had completed all of the above phases for
approximately 90% of the core systems identified. We expect to complete
compliance efforts for the remaining technology components by June 30, 1999.
As a financial institution, we may experience increases in problem loans
and credit losses in the event that borrowers fail to properly respond to this
issue. In addition, we may incur higher funding costs if consumers react to
publicity about the issue by withdrawing deposits. We also could be impacted if
third parties we deal with in conducting our business, such as foreign banks,
governmental agencies, clearing houses, telephone companies, and other service
providers, fail to properly address this issue.
Accordingly, we have formed a separate internal team charged with the task
of: (1) identifying critical business interfaces, (2) assessing potential
problems relating to credit, liquidity and counterparty risk, and (3) where
appropriate, developing contingency plans. This team has been surveying
significant credit customers to ascertain their Year 2000 readiness and to
evaluate the level of potential credit risk to us. Based on the information
obtained, specific follow-up policies will be established and the adequacy of
our allowance for loan losses will be assessed. The results of the assessment
will be reflected in the assignment of an appropriate risk rating in our loan
grading system. On an ongoing basis, we are also contacting significant third
parties with which we conduct business to determine the status of their Year
2000 compliance efforts.
Despite these actions, we cannot guarantee that significant customers or
critical third parties will adequately address their Year 2000 issues.
Consequently, we are developing contingency plans to help mitigate the risks
associated with: (1) potential delays in completing the renovation, validation
and implementation phases of our Year 2000 plans and (2) the failure of external
parties to adequately address their Year 2000 issues. These plans were well
underway by the 1998 year end and address primarily contingency solutions for
our core systems and the identification of alternative business partners.
Because the Year 2000 issue has never previously occurred, we are unable to
foresee or quantify the possible overall financial and operational impact or to
determine whether it will be material to our financial condition or operations.
The cost of the project, currently estimated to be $45 million to $50
million, and timing of its implementation are based on our management's best
estimates. We derived these estimates using numerous assumptions about future
events, including the continued availability of certain resources and other
factors. However, we cannot guarantee that these estimates will be achieved, and
actual results could differ materially from those anticipated. As of March 31,
1999, we had spent approximately $44 million of our total estimated project
cost. We currently expect that the estimated remaining cost of $1 million to $6
million will be recognized in 1999 and the first half of 2000. The total cost of
the project is being funded through operating cash flows.
SUPERVISION AND REGULATION
As a bank holding company, we are subject to regulation, supervision and
examination of the Federal Reserve under the Bank Holding Company Act. For a
discussion of the material elements of the regulatory framework applicable to
bank holding companies and their subsidiaries and specific information relevant
to us, reference is made to our annual report on Form 10-K for the fiscal year
ended December 31, 1998, incorporated by reference in this prospectus. This
regulatory framework is intended primarily for the protection of depositors and
the federal deposit insurance funds and not for the protection of security
holders. A change in applicable statutes, regulations or regulatory policy may
have a material effect on our business.
Our earnings also are affected by general economic conditions, management
policies and the legislative and governmental actions of various regulatory
authorities, including the Federal Reserve, the Office of the Comptroller of the
Currency, which is the principal regulator of our bank subsidiaries, and the
Federal Deposit Insurance Corporation, which insures, up to applicable limits,
the deposits of all of our full-service
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<PAGE> 15
banking subsidiaries. In addition, there are numerous governmental requirements
and regulations which affect our business activities.
Depository institutions such as our bank subsidiaries are also affected by
various federal laws, including those relating to consumer protection and
similar matters. We also have other financial services subsidiaries that are
subject to regulation, supervision and examination by the Federal Reserve, as
well as other applicable state and federal regulatory agencies and
self-regulatory organizations. For example, our brokerage and asset management
subsidiaries are subject to supervision and regulation by the SEC, the NASD or
the NYSE and state securities regulators, and our insurance subsidiaries are
subject to regulation by the insurance regulatory authorities of the various
states. Our other nonbank subsidiaries may be subject to other laws and
regulations of the federal government or the various states in which they are
authorized to do business, or both.
KEYCORP CAPITAL III
KeyCorp Capital III is a statutory business trust created under Delaware
law. The trust was created under (1) a trust agreement, dated as of April 13,
1999, executed by us, as depositor, Daniel R. Stolzer, as trustee, and Bankers
Trust (Delaware), as trustee, and (2) the filing of a certificate of trust with
the Delaware Secretary of State on April 13, 1999. This trust agreement will be
amended and restated in its entirety, substantially in the form filed as an
exhibit to the registration statement.
The trust will issue the capital securities and the common securities under
the amended trust agreement. The capital securities will represent preferred
undivided beneficial interests in the assets of the trust, and the common
securities will represent common undivided beneficial interests in the assets of
the trust.
At the closing of the offering, we will purchase all of the common
securities from the trust. The common securities will represent at least 3% of
the trust's total capital at the closing. The capital securities will represent
the remaining 97% or less of the trust's total capital at the closing. We will
continue to hold all the common securities, directly or through our
subsidiaries, after the closing.
The trust exists solely for the following purposes:
-- to issue and sell the capital securities and common securities;
-- to use the proceeds from the sale of the capital securities and
common securities to acquire the junior debentures; and
-- to engage only in those other activities that are necessary or
incidental to those activities.
The trust will have no assets other than the junior debentures and the
right to receive reimbursement of certain expenses under an expense agreement.
Consequently, the trust will have no revenue other than payments under the
junior debentures and the expense agreement.
The trust has a term of approximately 31 years but may dissolve earlier as
provided in the amended trust agreement. The Trust's business and affairs will
be conducted by its trustees. The trustees will include Bankers Trust Company,
as property trustee, and Bankers Trust (Delaware), as Delaware trustee. In
addition, as the holder of the common securities, we will select two individuals
who will act as administrative trustees of the trust. The administrative
trustees will initially be our employees or officers.
We will fully, irrevocably and unconditionally guarantee the capital
securities to the extent that the trust has funds sufficient to make payments.
We also will reimburse the trust for all of its expenses and liabilities other
than the trust's obligations under the capital securities and the common
securities. We will also pay the expenses of this offering, including the
underwriters' commissions.
The trust does not have separate financial statements. The statements would
not be material to holders of the capital securities because the trust has no
independent operations. In addition, we anticipate that the trust will not be
subject to the reporting requirements of the Securities Exchange Act of 1934.
The principal executive office of the trust is 127 Public Square,
Cleveland, Ohio 44144-1306, Attention: Office of the Secretary, and its
telephone number is (216) 689-6300.
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<PAGE> 16
SELECTED CONSOLIDATED FINANCIAL DATA
The following table presents summary consolidated financial data for each
of the years in the five-year period ended December 31, 1998 and for each of the
quarterly periods ended March 31, 1999 and 1998. The data (except for ratios)
for each of the years in the five-year period ended December 31, 1998 has been
derived from, and should be read in conjunction with, our audited consolidated
financial statements, accompanying notes and other information pertaining to us
included in the documents incorporated by reference in this prospectus. The data
presented for the three-month periods ended March 31, 1999 and 1998 are not
necessarily indicative of the data for the entire year and have been derived
from, and should be read in conjunction with, our unaudited consolidated
financial statements incorporated by reference in this prospectus. These
financial statements include, in the opinion of management, all adjustments of a
normal recurring nature and disclosures which are necessary to present fairly
the data for these interim periods.
This summary is qualified in its entirety by the detailed information
included in those documents incorporated by reference in this prospectus. The
comparability of the data presented is affected by certain acquisitions and
divestitures that we have completed in the periods presented. During the first
quarter of 1999, we reclassified the distributions on capital securities from
noninterest expense to interest expense. Where applicable, all information
presented in the following table has been restated to conform to the current
presentation.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED) (AUDITED (EXCEPT RATIOS))
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE PERIOD
Interest income.............................. $ 1,381 $ 1,327 $ 5,525 $ 5,262 $ 4,951 $ 5,121 $ 4,490
Interest expense............................. 696 677 2,841 2,517 2,237 2,485 1,797
Net interest income.......................... 685 650 2,684 2,745 2,714 2,636 2,693
Provision for loan losses.................... 111 77 297 320 197 100 125
Noninterest income........................... 609 356 1,575 1,306 1,087 933 883
Noninterest expense.......................... 748 586 2,483 2,386 2,461 2,312 2,168
Income before income taxes and extraordinary
item....................................... 435 343 1,479 1,345 1,143 1,157 1,283
Income before extraordinary item............. 293 235 996 919 783 789 853
Net income................................... 293 235 996 919 783 825 853
Net income applicable to Common Shares....... 293 235 996 919 775 809 837
PER COMMON SHARE
Income before extraordinary item............. $ .65 $ .53 $ 2.25 $ 2.09 $ 1.69 $ 1.65 $ 1.72
Net income................................... .65 .53 2.25 2.09 1.69 1.73 1.72
Net income-assuming dilution................. .65 .53 2.23 2.07 1.67 1.71 1.70
Cash dividends............................... .26 .235 .94 .84 .76 .72 .64
Book value at period end..................... 13.63 12.15 13.63 11.83 10.92 10.68 9.44
Weighted average Common Shares (000)......... 449,520 438,589 441,895 439,042 459,810 469,574 486,134
Weighted average Common Shares and potential
Common Shares (000)........................ 454,197 444,836 447,437 444,544 464,282 472,882 490,932
AT PERIOD END
Loans........................................ $ 61,045 $ 54,900 $ 62,012 $ 53,380 $ 49,235 $ 48,332 $ 46,579
Earning assets............................... 70,458 64,368 70,240 64,246 59,260 58,762 60,047
Total assets................................. 79,992 73,198 80,020 73,699 67,621 66,339 66,801
Deposits..................................... 41,323 41,661 42,583 45,073 45,317 47,282 48,564
Long-term debt............................... 15,457 9,041 12,967 7,446 4,213 4,003 3,570
Capital securities........................... 1,244 750 997 750 500 - -
Common shareholders' equity.................. 6,105 5,338 6,167 5,181 4,881 4,993 4,530
Total shareholders' equity................... 6,105 5,338 6,167 5,181 4,881 5,153 4,690
</TABLE>
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<PAGE> 17
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED) (AUDITED (EXCEPT RATIOS))
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE RATIOS
Return on average total assets............... 1.49% 1.32% 1.32% 1.33% 1.21% 1.24% 1.36%
Return on average common equity.............. 19.48 18.25 17.97 18.89 15.73 17.35 18.87
Return on average total equity............... 19.48 18.25 17.97 18.89 15.64 17.10 18.56
Efficiency(1)................................ 60.22 58.19 58.49 58.21 60.88 63.03 59.39
Overhead(2).................................. 33.19 36.12 35.17 40.34 45.51 49.66 46.14
Net interest margin (taxable equivalent)..... 3.95 4.14 4.08 4.54 4.78 4.47 4.83
CAPITAL RATIOS AT PERIOD END
Equity to assets............................. 7.63% 7.29% 7.71% 7.03% 7.22% 7.77% 7.03%
Tangible equity to tangible assets........... 5.86 5.81 5.93 5.52 5.88 6.25 6.19
Tier 1 risk-adjusted capital................. 7.44 6.81 7.21 6.65 7.98 7.53 8.48
Total risk-adjusted capital.................. 11.92 11.38 11.69 10.83 13.01 10.85 11.62
Leverage..................................... 7.21 6.61 6.95 6.40 6.93 6.20 6.63
ASSET QUALITY DATA
Nonperforming loans.......................... $ 395 $ 373 $ 365 $ 381 $ 349 $ 333 $ 256
Nonperforming assets......................... 430 421 404 431 400 379 340
Allowance for loan losses.................... 930 900 900 900 870 876 830
Net loan charge-offs......................... 81 77 297 293 195 99 109
Nonperforming loans to period end loans...... .65% .68% .59% .71% .71% .69% .55%
Nonperforming assets to period end loans plus
OREO and other nonperforming assets........ .70 .77 .65 .81 .81 .78 .73
Allowance for loan losses to nonperforming
loans...................................... 235.44 241.29 246.58 236.22 249.28 263.15 324.27
Allowance for loan losses to period end
loans...................................... 1.52 1.64 1.45 1.69 1.77 1.81 1.78
Net loan charge-offs to average loans........ .53 .58 .52 .57 .40 .21 .25
</TABLE>
- ---------------
(1) The efficiency ratio is noninterest expense, excluding certain nonrecurring
charges, divided by taxable-equivalent net interest income plus noninterest
income, excluding net securities transactions and gains from certain
divestitures.
(2) Overhead is noninterest expense, excluding certain nonrecurring charges,
less noninterest income, excluding net securities transactions and gains
from certain divestitures, divided by taxable-equivalent net interest
income.
---------------
The basis for the capital ratios presented in the table above is as
follows:
-- Tier 1 capital consists of: (1) common shareholders' equity,
excluding net unrealized gains or losses on securities, except for
net unrealized losses on marketable equity securities, (2) perpetual
preferred stock and (3) capital securities; less goodwill and other
non-qualifying intangible assets.
-- Total risk-adjusted capital consists of: (1) Tier 1 capital, (2)
subordinated debt, (3) qualifying preferred stock, (4) the qualifying
portion of the allowance for loan losses and (5) the qualifying
portion of certain unrealized net holding gains. At least half of a
bank holding company's total capital is required to be comprised of
Tier 1 capital.
-- The leverage ratio is Tier 1 capital as a percentage of average
quarterly total assets, less goodwill and other non-qualifying
intangible assets. Guidelines of the Federal Reserve provide for a
minimum leverage ratio of 3% for bank holding companies that either
have the highest supervisory rating or have implemented the Federal
Reserve's risk-based capital measures for market risk.
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<PAGE> 18
USE OF PROCEEDS
The trust will invest all of the proceeds from the sale of the capital
securities and the common securities in the junior debentures. We will use the
net proceeds from the sale of our junior debentures to the trust for general
corporate purposes. These purposes may include:
-- investments in subsidiaries;
-- extensions of credit to subsidiaries;
-- repurchases or redemptions of our capital stock; and
-- possible future acquisitions including, without limitation, the
acquisition of banking and nonbanking companies and financial assets
and liabilities.
We have not specifically allocated the proceeds to these purposes, although
our management has determined that funds should be borrowed at this time. The
precise amount and timing of investments in, or extensions of credit to, our
subsidiaries will depend on our subsidiaries' funding requirements and the
availability of other funds. We may temporarily invest the net proceeds or apply
the net proceeds to the reduction of short-term indebtedness.
ACCOUNTING TREATMENT
For financial reporting purposes, the trust will be treated as our
subsidiary. Accordingly, the accounts of the trust will be included in our
consolidated financial statements.
The capital securities will be included as a component of total liabilities
and represented in a separate line item in our consolidated balance sheets. The
separate line item is entitled "Corporation-obligated mandatorily redeemable
preferred capital securities of subsidiary trusts holding solely debentures of
the Corporation". Appropriate disclosures about the capital securities, the
guarantee and the junior debentures will be included in the notes to our
consolidated financial statements. For financial reporting purposes, we will
record distributions payable on the capital securities as interest expense in
our consolidated statements of income.
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<PAGE> 19
CAPITALIZATION
The following table sets forth our consolidated capitalization (1) as of
March 31, 1999 and (2) as adjusted to give effect to the consummation of the
offering of the capital securities.
You should read the following data in conjunction with our consolidated
financial statements and information incorporated by reference in this
prospectus.
<TABLE>
<CAPTION>
MARCH 31, 1999
-------------------------
OUTSTANDING ADJUSTED
-------------------------
(UNAUDITED)
(DOLLARS IN MILLIONS)
<S> <C> <C>
LONG-TERM DEBT
KeyCorp
Senior medium-term notes due through 2005(1).............. $ 401 $ 401
Subordinated medium-term notes due through 2005(2)........ 133 133
7.50% Subordinated notes due 2006......................... 250 250
6.75% Subordinated notes due 2006......................... 200 200
8.125% Subordinated notes due 2002........................ 199 199
8.00% Subordinated notes due 2004......................... 125 125
8.40% Subordinated capital notes due 1999................. 75 75
8.404% Notes due through 2001............................. 34 34
All other long-term debt.................................. 5 5
------- -------
Total KeyCorp........................................... 1,422 1,422
Subsidiaries
Senior medium-term bank notes due through 2004(3)......... 9,499 9,499
Senior euro medium-term bank notes due through 2007(4).... 1,856 1,856
6.50% Subordinated remarketable securities due 2027....... 313 313
6.95% Subordinated notes due 2028......................... 300 300
7.25% Subordinated notes due 2005......................... 200 200
7.85% Subordinated notes due 2002......................... 93 93
6.75% Subordinated notes due 2003......................... 200 200
7.50% Subordinated notes due 2008......................... 165 165
7.125% Subordinated notes due 2006........................ 250 250
7.55% Subordinated notes due 2006......................... 75 75
7.375% Subordinated notes due 2008........................ 70 70
7.30% Subordinated notes due 2011......................... 107 107
Lease financing debt due through 2004(5).................. 600 600
Federal Home Loan Bank Advances due through 2028(6)....... 237 237
------- -------
All other long-term debt.................................. 70 70
------- -------
Total subsidiaries...................................... 14,035 14,035
------- -------
Total long-term debt.................................... 15,457 15,457
CORPORATION-OBLIGATED MANDATORILY REDEEMABLE PREFERRED
CAPITAL SECURITIES OF SUBSIDIARY TRUSTS HOLDING SOLELY
DEBENTURES OF THE CORPORATION
7.826% Capital securities due 2026(7)..................... 350 350
8.250% Capital securities due 2026(7)..................... 150 150
6.625% Capital securities due 2029(7)..................... 250 250
Floating rate capital securities due 2028(7).............. 247 247
6.875% Capital securities due 2029(7)..................... 247 247
% Capital securities due 20 (8)...................... -- 250
------- -------
Total capital securities................................ 1,244 1,494
------- -------
Total long-term debt, including capital securities...... 16,701 16,951
SHAREHOLDERS' EQUITY
Preferred stock, $1 par value; authorized 25,000,000
shares, none issued..................................... -- --
Common stock, $1 par value; authorized 1,400,000,000
shares; issued 491,888,780 shares....................... 492 492
Capital surplus........................................... 1,409 1,409
Retained earnings......................................... 5,369 5,369
Loans to ESOP trustee..................................... (34) (34)
Treasury stock, at cost (44,066,638 shares)............... (1,075) (1,075)
Accumulated other comprehensive loss...................... (56) (56)
------- -------
Total shareholders' equity.............................. 6,105 6,105
------- -------
Total capitalization.................................... $22,806 $23,056
</TABLE>
- ---------------
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<PAGE> 20
(1) The weighted average rate on the senior medium-term notes due through 2005
was 6.38%. These notes had a combination of both fixed and floating interest
rates.
(2) The weighted average rate on the subordinated medium-term notes due through
2005 was 7.09%. These notes had a combination of both fixed and floating
interest rates.
(3) The weighted average rate on the senior medium-term bank notes due through
2004 was 5.11%. These notes had a combination of both fixed and floating
interest rates.
(4) The weighted average rate on the senior euro medium-term bank notes due
through 2007 was 5.33%. These notes are obligations of KeyBank National
Association and had fixed and floating interest rates based on the
three-month London Interbank Offered Rate.
(5) The weighted average rate on the lease financing debt was 5.99% and
represented primarily nonrecourse debt collateralized by lease equipment
under operating, direct financing and sales type leases.
(6) Long-term advances from the Federal Home Loan Bank had a weighted average
rate of 4.97%. These advances had a combination of both fixed and floating
interest rates.
(7) On December 4, 1996, a subsidiary trust of KeyCorp issued $350,000,000 of
capital securities that mature on December 1, 2026. On December 30, 1996, a
second subsidiary trust of KeyCorp issued $150,000,000 of capital securities
that mature on December 15, 2026. On May 30, 1997, a third subsidiary trust
of KeyCorp issued $250,000,000 of Coupon Adjusted Pass-Through Securities,
Series A, that mature on June 1, 2029. On June 25, 1998, a fourth subsidiary
trust of KeyCorp issued $247,000,000 of capital securities that mature on
July 1, 2028. On March 17, 1999, a fifth subsidiary trust of KeyCorp issued
$247,000,000 of capital securities that mature on March 17, 2029. These
capital securities have terms substantially identical to the capital
securities offered by this prospectus and accumulate distributions at an
annual rate of 7.826%, 8.250%, 6.625%, three-month LIBOR plus a margin of
.74% and 6.875%, respectively, of the liquidation amount of $1,000 per
capital security.
(8) The sole assets of the trust will be $ aggregate principal amount of the
junior debentures issued by us to the trust. The junior debentures will
mature on , 20 . We own all of the common securities of the trust.
We anticipate that the trust will not be subject to the reporting
requirements under the Securities Exchange Act of 1934.
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DESCRIPTION OF CAPITAL SECURITIES
This section summarizes the material provisions of the capital securities
and the amended trust agreement governing the trust. The amended trust agreement
and its associated documents, including the capital securities themselves,
contain the full legal text of the matters described in this section. We have
filed with the SEC a form of the amended trust agreement as an exhibit to our
registration statement. See "Where You Can Find More Information" on page 53 for
information on how to obtain a copy.
The amended trust agreement, the capital securities and the common
securities are governed by Delaware law.
ISSUANCE AND GENERAL CHARACTERISTICS
The trust will issue the capital securities and the common securities, with
a liquidation amount of $1,000 per security. The capital securities and the
common securities will rank equally with one another, and the trust will make
all payments on the capital securities proportionately with the common
securities, except under certain cases of default under the amended trust
agreement.
The trust will use the proceeds from the sale of the capital securities and
the common securities to purchase the junior debentures from us. We will issue
the junior debentures under an indenture between us and Bankers Trust Company as
further described in "Description of Junior Debentures -- Issuance and general
characteristics". Bankers Trust Company will also act as property trustee and
will hold legal title to the junior debentures in trust for the benefit of the
holders of the capital securities and common securities. We will guarantee, on a
subordinated basis, the payment of distributions and other amounts payable on
the capital securities, but only to the extent that the trust has funds
available on hand to make those payments. For further information on our
guarantee, see "Description of the Guarantee and the Expense Agreement".
The amended trust agreement will be qualified as an indenture under the
Trust Indenture Act. The property trustee will act as indenture trustee for the
capital securities, in order to comply with the provisions of the Trust
Indenture Act.
The capital securities will be represented by a global security that will
be deposited with and registered in the name of The Depository Trust Company or
its nominee. Whenever we refer to a "holder" of capital securities in this
prospectus, we mean the registered holder, which, for any capital securities in
book-entry form, will be DTC or its nominee. We discuss matters relevant to
global securities under the caption "Book-Entry Issuance".
DISTRIBUTIONS
Distributions will accumulate on the capital securities from their original
issue date, at the annual rate of % of their liquidation amount, or
$ per year per capital security. Unless deferred as described below,
distributions will be payable semi-annually in arrears on and of each
year to the holders of the capital securities at the close of business on the
or next preceding the relevant distribution date. The first
distribution date will be , 1999. The amount of distributions payable
for any period will be computed on the basis of a 360-day year of twelve 30-day
months.
The trust will have no funds to distribute in respect of the capital
securities other than the payments it receives from us in respect of the junior
debentures. Consequently, if we defer or for any other reason fail to make
interest payments on the junior debentures, the trust will not have funds
available to pay distributions on the capital securities. We have no current
intention to exercise our right to defer interest payments on the junior
debentures.
Deferral periods. As long as no event of default under the indenture, as
described under "Description of Junior Debentures -- Indenture events of
default", has occurred and is continuing, we have the right under the indenture
to defer the payment of interest on the junior debentures at any time and in
each case for a period not exceeding 10 consecutive semi-annual periods. No
deferral period may extend beyond the stated maturity of the junior debentures.
Before a deferral period ends, we may extend it further, subject to the limit
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described above. When a deferral period ends and we have paid all interest then
accrued and unpaid on the junior debentures, we may begin a new deferral period,
so long as no event of default under the indenture has occurred and is
continuing. There is no particular limit on the number of deferral periods that
we may begin.
If we elect to defer interest payments on the junior debentures, the trust
will defer the payment of distributions on the capital securities during the
related deferral period. However, during a deferral period, distributions will
continue to accumulate on the capital securities and additional distributions
will accumulate on each deferred distribution payment at the annual rate of
%, compounded semi-annually from the corresponding distribution date. The
term "distribution", wherever we use it in this prospectus, includes any of
these additional distributions. During a deferral period, holders of capital
securities will continue to be required to accrue interest income for U.S.
federal income tax purposes. For further information on tax consequences, see
"U.S. Federal Income Tax Considerations -- Interest income and original issue
discount".
Any distributions that would otherwise become due and payable during a
deferral period will not become due and payable until the day after the period
ends. If any capital securities become subject to redemption during a deferral
period, that period will end automatically on the day before the redemption
date.
We must give the property trustee and the holders of capital securities
notice of our election to begin or extend a deferral period. In general, each
notice must be given at least one business day before the record date for the
distribution date on which distributions would have been payable but for the
election. We must notify the holders in the manner described below in
"-- Notices".
Deferral period restrictions. The indenture provides that, during any
deferral period, neither we nor any of our subsidiaries may take any of the
following actions:
-- declare or pay any dividend or other distribution on, or redeem,
purchase or otherwise acquire any of our capital stock;
-- pay any principal, interest or other amount in respect of, or redeem,
purchase or otherwise acquire, any of our debt securities that rank
equally with or junior to the junior debentures; or
-- make a guarantee payment with respect to our guarantees of our
subsidiaries' securities that rank equally in all respects or junior
to the junior debentures.
The indenture restriction described above provides for significant
exceptions. Any of the following that would otherwise be covered by this
restriction will nevertheless be permitted:
-- any transaction in which the only consideration given or to be given
by us or any of our subsidiaries is junior securities, as defined
below;
-- any transaction in connection with or arising from:
-- any employment contract, benefit plan or other similar arrangement
with, or for the benefit of, one or more of our employees, officers,
directors or consultants;
-- any dividend reinvestment or stockholders' rights plans; and
-- any issuance of junior securities as consideration in an acquisition
transaction entered into before the applicable deferrable period;
-- any exchange or conversion of any class or series of our capital
stock or indebtedness into or for any other class or series of our
capital stock;
-- any purchase of fractional interests in our capital stock pursuant to
the conversion or exchange provisions of a security being converted
into or exchanged for capital stock; and
-- any declaration or payment of a dividend, issuance of rights, stock
or other property or redemption or other acquisition of rights in
connection with any stockholder rights plan.
"Junior securities" means (1) our capital stock or debt securities that rank, in
right of payment in all respects, equally with or junior to the junior
debentures and (2) warrants, options and other rights to acquire capital stock
or debt securities of the kind described in clause (1).
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REDEMPTION
The capital securities will remain outstanding until the trust redeems them
or distributes the junior debentures in exchange for the capital securities. Any
redemption of capital securities must occur as described below.
Redemption of capital securities. If we repay or redeem the junior
debentures at any time, the trust will be obligated to redeem a like amount of
capital securities and common securities. The redemption of the capital
securities will occur on the redemption date, which means the date on which
payment of the principal of those junior debentures becomes due under the
indenture. The redemption price for the capital securities will be the total
liquidation amount of the capital securities being redeemed plus (1) accumulated
but unpaid distributions up to but excluding the redemption date and (2) the
related amount of the premium, if any, paid by us on the concurrent redemption
of the junior debentures.
Repayment and redemption of junior debentures. We may redeem the junior
debentures before their stated maturity as follows:
(1) in whole at any time or in part from time to time, provided that no partial
redemption may occur during a deferral period; or
(2) in whole at any time within 90 days after the occurrence of a Tax Event or
a Capital Treatment Event, each as defined below.
If we elect to redeem the junior debentures, we will do so at the relevant
redemption price. The redemption price will equal accrued and unpaid interest on
the junior debentures being redeemed plus the greater of:
-- 100% of the principal amount of the junior debentures being redeemed;
or
-- as determined by a Quotation Agent, the sum of the present value of
scheduled payments of principal and interest from the redemption date
to , 20 on the junior debentures being redeemed, discounted to
the redemption date on a semi-annual basis at a discount rate equal
to the Treasury Rate plus %, in the case of a redemption under
clause (1) above, or plus %, in the case of a redemption under
clause (2) above.
Definition of Quotation Agent "Quotation Agent" means . However,
if ceases to be a primary U.S. Government securities dealer in New
York City, we will replace them with another primary U.S. Government securities
dealer.
Definition of Treasury Rate. "Treasury Rate" means (1) the yield, under the
heading which represents the average for the week immediately prior to the date
of calculation, appearing in the most recently published statistical release
designated H.15(519) or any successor publication which is published weekly by
the Federal Reserve and which establishes yields on actively traded U.S.
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities", for the maturity corresponding to the time period from the
redemption date to , 20 , or if no maturity is within three months
before or after this time period, yields for the two published maturities most
closely corresponding to this time period will be determined and the Treasury
Rate will be interpolated or extrapolated from those yields on a straight-line
basis, rounding to the nearest month, or (2) if the release or any successor
release is not published during the week preceding the calculation date or does
not contain such yields, the annual rate equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue, expressed as a percentage of its principal
amount, equal to the Comparable Treasury Price for the redemption date. The
Treasury Rate shall be calculated on the third business day preceding the
redemption date.
Definition of Comparable Treasury Issue. "Comparable Treasury Issue" means
with respect to any redemption date the U.S. Treasury security selected by the
Quotation Agent as having a maturity comparable to the time period from the
redemption date to , 20 that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to this time period.
If no U.S. Treasury security has a maturity which is
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within a period from three months before to three months after , 20 ,
the two most closely corresponding U.S. Treasury securities shall be used as the
Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
Definition of Comparable Treasury Price. "Comparable Treasury Price" means
(a) the average of five Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (b) if the debenture trustee obtains fewer than five such
Reference Treasury Dealer Quotations, the average of all such quotations.
Definition of Reference Treasury Dealer Quotations. "Reference Treasury
Dealer Quotations" means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the debenture trustee, of the bid
and asked prices for the Comparable Treasury Issue, expressed in each case as a
percentage of its principal amount, quoted in writing to the debenture trustee
by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third
business day preceding such redemption date.
Definition of Reference Treasury Dealer. "Reference Treasury Dealer" means
(1) the Quotation Agent and (2) any other primary U.S. Government securities
dealer selected by the debenture trustee after consultation with us.
Definition of business day. As used in this prospectus, "business day"
means a day other than (1) a Saturday or Sunday, (2) a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to remain closed, or (3) a day on which the property trustee's
Corporate Trust Office or the Corporate Trust Office of the debenture trustee is
closed for business.
Definition of Capital Treatment Event. "Capital Treatment Event" means the
reasonable determination by us that as a result of:
-- any amendment to or change, including any announced prospective
change, in the laws, or any rules or regulations under the laws, of
the United States or of any political subdivision of or in the United
States, if the amendment or change is effective on or after the date
of this prospectus or
-- any official or administrative pronouncement or action or any
judicial decision interpreting or applying such laws or regulations,
if the pronouncement, action or decision is announced on or after the
date of this prospectus,
there is more than an insubstantial risk that we will not be entitled to treat
the liquidation amount of the capital securities as "Tier 1" capital for
purposes of the applicable Federal Reserve capital adequacy guidelines as then
in effect.
Definition of Tax Event. "Tax Event" means the receipt by us and the trust
of an opinion of independent counsel, experienced in the following matters, to
the following effect:
As a result of any tax change, there is more than an insubstantial risk that any
of the following will occur:
(1) the trust is, or will be within 90 days after the date of the opinion of
counsel, subject to U.S. federal income tax on income received or accrued
on the junior debentures;
(2) interest payable by us on the junior debentures is not, or within 90 days
after the opinion of counsel will not be, deductible by us, in whole or in
part, for U.S. federal income tax purposes; or
(3) the trust is, or will be within 90 days after the date of the opinion of
counsel, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
As used above, "tax change" means any of the following:
-- any amendment to or change, including any announced prospective
change, in the laws or any regulations under the laws of the United
States or of any political subdivision or taxing authority of or in
the United States, if the amendment or change is enacted, promulgated
or announced on or after the date of this prospectus; or
-- any official administrative pronouncement, including any private
letter ruling, technical advice memorandum, field service advice,
regulatory procedure, notice or announcement, including any
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notice or announcement of intent to adopt any procedures or
regulations, or any judicial decision interpreting or applying such
laws or regulations, whether or not the pronouncement or decision is
issued to or in connection with a proceeding involving us or the
trust or is subject to review or appeal, if the pronouncement or
decision is enacted, promulgated or announced on or after the date of
this prospectus.
Payment of additional amounts. The indenture provides that, if a Tax Event
described in items (1) and (3) of the definition of Tax Event above has occurred
and is continuing and we do not redeem the junior debentures, we may be required
to pay additional sums on the junior debentures. These additional sums would be
those amounts necessary to ensure that distributions due and payable on the
capital securities and common securities will not be reduced as a result of any
additional taxes, duties and other governmental charges to which the trust has
become subject as a result of a Tax Event.
Redemption procedures. The property trustee will give notice of any
redemption of capital securities to the holders of capital securities not less
than 30 nor more than 60 days before the redemption date, unless the redemption
results from acceleration of the maturity of the junior debentures and the
property trustee cannot reasonably give this notice during this period. In that
case, the property trustee will give the notice as soon as practicable. In all
cases, the property trustee will give the notice of redemption in the manner
described below under "-- Notices".
Payment of the redemption price for any capital securities will be made
against surrender of the certificates representing those capital securities, or,
in the case of any capital securities held in book-entry form, in accordance
with the applicable procedures of DTC. However, any distributions that are
payable on or before the redemption date will be payable to the persons who are
the holders of those capital securities on the record date for the distribution.
If the property trustee gives a notice of redemption, the property trustee
will deposit funds sufficient to pay the redemption price for all capital
securities to be redeemed on that date to the extent the funds are available to
the property trustee. The property trustee, in the case of book-entry capital
securities, or the paying agent, in the case of non-book-entry capital
securities, will irrevocably deposit these amounts with DTC by noon, New York
City time, on the redemption date. If the property trustee gives notice of
redemption and deposits funds as required under the amended trust agreement then
upon the date of deposit all rights of the holders of the capital securities
called for redemption will cease, except the right of those holders to receive
the redemption price, without interest, and those capital securities will cease
to be outstanding. If payment of the redemption price for any capital securities
called for redemption is improperly withheld or refused and not paid either by
the trust or by us under the guarantee, or if notice of redemption is not given
as required, distributions on those capital securities will continue to
accumulate from the original redemption date to the date the redemption price is
actually paid.
If the trust redeems less than all the capital securities and common
securities, the aggregate liquidation amount of capital securities and common
securities to be redeemed will be allocated proportionately between the
outstanding capital securities and the outstanding common securities, based upon
their respective aggregate liquidation amounts. Not more than 60 days prior to
the redemption date, the property trustee will select the capital securities to
be redeemed from among the outstanding capital securities not previously called
for redemption. The property trustee may use any method of selection that it
deems to be fair and appropriate, including any method that involves the
redemption of a portion of the aggregate liquidation amount of any particular
holder's capital securities.
Other purchases of capital securities. Subject to applicable law, we may,
and our subsidiaries may, purchase outstanding capital securities by tender, in
the open market or by private agreement. These purchases may occur at any time
and from time to time.
EXCHANGE OF CAPITAL SECURITIES FOR JUNIOR DEBENTURES
As the holders of the common securities, we may dissolve the trust at any
time in our sole discretion subject to the prior approval of the Federal
Reserve, if then required. Upon such an election, the property
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trustee will dissolve the trust and satisfy liabilities to creditors, if any.
The property trustee will then distribute to the holders of the outstanding
capital securities and common securities, a like amount of junior debentures in
exchange for those securities. In this context, "like amount" means junior
debentures having an aggregate principal amount equal to the aggregate
liquidation amount of all outstanding capital securities and common securities.
If an exchange distribution occurs, we will use our best efforts to include
the junior debentures on those stock exchanges or other automated quotation
systems on which the capital securities are then listed or traded.
Exchange Procedures. The property trustee will notify holders of capital
securities of any exchange not less than 30 nor more than 60 days before the
exchange date, in the manner described below under "-- Notices". On the exchange
date, the following will occur:
-- the capital securities will cease to be outstanding;
-- DTC or its nominee will receive certificates representing the junior
debentures to be distributed in exchange for all capital securities
held in book-entry form, with those junior debentures also being in
book-entry form;
-- any certificates representing capital securities in non-book-entry
form will be deemed to represent a like amount of junior debentures,
bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid distributions on those capital securities,
until those certificates are presented to the paying agent for
exchange or transfer; and
-- all rights of the holders of capital securities will cease, except
for the right of holders of capital securities in non-book-entry form
to receive certificates representing junior debentures in non-book-
entry form upon surrender of the certificates representing their
capital securities.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Under the amended trust agreement, the trust will automatically dissolve
upon the occurrence of any of the following events:
-- the expiration of its term of approximately 31 years;
-- certain events of bankruptcy, dissolution or liquidation of KeyCorp;
-- distribution of the junior debentures in exchange for the capital
securities and common securities, upon our election to dissolve the
trust, as described above under "-- Exchange of capital securities
for junior debentures";
-- redemption of all the capital securities; or
-- the entry of an order for the dissolution of the trust by a court of
competent jurisdiction.
If the trust dissolves while the capital securities are outstanding, the
property trustee will liquidate the trust as expeditiously as the property
trustee determines to be possible. After the property trustee satisfies
liabilities of the trust's creditors, it will distribute to the holders of the
outstanding capital securities and the common securities, a like amount of the
junior debentures.
If the property trustee determines that an exchange distribution is not
practical, each holder of outstanding capital securities will be entitled to
receive out of the available assets of the trust, after satisfaction of
liabilities to creditors of the trust, an amount equal to the liquidation
distribution. The "liquidation distribution" for any capital securities will
equal the aggregate liquidation amount of those capital securities plus all
accrued and unpaid distributions on them to the date of payment. If the
liquidation distribution for all outstanding capital securities can be paid only
in part because the trust has insufficient assets available to pay it in full,
the amounts payable by the trust on the capital securities will be paid
proportionately, based on their respective liquidation distributions.
On any liquidation of the trust, the holders of the common securities will
be entitled to receive distributions proportionately with the holders of the
capital securities, unless an event of default under the
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amended trust agreement, a "trust event of default", has occurred and is
continuing. In that case, the capital securities will have priority in right of
payment over the common securities, as described below under "-- Priority over
common securities".
PRIORITY OVER COMMON SECURITIES
Payment of distributions and the redemption price will be made on the
capital securities and the common securities proportionately, based on the
respective aggregate liquidation amounts of the two classes, except as follows.
If a trust event of default has occurred and is continuing, the trust will not
pay any distribution or redemption price, or make any liquidation distribution,
in respect of the common securities on any day unless the following have
occurred:
-- in the case of any distribution to be paid, all accumulated and
unpaid distributions on all outstanding capital securities for all
distribution periods ending on or before the payment day have been
paid or duly provided for in cash;
-- in the case of any redemption price to be paid, the redemption price
on all outstanding capital securities called on or before the payment
day for redemption has been paid or duly provided for in cash; and
-- in the case of a liquidation distribution to be made, the liquidation
distribution on all outstanding capital securities has been made or
duly provided for.
Accordingly, if a trust event of default has occurred and is continuing,
whenever any distributions or redemption price is due and payable in respect of
the capital securities, the property trustee will apply all available funds to
the payment of those amounts in full in cash before making any payment in
respect of the common securities.
The trust will not make any payment or other distribution in respect of the
common securities, including on account of any purchase or other acquisition,
while the capital securities are outstanding, other than distributions, the
redemption price and the liquidation distribution on the terms set forth in the
amended trust agreement.
If a trust event of default occurs as a result of an indenture event of
default, the holders of the common securities will be treated as having waived
all rights to act with respect to the trust event of default until all trust
events of default have been cured, waived or otherwise eliminated. Until that
time, the property trustee will act solely on behalf of the holders of the
capital securities and not on behalf of the holders of the common securities,
and only the holders of the capital securities will have the right to direct the
property trustee to act on their behalf.
TRUST EVENTS OF DEFAULT
Any one of the following events will be a "trust event of default" under
the amended trust agreement:
-- the occurrence of an "indenture event of default" under the
indenture, see "Description of Junior Debentures -- Indenture events
of default";
-- default by the trust in the payment of any distribution when it
becomes due and payable and continuation of the default for 30 days;
-- default by the trust in the payment of any redemption price when it
becomes due and payable;
-- material default or breach under any covenant or warranty of the
property trustee or Delaware trustee under the amended trust
agreement, and continuation of the default or breach for 60 days
after a notice of default has been given; a notice of default may be
given only by the holders of at least 25% of the outstanding capital
securities, as provided under the amended trust agreement; and
-- the occurrence of certain events of bankruptcy or insolvency with
respect to the property trustee if a successor property trustee has
not been appointed within 90 days.
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Within five business days after learning about a trust event of default,
the property trustee will notify the administrative trustees and the holders of
the outstanding capital securities and common securities, unless the trust event
of default has been cured or waived.
We, as depositor, and the administrative trustees are obligated to file
annually with the property trustee a certificate as to whether or not we are in
compliance with all the conditions and covenants applicable to us under the
amended trust agreement.
ENFORCEMENT RIGHTS
If an indenture event of default occurs, the holders of capital securities
must rely on the property trustee, as the holder of the junior debentures, to
enforce their rights under the junior debentures and the indenture against us,
subject to the following.
Right to direct property trustee's actions. The holders of a majority of
outstanding capital securities will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to, or
exercising any trust or power conferred on, the property trustee under the
amended trust agreement. This includes the right to direct the property trustee
to exercise the remedies available to it as the holder of the junior debentures.
Accordingly, the property trustee will not take any of the following actions
without obtaining the prior approval of the holders of a majority of the
outstanding capital securities, or, in the case of any action that under the
indenture may be taken only with the prior consent of each affected holder of
junior debentures, without the prior consent of each holder of outstanding
capital securities:
-- direct the time, method or place of conducting any proceeding for any
remedy available to, or executing any trust or power conferred on,
the indenture trustee with respect to the junior debentures;
-- waive any past default that may be waived under the indenture;
-- exercise any right to rescind or annul a declaration that the
principal of all the junior debentures be due and payable;
-- consent to any amendment, modification or termination of the
indenture or the junior debentures, if the consent of any holder of
junior debentures is required under the indenture; or
-- revoke any action previously authorized or approved by the holders of
the capital securities except by or with the subsequent authorization
or approval of the holders of the capital securities.
Before taking any of the actions described above, the property trustee must
also obtain, at our expense, an opinion of counsel, experienced in the following
matters, to the effect that the action will not cause the trust to be classified
as an association taxable as a corporation, or as other than a grantor trust,
for U.S. federal income tax purposes. The property trustee will notify the
holders of capital securities of any notice of default with respect to the
junior debentures, in the manner described below under "-- Notices".
Any required approval of holders of capital securities may be given by
written consent, without prior notice, or at a meeting convened for that
purpose. The property trustee must cause a notice to be given to the holders of
capital securities of any meeting at which holders of capital securities are
entitled to vote, in the manner described below under "-- Notices".
Right of direct action. If an indenture event of default has occurred and
is continuing and is attributable to our failure to pay any interest or
principal on the junior debentures when due and payable, a holder of capital
securities may begin a legal proceeding directly against us for enforcement of
payment to that holder of the interest or principal due and payable on a like
amount of junior debentures. We may not amend the indenture to remove the right
of any holder of outstanding capital securities to bring a direct action without
the prior written consent of that holder.
We will have the right under the indenture to set off any payment made to a
holder of capital securities in connection with a direct action. Except for the
right to bring a direct action, holders of capital securities will not have the
right to exercise directly against us any remedy available to a holder of junior
debentures.
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Right to accelerate junior debentures. If the holders of junior debentures
do not exercise their rights under the indenture to:
-- accelerate the maturity of the junior debentures when an indenture
event of default has occurred and is continuing,
-- annul a declaration of acceleration of the junior debentures, and
-- waive certain defaults under the indenture,
then the holders of certain minimum percentages of the outstanding capital
securities will be entitled to exercise these specified rights. See "Description
of Junior Debentures -- Indenture events of default".
MERGERS, CONSOLIDATIONS, AMALGAMATIONS AND REPLACEMENTS OF THE TRUST
At our request and with the consent of the holders of a majority of the
capital securities, the trust may merge with or into, or consolidate or
amalgamate with, or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to, another entity. Each of these
mentioned transactions, referred to as "trust successor transactions", may be
consummated only if the other entity is organized as a trust under the laws of
any state in the United States and only if all the following requirements are
met:
-- the successor entity, if not the trust, either (1) expressly assumes
all the obligations of the trust with respect to the capital
securities or (2) substitutes for the capital securities other
securities having substantially the same terms as the capital
securities, or "successor securities", provided that these successor
securities rank at least as high as the capital securities rank with
regard to the priority in right of payment of all distributions and
other amounts payable upon liquidation, redemption and otherwise;
-- the successor entity, if not the trust, has a purpose substantially
identical to that of the trust;
-- a trustee of the successor entity, if not the trust, possessing the
same powers and duties as the property trustee is appointed to hold
the junior debentures;
-- the trust successor transaction does not cause the capital
securities, or any successor securities, to be downgraded by any
nationally recognized statistical rating organization that assigns
ratings to the capital securities;
-- the trust successor transaction does not adversely affect the rights,
preferences and privileges of the holders of the capital securities,
or any successor securities, in any material respect;
-- prior to the trust successor transaction, we and the trust have
received an opinion from our independent counsel, experienced in the
following matters, to the effect that (1) the trust successor
transaction will not adversely affect the rights, preferences and
privileges of the holders of the capital securities, or any successor
securities, in any material respect and (2) upon completion of the
trust successor transaction, the trust or the successor entity, as
applicable, will not be required to register as an investment company
under the Investment Company Act of 1940; and
-- we, or any permitted successor, together with our permitted
assignees, hold all the common securities of the trust or all
comparable securities of the successor entity, as applicable, and
guarantee the obligations of the successor entity, if not the trust,
in respect of the capital securities, or any successor securities, at
least to the extent provided by the guarantee.
Despite the foregoing, the trust may not engage in a trust successor
transaction that would cause the trust or the successor entity, as applicable,
to be classified as an association taxable as a corporation or as other than a
grantor trust for U.S. federal income tax purposes, unless it first obtains the
consent of all holders of outstanding capital securities.
AMENDMENT OF THE TRUST AGREEMENT
We, as holder of common securities, the property trustee and the Delaware
trustee, without the consent of the holders of the capital securities, may amend
the amended trust agreement from time to time to:
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-- cure any ambiguity, or correct or supplement any provision that may
be inconsistent with any other provision, in the amended trust
agreement;
-- make any provision with respect to matters or questions arising under
the amended trust agreement that is consistent with the other
provisions of the amended trust agreement; and
-- modify, eliminate or add to any provisions of the amended trust
agreement to any extent that may be necessary to ensure that the
trust will not be taxable as a corporation or be classified as other
than a grantor trust, or to ensure that the junior debentures are
treated as our indebtedness, for U.S. federal income tax purposes, or
to ensure that the trust will not be required to register as an
"investment company" under the Investment Company Act;
but only if the amendment does not adversely affect the interests of any holder
of capital securities in any material respect and does not become effective
until notice of the amendment is given to the holders of capital securities.
We and the trustees may also amend the amended trust agreement if all of
the following requirements are met:
-- we obtain the consent of the holders of not less than a majority of
the outstanding capital securities; and
-- the trustees receive an opinion of counsel to the effect that the
amendment or the exercise of any power granted to them in accordance
with the amendment will not result in the trust being taxable as a
corporation or being classified as other than a grantor trust, or the
junior debentures being treated as other than our indebtedness, for
U.S. federal income tax purposes or being required to register as an
"investment company" under the Investment Company Act.
Despite the foregoing, each holder of capital securities must consent to an
amendment of the amended trust agreement that does any of the following:
-- changes the amount or timing of any distribution or other payment, or
otherwise adversely affects the amount of any distribution or other
payment required to be made as of a specified date, in respect of
that holder's capital securities; or
-- restricts the right of that holder to institute suit for the
enforcement of any payment on those capital securities on or after
the date on which it becomes due and payable.
For the purpose of any vote or consent of holders of capital securities,
any capital securities owned by us, the property trustee, the Delaware trustee
or any affiliate of the foregoing will be treated as if they were not
outstanding.
VOTING RIGHTS
The holders of the capital securities will have no voting rights except as
provided under "-- Enforcement rights", "-- Amendment of the trust agreement",
"Description of Guarantee -- Amendments, assignment and succession", and as
otherwise required by law and the amended trust agreement.
NOTICES
Notices to be given to holders of capital securities held in book-entry
form will be given only to DTC in accordance with its applicable procedures.
Notices to be given to holders of capital securities held in non-book-entry form
may be given by mail to the respective addresses of the holders as they appear
in the security register and will be deemed duly given when mailed to those
addresses. Neither the failure to give any notice to a particular holder, nor
any defect in a notice given to a particular holder, will affect the sufficiency
of any notice given to another holder.
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PAYMENT AND PAYING AGENCY
Payments in respect of any capital securities held in book-entry form will
be made only to DTC or its nominee in accordance with DTC's applicable
procedures. Payments in respect of any capital securities not held in book-entry
form will be made at the offices of any paying agent. However, at our option,
distributions payable on non-book-entry capital securities may be paid by check
mailed to the persons entitled to receive them, at their addresses appearing on
the security register on the relevant record date.
The property trustee will initially serve as the paying agent. From time to
time, the property trustee may select one or more firms to act as the paying
agent or as co-paying agents. Each paying agent must be a bank or trust company
acceptable to the administrative trustees. A paying agent will be permitted to
resign as paying agent upon 30 days' written notice to the property trustee and
us. In the event there is no paying agent, the property trustee will appoint a
firm to act as paying agent.
If any distribution, redemption price or other amount is payable in respect
of the capital securities on a day that is not a business day, the payment may
be made on the next succeeding business day unless that business day is in a
different calendar year, in which case the payment may be made on the next
preceding business day.
The owners of beneficial interests in capital securities held in book-entry
form will not have any rights under the amended trust agreement or the indenture
to receive payments in respect of those capital securities. Those beneficial
owners will have only such rights as may exist under the applicable procedures
of DTC and its direct and indirect participants. For a description of certain
matters relating to securities held in book-entry form, see "Book-Entry
Issuance".
Any moneys deposited with the property trustee or any paying agent, or then
held in trust by us or the trust, for the payment of any amount due and payable
on any capital securities, and remaining unclaimed for two years after the
amount has become due and payable, will, at our request, be repaid to us.
Thereafter, the holders of those capital securities will look, as a general
unsecured creditor, only to us for payment thereof.
REGISTRAR AND TRANSFER AGENT
The property trustee will act as registrar and transfer agent for the
capital securities. The property trustee will exchange and register transfers of
capital securities without charge by or on behalf of the trust, but will require
payment of any tax or other governmental charge that may be imposed in
connection with the exchange or transfer. If any capital securities have been
called for redemption, the property trustee may refuse to register any transfer
of those capital securities.
THE TRUSTEES OF THE TRUST
Removal, appointment and successors. The holders of at least a majority of
the outstanding capital securities may remove either the property trustee or the
Delaware trustee for cause or, if an indenture event of default has occurred and
is continuing, with or without cause. If one of these trustees is removed by the
holders of the outstanding capital securities, the successor may be appointed by
the holders of at least 25% of the outstanding capital securities. If one of
these trustees resigns, it will appoint its successor. If the trustee fails to
appoint a successor, the holders of at least 25% of the outstanding capital
securities may appoint a successor. If a successor has not been appointed by the
holders, any holder of capital securities or common securities, or the other
trustee, may petition a court in the State of Delaware to appoint a successor.
As long as no indenture event of default has occurred and is continuing, we, as
the holder of the common securities, have the right to remove the property
trustee and the Delaware trustee at any time.
Any Delaware trustee must meet the applicable requirements of Delaware law.
Any property trustee must be a national or state-chartered bank and, at the time
of appointment, must have securities rated in one of the three highest rating
categories by a nationally recognized statistical rating organization and have
capital and surplus of at least $50,000,000. No resignation or removal of a
trustee, and no appointment of a successor trustee, will be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the amended trust agreement.
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In no event will the holders of the capital securities have the right to
vote to appoint, remove or replace the administrative trustees. We have this
exclusive right as the holder of the common securities.
Co-trustees and separate property trustee. As long as no event of default
has occurred and is continuing, in order to meet the legal requirement of the
Trust Indenture Act or of any other jurisdiction where any part of the trust
property may be located, we, as the holder of the common securities, and the
administrative trustees may at any time appoint a co-trustee or a separate
property trustee. We will vest the co-trustee, which will act jointly with the
property trustee, or the separate trustee with any property, title, right or
power sufficient to enable him to comply with the legal requirements of the
Trust Indenture Act or of any other jurisdiction.
If an indenture event of default is occurred and is continuing, the
property trustee will have the sole authority to appoint a co-trustee or a
separate trustee.
Merger, consolidation, etc. If the property trustee or the Delaware trustee
merges, consolidates with or converts into, another entity, or another entity
succeeds to all or substantially all the corporate trust business of that
trustee, that other entity will be the successor of that trustee under the
amended trust agreement, but only if that other entity is qualified and eligible
to be a trustee.
Duties of property trustee. The property trustee undertakes to perform only
those duties that are specifically set forth in the amended trust agreement. If,
however, a trust event of default is continuing, the property trustee must
exercise the same degree of care and skill as a prudent person would exercise or
use in the conduct of his or her own affairs. Subject to this provision, the
property trustee will have no obligation to exercise any of the powers vested in
it by the amended trust agreement at the request of any holder of capital
securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that it might incur as a result.
If no trust event of default is continuing and the property trustee must
decide between alternative causes of action or construe ambiguous provisions in
the amended trust agreement, or is unsure of the application of any provision of
the amended trust agreement, and the matter is not one on which the holders of
capital securities and common securities are entitled under the amended trust
agreement to vote, then the property trustee may take any action that it deems
to be advisable and in the best interests of the holders of the capital
securities and common securities and will have no liability except for its own
bad faith, negligence or willful misconduct.
Conducting the affairs and operations of the trust. The amended trust
agreement authorizes and directs the administrative trustees and the property
trustee to conduct the affairs of and to operate the trust so that the trust
will not be required to register as an "investment company" under the Investment
Company Act or be classified as an association taxable as a corporation or as
other than a grantor trust for U.S. federal income tax purposes and so that the
junior debentures will be treated as our indebtedness for U.S. federal income
tax purposes. The amended trust agreement authorizes the property trustee and
the holders of common securities to take any action, not inconsistent with
applicable law, the certificate of trust of the trust or the amended trust
agreement, that they, or any successor entity, determine in their discretion to
be necessary or desirable for these purposes, as long as the action does not
adversely affect the interests of the holders of the capital securities in any
material respect.
NO PREEMPTIVE RIGHTS
Holders of the capital securities will have no preemptive or similar
rights.
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DESCRIPTION OF JUNIOR DEBENTURES
This section summarizes the material provisions of the junior debentures
and a document called the "indenture", which governs the junior debentures. The
indenture is a contract between us and Bankers Trust Company, who acts as
indenture trustee. The indenture and its associated documents, including the
junior debentures, contain the full legal text of the matters described in this
section. A copy of the indenture has been filed with the SEC as part of our
registration statement. See "Where You Can Find More Information" on page 53 for
information on how to obtain a copy.
The indenture and the junior debentures are governed by New York law.
ISSUANCE AND GENERAL CHARACTERISTICS
We will issue the junior debentures under the indenture concurrently with
the issuance of the capital securities. The trust will use the proceeds from the
sale of the capital securities, together with the consideration we will pay for
the common securities, to purchase the junior debentures. The junior debentures
will initially have an aggregate principal amount of $ , which will
equal the sum of the initial aggregate liquidation amount of the capital
securities and the common securities. Unless the trust distributes the junior
debentures in exchange for the capital securities as described below, the junior
debentures will be held in the name of the property trustee in trust for the
benefit of the holders of the capital securities and common securities.
The junior debentures will be our general and unsecured obligations and
will be subordinated in right of payment to all of our senior indebtedness as
described in "-- Subordination". Because we are a holding company, the junior
debentures will also effectively be subordinated to all existing and future
liabilities of our bank or non-bank subsidiaries.
The junior debentures will have a stated maturity of , 20 .
INTEREST
Interest will accrue on the principal of the junior debentures from their
original issue date at the annual rate of %. Unless deferred as described
below, interest will be payable semi-annually in arrears on
and of each year commencing on , 1999, to the persons who are the
record holders of the junior debentures at the close of business on the or
next preceding the relevant 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.
We will have the right to defer the payment of interest on the junior
debentures as long as no indenture event of default has occurred and is
continuing, as described in "Description of Capital Securities --
Distributions -- Deferral periods". During a deferral period, interest will
continue to accrue on the junior debentures and additional interest will accrue
on each deferred interest payment at the yearly rate of %, compounded
semi-annually from the corresponding interest payment date. The term "interest",
wherever we use it in this prospectus with respect to the junior debentures,
includes any of this additional interest. In addition, during any deferral
period, the indenture will prohibit us and our subsidiaries from taking certain
actions described in "Description of Capital
Securities -- Distributions -- Deferral period restrictions".
Any interest that would otherwise become due and payable in respect of any
junior debentures during a deferral period will not become due and payable until
the day after the period ends. If the principal of any junior debentures becomes
due and payable on a day that would otherwise occur during a deferral period,
that period will end automatically on the next preceding day.
REDEMPTION
We will have the option to redeem the junior debentures before the stated
maturity as follows:
(1) in whole at any time or in part from time to time, provided that no partial
redemption may occur during a deferral period; or
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(2) in whole at any time within 90 days after the occurrence of a Tax Event or
a Capital Treatment Event.
The definitions of "Tax Event" and "Capital Treatment Event" are set forth
in "Description of Capital Securities -- Redemption".
If we redeem any junior debentures, we will do so at the relevant
redemption prices set forth in "Description of Capital
Securities -- Redemption -- Repayment and redemption of junior debentures".
Unless we default in payment of the redemption price, interest will cease to
accrue on the junior debentures called for redemption on and after the
redemption date. We may not redeem any junior debentures on a redemption date
that would occur during a deferral period unless we redeem all of the
outstanding junior debentures.
We must give notice of any redemption to the holders of the junior
debentures not less than 30 days nor more than 60 days before the redemption
date, in the manner described below under "-- Notices". In all other respects,
the procedures for redeeming the junior debentures will be similar to those for
redeeming the capital securities. See "Description of Capital
Securities -- Redemption -- Redemption procedures".
Payment of additional sums. As described under "Description of Capital
Securities -- Redemption -- Payment of additional sums", if a Tax Event has
occurred and is continuing, we may be obligated to pay additional sums on the
junior debentures.
EXCHANGE OF CAPITAL SECURITIES FOR JUNIOR DEBENTURES
As described under "Description of Capital Securities -- Exchange of
capital securities for junior debentures", we may elect to dissolve the trust
and cause the trust to distribute a like amount of the junior debentures to the
holders of the capital securities and common securities in exchange for these
securities. Junior debentures distributed in exchange for capital securities
held in book-entry form will also be issued, upon the distribution, in
book-entry form. We expect that the book-entry arrangements for the junior
debentures will be substantially similar to those that will apply to the capital
securities. For further information on book-entry arrangements, see "Book-Entry
Issuance".
If an exchange distribution occurs, we will be obligated to use our best
efforts to list the junior debentures on the NYSE or any other stock exchange or
organization on which the capital securities are then listed. We can give no
assurance as to the market price of any junior debentures that may be
distributed to the holders of the capital securities.
CERTAIN COVENANTS MADE BY US IN THE INDENTURE
We will make the following covenants in the indenture:
-- to hold, directly or indirectly through one or more of our
subsidiaries, 100% of the common securities, provided that permitted
successors under the indenture may succeed to our ownership of the
common securities;
-- not to voluntarily terminate, wind-up or liquidate the trust, except
with the prior approval of the Federal Reserve, if then required, and
either in connection with (1) a distribution of junior debentures in
exchange for capital securities or (2) any merger, consolidation or
amalgamation permitted by the amended trust agreement; and
-- to use our reasonable efforts, consistent with the amended trust
agreement, to cause the trust to be classified as a grantor trust and
not to be taxable as a corporation for U.S. federal income tax
purposes.
MODIFICATION OF THE INDENTURE
From time to time we and the indenture trustee may, without the consent of
the holders of the junior debentures, amend, waive or supplement the indenture
for specified purposes. These include curing ambiguities, defects or
inconsistencies, provided that doing so does not adversely affect the interests
of the
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holders of the junior debentures or the capital securities in any material
respect, and qualifying, or maintaining the qualification of, the indenture
under the Trust Indenture Act.
The indenture also permits us and the indenture trustee, with the consent
of the holders of a majority of the outstanding junior debentures, to modify the
indenture in any manner whatsoever. However, we and the indenture trustee may
not modify the indenture in the following ways without the consent of the holder
of each outstanding junior debenture:
-- change the stated maturity of the junior debentures;
-- reduce the principal amount of the junior debentures;
-- reduce the rate of interest on or any premium payable upon the
redemption of the junior debentures;
-- change the place of payment where, or the currency in which, any
amount is payable on the junior debentures;
-- impair the right to institute a suit for enforcement of any junior
debenture; or
-- reduce the percentage of principal amount of the outstanding junior
debentures, the holders of which are required to consent to any
modification of the indenture.
As long as the capital securities are outstanding, any modification, waiver
or termination of the indenture which will adversely affect the holders of the
capital securities cannot be made without obtaining the consent of at least a
majority of the holders of capital securities. See "Description of Capital
Securities -- Enforcement rights".
INDENTURE EVENTS OF DEFAULT
Each of the following events will be an "indenture event of default":
-- failure to pay any interest or additional sum on the junior
debentures when due and continuation of the default for 30 days,
subject to any deferral period;
-- failure to pay any principal of the junior debentures when due;
-- failure to observe or perform any other covenants in the indenture in
any material respect for 90 days after written notice has been given
to us by the indenture trustee or the holders of at least 25% of the
outstanding junior debentures; and
-- certain events of bankruptcy, insolvency or reorganization of
KeyCorp.
If an indenture event of default has occurred and is continuing, either the
indenture trustee or the holders of not less than 25% of the outstanding junior
debentures may declare the principal of all junior debentures to be due and
payable immediately. If the capital securities are outstanding and the indenture
trustee or those holders of junior debentures fail to exercise this right, the
holders of at least 25% of the outstanding capital securities may do so.
The holders of a majority of the outstanding junior debentures may annul
any declaration of acceleration if we paid or deposited with the property
trustee all matured installments of interest and principal, and any additional
sums, due otherwise than by acceleration. Upon such payment, if the holders of
junior debentures do not exercise this right, the holders of a majority of the
outstanding capital securities may do so.
The holders of a majority of the outstanding junior debentures may waive
any default under the indenture other than:
-- a default in the payment of principal or interest, and any additional
sum, unless the default has been cured; or
-- a default in respect of a covenant that under the indenture cannot be
modified or amended without the consent of the holder of each
affected junior debenture.
If the holders of the junior debentures do not waive a default under the
indenture as permitted, the holders of a majority in aggregate liquidation
amount of the outstanding capital securities may do so.
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The holders of a majority of outstanding junior debentures will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the indenture trustee. This right, as well as the rights of
the holders of junior debentures with regard to acceleration, annulment and
waiver described above, will be subject to the enforcement rights of the holders
of capital securities when the capital securities are outstanding. See
"Description of Capital Securities -- Enforcement rights". We will be obligated
to provide the indenture trustee, and, if the capital securities are
outstanding, the property trustee, annually a certificate as to whether or not
we are in compliance with the applicable provisions of the indenture.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
We may not consolidate with, or merge with or into, or convey, transfer or
lease our properties and assets substantially as an entirety to, any other
entity, referred to as a "successor transaction", unless the following
conditions are satisfied:
-- the successor entity, if not us, must be organized under the laws of
the United States or any state of the United States or the District
of Columbia, and must expressly assume our obligations in respect of
the junior debentures, the indenture, the guarantee and the expense
agreement;
-- immediately after giving effect to the transaction, no indenture
event of default, and no event that, after notice or lapse of time or
both, would become an indenture event of default, will have occurred
and be continuing;
-- such transaction is permitted under the amended trust agreements; and
-- we deliver to the property trustee an officer's certificate and
opinion of counsel, each stating that such transaction complies with
the indenture and that the property trustee can rely on the opinion
and certificate.
The general provisions of the indenture do not afford holders of the junior
debentures or capital securities protection in the event of a highly leveraged
or other transaction involving us that may adversely affect the interests of
those holders.
SATISFACTION AND DISCHARGE
Except as noted below, the indenture will cease to be of further effect,
and we will be deemed to have satisfied and discharged the indenture, when the
following conditions have been satisfied:
-- all junior debentures not previously delivered to the indenture
trustee for cancellation have become due and payable or will become
due and payable at their stated maturity or on a redemption date
within one year;
-- we deposit with the indenture trustee, in trust, funds sufficient to
pay the entire indebtedness on those junior debentures not previously
delivered for cancellation, for the principal and interest, including
any additional sums, to the date of the deposit for junior debentures
that have become due and payable or to the stated maturity or the
redemption date, as the case may be; and
-- we delivered to the indenture trustee an officer's certificate and an
opinion of counsel each stating that we complied with the conditions
relating to the satisfaction of the indenture, as stated above.
We will remain obligated to provide for registration of transfer and
exchange and notices of redemption and in other ministerial respects.
SUBORDINATION
To the extent set forth in the indenture, the junior debentures will be
subordinated in right of payment to all of our senior indebtedness. The
subordination provisions will have the following significant effects.
If we default in the payment of any principal, interest or other amount
payable on any senior indebtedness when the same becomes due and payable, we may
not make or agree to make any payment in respect of the junior debentures, or in
respect of any redemption, repayment, retirement, purchase or other acquisition
of the junior debentures, unless and until that default has been cured or waived
or has otherwise
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ceased to exist, or all senior indebtedness has been paid. This prohibition
would apply to payments of principal, interest and additional sums on any junior
debentures, as well as to payments in respect of any acquisition or retirement
of junior debentures.
In addition, if any of the following events occurs, all senior
indebtedness, including any interest that accrues after the commencement of any
proceedings, must be paid in full before any payment or distribution may be made
on account of the junior debentures:
-- the commencement of any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other
similar proceeding relating to us, our creditors or our property;
-- the commencement of any proceeding for the liquidation, dissolution
or other winding up of KeyCorp, voluntary or involuntary, whether or
not involving insolvency or bankruptcy proceedings;
-- any assignment by us for the benefit of creditors; or
-- any other marshaling of our assets.
In any of these events, any payment or distribution on account of the
junior debentures that would otherwise, but for the subordination provisions, be
payable or deliverable in respect of the junior debentures will be paid or
delivered directly to the holders of senior indebtedness in accordance with the
priorities then existing among those holders, until all senior indebtedness,
including any post-commencement interest, has been paid in full.
In the event of any proceeding described above, after payment in full of
all sums owing with respect to senior indebtedness, the holders of junior
debentures, together with the holders of any of our obligations ranking equally
with the junior debentures, will be entitled to be paid from our remaining
assets the amounts at the time due and owing on the junior debentures and those
other obligations before any payment or other distribution will be made on
account of any of our capital stock or any of our obligations ranking junior in
right of payment to the junior debentures.
If any holder of junior debentures receives any payment or distribution on
account of the junior debentures before all the senior indebtedness has been
paid in full, or otherwise in contravention of any of the subordination
provisions, the holder must receive the payment or distribution in trust for the
benefit of, and must pay over or deliver and transfer the same to, the holders
of the senior indebtedness at the time outstanding in accordance with the
priorities then existing among them for application to the payment of all senior
indebtedness remaining unpaid, to the extent necessary to pay all the senior
indebtedness in full.
If we become insolvent, then by reason of the subordination provisions,
holders of senior indebtedness may receive more, ratably, and holders of the
junior debentures may receive less, ratably, than our other creditors.
Definition of senior indebtedness. "Senior indebtedness" includes:
-- "senior debt", which means any of our obligations to our creditors,
whether now outstanding or incurred in the future, other than (1) any
obligation as to which, in the instrument creating or evidencing the
obligation or under which the obligation is outstanding, it is
provided that the obligation is not senior debt and (2) trade
accounts payable and accrued liabilities arising in the ordinary
course of business; and
-- the amounts necessary to pay all principal of, and premium, if any,
and interest, if any, on "senior subordinated debt" in full less, if
applicable, any portion of such amounts which would have been paid
to, and retained by, the holders of such senior subordinated debt but
for the fact that such senior subordinated debt is subordinate or
junior in right of payment to trade accounts payable or accrued
liabilities arising in the ordinary course of business.
"Senior subordinated debt" means any of our obligations to our creditors,
whether now outstanding or incurred in the future, where the instrument creating
or evidencing the obligation or under which the obligation is outstanding,
provides that it is subordinate and junior in right of payment to senior debt.
Senior subordinated debt includes our outstanding subordinated debt securities
and any subordinated debt securities issued in the future with substantially
similar subordinated terms, but does not include:
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-- the junior debentures described in this prospectus;
-- our 7.826% Junior Subordinated Deferrable Interest Debentures issued
to a subsidiary trust on December 4, 1996;
-- our 8.250% Junior Subordinated Deferrable Interest Debentures issued
to a subsidiary trust on December 30, 1996;
-- our Floating Rate Junior Subordinated Deferrable Interest Debentures
issued to a subsidiary trust on June 25, 1998;
-- our 6.875% Junior Subordinated Deferrable Interest Debentures issued
to a subsidiary trust on March 17, 1999; or
-- any subordinated debt securities issued in the future with
substantially similar subordinated terms.
Senior debt does not include senior subordinated debt or the junior
debentures.
The indenture places no limitation on the amount of additional senior
indebtedness that we may incur in the future. We expect from time to time to
incur additional senior indebtedness. As of March 31, 1999, we had approximately
$24.1 billion of senior indebtedness outstanding.
PAYMENT AND PAYING AGENTS
Unless we distribute the junior debentures in exchange for the capital
securities, payments in respect of the junior debentures will be made to or upon
the order of the property trustee. If in the future we distribute the junior
debentures in exchange for the capital securities, payments in respect of the
junior debentures will be made in accordance with provisions similar to those
applicable to payments in respect of the capital securities. For further
information, see "Description of Capital Securities -- Payment and paying
agency".
NOTICES
Notices to holders of junior debentures under the indenture will also be
given to the holders of the capital securities in accordance with provisions
similar to those described in "Description of Capital Securities -- Notices" and
to the property trustee. If in the future we distribute the junior debentures in
exchange for the capital securities, notices to holders of junior debentures
will be given to those holders in accordance with the provisions for notices to
capital securities holders referred to above.
THE INDENTURE TRUSTEE
The indenture trustee will have all the duties and responsibilities
specified with respect to an indenture trustee under the Trust Indenture Act.
Subject to those provisions, the indenture trustee will have no obligation to
exercise any of the powers vested in it by the indenture at the request of any
holder of junior debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities that might be incurred. The
indenture trustee will not be required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties if
it reasonably believes that repayment or adequate indemnity is not reasonably
assured to it.
Bankers Trust Company, the debenture trustee, may serve from time to time
as trustee under other indentures or trust agreements entered into with us or
our subsidiaries relating to issues of other securities. In addition, we and
some of our affiliates may have other banking relationships with Bankers Trust
Company.
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DESCRIPTION OF THE GUARANTEE AND THE EXPENSE AGREEMENT
This section summarizes the material provisions of the guarantee agreement
and the agreement as to expenses and liabilities. The guarantee agreement and
the expense agreement contain the full legal text of the matters described in
this section and are governed by New York law. We have filed with the SEC a form
of each of these agreements as exhibits to our registration statement. See
"Where to Find More Information" on page 53 for information on how to obtain a
copy.
THE GUARANTEE
We will execute a guarantee agreement when the capital securities are
issued. Bankers Trust Company will act as trustee under the guarantee for the
purpose of compliance with the Trust Indenture Act, and the guarantee will be
qualified as an indenture under the Trust Indenture Act. The guarantee trustee
will hold the guarantee for the benefit of the holders of the capital
securities.
Under the guarantee, we will irrevocably and unconditionally agree to pay
in full, on a subordinated basis and to the extent described below, to the
holders of the capital securities, the guarantee payments as and when due,
regardless of any defense, right of set-off or counterclaim that the trust may
have or assert other than the defense of payment. The following payments in
respect of the capital securities, to the extent not paid by or on behalf of the
trust, are "guarantee payments":
-- any accumulated and unpaid distributions required to be paid on the
capital securities, to the extent that the trust has funds legally
and immediately available to pay them;
-- any redemption price required to be paid on the capital securities,
to the extent that the trust has funds legally and immediately
available to pay it; and
-- upon a voluntary or involuntary termination, winding-up or
liquidation of the trust unless the junior debentures are distributed
to holders of the capital securities in exchange for these
securities, the lesser of (1) the liquidation distribution for the
capital securities and (2) the amount of assets of the trust
remaining available for distribution to holders of capital securities
after satisfaction of liabilities to creditors of the trust as
required by applicable law.
We may satisfy our obligation to make a guarantee payment by paying the
required amounts directly to the holders of the capital securities, or by
causing the trust to pay them to the holders.
We will be required to make payments under the guarantee only to the extent
that the trust has funds sufficient to make payments in respect of its
obligations under the capital securities. If and to the extent we do not make
payments on the junior debentures, the trust will not be able to make payments
on the capital securities and will not have funds available to do so. However,
through the guarantee, the amended trust agreement, the junior debentures, the
indenture and the expense agreement, taken together, we have fully, irrevocably
and unconditionally guaranteed all the trust's obligations under the capital
securities. See "Relationship Among Capital Securities, Junior Debentures, the
Guarantee and the Expense Agreement".
The guarantee will guarantee payment and not collection. This means that
any holder of outstanding capital securities may begin a legal proceeding
directly against us to enforce its rights under the guarantee without first
beginning a legal proceeding against the trust, the guarantee trustee or any
other party.
STATUS OF THE GUARANTEE
The guarantee will be a general unsecured obligation of KeyCorp and will be
subordinated in right of payment to all of our senior indebtedness in the same
manner as the junior debentures.
Because we are a holding company, our obligations under the guarantee, like
our obligations under the junior debentures, will also be effectively
subordinated to all existing and future liabilities of our bank subsidiaries and
any other subsidiaries we may have. See "Description of Junior Debentures --
Subordination".
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AMENDMENTS, ASSIGNMENT AND SUCCESSION
We and Bankers Trust Company may not amend the guarantee in a way that will
adversely affect in any material respect the rights of the holders of the
capital securities without the consent of a majority of the outstanding capital
securities. The manner of obtaining any such approval will be similar to the
manner in which any approval to amend the amended trust agreement may be
obtained. See "Description of Capital Securities -- Amendment of the trust
agreement".
We may not assign our obligations under the guarantee except in connection
with a merger, consolidation or amalgamation which is permitted under the
indenture. In addition, any permitted successor to our obligations under the
indenture will also succeed to our obligations under the guarantee. See
"Description of Junior Debentures -- Consolidation, merger, sale of assets and
other transactions". The guarantee will bind our successors, assigns, receivers,
trustees and representatives and will inure to the benefit of the holders of the
outstanding capital securities.
EVENTS OF DEFAULT
An event of default under the guarantee will occur if we fail to (1) make
any guarantee payment when obligated to do so, or (2) perform any other
obligation and the default remains unremedied for 30 days. The holders of a
majority of the outstanding capital securities will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the guarantee trustee or to direct the exercise of any trust or power conferred
upon the guarantee trustee under the guarantee.
We, as guarantor, will be obligated to file annually with the guarantee
trustee a certificate as to our compliance with all the conditions and covenants
applicable to us under the guarantee.
THE GUARANTEE TRUSTEE
The guarantee trustee undertakes to perform only those duties that are
specifically set forth in the guarantee, except that, after a default by us
under the guarantee, it must exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the guarantee trustee is under no obligation to
exercise any of the powers vested in it by the guarantee at the request of any
holder of capital securities unless it is offered reasonable indemnity against
the costs, expenses and liabilities that it might incur as a result.
TERMINATION OF THE GUARANTEE
The guarantee will terminate and be of no further force or effect (1) when
the guarantee payments have been paid in full by us, the trust or both or (2)
when the junior debentures are distributed to the holders of the capital
securities in exchange for their securities. Until that time, the guarantee will
remain in full force and effect. In addition, the guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of the capital securities must restore payment of any sums paid to it under the
capital securities or the guarantee.
THE EXPENSE AGREEMENT
In the expense agreement, we will irrevocably and unconditionally guarantee
to each person to whom the trust becomes indebted or liable, the full payment of
all the trust's costs, expenses and liabilities, other than the obligations of
the trust to pay amounts due to the holders of the capital securities and common
securities pursuant to the terms of those securities. The expense agreement will
be enforceable by third parties.
Our obligations under the expense agreement will be subordinated in right
of payment to the same extent as the guarantee. Our obligations under the
expense agreement will be subject to provisions regarding amendment,
termination, assignment, succession and governing law similar to those
applicable to the guarantee.
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RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE JUNIOR
DEBENTURES, THE GUARANTEE AND THE EXPENSE AGREEMENT
FULL, IRREVOCABLE AND UNCONDITIONAL GUARANTEE
Taken together, our obligations under the trust agreement, the junior
debentures, the indenture, the guarantee and expense agreement provide a full,
irrevocable and unconditional guarantee of the trust's obligations under the
capital securities. No single document standing alone or operating in
conjunction with fewer than all the other documents provides this guarantee. It
is only the combined operation of these documents that has the effect of
providing a full, irrevocable and unconditional guarantee of the trust's
obligations under the capital securities.
If and to the extent that we do not make payments on the junior debentures,
the trust will not have funds available for payments on the capital securities.
The guarantee will not apply to payment of any amounts due on the capital
securities when the trust does not have available funds to pay those amounts. In
that event, the remedy of a holder of capital securities is to exercise its
right of direct action -- that is, to begin a legal proceeding directly against
us for enforcement of our obligations under junior debentures.
If we make payment on the junior debentures and the trust has funds
available to make payments on the capital securities but fails to do so, a
holder of capital securities may begin a legal proceeding against us to enforce
our obligations under the guarantee to make these payments or to cause the trust
to make these payments. In the event that the trust receives payments on the
junior debentures, but these funds are unavailable for payment on the capital
securities because of claims made by creditors of the trust, we would be
obligated under the expense agreement to pay those claims.
Our obligations under the junior debentures, the guarantee and the expense
agreement are subordinated in right of payment to all of our senior
indebtedness. They are subordinated in the manner described in "Description of
Junior Debentures -- Subordination" and "Description of the Guarantee and the
Expense Agreement -- Status of the guarantee".
SUFFICIENCY OF PAYMENTS
As long as payments are made when due on the junior debentures, those
payments should be sufficient to fund distributions and other amounts payable on
the capital securities, primarily because:
-- the aggregate principal amount of the junior debentures will equal
the aggregate liquidation amount of the capital securities and the
common securities;
-- the interest rate, interest payment dates and other payment dates for
the junior debentures will match the distribution rate, distribution
dates and other payment dates for the capital securities;
-- the expense agreement provides that we will pay any and all costs,
expenses and liabilities of the trust, other than the trust's
obligations under the capital securities and common securities; and
-- the amended trust agreement provides that the trust will not engage
in any activity that is not consistent with the limited purposes of
the trust.
Despite anything to the contrary in the indenture, we have the right to set
off any payment we make under the guarantee in respect of the capital securities
against any payment we are otherwise required to make under the indenture in
respect of the junior debentures.
ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of capital securities may begin a legal proceeding directly
against us to enforce its right of direct action under the indenture without
first beginning a legal proceeding against the trust, the property trustee or
any other party. A holder of capital securities may also begin a legal
proceeding directly against us to enforce its rights under the guarantee without
first instituting a legal proceeding against the guarantee trustee, the trust or
any other party.
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A default or event of default under any of our senior indebtedness would
not be a default with respect to the capital securities or the junior
debentures. However, in the event of a payment default under, or acceleration
of, any of our senior indebtedness, the subordination provisions of the
indenture provide that no payments may be made in respect of the junior
debentures, until the senior indebtedness has been paid in full or any payment
default under that debt has been cured or waived. See "Description of Junior
Debentures -- Subordination".
LIMITED PURPOSE OF ISSUER TRUST
The capital securities evidence a preferred undivided beneficial interest
in the assets of the trust, and the trust exists solely to issue and sell the
capital securities and common securities, invest the sale proceeds in the junior
debentures and engage only in such other activities as may be necessary or
incidental to those activities. A principal difference between the rights of a
holder of capital securities against the trust and those of a holder of junior
debentures against us is that a holder of junior debentures is entitled to
receive from us all amounts payable on the junior debentures, while a holder of
capital securities is entitled to receive from the trust, or from us under the
guarantee, amounts payable on the capital securities only if and to the extent
the trust has funds available to pay those amounts.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary dissolution of the trust, the holders of
capital securities will be entitled to receive a like amount of junior
debentures in exchange for their capital securities, subject to prior
satisfaction of liabilities to creditors of the trust. If the property trustee
determines that a distribution of junior debentures is not practical, the
holders of capital securities will be entitled to receive a liquidation
distribution out of the assets held by the trust after satisfaction of those
liabilities. For further information, see "Description of Capital
Securities -- Liquidation distribution upon termination".
Upon any voluntary or involuntary liquidation or bankruptcy of KeyCorp, the
property trustee, as registered holder of the junior debentures, would be our
creditor subordinated in right of payment to all of our senior indebtedness as
set forth in the indenture. However, the property trustee would be entitled to
receive payment in full of all amounts payable with respect to the junior
debentures before any holders of our capital stock receive payments or
distributions.
In light of the effective guarantee provided by the combined operation of
the documents described above and the subordinated status of the obligations
they evidence, the positions of a holder of capital securities and a holder of
junior debentures, in the event of our liquidation or bankruptcy, should be
substantially the same, relative to our other creditors and to our shareholders.
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BOOK-ENTRY ISSUANCE
The information in this section has been obtained from sources that we and
the trust believe to be accurate, but we nor the trust assume responsibility for
its accuracy. None of us, the trustees nor the trust has any responsibility for
the performance by DTC or its participants of their respective obligations as
described in this section or under the rules and procedures governing their
respective operations.
The capital securities will be issued in the form of one or more global
certificates. A global certificate represents a large amount of securities and
is registered in the name of a financial institution that holds the certificate
as a depositary on behalf of its customers, who in turn own the beneficial
interests in those securities. The capital securities global certificates will
be registered in the name of DTC, which will act as securities depositary for
all of the capital securities except in the circumstances we describe at the end
of this section. We refer to capital securities represented by a global
certificate as being issued in "global" or "book-entry" form.
THE DTC SYSTEM
DTC has advised us that it is a limited-purpose trust company created to
hold securities for its participating organizations, or its "participants", and
to facilitate the clearance and settlement of transactions in those securities
between participants through electronic book-entry changes in accounts of its
participants. The participants include securities brokers and dealers including
the underwriters, banks, trust companies, clearing corporations and certain
other organizations. Access to DTC's system is also available to other entities
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly. We refer to these entities as "indirect participants".
If you buy capital securities while they are represented by a global
certificate, you must do so through a participant, which will receive a credit
in DTC's book-entry system for those capital securities, and your ownership
interest will in turn be recorded on the participant's records. We refer to
persons who have acquired an interest in a global security as a "beneficial
owner". Beneficial owners will not receive written confirmation from DTC of
their purchases, but we expect that beneficial owners will receive written
confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the participants through which they purchased
the capital securities. Transfers by beneficial owners of ownership interests in
the global certificates will be accomplished by entries made on the books of
participants or indirect participants acting on their behalf. Transfers between
DTC's participants will be effected in the ordinary way in accordance with DTC's
rules and will be settled in same-day funds. Beneficial owners will not receive
certificates representing their ownership interests in capital securities,
unless the book-entry system for the capital securities is discontinued, which
will only happen under the circumstances we describe at the end of this section.
DTC has no knowledge of the actual beneficial owners of the capital
securities. DTC's records reflect only the identity of the participants to whose
accounts the capital securities are credited, which may or may not be the
beneficial owners. The participants and indirect participants are responsible
for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to participants, by
participants to indirect participants and by participants and indirect
participants to beneficial owners, as well as the voting rights of participants,
indirect participants and beneficial owners, will be governed by arrangements
among them. Those arrangements may be subject to statutory or regulatory
requirements in effect from time to time.
Redemption notices will be sent to DTC or its nominee as the registered
holder of the capital securities. If less than all of the capital securities are
being redeemed, DTC's current practice is to determine by lot the amount of the
interest of each participant to be redeemed. Although voting with respect to the
capital securities is limited to the holders of record of the capital
securities, in those instances in which a vote is required, neither DTC nor its
nominee will itself consent or vote with respect to the capital securities.
Under its usual procedures, DTC would mail an omnibus proxy to the property
trustee as soon as possible after the
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record date. The omnibus proxy assigns the consenting or voting rights of DTC or
its nominee to those participants to whose accounts the capital securities are
credited on the record date identified in a listing attached to the omnibus
proxy.
EXCHANGE OF GLOBAL CERTIFICATES FOR NON-GLOBAL CERTIFICATES
Capital securities represented by a global certificate will not be
exchanged for capital securities represented by a non-global certificate -- that
is, one registered in the name of a person other than DTC or its nominee --
unless any of the following events occurs:
-- DTC notifies the trust that it is unwilling or unable to continue as
depositary for the global certificate and no successor depositary has
been appointed;
-- DTC ceases to be a clearing agency registered under the Securities
Exchange Act of 1934 at any time when it is required to be so
registered to act as a depositary;
-- we, in our sole discretion determine that the global certificate will
be exchangeable; or
-- an indenture event of default has occurred and is continuing, and
holders of a majority of the outstanding capital securities determine
to discontinue the system of book-entry transfers.
Any global certificate that is exchangeable as described above will be
exchangeable for non-global certificates registered in the names that DTC
directs. We expect that DTC will base these directions on instructions received
by it from its participants with respect to ownership of beneficial interests in
the global certificate. If capital securities are issued in non-global form,
they will be issued in denominations of $1,000 and multiples of that amount and
may be transferred or exchanged at the corporate office of the property trustee
in New York, New York, or at the offices of any paying agent or transfer agent
chosen by the property trustee and acceptable to the administrators.
BENEFICIAL OWNERS WILL NOT BE REGISTERED OWNERS
As the registered holder of the global certificate representing the capital
securities, DTC or its nominee will be the sole owner and holder of all the
capital securities for all purposes under the amended trust agreement, the
indenture and the guarantee. Consequently, unless and until beneficial owners
receive non-global certificates representing their ownership interests in the
capital securities and registered in their own name, beneficial owners will not
be considered the registered owners or holders of the capital securities for any
purpose under those documents. We and the trust will make all payments and give
all notices required to be made or given under those documents directly to DTC
or its nominee and not to any beneficial owner. Once we and the trust do so, we
and the trust will have no further responsibility for any payments or notices,
even if DTC or its nominee, or any participant or indirect participant, fails to
pass them along to the beneficial owners.
The rights and interests of beneficial owners will be subject to the rules
and practices of DTC and its participants and indirect participants, as
applicable. The rules and practices are subject to change by them, and we assume
no responsibility for those rules and practices.
The laws of some jurisdictions require that certain purchasers must take
physical delivery of securities in non-global form. As a result, the ability to
transfer beneficial interests in a global certificate to those purchasers may be
limited. Also, the ability of beneficial owners to pledge their beneficial
interests to persons or entities that do not participate in the DTC system, or
otherwise take actions in respect of those interests, may be impaired by the
lack of a non-global certificate representing those interests.
REGISTRATION OF JUNIOR DEBENTURES
The junior debentures will initially be registered in the name of and held
by the property trustee. If in the future the junior debentures are distributed
to the holders of capital securities in exchange for the capital securities and
the capital securities are then held in book-entry form, the junior debentures
would be distributed in book-entry form. We expect that the book-entry
arrangements applicable to the junior
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debentures would be similar to those applicable to the capital securities. If
junior debentures are issued in non-global form, they will be issued in
denominations of $1,000 and multiples of that amount.
DTC YEAR 2000 EFFORTS
DTC has advised us that its management is aware that some computer
applications systems, and the like for processing data that are dependent upon
calendar dates, including dates before, on and after January 1, 2000, may
encounter "Year 2000 problems".
DTC has informed its participants and other members of the financial
community, or the industry, that it has developed and is implementing a program
so that its systems, as the same relate to the timely payment of distributions,
including principal and income payments, to securityholders, book-entry
deliveries, and settlement of trades within DTC continue to function
appropriately. This program includes a technical assessment and a remediation
plan, each of which is complete.
Additionally, DTC's plan includes a testing phase, which is expected to be
completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as third-party vendors from whom DTC licenses software and hardware, and
third-party vendors on whom DTC relies for information or the provision of
services, including telecommunication and electrical utility service providers,
among others. DTC has informed the industry that it is contacting and will
continue to contact third-party vendors from whom DTC acquires services to:
-- impress upon them the importance of such services being Year 2000
compliant; and
-- determine the extent of their efforts for Year 2000 remediation, and,
as appropriate, testing, of their services.
In addition, DTC is in the process of developing contingency plans as it
deems appropriate.
According to DTC, the preceding year 2000 information has been provided to
the industry for informational purposes only and is not intended to serve as a
representation, warranty or contract modification of any kind.
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U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion of the material U.S. federal income tax
consequences to the purchase, ownership and disposition of capital securities
only addresses the tax consequences to a U.S. holder that acquires capital
securities on their original issue date at their original offering price and
holds the capital securities as a capital asset for tax purposes. You are a U.S.
holder if you are a beneficial owner of a capital security that is:
-- a citizen or resident of the United States;
-- a domestic corporation;
-- an estate whose income is subject to U.S. federal income tax
regardless of its source; or
-- a trust if a U.S. court can exercise primary supervision over the
trust's administration and one or more U.S. persons have authority to
control all substantial decisions of the trust.
This section does not apply to you if you are a member of a class of
holders subject to special rules, such as:
-- a dealer in securities or currencies;
-- a trader in securities that elects to use a mark-to-market method of
accounting;
-- a bank;
-- an insurance company;
-- a thrift institution;
-- a regulated investment company;
-- a real estate investment trust;
-- a tax-exempt organization;
-- a person that holds capital securities that are a hedge or that are
hedged against interest rate or currency risks;
-- a person that holds capital securities as part of a straddle or
conversion transaction for tax purposes; or
-- a person whose functional currency is not the U.S. dollar.
The statements of law or legal conclusion set forth in this section
constitute the opinion of Sullivan & Cromwell, special tax counsel to us and the
trust. This section is based upon the U.S. Internal Revenue Code of 1986, as
amended, its legislative history, existing and proposed regulations under the
Internal Revenue Code, published rulings and court decisions, all as currently
in effect. These laws are subject to change, possibly on a retroactive basis.
The authorities on which this section is based are subject to various
interpretations, and it is therefore possible that the federal income tax
treatment of the purchase, ownership and disposition of capital securities may
differ from the treatment described below.
PLEASE CONSULT YOUR OWN TAX ADVISOR CONCERNING THE CONSEQUENCES OF OWNING
THE CAPITAL SECURITIES IN YOUR PARTICULAR CIRCUMSTANCES UNDER THE INTERNAL
REVENUE CODE AND THE LAWS OF ANY OTHER TAXING JURISDICTION.
CLASSIFICATION OF THE JUNIOR DEBENTURES AND THE TRUST
Under current law and assuming full compliance with the terms of the
amended trust agreement and the indenture, the trust will not be taxable as a
corporation for U.S. federal income tax purposes. As a result, you will be
required to include in your gross income your proportional share of the interest
income, including original issue discount, paid or accrued on the junior
debentures, whether or not the trust actually distributes cash to you.
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INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under Treasury regulations, an issuer and the Internal Revenue Service will
ignore a "remote" contingency that stated interest will not be timely paid when
determining whether a junior debenture is issued with OID. We believe that the
likelihood of exercising our option to defer interest payments is remote because
we would be prohibited from making certain distributions on our capital stock
and payments on our indebtedness if we exercise that option. Accordingly, we
believe that the junior debentures will not be considered to be issued with OID
at the time of their original issuance.
Under these regulations, if we were to exercise our option to defer any
payment of interest, the junior debentures would at that time be treated as
issued with OID, and all stated interest on the junior debentures would
thereafter be treated as OID as long as the junior debentures remained
outstanding. In that event, all of your taxable interest income on the junior
debentures would be accounted for as OID on an economic accrual basis regardless
of your method of tax accounting, and actual distributions of stated interest
would not be reported as taxable income. Consequently, you would be required to
include OID in gross income even though we would not make any actual cash
payments during a deferral period.
These regulations have not been addressed in any rulings or other
interpretations by the Internal Revenue Service, and it is possible that the
Internal Revenue Service could take a position contrary to the interpretation in
this prospectus.
Because income on the capital securities will constitute interest or OID,
corporate U.S. holders of the capital securities will not be entitled to a
dividends-received deduction for any income taken into account on the capital
securities.
In the rest of this section, we assume that unless and until we exercise
our option to defer any payment of interest, the junior debentures will not be
treated as issued with OID, and whenever we use the term interest, it also
includes income in the form of OID.
DISTRIBUTION OF JUNIOR DEBENTURES TO HOLDERS OF CAPITAL SECURITIES UPON
LIQUIDATION OF THE TRUST
If the trust distributes the junior debentures as described under the
caption "Description of Capital Securities -- Liquidation distribution upon
termination", you will receive directly your proportional share of the junior
debentures previously held indirectly through the trust. Under current law, you
will not be taxed on the distribution and your holding period and aggregate tax
basis in your junior debentures will be equal to the holding period and
aggregate tax basis you had in your capital securities before the distribution.
If, however, the trust were to become taxed on the income received or accrued on
the junior debentures due to a tax event, the trust might be taxed on a
distribution of junior debentures to you, and you might recognize gain or loss
as if you had exchanged your capital securities for the junior debentures you
received upon the liquidation of the trust. You will include interest in income
in respect of junior debentures received from the trust in the manner described
above under "-- Interest income and original issue discount".
SALE OR REDEMPTION OF CAPITAL SECURITIES
If you sell your capital securities, including through a redemption for
cash, you will recognize gain or loss equal to the difference between your
adjusted tax basis in your capital securities and the amount you realize on the
sale of your capital securities. Assuming that we do not exercise our option to
defer payment of interest on the junior debentures, your adjusted tax basis in
your capital securities generally will be the price you paid for your capital
securities.
If the junior debentures are deemed to be issued with OID as a result of an
actual deferral of interest payments, your adjusted tax basis in your capital
securities generally will be the price you paid for your capital securities,
increased by OID previously includible in your gross income to the date of
disposition and decreased by distributions or other payments you received on
your capital securities since and including the date of the first deferral
period. This gain or loss generally will be a capital gain or loss, except to
the extent any amount that you realize is treated as a payment of accrued
interest on your proportional share of the
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junior debentures required to be included in income. Capital gain of a
non-corporate U.S. holder is generally taxed at a maximum rate of 20% where the
property is held for more than one year.
If we exercise our option to defer any payment of interest on the junior
debentures, your capital securities may trade at a price that does not
accurately reflect the value of accrued but unpaid interest with respect to the
underlying junior debentures. If you sell your capital securities before the
record date for the payment of distributions, then you will not receive payment
of a distribution for the period before the sale. However, you will be required
to include accrued but unpaid interest on the junior debentures through the date
of the sale as ordinary income for U.S. federal income tax purposes and to add
the amount of accrued but unpaid interest to your tax basis in the capital
securities. Your increased tax basis in the capital securities will increase the
amount of any capital loss that you may have otherwise realized on the sale. In
general, an individual taxpayer may only offset $3,000 of capital losses against
regular income during any year.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest income paid and OID accrued on your capital
securities will be reported to the Internal Revenue Service unless you are a
corporation or other exempt U.S. holder. Backup withholding at a rate of 31%
will apply to payments of interest to you unless you are an exempt U.S. holder
or you furnish your taxpayer identification number in the manner prescribed in
applicable regulations, certify that such number is correct, certify as to no
loss of exemption from backup withholding and meet certain other conditions.
Payment of the proceeds from the disposition of capital securities to or
through the U.S. office of a broker is subject to information reporting and
backup withholding unless you establish an exemption from information reporting
and backup withholding.
Any amounts withheld from you under the backup withholding rules will be
allowed as a refund or a credit against your U.S. federal income tax liability,
provided the required information is furnished to the Internal Revenue Service.
It is anticipated that the trust or its paying agent will report income on
the capital securities to the Internal Revenue Service and to you on Form 1099
by January 31 following each calendar year.
ERISA CONSIDERATIONS
If you are a fiduciary of a pension, profit-sharing or other employee
benefit plan subject to the Employee Retirement Income Security Act ("ERISA"),
you should review the fiduciary standards of ERISA and the plan's particular
circumstances before deciding to invest in the capital securities. You should
consider whether the investment would satisfy the prudence and diversification
requirements of ERISA and whether the investment would be consistent with the
terms of the plan and the other agreements which apply to plan investments.
A fiduciary of a plan subject to ERISA, as well as a person investing on
behalf of an individual retirement account or a pension or profit sharing plan
for one or more self-employed persons, should also consider whether an
investment in the capital securities could result in a prohibited transaction.
ERISA and the Internal Revenue Code prohibit plans and individual retirement
accounts from engaging in certain transactions involving plan assets with
persons who are called parties in interest under ERISA or disqualified persons
under the Internal Revenue Code with respect to the plan or individual
retirement account. A violation of these rules may result in a substantial
excise tax under the Internal Revenue Code and other liabilities under ERISA.
Employee benefit plans which are governmental plans, foreign plans or church
plans generally are not subject to the prohibited transaction rules or the
fiduciary standards of ERISA.
The assets of the trust would be treated as plan assets for purposes of the
prohibited transaction rules under a U.S. Department of Labor regulation if
plans and individual retirement accounts purchase capital securities, unless an
exception under the regulation applies. The only exception in the regulation
that could
47
<PAGE> 49
apply to the trust requires that after each purchase of capital securities in
the trust, less than 25% of the total value of the securities is held by:
(1) plans subject to ERISA, individual retirement accounts and plans for
self-employed persons;
(2) other employee benefit plans not subject to ERISA, such as governmental,
church and foreign plans; and
(3) entities which are considered to hold assets of a plan subject to ERISA
according to the regulation.
The plans, individual retirement accounts and entities described in clauses
(1), (2) and (3) are referred to as "benefit plan investors". The underwriters
cannot be certain that benefit plan investors will hold less than 25% of the
total value of capital securities when the initial offering is completed. After
that time, when a person sells capital securities, no one will review the
securities held by benefit plan investors to determine if the exception applies.
Some of the transactions involving the trust could be treated as prohibited
transactions if the trust's assets were considered to be plan assets. For
example, if we are a party in interest or a disqualified person with respect to
a plan or individual retirement account which buys capital securities, either
directly or because we own banking or other subsidiaries, extensions of credit
from us and the trust would likely be prohibited transactions unless an
administrative exemption issued by the Department of Labor applies.
The Department of Labor has issued five class exemptions that may apply to
exempt transactions resulting from the purchase or holding of the capital
securities. Those class exemptions are:
-- 96-23, for transactions determined by in-house asset managers;
-- 95-60, for transactions involving insurance company general accounts;
-- 91-38, for transactions involving bank collective investment funds;
-- 90-1, for transactions involving insurance company separate accounts;
and
-- 84-14, for transactions determined by independent qualified asset
managers.
Because the capital securities may be treated as equity interests in the
trust for purposes of applying the prohibited transaction rules, the capital
securities may not be purchased or held by any benefit plan investor, unless
such purchaser or holder can use one of the above class exemptions or another
applicable exemption. By purchasing or holding capital securities or any
interest in the capital securities, any purchaser or holder is deemed to have
represented that it either:
(1) is not a benefit plan investor; or
(2) can use one of the above class exemptions or another applicable exemption
with respect to its purchase or holding.
If a purchaser or holder of the capital securities that is a benefit plan
investor will rely on an exemption other than one listed above, we and the trust
may require a satisfactory opinion of counsel or other evidence with respect to
the availability of such exemption for such purchase and holding.
These rules are very complicated and the penalties that may be imposed upon
persons involved in prohibited transactions can be substantial. This makes it
very important that fiduciaries or other persons considering purchasing the
capital securities on behalf of a benefit plan investor consult with their
lawyer regarding what could happen if the assets of the trust were deemed to be
plan assets and if the investor can use one of the above class exemptions or
another applicable exemption.
48
<PAGE> 50
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement dated June , 1999, the trust has agreed to sell to each of the
underwriters named below, for whom Credit Suisse First Boston Corporation and
McDonald Investments Inc. are acting as representatives, the following
respective number of capital securities:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER CAPITAL SECURITIES
----------- ------------------
<S> <C>
Credit Suisse First Boston Corporation......................
McDonald Investments Inc....................................
J.P. Morgan Securities Inc..................................
Salomon Smith Barney Inc....................................
-----------
Total..................................................... 250,000
===========
</TABLE>
The underwriting agreement provides that the underwriters are obligated to
purchase all of the capital securities if any are purchased. The underwriting
agreement provides that if an underwriter defaults, the purchase commitments of
non-defaulting underwriters may be increased or the offering may be terminated.
The underwriters propose to offer the capital securities initially at the
public offering price on the cover page of this prospectus and to selling group
members at that price less a concession of % of the liquidation amount per
capital security. The underwriters and selling group members may allow a
discount of % of the liquidation amount per capital security to other
broker/dealers. After the initial public offering, the public offering price and
concession and discount to broker/dealers may be changed by the representatives.
Since the trust will use the proceeds from the sale of the capital
securities to purchase our junior debentures, we have agreed to pay the
underwriters an underwriting commission of $ per capital security or a total
of $ .
We estimate that our total expenses for this offering, excluding
underwriting discounts and commissions, will be approximately $307,500.
The capital securities are a new issue of securities with no established
trading market. One or more of the underwriters intends to make a secondary
market for the capital securities. However, the underwriters are not obligated
to do so and may discontinue making a secondary market for the capital
securities at any time without notice. We can give no assurance as to how liquid
the trading market for the capital securities will be.
In connection with the offer and sale of the capital securities, the
underwriters have advised us that they will comply with Rule 2810 of the Conduct
Rules of the NASD. Offers and sales of capital securities will be made only to:
-- "qualified institutional buyers", as defined in Rule 144A under the
Securities Act of 1933;
-- institutional "accredited investors", as defined in Rule
501(a)(1)-(3) of Regulation D under the Securities Act; or
-- individual "accredited investors", as defined in Rule 501(a)(4)-(6)
under the Securities Act, for whom an investment in non-convertible
investment grade preferred securities is appropriate.
In addition, NASD members may not confirm sales of capital securities to
any discretionary accounts without the prior written approval of the customer.
We and the trust have agreed with the underwriters not to offer, sell,
contract to sell or otherwise dispose of (1) any other capital securities, (2)
any other securities of KeyCorp, the trust or any other of our subsidiaries that
are substantially similar to the capital securities, including any guarantee of
those securities, or (3) any securities convertible into or exchangeable for any
of these securities, in each case except with the prior written consent of the
representative and except for the capital securities offered in this offering.
This restriction will apply for 30 days from the date of this prospectus.
49
<PAGE> 51
We and the trust have agreed to indemnify the underwriters against
liabilities under the Securities Act, or contribute to any payments which the
underwriters may be required to make in that respect.
One or more of the underwriters or their affiliates have provided from time
to time, and may provide in the future, investment or commercial banking
services in the ordinary course of business to us and our affiliates. For these
services, the underwriters or their affiliates have received or will receive
customary fees and commissions.
McDonald Investments is our wholly owned subsidiary and an affiliate of the
trust and may be participating in the distribution of the capital securities.
McDonald Investments, as our affiliate, can use this prospectus for offers and
sales related to market-making transactions in the capital securities effected
from time to time after the commencement of the offering to which this
prospectus relates. McDonald Investments may act as principal or agent in such
transactions, including as agent for the counterparty when acting as principal
or as agent for both counterparties. McDonald Investments may receive
compensation in the form of discounts and commissions, including from both
counterparties when it acts as agent for both. These sales will be made at
prevailing market prices at the time of sale, at prices related thereto or at
negotiated prices.
The representatives, on behalf of the underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange Act
of 1934.
Over-allotment involves syndicate sales in excess of the offering size,
which creates a syndicate short position. Stabilizing transactions permit bids
to purchase the underlying security so long as the stabilizing bids do not
exceed a specified maximum. Syndicate covering transactions involve purchases of
the capital securities in the open market after the distribution has been
completed in order to cover syndicate short positions. Penalty bids permit the
representatives to reclaim a selling concession from a syndicate member when the
capital securities originally sold by such syndicate member are purchased in a
syndicate covering transaction to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty
bids may cause the price of the capital securities to be higher than it would
otherwise be in the absence of such transactions. These transactions, if
commenced, may be discontinued at any time.
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the capital securities in Canada is being made only on
a private placement basis exempt from the requirement that we and the trust
prepare and file a prospectus with the securities regulatory authorities in each
province where trades to the capital securities are effected. Accordingly, any
resale of the capital securities in Canada must be made in accordance with
applicable securities laws which will vary depending on the relevant
jurisdiction, and which may require resales to be made in accordance with
available statutory exemptions or pursuant to a discretionary exemption granted
by the applicable Canadian securities regulatory authority. Purchasers are
advised to seek legal advice prior to any resale of the capital securities.
REPRESENTATIONS OF PURCHASERS
Each purchaser of capital securities in Canada who receives a purchase
confirmation will be deemed to represent to us and the trust and the dealer from
whom such purchase confirmation is received that (i) the purchaser is entitled
under applicable provincial securities laws to purchase the capital securities
without the benefit of a prospectus qualified under such securities laws, (ii)
where required by law, that the purchaser is purchasing as principal and not as
agent and (iii) the purchaser has reviewed the text above under "-- Resale
restrictions".
50
<PAGE> 52
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or these persons. All or a substantial portion of the assets of the
issuer and these persons may be located outside of Canada and, as a result, it
may not be possible to satisfy a judgment against the issuer or these persons in
Canada or to enforce a judgment obtained in Canadian courts against the issuer
or these persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of capital securities to whom the Securities Act (British
Columbia) applies is advised that such purchaser is required to file with the
British Columbia Securities Commission a report within ten days of the sale of
any capital securities acquired by such purchaser pursuant to this offering.
Such report must be in the form attached to British Columbia Securities
commission Blanket Order BOR #95/17, a copy of which may be obtained from the
trust. Only one report must be filed in respect of the capital securities
acquired on the same date and under the same prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of capital securities should consult their own legal
and tax advisors with respect to the tax consequence of an investment in the
capital securities in their particular circumstances and with respect to the
eligibility of the capital securities for investment by the purchaser under
relevant Canadian legislation.
51
<PAGE> 53
VALIDITY OF SECURITIES
Richards, Layton & Finger, P.A., special Delaware counsel to us and the
trust, will pass upon certain matters of Delaware law relating to the validity
of the capital securities, the enforceability of the amended trust agreement and
the creation of the trust. Our Associate General Counsel and Sullivan &
Cromwell, New York, New York, counsel for the underwriters, will each pass upon
the validity of the guarantee and the junior debentures. Our Associate General
Counsel will rely upon the opinion of Sullivan & Cromwell as to matters of New
York law and upon the opinion of Richards, Layton & Finger, P.A. as to matters
of Delaware law. Sullivan & Cromwell will rely upon the opinion of our Associate
General Counsel as to matters of Ohio law and upon the opinion of Richards,
Layton & Finger, P.A., as to matters of Delaware law. Sullivan & Cromwell
regularly perform legal services for us and our subsidiaries.
Our General Counsel and the Associate General Counsel, who are currently
authorized to render an opinion on our behalf, own shares of KeyCorp, including
common stock and options that are immediately exercisable. As of this date, the
General Counsel holds 71,000 shares and the Associate General Counsel holds
20,000 shares.
Sullivan & Cromwell, as special tax counsel to us and the trust, will pass
upon certain matters relating to U.S. federal income tax considerations.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our annual report on Form 10-K for the year
ended December 31, 1998, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
consolidated financial statements are incorporated by reference in reliance on
Ernst & Young LLP's report, given on their authority as experts in accounting
and auditing.
With respect to the unaudited condensed consolidated interim financial
information for the three-month periods ended March 31, 1999 and 1998,
incorporated by reference in this prospectus, Ernst & Young LLP have reported
that they have applied limited procedures in accordance with professional
standards for a review of such information. However, their separate report,
included in our quarterly report on Form 10-Q for the quarter ended March 31,
1999, which is incorporated by reference in this prospectus, states that they
did not audit and they do not express an opinion on that interim financial
information. Accordingly, the degree of reliance on their report on that
information should be restricted considering the limited nature of the review
procedures applied. The independent auditors are not subject to the liability
provisions of Section 11 of the Securities Act for their report on the unaudited
interim financial information because that report is not a "report" or a "part"
of the registration statement prepared or certified by the auditors within the
meaning of Sections 7 and 11 of the Securities Act.
52
<PAGE> 54
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document that we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Our filings with the SEC are also available to the public
through the SEC's Internet site at http://www.sec.gov and through the New York
Stock Exchange, 20 Broad Street, New York, New York 10005. The trust will not
file any reports or other information with the SEC under the Securities Exchange
Act of 1934.
We and the trust have filed a registration statement on Form S-3 with the
SEC. This prospectus is a part of the registration statement and does not
contain all of the information in the registration statement. Wherever a
reference is made in this prospectus to a contract or other document, please be
aware that the reference is not necessarily complete and that you should refer
to the exhibits that are a part of the registration statement for a copy of the
contract or other document. You may review a copy of the registration statement
at the SEC's public reference room in Washington, D.C. as well as through the
SEC's Internet site.
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus.
Information that we file in the future with the SEC and incorporated by
reference in this prospectus will automatically update and replace this
information. We incorporate by reference the documents listed below and any
future filings made by us with the SEC under Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 if the filings are made before the time
that all of the capital securities are sold in this offering:
-- annual report on Form 10-K for the year ended December 31, 1998; and
-- quarterly report on Form 10-Q for the quarter ended March 31, 1999;
and
-- current reports on Form 8-K, filed on January 20, March 15, 1999 and
April 16, 1999.
You may request a copy of these filings at no cost by writing or telephoning us
at the following address:
KeyCorp
127 Public Square
Cleveland, Ohio, 44114-1306
Attention: Investor Relations
(216) 689-6300
You should rely only on the information incorporated by reference or
provided in this prospectus. Neither we nor the trust has authorized anyone else
to provide you with different information. Neither we nor the trust is making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus is accurate as of any
date other than the date of this prospectus or the date of the documents
incorporated by reference in this prospectus.
53
<PAGE> 55
[KeyCorp Logo]
<PAGE> 56
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
<TABLE>
<S> <C>
Registration fee under the Securities Act of 1933, as
amended................................................... $ 69,500
Blue Sky fees and expenses (including counsel fees)......... 5,000
Fees of rating agencies..................................... 100,000
Trustees' fees and expenses................................. 8,000
Printing fees and expenses.................................. 50,000
Accounting fees and expenses................................ 20,000
Legal fees and expenses..................................... 30,000
Miscellaneous............................................... 25,000
--------
Total.................................................. $307,500
</TABLE>
- ---------------
* All of the above amounts, except the Registration Fee, are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Ohio law, Ohio corporations are authorized to indemnify directors,
officers, employees, and agents within prescribed limits and must indemnify them
under certain circumstances. Ohio law does not provide statutory authorization
for a corporation to indemnify directors, officers, employees, and agents for
settlements, fines, or judgments in the context of derivative suits. However, it
provides that directors (but not officers, employees, and agents) are entitled
to mandatory advancement of expenses, including attorneys' fees, incurred in
defending any action, including derivative actions, brought against the
director, provided the director agrees to cooperate with the corporation
concerning the matter and to repay the amount advanced if it is proved by clear
and convincing evidence that his act or failure to act was done with deliberate
intent to cause injury to the corporation or with reckless disregard to the
corporation's best interests.
Ohio law does not authorize payment of judgments to a director, officer,
employee, or agent after a finding of negligence or misconduct in a derivative
suit absent a court order. Indemnification is required, however, to the extent
such person succeeds on the merits. In all other cases, if a director, officer,
employee, or agent acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, indemnification
is discretionary except as otherwise provided by a corporation's articles, code
of regulations, or by contract except with respect to the advancement of
expenses of directors.
Under Ohio law, a director is not liable for monetary damages unless it is
proved by clear and convincing evidence that his action or failure to act was
undertaken with deliberate intent to cause injury to the corporation or with
reckless disregard for the best interests of the corporation. There is, however,
no comparable provision limiting the liability of officers, employees, or agents
of a corporation. The statutory right to indemnification is not exclusive in
Ohio, and Ohio corporations may, among other things, procure insurance for such
persons.
The KeyCorp Regulations provide that KeyCorp shall indemnify to the fullest
extent permitted by law any person made or threatened to be made a party to any
action, suit, or proceeding by reason of the fact that he is or was a director,
officer, or employee of KeyCorp or of any other bank, corporation, partnership,
trust, or other enterprise for which he was serving as a director, officer, or
employee at the request of KeyCorp.
Under the terms of KeyCorp's directors' and officers' liability and company
reimbursement insurance policy, directors and officers of KeyCorp are insured
against certain liabilities, including liabilities arising under the Securities
Act.
KeyCorp is a party to agreements with, respectively, Robert W. Gillespie,
Henry L. Meyer III and William B. Summers, Jr., and KeyCorp is party to Change
of Control Agreements with certain other executive officers (the provisions of
which became effective as a result of the merger of old KeyCorp with
II-1
<PAGE> 57
and into Society Corporation), pursuant to which KeyCorp has agreed to indemnify
the officer, to the full extent permitted or authorized by Ohio law, if the
officer is made or threatened to be made a party to any action, suit, or
proceeding by reason of the officer's serving as employee, officer, or director
of KeyCorp and/or any of its subsidiaries, and KeyCorp has agreed to advance
expenses incurred by the officer in defending any such action, suit, or
proceeding.
Under the Amended and Restated Trust Agreement, KeyCorp will agree to
indemnify each of the trustees of the trust and any predecessor trustees, and to
hold such trustees harmless, against any loss, damage, claims, liability or
expense incurred without negligence or bad faith on their part, arising out of
or in connection with the acceptance of administration of such trust agreement,
including the costs and expenses of defense against any claim or liability in
connection with the exercise or performance of any of their powers or duties
under the Trust Agreement or the Amended and Restated Trust Agreement, each of
which is an exhibit to this Registration Statement.
Reference is made to the indemnity provisions in the Underwriting Agreement
which is filed as Exhibit 1 to this Registration Statement.
ITEM 16. EXHIBITS.
Reference is made to the Exhibit Index filed herewith.
ITEM 17. UNDERTAKINGS.
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934, as amended, that is incorporated
by reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein, 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 a registrant
pursuant to the foregoing provisions, or otherwise, each of the undersigned
Registrants has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against such 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 a
registrant of expenses incurred by a director, officer or controlling person of
a registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, each of the undersigned Registrants will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question 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.
Each of the undersigned Registrants hereby also undertakes:
(1) to provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations and
registered in such names as required by the underwriter to permit
prompt delivery to each purchaser.
(2) that, for the purposes of determining any liability under the
Securities Act:
(i) The information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(ii) Each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 58
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
KeyCorp 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 Amendment No. 1
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cleveland, State of Ohio, as of the
8th day of June, 1999.
KEYCORP
By: /s/ DANIEL R. STOLZER
-------------------------------------
Name: Daniel R. Stolzer
Title: Vice President and Associate
General Counsel
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities indicated below and as of the date indicated above.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
/s/ ROBERT W. GILLESPIE* Chairman of the Board, President, Chief
- -------------------------------------------- Executive Officer and Director (Principal
ROBERT W. GILLESPIE Executive Officer)
/s/ K. BRENT SOMERS* Senior Executive Vice President and Chief
- -------------------------------------------- Financial Officer (Principal Financial
K. Brent Somers Officer)
/s/ LEE G. IRVING* Executive Vice President and Chief
- -------------------------------------------- Accounting Officer (Principal Accounting
Lee G. Irving Officer)
/s/ CECIL D. ANDRUS* Director
- --------------------------------------------
Cecil D. Andrus
/s/ WILLIAM G. BARES* Director
- --------------------------------------------
William G. Bares
/s/ ALBERT C. BERSTICKER* Director
- --------------------------------------------
Albert C. Bersticker
/s/ EDWARD P. CAMPBELL* Director
- --------------------------------------------
Edward P. Campbell
/s/ CAROL A. CARTWRIGHT* Director
- --------------------------------------------
Carol A. Cartwright
/s/ THOMAS A. COMMES* Director
- --------------------------------------------
Thomas A. Commes
/s/ KENNETH M. CURTIS* Director
- --------------------------------------------
Kenneth M. Curtis
/s/ STEPHEN R. HARDIS* Director
- --------------------------------------------
Stephen R. Hardis
/s/ HENRY S. HEMINGWAY* Director
- --------------------------------------------
Henry S. Hemingway
</TABLE>
II-3
<PAGE> 59
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
/s/ CHARLES R. HOGAN* Director
- --------------------------------------------
Charles R. Hogan
/s/ DOUGLAS J. MCGREGOR* Director
- --------------------------------------------
Douglas J. McGregor
/s/ HENRY L. MEYER III* Director
- --------------------------------------------
Henry L. Meyer III
/s/ STEVEN A. MINTER* Director
- --------------------------------------------
Steven A. Minter
Director
- --------------------------------------------
Bill R. Sanford
/s/ RONALD B. STAFFORD* Director
- --------------------------------------------
Ronald B. Stafford
/s/ DENNIS W. SULLIVAN* Director
- --------------------------------------------
Dennis W. Sullivan
Director
- --------------------------------------------
Peter G. Ten Eyak, II
*By:/s/ DANIEL R. STOLZER
---------------------------------------
Name: Daniel R. Stolzer
Title: Attorney-in-Fact
</TABLE>
II-4
<PAGE> 60
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
KeyCorp Capital III 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
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio,
as of the 8th day of June, 1999.
KEYCORP CAPITAL III
BY: KEYCORP, AS DEPOSITOR
By: /s/ DANIEL R. STOLZER
------------------------------------
Name: Daniel R. Stolzer
Title: Vice President and
Associate General Counsel
II-5
<PAGE> 61
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C>
1 Form of Underwriting Agreement
4(a) Junior Subordinated Indenture, dated as of December 4, 1996,
between KeyCorp and Bankers Trust Company, as Debenture
Trustee (Incorporated by reference to Exhibit 4(a) to
Registration Statement on Form S-4, Commission No. 333-19151
and 333-19151-01)
4(b) Certificate of Trust of KeyCorp Capital III, dated as of
April 13, 1999*
4(c) Trust Agreement of KeyCorp Capital III, dated as of April
13, 1999*
4(d) Form of Amended and Restated Trust Agreement of KeyCorp
Capital III (Including the related form of Expense
Agreement)
4(e) Form of Capital Security Certificate (Included in Exhibit
4(d))
4(f) Form of Guarantee Agreement
4(g) Form of % Junior Subordinated Deferrable Interest
Debentures
5(a) Opinion of Daniel R. Stolzer, Esq., as to validity of the
Junior Subordinated Deferrable Interest Debentures and the
Guarantee
5(b) Opinion of Richards, Layton & Finger, P.A., as to validity
of the Capital Securities
8 Opinion of Sullivan & Cromwell as to certain federal income
tax matters
12(a) Computations of Consolidated Ratios of Earnings to Fixed
Charges for the years ended December 31, 1998, 1997, 1996,
1995 and 1994 (Incorporated by reference to Exhibit 12 to
KeyCorp's Annual Report on Form 10-K for the year ended
December 31, 1998)
12(b) Computations of Consolidated Ratios of Earnings to Fixed
Charges for the three months ended March 31, 1999 and 1998
15 Acknowledgment of Ernst & Young L.L.P.
23(a) Consent of Ernst & Young L.L.P.
23(b) Consent of Daniel R. Stolzer, Esq. (Included in Exhibit
5(a))
23(c) Consent of Richards, Layton & Finger, P.A. (Included in
Exhibit 5(b))
23(d) Consent of Sullivan & Cromwell (Included in Exhibit 8)
24 Powers of Attorney*
25 Form T-1 Statement of Eligibility of Bankers Trust Company
to act as trustee under the Indenture, under the Amended and
Restated Trust Agreement, and under the Guarantee for the
benefit of holders of Capital Securities
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
Exhibit 1
$250,000,000
KEYCORP CAPITAL III
__% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
GUARANTEED TO THE EXTENT SET FORTH IN THE GUARANTEE BY
KEYCORP
UNDERWRITING AGREEMENT
----------------------
June __, 1999
CREDIT SUISSE FIRST BOSTON CORPORATION
McDONALD INVESTMENTS INC.,
As Representatives of the Several Underwriters,
Eleven Madison Avenue,
New York, N.Y. 10010-3629.
Ladies and Gentlemen:
1. Introductory. KeyCorp Capital III (the "Trust"), a statutory
business trust created under the Business Trust Act of the State of Delaware
(the "Delaware Business Trust Act"), and KeyCorp, an Ohio corporation, as
depositor of the Trust and as guarantor (the "Guarantor"), propose, subject to
the terms and conditions stated herein, that the Trust issue and sell to the
several underwriters named in Schedule A hereto (the "Underwriters") an
aggregate of 250,000 __% Capital Securities (liquidation amount $1,000 per
capital security) (the "Securities") representing undivided beneficial interests
in the assets of the Trust, guaranteed by the Guarantor as to the payment of
distributions, and as to payments on liquidation or redemption, to the extent
set forth in a guarantee agreement (the "Guarantee") between the Guarantor and
Bankers Trust Company, as trustee (the "Guarantee Trustee"). The proceeds of the
sale of the Securities and an aggregate of 7,800 of its Common Securities
(liquidation amount $1,000 per common security) (the "Common Securities") by the
Trust are to be invested in __% Junior Subordinated Deferrable Interest
Debentures (the "Subordinated Debentures") of the Guarantor, to be issued
pursuant to an Indenture, dated as of December 4, 1996 (the "Indenture"),
between the Guarantor and Bankers Trust Company, as trustee (the "Debenture
Trustee"). The Guarantor and the Trust hereby agree with the Underwriters as
follows:
2. Representations and Warranties of the Guarantor and the Trust. The
Guarantor and the Trust jointly and severally represent and warrant to, and
agree with, the several Underwriters that:
(a) A registration statement (Nos. 333-76619 and 333-76619-01)
relating to the Securities, the Subordinated Debentures and the
Guarantee, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and either (i) has
been declared effective under the Securities Act of 1933 ("Act") and is
not proposed to be amended or (ii) is proposed to be amended by
amendment or post-effective amendment. If such registration statement
(the "initial
<PAGE> 2
registration statement") has been declared effective, either (i) an
additional registration statement (the "additional registration
statement") relating to the Securities, the Subordinated Debentures and
the Guarantee may have been filed with the Commission pursuant to Rule
462(b) ("Rule 462(b)") under the Act and, if so filed, has become
effective upon filing pursuant to such Rule and the Securities, the
Subordinated Debentures and the Guarantee all have been duly registered
under the Act pursuant to the initial registration statement and, if
applicable, the additional registration statement or (ii) such an
additional registration statement is proposed to be filed with the
Commission pursuant to Rule 462(b) and will become effective upon
filing pursuant to such Rule and upon such filing the Securities, the
Subordinated Debentures and the Guarantee will all have been duly
registered under the Act pursuant to the initial registration statement
and such additional registration statement. If the Guarantor and the
Trust do not propose to amend the initial registration statement or if
an additional registration statement has been filed and the Guarantor
and the Trust do not propose to amend it, and if any post-effective
amendment to either such registration statement has been filed with the
Commission prior to the execution and delivery of this Agreement, the
most recent amendment (if any) to each such registration statement has
been declared effective by the Commission or has become effective upon
filing pursuant to Rule 462(c) ("Rule 462(c)") under the Act or, in the
case of the additional registration statement, Rule 462(b). For
purposes of this Agreement, "Effective Time" with respect to the
initial registration statement or, if filed prior to the execution and
delivery of this Agreement, the additional registration statement means
(i) if the Guarantor and the Trust have advised the Representatives
that they do not propose to amend such registration statement, the date
and time as of which such registration statement, or the most recent
post-effective amendment thereto (if any) filed prior to the execution
and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c),
or (ii) if the Guarantor and the Trust have advised the Representatives
that they propose to file an amendment or post-effective amendment to
such registration statement, the date and time as of which such
registration statement, as amended by such amendment or post-effective
amendment, as the case may be, is declared effective by the Commission.
If an additional registration statement has not been filed prior to the
execution and delivery of this Agreement but the Guarantor and the
Trust have advised the Representatives that they propose to file one,
"Effective Time" with respect to such additional registration statement
means the date and time as of which such registration statement is
filed and becomes effective pursuant to Rule 462(b). "Effective Date"
with respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its
Effective Time, including all material incorporated by reference
therein, including all information contained in the additional
registration statement (if any) and deemed to be a part of the initial
registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form
on which it is filed and including all information (if any) deemed to
be a part of the initial registration statement as of its Effective
Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is
hereinafter referred to as the "Initial Registration Statement". The
additional registration statement, as amended at its Effective Time,
including the contents of the initial registration statement
incorporated by reference therein and including all information (if
any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to
as the "Additional Registration Statement". The Initial Registration
Statement and the Additional Registration Statement are hereinafter
referred to collectively as the "Registration Statements" and
individually as a "Registration Statement". The form of prospectus
relating to the Securities, the Subordinated
2
<PAGE> 3
Debentures and the Guarantee, as first filed with the Commission
pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under
the Act or (if no such filing is required) as included in a
Registration Statement, including all material incorporated by
reference in such prospectus, is hereinafter referred to as the
"Prospectus". No document has been or will be prepared or distributed
in reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (i) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all respects to the requirements of
the Act, the Trust Indenture Act of 1939 ("Trust Indenture Act") and
the rules and regulations of the Commission ("Rules and Regulations")
and did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) on the Effective Date
of the Additional Registration Statement (if any), each Registration
Statement conformed, or will conform, in all respects to the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations and did not include, or will not include, any untrue
statement of a material fact and did not omit, or will not omit, to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and (iii) on the date of
this Agreement, the Initial Registration Statement and, if the
Effective Time of the Additional Registration Statement is prior to the
execution and delivery of this Agreement, the Additional Registration
Statement each conforms, and at the time of filing of the Prospectus
pursuant to Rule 424(b) or (if no such filing is required) at the
Effective Date of the Additional Registration Statement in which the
Prospectus is included, each Registration Statement and the Prospectus
will conform, in all respects to the requirements of the Act, the Trust
Indenture Act and the Rules and Regulations, and neither of such
documents includes, or will include, any untrue statement of a material
fact or omits, or will omit, to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading. If the Effective Time of the Initial Registration Statement
is subsequent to the execution and delivery of this Agreement: on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement and the Prospectus will conform in all respects
to the requirements of the Act, the Trust Indenture Act and the Rules
and Regulations, neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and no Additional Registration Statement has
been or will be filed. The two preceding sentences do not apply to
statements in or omissions from a Registration Statement or the
Prospectus based upon (i) written information furnished to the
Guarantor and Trust by any Underwriter through the Representatives
specifically for use therein, and (ii) the Statements of Eligibility
(Forms T-1) under the Trust Indenture Act of Bankers Trust Company, as
Debenture Trustee, Guarantee Trustee and Property Trustee (under the
Amended and Restated Trust Agreement) (the "Form T-1").
(c) The Guarantor has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Ohio, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and is duly
registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended; and the Guarantor is duly qualified to do business
as a foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business
requires such qualification.
3
<PAGE> 4
(d) Each of the Guarantor's national bank subsidiaries has been
duly organized and is a validly existing national banking association
under the laws of the United States, continues to hold a valid
certificate to do business as such and has full power and authority to
conduct its business as such; each of the Guarantor's other bank
subsidiaries, if any, has been duly organized and is validly existing
in good standing under the laws of its jurisdiction of organization,
continues to hold a valid certificate to do business as such and has
full power and authority to conduct its business as such; each of its
other significant subsidiaries, as defined in Regulation S-X (the
"Significant Subsidiaries"), has been duly organized and is validly
existing under the laws of the jurisdiction of its organization with
power and authority (corporate and other) under such laws to own its
properties and conduct its business; and (iii) all of the issued and
outstanding shares of capital stock of each such subsidiary have been
duly authorized and validly issued and are fully paid and
non-assessable (except, with respect to any subsidiary that is a
national bank, as provided by Section 55 of Title 12 of the United
States Code; and with respect to any subsidiary that is a bank
incorporated under state law, except as provided by the laws of any
such states) and are owned beneficially by the Guarantor subject to no
security interest, pledge, lien, charge or other encumbrance or adverse
claim, except as otherwise stated in the Prospectus.
(e) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Delaware Business
Trust Act with the power and authority to own its properties and
conduct its business as described in the Prospectus, and the Trust has
conducted no business to date other than as contemplated by this
Agreement, and it will conduct no business in the future that would be
inconsistent with the Trust Agreement (defined below) and the
description of the Trust set forth in the Prospectus; the Trust is not
a party to or bound by any agreement or instrument other than this
Agreement, the Amended and Restated Trust Agreement (the "Trust
Agreement") among the Guarantor, the trustees named therein (the
"Trustees") and the holders of the Securities issued thereunder, and
the agreements and instruments contemplated by the Trust Agreement; the
Trust has no liabilities or obligations other than those arising out of
the transactions contemplated by this Agreement and the Trust Agreement
and described in the Prospectus; based on expected operations and
current law, the Trust is not and will not be classified as an
association taxable as a corporation for United States federal income
tax purposes; and the Trust is not a party to or subject to any action,
suit or proceeding of any nature.
(f) The Securities have been duly and validly authorized by the
Trust, and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued and fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust and will conform to the description of the Securities contained
in the Prospectus; the issuance of the Securities is not subject to
preemptive or other similar rights; the Securities will have the rights
set forth in the Trust Agreement, and the terms of the Securities are
valid and binding on the Trust; and the holders of the Securities (the
"Securityholders") will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
(g) The Common Securities of the Trust have been duly and validly
authorized by the Trust and, upon delivery by the Trust to the
Guarantor against payment therefor as described in the Prospectus, will
be duly and validly issued undivided beneficial interests in the assets
of the Trust and will conform to the description thereof contained in
the Prospectus; the issuance of the Common
4
<PAGE> 5
Securities is not subject to preemptive or other similar rights; and at
the Closing Date, all of the issued and outstanding Common Securities
of the Trust will be directly owned by the Guarantor free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(h) The Guarantee, the Subordinated Debentures, the Trust
Agreement, the Indenture and the Agreement as to Expenses and
Liabilities between the Guarantor and the Trust (the "Expense
Agreement") (the Guarantee, the Subordinated Debentures, the Trust
Agreement, the Indenture and the Expense Agreement being collectively
referred to as the "Guarantor Agreements"), when validly executed and
delivered by the Guarantor and, in the case of the Guarantee, by the
Guarantee Trustee, in the case of the Trust Agreement, by the Trustees
and, in the case of the Indenture, by the Debenture Trustee, will
constitute valid and legally binding obligations of the Guarantor,
enforceable in accordance with their respective terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles (regardless of whether enforcement is sought in a proceeding
at law or in equity); the Subordinated Debentures are entitled to the
benefits of the Indenture; the Guarantor Agreements will conform to the
descriptions thereof in the Prospectus; and the Guarantee and the
Indenture have been duly qualified under the Trust Indenture Act.
(i) The execution and delivery of this Agreement and the Guarantor
Agreements, and the consummation of the transactions contemplated
herein and therein, have been duly authorized by all necessary
corporate action and, when executed and delivered by the Guarantor and
the other parties thereto, will not result in any breach of any of the
terms, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of any security interest, lien,
charge or encumbrance upon any property or assets of the Guarantor or
its subsidiaries, pursuant to any indenture, loan agreement, contract
or other material agreement or instrument to which the Guarantor or its
subsidiaries is a party or by which the Guarantor may be bound or to
which any of the property or assets of the Guarantor or its
subsidiaries is subject, nor will such action result in any violation
of the provisions of the Amended and Restated Articles of Incorporation
or the Regulations (or similar instruments) of the Guarantor or its
subsidiaries or any applicable statute, rule or regulation or, to the
best of the Guarantor's knowledge, any order of any court or
governmental agency or body having jurisdiction over the Guarantor, its
subsidiaries or any of their respective properties.
(j) Neither the Guarantor nor any of its affiliates has taken or
will take any action which is designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Guarantor in connection with the offering
of the Securities.
(k) The Trust is not, and after giving effect to the offering and
sale of the Securities will not be, an "investment company", or an
entity "controlled" by an "investment company", as such terms are
defined in the United States Investment Company Act of 1940, as amended
(the "Investment Company Act").
(l) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance and the sale of the Securities by the
Trust, except such
5
<PAGE> 6
as may be required under the Blue Sky or securities laws of any
jurisdiction or as have been duly made or obtained.
(m) The Guarantor and its subsidiaries possess adequate
certificates, authorities and permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now
operated by them and have not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Guarantor or
any of its subsidiaries, would individually or in the aggregate have a
material adverse effect on the condition (financial or other),
business, properties or results of operations of the Guarantor and its
subsidiaries taken as a whole.
(n) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Guarantor, any
of its subsidiaries or any of their respective properties that, if
determined adversely to the Guarantor or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
condition (financial or other), business, properties or results of
operations of the Guarantor and its subsidiaries taken as a whole, or
would materially and adversely affect the ability of the Guarantor to
perform its obligations under the Guarantor Agreements, this Agreement,
or which are otherwise material in the context of the sale of the
Securities by the Trust; and no such actions, suits or proceedings are
threatened or, to the Guarantor's knowledge, contemplated.
(o) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of
the Guarantor and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown,
and, except as otherwise disclosed in the Prospectus, such financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent
basis.
(p) Since the date of the latest audited financial statements
included in the Prospectus there has been no material adverse change,
nor any development or event involving a prospective material adverse
change, in the condition (financial or other), business, properties or
results of operations of the Guarantor and its subsidiaries taken as a
whole, and, except as disclosed in or contemplated by the Prospectus,
there has been no dividend or distribution of any kind declared, paid
or made by the Guarantor on any class of its capital stock.
(3) Purchase, Sale and Delivery of Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Guarantor and the Trust agree that
the Trust will issue and sell to the Underwriters, and the Underwriters agree,
severally and not jointly, to purchase from the Trust, at a purchase price of
$______ per Security, the respective number of Securities set forth opposite the
names of the Underwriters in Schedule A hereto.
The Trust will deliver against payment of the purchase price the
Securities in the form of one or more permanent global Securities in definitive
form (the "Global Securities") deposited with the Property Trustee as custodian
for The Depository Trust Company ("DTC") and registered in the name of Cede &
Co., as nominee for DTC. Interests in any permanent global Securities will be
held only in book-entry form through DTC, except in the limited circumstances
described in the Prospectus. Payment for the Securities shall be made by the
Underwriters in Federal (same day) funds by official check or checks or wire
transfer
6
<PAGE> 7
to an account at a bank acceptable to the Representatives drawn to the order of
the Trust at the office of Sullivan & Cromwell, 125 Broad Street, New York, New
York 10004 at 9:30 A.M., (New York time), on June __, 1999, or at such other
time not later than seven full business days thereafter as the Representatives
and the Guarantor and the Trust determine, such time being herein referred to as
the "Closing Date", against delivery to the Property Trustee as custodian for
DTC of the Global Securities representing all of the Securities. The Global
Securities will be made available for checking at the above office of Sullivan &
Cromwell at least 24 hours prior to the Closing Date.
As compensation for the Underwriters' commitments, and in view of the
fact that the proceeds of the sale of the Securities will be issued by the Trust
to purchase the Subordinated Debentures of the Guarantor, the Guarantor will pay
to the Representatives for the Underwriters' proportionate accounts the sum of
$10 per Security times the total number of Securities purchased by the
Underwriters on the Closing Date. Such payment will be made on the Closing Date.
Alternatively, as a matter of convenience, the Representatives may deduct such
amount from the purchase price of the Securities and in such event the Guarantor
shall be deemed to have paid the same.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Certain Agreements of the Guarantor and the Trust. The Guarantor and
the Trust jointly and severally agree with the several Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Guarantor
and the Trust will file the Prospectus with the Commission pursuant to
and in accordance with subparagraph (1) (or, if applicable and if
consented to by the Representatives, subparagraph (4)) of Rule
424(b) not later than the earlier of (A) the second business day
following the execution and delivery of this Agreement or (B) the
fifteenth business day after the Effective Date of the Initial
Registration Statement.
The Guarantor and the Trust will advise the Representatives promptly of
any such filing pursuant to Rule 424(b). If the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement and an additional registration statement is necessary
to register a portion of the Securities under the Act but the Effective
Time thereof has not occurred as of such execution and delivery, the
Guarantor and the Trust will file the additional registration statement
or, if filed, will file a post-effective amendment thereto with the
Commission pursuant to and in accordance with Rule 462(b) on or prior
to 10:00 P.M., New York time, on the date of this Agreement or, if
earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later
date as shall have been consented to by Credit Suisse First Boston.
(b) The Guarantor and the Trust will advise the Representatives
promptly of any proposal to amend or supplement the initial or any
additional registration statement as filed or the related prospectus or
the Initial Registration Statement, the Additional Registration
Statement (if any) or the Prospectus and will not effect such amendment
or supplementation without the Representatives' consent; and the
Guarantor and the Trust will also advise the Representatives promptly
of the effectiveness of each Registration Statement (if its Effective
Time is subsequent to 7
<PAGE> 8
the execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or the Prospectus and of
the institution by the Commission of any stop order proceedings in
respect of a Registration Statement and will use its best efforts to
prevent the issuance of any such stop order and to obtain as soon as
possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Securities,
the Subordinated Debentures or the Guarantee is required to be
delivered under the Act in connection with sales by any Underwriter or
dealer, any event occurs as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend
the Prospectus to comply with the Act, the Guarantor and the Trust will
promptly notify Credit Suisse First Boston of such event and will
promptly prepare and file with the Commission, at their own expense, an
amendment or supplement which will correct such statement or omission
or an amendment which will effect such compliance. Neither Credit
Suisse First Boston's consent to, nor the Underwriters' delivery of,
any such amendment or supplement shall constitute a waiver of any of
the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability
Date (as defined below), the Guarantor will make generally available to
its securityholders an earnings statement covering a period of at least
12 months beginning after the Effective Date of the Initial
Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Guarantor's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter.
(e) The Guarantor and the Trust will furnish to the Representatives
copies of each Registration Statement (two of which will be signed and
will include all exhibits), each related preliminary prospectus, and,
so long as a prospectus relating to the Securities, the Subordinated
Debentures or the Guarantee is required to be delivered under the Act
in connection with sales by any Underwriter or dealer, the Prospectus
and all amendments and supplements to such documents, in each case in
such quantities as the Representatives requests. Each of the
Guarantor and the Trust will use its reasonable best efforts to furnish
in New York City to each of the Underwriters the Prospectus on or prior
to 10:00 A.M., New York time, on the second business day following the
later of the execution and delivery of this Agreement or the Effective
Time of the Initial Registration Statement. All other such documents
shall be so furnished as soon as available. The Guarantor and the Trust
will pay the expenses of printing and distributing to the Underwriters
all such documents.
(f) The Guarantor and the Trust will use their reasonable best
efforts to arrange for the qualification of the Securities for sale and
the determination of their eligibility for investment under the laws of
such jurisdictions as the Representatives designates and will continue
such qualifications in effect so long as required for the distribution;
provided that in connection therewith neither the Guarantor nor the
Trust shall be required to qualify as a foreign corporation to do
8
<PAGE> 9
business in any jurisdiction where it is not now qualified or to take
any action which would subject it to general or unlimited service of
process in any jurisdiction where it is not now so subject.
(g) The Guarantor and the Trust will pay all expenses incident to
the performance of their obligations under this Agreement for any
filing fees and other expenses (including fees and disbursements of
counsel) incurred in connection with qualification of the Securities
and the Subordinated Debentures issuable upon exchange of the
Securities for offering and sale under the laws of such jurisdictions
as the Representatives designates and the printing of memoranda
relating thereto, for any fees charged by investment rating agencies
for the rating of the Securities, for any filing fee incident to and
the fees and disbursements of counsel to the Underwriters in connection
with the review by the National Association of Securities Dealers, Inc.
of the Securities, the cost of preparing the Securities and
Subordinated Debentures, the fees and expenses of the Trustees, the
Guarantee Trustee and the Debenture Trustee and any agent of the
Trustees, the Guarantee Trustee and the Debenture Trustee and the fees
and disbursements of counsel for the Trustees in connection with the
Trust Agreement and the Securities, counsel for the Guarantee Trustee
in connection with the Guarantee and counsel for the Debenture Trustee
in connection with the Indenture and the Subordinated Debentures and
for expenses incurred in the preparation, printing and filing of
preliminary prospectuses and the Prospectus (including any amendments
and supplements thereto) and the distribution of copies thereof to the
Underwriters.
(h) During a period of 30 days beginning from the date of this
Agreement, not to offer, sell, contract to sell or otherwise dispose of
any Securities (except for the Securities proposed to be sold to the
Underwriters pursuant hereto), any other beneficial interests in the
assets of the Trust, or any preferred securities or any other
securities of the Trust or the Guarantor, as the case may be, that are
substantially similar to the Securities (including any guarantee of
such securities) or any securities that are convertible into or
exchangeable for or that represent the right to receive preferred
securities or any such substantially similar securities of either the
Trust or the Guarantor without the prior written consent of the
Representatives.
(i) Not to have the Trust be or become, at any time prior to the
expiration of three years after the Closing Date, an open-end
investment company, unit investment trust, closed-end investment
company or face-amount certificate company that is or is required to be
registered under Section 8 of the Investment Company Act; and
(j) To issue the Guarantee and the Subordinated Debentures
concurrently with the issue and sale of the Securities as contemplated
herein.
(6) Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Securities on the
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Guarantor and the Trust herein, to the accuracy of
the statements of Guarantor and Trust officers or administrators, as the case
may be, made pursuant to the provisions hereof, to the performance by each of
the Guarantor and the Trust of its obligations hereunder and to the following
additional conditions precedent:
(a) The Representatives shall have received letters, one on or
prior to the date of this Agreement and the other on the Closing Date,
from Ernst & Young LLP, independent public accountants (or other
independent public accountants acceptable to the Representatives), each
dated on such delivery
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date, in form and substance satisfactory to the Representatives
containing statements and information of the type ordinarily included
in accountants "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
deemed to be part of the Prospectus.
(b) If the Effective Time of the Initial Registration Statement is
not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York
time, on the date of this Agreement or such later date as shall have
been consented to by the Representatives. If the Effective Time
of the Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time the Prospectus is printed and
distributed to any Underwriter, or shall have occurred at such later
date as shall have been consented to by the Representatives. If
the Effective Time of the Initial Registration Statement is prior to
the execution and delivery of this Agreement, the Prospectus shall have
been filed with the Commission in accordance with the Rules and
Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of a Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or, to the knowledge of the Guarantor, the
Trust or the Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or
event involving a prospective change, in the condition (financial or
other), business, properties or results of operations of the Guarantor
and its subsidiaries taken as one enterprise which, in the judgment of
a majority in interest of the Underwriters, including the
Representatives, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the
sale of and payment for the Securities; (ii) any downgrading in the
rating of any debt securities or preferred stock of the Guarantor by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has under surveillance or review its rating
of any debt securities or preferred stock of the Guarantor (other than
an announcement with positive implications of a possible upgrading, and
no implication of a possible downgrading, of such rating); (iii) any
material suspension or material limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of
any securities of the Guarantor on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by U.S.
Federal or New York or Ohio authorities; or (v) any outbreak or
escalation of major hostilities in which the United States is involved,
any declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority
in interest of the Underwriters, including the Representatives, the
effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Securities.
(d) The Representatives shall have received an opinion, dated the
Closing Date, of counsel for the Guarantor and the Trust, to the effect
that:
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<PAGE> 11
(i) the Guarantor has been duly incorporated and is an
existing corporation in good standing under the laws of Ohio and
is duly registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended; each of KeyBank National
Association and Key Bank USA, National Association (the "National
Banks") is a duly organized and validly existing national banking
association under the laws of the United States and continues to
hold a valid certificate to do business as such; each of the
Guarantor and the National Banks has full corporate power and
authority to conduct its business as described in the Prospectus
and is duly qualified to do business in each jurisdiction in which
it owns or leases real property, except where the failure to be so
qualified, considering all such cases in the aggregate, does not
involve a material risk to the business, properties, financial
position or results of operations of the Guarantor and its
subsidiaries taken as a whole; and all of the outstanding shares
of capital stock of each of the National Banks have been duly
authorized and validly issued, are fully paid and (except as
provided by Section 55 of Title 12 of the United States Code)
non-assessable and (except as otherwise stated in the Prospectus)
are owned beneficially by the Guarantor subject to no security
interest, other encumbrance or adverse claim;
(ii) to the best knowledge of such counsel, (A) there is no
pending or threatened action, suit or proceeding before any court
or governmental agency, authority or body or any arbitrator
involving the Guarantor or any of its subsidiaries of a character
required to be disclosed in the Prospectus which is not adequately
disclosed in the Prospectus, and (B) there is no franchise,
contract or other document which is known to such counsel of a
character required to be described in the Prospectus, which is not
described as required;
(iii) this Agreement has been duly authorized, executed
and delivered by the Guarantor and the Trust;
(iv) the issuance by the Guarantor of the Guarantee and the
Subordinated Debentures, the compliance by the Guarantor with all
of the provisions of this Agreement, the execution, delivery and
performance by the Guarantor of the Guarantor Agreements and the
consummation of the transactions herein and therein contemplated
will not conflict with, result in a breach of, or constitute a
default under the Articles of Incorporation or Regulations of the
Guarantor or, to the best knowledge of such counsel, any indenture
or other agreement or instrument to which the Guarantor or its
subsidiaries is a party or bound, or any order or regulation of
any court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over the Guarantor or its
subsidiaries which in the case of any indenture, agreement,
instrument or order, would have a material adverse effect on the
holders of the Securities or condition (financial or other),
business, properties or results of operations of the Guarantor and
its subsidiaries, taken as one enterprise;
(v) the Guarantor Agreements have each been duly
authorized, executed and delivered by the Guarantor and/or the
Trust, as the case may be, and constitute the valid and legally
binding obligations of the Guarantor and/or the Trust, as the case
may be, enforceable in accordance with their respective terms,
except as limited by Title II of the United States Code
(Bankruptcy) and other applicable bankruptcy, insolvency,
reorganization, arrangement, fraudulent transfer, moratorium or
other laws relating to or affecting creditors' rights generally
and general principles of equity, constitutional rights and public
policy, regardless of whether
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<PAGE> 12
enforceability is considered in proceedings at law or in equity
and except that the provisions requiring payment of attorneys'
fees may not be enforceable by courts applying Ohio law; the
Subordinated Debentures are entitled to the benefits provided by
the Indenture; and the Guarantee and the Indenture have each been
duly qualified under the Trust Indenture Act;
(vi) each of the Guarantor and the Trust is not, and after
giving effect to the offering and sale of the Securities will not
be, an "investment company", or an entity "controlled" by an
"investment company", as such terms are defined in the Investment
Company Act;
(vii) no consent, approval, authorization or order of any
court or governmental agency or body is required of the Guarantor
or the Trust for the consummation of the transactions contemplated
in this Agreement or any of the Guarantor Agreements, except such
as may be required under the Blue Sky laws of any jurisdiction or
as have been duly made or obtained; and
(viii) the Registration Statement has become effective
under the Act, and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have
been instituted or are pending or threatened under the Act, and
each part of the Registration Statement, when such part became
effective, any amendments thereof filed prior to the date of this
Agreement, as of their respective effective dates, and the
Registration Statement and the Prospectus, as of the date of the
Prospectus, and each amendment thereof or supplement thereto, as
of their respective effective or issue dates, appeared on their
face to be appropriately responsive in all material respects to
the requirements of the Act, the Trust Indenture Act and the
respective Rules and Regulations thereunder; and that such counsel
has no reason to believe that any part of the Registration
Statement, when such part became effective, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, as of the date of
the Prospectus, or any amendments thereof or supplements thereto,
as of their respective effective or issue dates, contained any
untrue statement of a material fact or omitted to state any
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, or that, as of the Closing Date, either the Prospectus
or any further amendment or supplement thereto made by the
Guarantor or the Trust prior to the Closing Date contained any
untrue statement of a material fact or omitted to state any
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; it being understood that such counsel need express no
opinion as to the Form T-1, as to the financial statements or
other financial data contained in any part of the Registration
Statement or the Prospectus, as to any information pertaining to
the Internal Revenue Code of 1986, as amended, or to the Employee
Retirement Income Security Act of 1974, as amended, or as to any
statements or omissions made in reliance upon or in conformity
with information furnished in writing to the Guarantor and the
Trust by or on behalf of an Underwriter for use therein.
Such opinion or opinions shall be limited to New York, Ohio and United
States federal law and, if applicable, the law of the State of incorporation of
any other Significant Subsidiary. In giving such opinion, such counsel may rely,
as to all matters governed by the laws of jurisdictions in which such counsel is
not
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<PAGE> 13
qualified, upon opinions of other counsel, who shall be counsel satisfactory to
counsel for the Underwriters, in which case the opinion shall state that they
believe you and they are entitled to rely. In addition, as to paragraph (vi),
such counsel may rely upon the opinion of Sullivan & Cromwell. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent that they deem proper, upon certificates of officers of
the Guarantor, the National Banks and the Significant Subsidiaries and
certificates of public officials.
(e) The Representatives shall have received from Sullivan &
Cromwell, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to such matters as the Representatives
may reasonably require, and the Guarantor and the Trust shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(f) The Representatives shall have received certificates of the
Guarantor and the Trust, signed, in the case of the Guarantor, by the
Chairman of the Board, the President, an Executive Vice President or
Vice President of the Guarantor and by the principal accounting or
financial officer of the Guarantor, and in the case of the Trust, by an
Administrative Trustee, dated the Closing Date, to the effect that, to
the best of their knowledge upon reasonable investigation:
(i) the representations and warranties of the Guarantor and
the Trust in this Agreement are true and correct on and as of the
Closing Date with the same effect as if made at the Closing Date
and each of the Guarantor and the Trust has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) since the respective dates as of which information is
given in the Prospectus, there has been no material adverse
change, nor any presently known and existing development that the
Guarantor or the Trust, as the case may be, expects to result in a
material adverse change on the condition (financial or other),
business, properties or results of operations of the Guarantor and
its subsidiaries considered as one enterprise or the Trust, as the
case may be, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus; and
(iii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted and are pending or have been
threatened as of such date.
(g) The Representatives shall have received at the Closing Date
the opinion of Richards, Layton & Finger, P.A., special Delaware
counsel for the Trust and the Guarantor, dated the Closing Date, to the
effect that:
(i) the Trust has been duly created and is validly existing as
a business trust in good standing under the Delaware Business
Trust Act and, under the Trust Agreement and the Delaware Business
Trust Act, has the trust power and authority to own its properties
and conduct its business, all as described in the Prospectus, and
all filings required under the laws of the State of Delaware with
respect to the creation and valid existence of the Trust as a
business trust have been made;
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(ii) the Trust Agreement constitutes a valid and binding
obligation of the Guarantor and the Trustees, and is enforceable
against the Guarantor and the Trustees in accordance with its
terms, and the terms of the Securities as set forth in the Trust
Agreement are valid and binding obligations of the Trust in
accordance with the terms of the Trust Agreement, all subject to
the effect upon the Trust Agreement of (A) bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation, fraudulent
conveyance or transfer and other similar laws relating to or
affecting the rights and remedies of creditors generally, (B)
principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in
a proceeding in equity or at law), and (C) the effect of
applicable public policy on the enforceability of provisions
relating to indemnification or contribution;
(iii) under the Trust Agreement and the Delaware Business
Trust Act, the Trust has the trust power and authority to (A)
execute and deliver this Agreement, and perform its obligations
under this Agreement, and (B) issue, and perform its obligations
under, the Securities and the Common Securities;
(iv) under the Trust Agreement and the Delaware Business Trust
Act, the execution and delivery by the Trust of this Agreement,
and the performance by the Trust of its obligations hereunder have
been duly authorized by all necessary trust action on the part of
the Trust;
(v) the Securities have been duly and validly authorized by
the Trust Agreement, and, when issued and delivered against
payment therefor as provided herein, will be duly and validly
issued and, subject to the qualifications set forth herein, fully
paid and non-assessable undivided beneficial interests in the
assets of the Trust; under the Trust Agreement and the Delaware
Business Trust Act, the issuance of the Securities is not subject
to preemptive or other similar rights; the Securities will have
the rights set forth in the Trust Agreement; and the
Securityholders, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware; provided
that such counsel may note that the Securityholders may be
obligated, pursuant to the Trust Agreement, to (A) provide
indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers or exchanges of
Capital Securities Certificates (as defined in the Trust
Agreement) and the issuance of replacement Capital Securities
Certificates and (B) provide security and indemnity in connection
with requests of or directions to the Property Trustee (as defined
in the Trust Agreement) to exercise its rights and remedies under
the Trust Agreement;
(vi) the Common Securities of the Trust have been duly and
validly authorized by the Trust Agreement; under the Trust
Agreement and the Delaware Business Trust Act, the issuance of the
Common Securities is not subject to preemptive or other similar
rights;
(vii) the issue and sale of the Securities and the Common
Securities by the Trust, the execution and delivery of this
Agreement by the Trust, the compliance by the Trust with all of
the provisions of the Securities, the Trust Agreement and this
Agreement, the purchase by the Trust of the Subordinated
Debentures and the consummation of the transactions herein and
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<PAGE> 15
therein contemplated do not violate (A) the Trust Agreement or the
Certificate of Trust of the Trust, or (B) any applicable Delaware
law, rule or regulation;
(viii) assuming that the Trust derives no income from or
connected with services provided within the State of Delaware and
has no assets, activities (other than maintaining the Delaware
Trustee (as defined in the Trust Agreement) and the filing of
documents with the Secretary of State of the State of Delaware) or
employees in the State of Delaware, no authorization, approval,
consent or order of any Delaware court or Delaware governmental
authority or Delaware agency is required to be obtained by the
Trust solely in connection with the issuance and sale of the
Securities and the Common Securities. In rendering the opinion
expressed in this paragraph, such counsel need express no opinion
concerning the securities laws of the State of Delaware; and
(ix) assuming that the Trust derives no income from or
connected with sources within the State of Delaware and has no
assets, activities (other than having a Delaware trustee as
required by the Delaware Business Trust Act and filing documents
with the Delaware Secretary of State) or employees in the State of
Delaware and that the Trust is treated as a grantor trust for
purposes of US Federal income tax, the Securityholders (other than
those holders of the Securities who reside or are domiciled in the
State of Delaware) will have no liability for income taxes imposed
by the State of Delaware solely as a result of their participation
in the Trust, and the Trust will not be liable for any income tax
imposed by the State of Delaware.
(h) Sullivan & Cromwell, special tax counsel for the Guarantor and
the Trust, shall have furnished to the Representatives their written
opinion, dated the Closing Date, in form and substance satisfactory to
you, to the effect that such firm confirms its opinion set forth in the
Prospectus under the caption "Certain Federal Income Tax Consequences".
(i) Prior to the Closing Date, the Guarantor and the Trust shall
have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request.
7. (a) Indemnification and Contribution. 1. The Guarantor and the Trust
jointly and severally will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter, its partners, directors and officers and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Act, may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Guarantor and the Trust will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of the Form T-1 or arises out of or is based upon an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Guarantor and the Trust by any
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<PAGE> 16
Underwriter through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by the
Underwriter consists of the information described as such in subsection (b)
below.
Insofar as the foregoing indemnity agreement, or the representations
and warranties contained in Section 2(b), may permit indemnification for
liabilities under the Act of any person who is an Underwriter or a partner or
controlling person of an Underwriter within the meaning of Section 15 of the Act
and who, at the date of this Agreement, is a director, officer or controlling
person of the Guarantor or the Trust, the Guarantor and the Trust have been
advised that in the opinion of the Commission such provisions may contravene
Federal public policy as expressed in the Act and may therefore be
unenforceable. In the event that a claim for indemnification under such
agreement or such representations and warranties for any such liabilities
(except insofar as such agreement provides for the payment by the Guarantor or
the Trust of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by such a person, the Guarantor or the Trust will submit to a court of
appropriate jurisdiction (unless in the opinion of counsel for the Guarantor and
the Trust the matter has already been settled by controlling precedent) the
question of whether or not indemnification by it for such liabilities is against
public policy as expressed in the Act and therefore unenforceable, and the
Guarantor and the Trust will be governed by the final adjudication of such
issue.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Guarantor and the Trust, their directors, officers and
administrators and each person, if any who controls the Guarantor or the Trust
within the meaning of Section 15 of the Act, against any losses, claims, damages
or liabilities to which the Guarantor or the Trust may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Guarantor and the Trust
by such Underwriter through the Representatives specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by the
Guarantor and the Trust in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Underwriter consists of
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to
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<PAGE> 17
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i) includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Guarantor and
the Trust on the one hand and the Underwriters on the other from the offering of
the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Guarantor and the Trust on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Guarantor and the Trust on
the one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Guarantor and the Trust bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Guarantor and the Trust
or the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Guarantor and the Trust under this Section
shall be in addition to any liability which the Guarantor and the Trust may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director or administrator,
as the
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<PAGE> 18
case may be, of the Guarantor and the Trust, to each officer or administrator,
as the case may be, of the Guarantor and the Trust who has signed a Registration
Statement and to each person, if any, who controls the Guarantor or the Trust
within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Securities hereunder on the Closing
Date and the aggregate number of Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
number of Securities that the Underwriters are obligated to purchase on the
Closing Date, the Representatives may make arrangements satisfactory to
the Guarantor and the Trust for the purchase of such Securities by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Securities that such defaulting Underwriters agreed but failed to purchase
on the Closing Date. If any Underwriter or Underwriters so default and the
aggregate number of Securities with respect to which such default or defaults
occur exceeds 10% of the total number of Securities that the Underwriters are
obligated to purchase on the Closing Date and arrangements satisfactory to
Credit Suisse First Boston and the Guarantor and the Trust for the purchase of
such Securities by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Guarantor or the Trust, except as provided in
Section 9. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve a
defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Guarantor and the Trust or each of its officers or administrators, as the case
may be, and of the several Underwriters set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation,
or statement as to the results thereof, made by or on behalf of any Underwriter,
the Guarantor or the Trust or any of their respective representatives,
administrators, officers or directors or any controlling person, and will
survive delivery of and payment for the Securities. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the
Securities by the Underwriters is not consummated, the Guarantor and the Trust
shall remain responsible for the expenses to be paid or reimbursed by them
pursuant to Section 5 and the respective obligations of the Guarantor and the
Trust and the Underwriters pursuant to Section 7 shall remain in effect, and if
any Securities have been purchased hereunder the representations and warranties
in Section 2 and all obligations under Section 5 shall also remain in effect. If
the purchase of the Securities by the Underwriters is not consummated for any
reason other than solely because of the termination of this Agreement pursuant
to Section 8 or the occurrence of any event specified in clause (iii), (iv) or
(v) of Section 6(c), the Guarantor and the Trust will reimburse the Underwriters
for all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representatives at Eleven Madison Avenue, New York, N.Y. 10010-3629,
Attention: Investment Banking Department--Transactions Advisory Group, or, if
sent to the Guarantor and the Trust, will be mailed, delivered or telegraphed
and confirmed to it at KeyCorp, 127 Public Square, Cleveland, Ohio 44114-1306,
Attention: Daniel R. Stolzer, Esq., provided, however, that any notice to an
Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed and
confirmed to such Underwriter.
18
<PAGE> 19
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives will act for
the several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives will be binding upon all the
Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
Each of the Guarantor and the Trust hereby submits to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
19
<PAGE> 20
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Guarantor and the
Trust two of the counterparts hereof, whereupon it will become a binding
agreement between the Guarantor and the Trust and the several Underwriters in
accordance with its terms.
Very truly yours,
KEYCORP CAPITAL III
BY: KEYCORP, AS DEPOSITOR
By_____________________________
Name:
Title:
KEYCORP
By_____________________________
Name:
Title:
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
MCDONALD INVESTMENTS INC.
Acting on behalf of themselves and as the
Representatives of the several
Underwriters.
BY: CREDIT SUISSE FIRST BOSTON CORPORATION
________________________
Name:
Title:
20
<PAGE> 21
SCHEDULE A
Underwriter
----------- NUMBER OF
SECURITIES
----------
Credit Suisse First Boston Corporation................................
McDonald Investments Inc..............................................
J.P. Morgan Securities Inc............................................
Salomon Smith Barney Inc..............................................
Total...................................... 250,000
=======
21
<PAGE> 1
EXHIBIT 4(d)
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
among
KEYCORP,
as Depositor,
BANKERS TRUST COMPANY,
as Property Trustee,
BANKERS TRUST (DELAWARE),
as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES
NAMED HEREIN
Dated as of June _______, 1999
KEYCORP CAPITAL III
================================================================================
<PAGE> 2
KeyCorp Capital III
Reconciliation and tie between the Trust Indenture Act of 1939 (including
cross-references to provisions of Sections 310 to and including 318(a) which,
pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended by the
Trust Reform Act of 1990, are a part of and govern the Indenture whether or not
physically contained therein) and the Amended and Restated Trust Agreement,
dated as of June____, 1999.
Trust Indenture Trust Agreement
Act Section Section
- --------------- ---------------
310 (a)(1).......................................... 8.7
(a)(2).......................................... 8.7
(a)(3).......................................... 8.9
(a)(4).......................................... 2.7(a)(ii)(E)
(b)............................................. 8.8, 10.10
(c)............................................. Not Applicable
311 (a)............................................. 8.13
(c)............................................. Not Applicable
(b)............................................. 8.13
312 (a)............................................. 5.7, 10.10
(b)............................................. 5.7, 10.10
(c)............................................. 5.7, 10.10
313 (a)............................................. 8.14(a)
(a)(4).......................................... 8.14(b)
(b)............................................. 8.14(b)
(c)............................................. 10.8
(d)............................................. 8.14(c)
314 (a)............................................. 8.15
(b)............................................. Not Applicable
(c)(1).......................................... 8.16
(c)(2).......................................... 8.16
(c)(3).......................................... Not Applicable
(d)............................................. Not Applicable
(e)............................................. 1.1, 8.16
315 (a)............................................. 8.1(a), 8.3(a)
(b)............................................. 8.2, 10.8
(c)............................................. 8.1(a), 8.1(d)(iii)
(d)............................................. 8.1, 8.3
(e)............................................. Not Applicable
316 (a)(1)(A)....................................... Not Applicable
(a)(1)(B)....................................... 5.13(b)
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<PAGE> 3
(a)(2).......................................... Not Applicable
(b)............................................. 5.13(c)
(c)............................................. 6.7
317 (a)(1).......................................... Not Applicable
(a)(2).......................................... Not Applicable
(b)............................................. 5.10
318 (a)............................................. 10.10
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Trust Agreement.
-ii-
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINED TERMS
SECTION 1.1. Definitions.................................................................................2
ARTICLE II.
CONTINUATION OF THE ISSUER TRUST
SECTION 2.1. Name.......................................................................................12
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business................................12
SECTION 2.3. Initial Contribution of Trust Property; Organizational Expenses............................12
SECTION 2.4. Issuance of the Capital Securities.........................................................12
SECTION 2.5. Issuance of the Common Securities; Subscription and Purchase
of Debentures.....................................................................13
SECTION 2.6. Continuation of Trust......................................................................13
SECTION 2.7. Authorization to Enter into Certain Transactions...........................................14
SECTION 2.8. Assets of Trust............................................................................18
SECTION 2.9. Title to Trust Property....................................................................18
ARTICLE III.
PAYMENT ACCOUNT
SECTION 3.1. Payment Account............................................................................18
ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions..............................................................................19
SECTION 4.2. Redemption.................................................................................20
SECTION 4.3. Subordination of Common Securities.........................................................22
SECTION 4.4. Payment Procedures.........................................................................23
SECTION 4.5. Tax Returns and Reports....................................................................23
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Issuer Trust.........................................23
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.....................................24
</TABLE>
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<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 4.8. Liability of the Holder of Common Securities...............................................24
SECTION 4.9. Exchange...................................................................................24
ARTICLE V.
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership..........................................................................25
SECTION 5.2. The Trust Securities Certificates..........................................................25
SECTION 5.3. Execution and Delivery of Trust Securities Certificates....................................25
SECTION 5.4. Book-Entry Capital Securities..............................................................26
SECTION 5.5. Registration of Transfer and Exchange of Capital
Securities Certificates...........................................................28
SECTION 5.6. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates.........................31
SECTION 5.7. Persons Deemed Holders.....................................................................31
SECTION 5.8. Access to List of Holders' Names and Addresses.............................................31
SECTION 5.9. Maintenance of Office or Agency............................................................31
SECTION 5.10. Appointment of Paying Agent...............................................................32
SECTION 5.11. Ownership of Common Securities by Depositor...............................................32
SECTION 5.12. Notices to Clearing Agency................................................................33
SECTION 5.13. Rights of Holders.........................................................................33
ARTICLE VI.
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Voting Rights...............................................................35
SECTION 6.2. Notice of Meetings.........................................................................36
SECTION 6.3. Meetings of Holders of Capital Securities. ................................................37
SECTION 6.4. Voting Rights. ............................................................................37
SECTION 6.5 Proxies, Etc. .............................................................................37
SECTION 6.6. Holder Action by Written Consent. .........................................................38
SECTION 6.7. Record Date for Voting and Other Purposes. ................................................38
SECTION 6.8. Acts of Holders. ..........................................................................38
SECTION 6.9. Inspection of Records......................................................................39
</TABLE>
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<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee
and the Delaware Trustee..........................................................39
SECTION 7.2. Representations and Warranties of Depositor. ..............................................41
ARTICLE VIII.
THE ISSUER TRUSTEES
SECTION 8.1. Certain Duties and Responsibilities........................................................41
SECTION 8.2. Certain Notices............................................................................43
SECTION 8.3. Certain Rights of Property Trustee.........................................................43
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities.....................................46
SECTION 8.5. May Hold Securities........................................................................46
SECTION 8.6. Compensation; Indemnity; Fees..............................................................46
SECTION 8.7. Corporate Property Trustee Required; Eligibility of Issuer Trustees........................47
SECTION 8.8. Conflicting Interests......................................................................48
SECTION 8.9. Co-Trustees and Separate Trustee...........................................................48
SECTION 8.10. Resignation and Removal; Appointment of Successor.........................................50
SECTION 8.11. Acceptance of Appointment by Successor....................................................51
SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business...............................52
SECTION 8.13. Preferential Collection of Claims Against Depositor
or the Issuer Trust...............................................................52
SECTION 8.14. Reports by Property Trustee...............................................................53
SECTION 8.15. Reports to the Property Trustee. .........................................................54
SECTION 8.16. Evidence of Compliance with Conditions Precedent. ........................................54
SECTION 8.17. Number of Issuer Trustees. ...............................................................54
SECTION 8.18. Delegation of Power. .....................................................................54
SECTION 8.19. Appointment of Administrative Trustees....................................................55
ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Dissolution Upon Expiration Date...........................................................55
SECTION 9.2. Early Termination..........................................................................56
SECTION 9.3. Termination................................................................................56
</TABLE>
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<PAGE> 7
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 9.4. Liquidation................................................................................56
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements
of the Issuer Trust...............................................................58
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Holders..........................................................59
SECTION 10.2. Amendment. ..............................................................................59
SECTION 10.3. Separability. ...........................................................................61
SECTION 10.4. Governing Law............................................................................61
SECTION 10.5. Payments Due on Non-Business Day.........................................................61
SECTION 10.6. Successors...............................................................................61
SECTION 10.7. Headings.................................................................................61
SECTION 10.8. Reports, Notices and Demands.............................................................62
SECTION 10.9 Agreement Not to Petition................................................................62
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act...................................63
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and Indenture..........................63
SECTION 10.12. Counterparts.............................................................................64
Exhibit A Certificate of Trust
Exhibit B DTC Letter of Representation
Exhibit C Form of Common Securities Certificate
Exhibit D Expense Agreement
Exhibit E Form of Capital Securities Certificate
</TABLE>
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<PAGE> 8
AMENDED AND RESTATED TRUST AGREEMENT, dated as of June ___, 1999, among
(i) KEYCORP, an Ohio corporation (including any successors or assigns, the
"Depositor"), (ii) BANKERS TRUST COMPANY, a New York banking corporation, as
property trustee (in such capacity, the "Property Trustee" and, in its separate
corporate capacity and not in its capacity as Property Trustee, the "Bank"),
(iii) BANKERS TRUST (DELAWARE), a Delaware banking corporation, as Delaware
trustee (the "Delaware Trustee"), (iv) Louis D. Raffis, an individual, and
Daniel R. Stolzer, an individual, each of whose address is c/o KeyCorp, 127
Public Square, Cleveland, Ohio 44144 (each an "Administrative Trustee" and
collectively the "Administrative Trustees") (the Property Trustee, the Delaware
Trustee and the Administrative Trustees being referred to collectively as the
"Issuer Trustees") and (v) the several HOLDERS, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor and certain of the Issuer Trustees have
heretofore duly declared and established a business trust pursuant to the
Delaware Business Trust Act by entering into that certain Trust Agreement, dated
as of April 13, 1999 (the "Original Trust Agreement"), and by the execution and
filing by certain of the Issuer Trustees with the Secretary of State of the
State of Delaware of the Certificate of Trust (the "Certificate of Trust"),
filed on April 13, 1999, attached as Exhibit A; and
WHEREAS, the parties hereto desire to amend and restate the Original
Trust Agreement in its entirety as set forth herein to provide for, among other
things, (i) the issuance of the Common Securities by the Issuer Trust to the
Depositor, (ii) the issuance and sale of the Capital Securities by the Issuer
Trust pursuant to the Underwriting Agreement, (iii) the acquisition by the
Issuer Trust from the Depositor of all of the right, title and interest in the
Debentures and (iv) the appointment of the Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each party, for the benefit of the
other parties and for the benefit of the Holders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
<PAGE> 9
ARTICLE I
DEFINED TERMS
SECTION 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Trust Agreement;
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole and
not to any particular Article, Section or other subdivision; and
(e) unless the context otherwise requires, any reference to a
statute, rule or regulation refers to the same (including any successor
statute, rule or regulation thereto) as it may be amended from time to
time.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Indenture) paid by the Depositor on a Like Amount of Debentures
for such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Administrative Trustees" means each Person appointed in accordance
with Section 8.19 solely in such Person's capacity as Administrative Trustee of
the Issuer Trust and not in such Person's individual capacity, or any successor
Administrative Trustee appointed as herein provided. The initial Administrative
Trustees are Louis D. Raffis and Daniel R. Stolzer.
-2-
<PAGE> 10
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that the Issuer Trust
shall not be deemed an Affiliate of the Depositor. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Applicable Procedures" means, with respect to any transfer or
transaction involving Book-Entry Capital Securities, the rules and procedures of
the Clearing Agency for such Book-Entry Capital Securities, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises judging such Person as bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt, or the taking of corporate action by such Person
in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of
-3-
<PAGE> 11
Directors, or such committee of the Board of Directors or officers of the
Depositor to which authority to act on behalf of the Board of Directors has been
delegated, and to be in full force and effect on the date of such certification,
and delivered to the Issuer Trustees.
"Book-Entry Capital Securities" means a beneficial interest in a Global
Capital Securities Certificate, the ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in Section 5.4.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed, or (c) a day on which the
Property Trustee's Corporate Trust Office or the Corporate Trust Office of the
Debenture Trustee is closed for business.
"Capital Securities Certificate" means a certificate evidencing Capital
Securities, substantially in the form attached as Exhibit E.
"Capital Security" means a preferred undivided beneficial interest in
the assets of the Issuer Trust, having a Liquidation Amount of $1,000 and having
the rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution as provided herein.
"Certificate Depository Agreement" means the agreement among the Issuer
Trust, the Depositor and DTC, as the initial Clearing Agency, dated as of the
Closing Date, relating to the Trust Securities Certificates, substantially in
the form attached as Exhibit B, as the same may be amended and supplemented from
time to time.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" has the meaning given to such term in the Underwriting
Agreement, which date is also the date of execution and delivery of this Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"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 Trust Agreement 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.
-4-
<PAGE> 12
"Common Securities Certificate" means a certificate evidencing Common
Securities, substantially in the form attached as Exhibit C.
"Common Security" means an undivided beneficial interest in the assets
of the Issuer Trust, having a Liquidation Amount of $1,000 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Corporate Trust Office" means (i) when used with respect to the
Property Trustee, the principal office of the Property Trustee located in New
York, New York which on the date of this Trust Agreement is Four Albany Street,
New York, New York 10006 - Attention: Corporate Trust and Agency Group -
Corporate Market Services, and (ii) when used with respect to the Debenture
Trustee, its Corporate Trust Office as defined in the Indenture.
"Debenture Event of Default" means an "Event of Default" as defined in
the Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Trustee" means Bankers Trust Company, a New York banking
corporation and any successor thereto.
"Debentures" means the aggregate principal amount of the Depositor's
___% Junior Subordinated Deferrable Interest Debentures, issued pursuant to the
Indenture.
"Definitive Capital Securities Certificates" means either or both (as
the context requires) of (a) Capital Securities Certificates issued as
Book-Entry Capital Securities as provided in Section 5.2 or 5.4 and (b) Capital
Securities Certificates issued in certificated, fully registered form as
provided in Section 5.2, 5.4 or 5.5.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801, et seq., as it may be amended from time
to time.
"Delaware Trustee" means the Person identified as the "Delaware
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Issuer Trust and not in its individual capacity, or its
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
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<PAGE> 13
"Distribution Rate" means, with respect to any Distribution Period, a
rate per annum equal to the Interest Rate (as defined in the Debentures) with
respect to the Interest Period under (and as defined in) the Debentures that
begins on the same date as such Distribution Period begins and ends on the same
date as such Distribution Period ends.
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"DTC" means The Depository Trust Company.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Issuer Trust in the payment of any
Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days; or
(c) default by the Issuer Trust in the payment of any
Redemption Price of any Trust Security when it becomes due and payable;
or
(d) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Issuer Trustees in this
Trust Agreement (other than a covenant or warranty a default in the
performance or breach of which is described in clause (b) or (c) above)
and continuation of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to the
Issuer Trustees and the Depositor by the Holders of at least 25% in
aggregate Liquidation Amount of the Outstanding Capital Securities a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the
Property Trustee and a successor Property Trustee not being appointed
within 90 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
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<PAGE> 14
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between KeyCorp, as Holder of the Common Securities, and the Issuer Trust, to be
dated the date hereof, substantially in the form attached as Exhibit D, as
amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Global Capital Securities Certificate" means a Capital Securities
Certificate that is registered in the Security Register in the name of a
Clearing Agency or a nominee thereof.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Depositor and Bankers Trust Company, as trustee, for the benefit of the holders
of the Capital Securities, as amended from time to time.
"Holder" means a Person in whose name a Trust Security or Trust
Securities is or are registered in the Securities Register; any such Person
shall be a beneficial owner within the meaning of the Delaware Business Trust
Act; provided, however, that in determining whether the Holders of the requisite
amount of Capital Securities have voted on any matter provided for in this Trust
Agreement, then for the purpose of any such determination, so long as Definitive
Capital Securities Certificates have not been issued, the term Holders as used
herein shall refer to the Owners, notwithstanding the provisions of Section 5.7
of this Trust Agreement.
"Indenture" means the Indenture, dated as of December 4, 1996, between
the Depositor and the Debenture Trustee, as trustee, as amended or supplemented
from time to time.
"Issuer Trust" means the business trust created under the laws of the
State of Delaware and identified on the cover page to this Trust Agreement.
"Issuer Trustees" means the parties identified as the "Issuer Trustees"
in the preamble to this Trust Agreement.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures to be contemporaneously redeemed in accordance with the
Indenture, the proceeds of which will
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<PAGE> 15
be used to pay the Redemption Price of such Trust Securities, (b) with respect
to a distribution of Debentures to Holders in connection with a dissolution or
liquidation of the Issuer Trust, Debentures having a principal amount equal to
the aggregate Liquidation Amount of the Trust Securities of the Holder to whom
such Debentures are distributed, and (c) with respect to a distribution of
Debentures to the Depositor or any of its Affiliates pursuant to Section 4.9,
Debentures having a principal amount equal to the aggregate Liquidation Amount
of the Capital Securities of the Depositor or its Affiliate(s) to whom such
Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust
Security.
"Liquidation Date" means the date on which the Debentures are
distributed to the Holders pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended from
time to time.
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary, of
the Depositor, and delivered to the appropriate Issuer Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 8.16 shall
be the principal executive, financial or accounting officer of the Depositor.
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
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"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Issuer Trust, the Property Trustee or the Depositor and who
shall be reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding," when used with respect to Trust Securities, means, as of
the date of determination, all Trust Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Trust Securities theretofore cancelled by the Securities
Registrar or delivered to the Securities Registrar for cancellation;
(b) Trust Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Property
Trustee or any Paying Agent for the Holders of such Trust Securities;
provided that, if such Trust Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Trust Agreement;
and
(c) Trust Securities which have been paid or in exchange for
or in lieu of which other Trust Securities have been executed and
delivered pursuant to Sections 5.4, 5.5, and 5.6;
provided, however, that in determining whether the Holders of the requisite
aggregate Liquidation Amount of the Outstanding Capital Securities have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, Capital Securities owned by the Depositor, any Issuer Trustee, any
Administrative Trustee or any Affiliate of the Depositor, any Issuer Trustee or
any Administrative Trustee shall be disregarded and deemed not to be
Outstanding, except that (a) in determining whether any Issuer Trustee or any
Administrative Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Capital
Securities that a Responsible Officer of such Issuer Trustee or such
Administrative Trustee, as the case may be, knows to be so owned shall be so
disregarded, and (b) the foregoing shall not apply at any time when all of the
outstanding Capital Securities are owned by the Depositor, one or more of the
Issuer Trustees, one or more of the Administrative Trustees and/or any such
Affiliate. Capital Securities so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Administrative Trustees the pledgee's right so to act with respect to such
Capital Securities and that the pledgee is not the Depositor or any Affiliate of
the Depositor.
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"Owner" means each Person who is the beneficial owner of Book-Entry
Capital Securities as reflected in the records of the Clearing Agency or, if a
Clearing Agency Participant is not the Owner, then as reflected in the records
of a Person maintaining an account with such Clearing Agency (directly or
indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.10 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Holders in which all amounts paid in respect
of the Debentures will be held and from which the Property Trustee, through the
Paying Agent, shall make payments to the Holders in accordance with Sections 4.1
and 4.2.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Property Trustee" means the Person identified as the "Property
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Property Trustee of the Issuer Trust and not in its individual capacity, or its
successor in interest in such capacity, or any successor property trustee
appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Debentures, allocated on a pro rata basis (based on Liquidation Amounts) among
the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Responsible Officer" means, when used with respect to the Property
Trustee, any officer assigned to the Corporate Trust Office, including any
managing director, principal vice president, assistant vice president, assistant
treasurer, assistant secretary or any other officer of the Property Trustee
customarily performing functions similar to those performed by any of the above
designated officers, and also, with respect to a particular matter, any
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other officer, to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject and with respect to the
Delaware Trustee, any officer of the Delaware Trustee customarily performing
functions similar to those performed by any of the above designated officers,
and also, with respect to a particular matter, any other officer, to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.5(a).
"Successor Capital Security" of any particular Capital Security means
every Capital Security issued after, and evidencing all or a portion of the same
beneficial interest in the Issuer Trust as that evidenced by, such particular
Capital Security; and, for the purposes of this definition, any Capital Security
executed and delivered under Section 5.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Capital Security shall be deemed to
evidence the same beneficial interest as the mutilated, destroyed, lost or
stolen Capital Securities Certificate.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including (i) all exhibits hereto and (ii) for all
purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this Trust Agreement is executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) the rights of the Issuer
Trust under the Expense Agreement, (c) any cash on deposit in, or owing to, the
Payment Account and (d) all proceeds and rights in respect of the foregoing and
any other property and assets for the time being held or deemed to be held by
the Property Trustee pursuant to the trusts of this Trust Agreement.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
"Trust Security" means any one of the Common Securities or the Capital
Securities.
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"Underwriting Agreement" means the Underwriting Agreement, dated as of
June ______, 1999, among the Issuer Trust, the Depositor and the Underwriters
named therein, as the same may be amended from time to time.
ARTICLE II.
CONTINUATION OF THE ISSUER TRUST
SECTION 2.1. Name.
The Issuer Trust continued hereby shall be known as "KeyCorp Capital
III," as such name may be modified from time to time by the Administrative
Trustees following written notice to the Holders of Trust Securities and the
Issuer Trustees, in which name the Issuer Trustees may conduct the business of
the Issuer Trust, make and execute contracts and other instruments on behalf of
the Issuer Trust and sue and be sued.
SECTION 2.2. Office of the Delaware Trustee; Principal Place of
Business.
The address of the Delaware Trustee in the State of Delaware is E.A.
Delle Donne Corporate Center, Montgomery Bldg., 1011 Centre Road, Suite 200,
Wilmington, Delaware 19805-1266, or such other address in the State of Delaware
as the Delaware Trustee may designate by written notice to the Holders and the
Depositor. The principal executive office of the Issuer Trust is in care of
KeyCorp, 127 Public Square, Cleveland, Ohio 44114-1306,
Attn: Corporate Treasury.
SECTION 2.3. Initial Contribution of Trust Property; Organizational
Expenses.
The Property Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Issuer Trust as they arise or shall, upon request of any Issuer
Trustee, promptly reimburse such Issuer Trustee for any such expenses paid by
such Issuer Trustee. The Depositor shall make no claim upon the Trust Property
for the payment of such expenses.
SECTION 2.4. Issuance of the Capital Securities.
On June ____, 1999, the Depositor, both on its own behalf and on behalf
of the Issuer Trust and pursuant to the Original Trust Agreement, executed and
delivered the Underwriting Agreement. Contemporaneously with the execution and
delivery of this Trust Agreement, an Administrative Trustee, on behalf of the
Issuer Trust, shall execute in accordance with Sections 5.2, 5.3 and 8.9(a) and
deliver to the Underwriters, Capital Securities Certificates,
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registered in the names requested by the Underwriters or a representative
thereof, evidencing 250,000 Capital Securities having an aggregate Liquidation
Amount of $250,000,000, against receipt of the aggregate purchase price for such
Capital Securities of $___________ by the Property Trustee.
SECTION 2.5. Issuance of the Common Securities; Subscription and
Purchase of Debentures.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Issuer Trust, shall
execute in accordance with Sections 5.2 and 5.3 and the Property Trustee shall
deliver to the Depositor Common Securities Certificates, registered in the name
of the Depositor, evidencing 7,800 Common Securities having an aggregate
Liquidation Amount of $7,800,000 against payment by the Depositor of such amount
to the Property Trustee. Contemporaneously therewith, an Administrative Trustee,
on behalf of the Issuer Trust, shall subscribe for and purchase from the
Depositor the Debentures, registered in the name of the Property Trustee on
behalf of the Issuer Trust and having an aggregate principal amount equal to
$257,800,000, and, in satisfaction of the purchase price for such Debentures,
the Property Trustee, on behalf of the Issuer Trust, shall deliver to the
Depositor the sum of $__________ (being the sum of the amounts delivered to the
Property Trustee pursuant to (i) Section 2.4 and (ii) this Section 2.5).
SECTION 2.6. Continuation of Trust.
The exclusive purposes and functions of the Issuer Trust are (a) to
issue and sell Trust Securities and to use the proceeds from such sale to
acquire the Debentures, and (b) to engage in only those activities necessary or
incidental thereto. The Depositor hereby appoints the Issuer Trustees as
trustees of the Issuer Trust, to have all the rights, powers and duties to the
extent set forth herein, and the Issuer Trustees hereby accept such appointment.
The Property Trustee hereby declares that it will hold the Trust Property in
trust upon and subject to the conditions set forth herein for the benefit of the
Issuer Trust and the Holders. The Administrative Trustees shall have only those
ministerial duties set forth herein with respect to accomplishing the purposes
of the Issuer Trust and, to the fullest extent permitted by law, shall not be
fiduciaries with respect to the Issuer Trust or the Holders. The Property
Trustee shall have the power to perform those duties assigned to the
Administrative Trustees. The Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative Trustees set
forth herein. The Delaware Trustee shall be one of the Issuer Trustees of the
Issuer Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act and for taking such actions as
are required to be taken by a Delaware Trustee under the Delaware Business Trust
Act.
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SECTION 2.7. Authorization to Enter into Certain Transactions.
(a) The Issuer Trustees shall conduct the affairs of the Issuer Trust
in accordance with the terms of this Trust Agreement. Subject to the limitations
set forth in paragraph (b) of this Section 2.7, and in accordance with the
following provisions (i) and (ii), the Issuer Trustees shall have the authority
to enter into all transactions and agreements determined by the Issuer Trustees
to be appropriate in exercising the authority, express or implied, otherwise
granted to the Issuer Trustees, as the case may be, under this Trust Agreement,
and to perform all acts in furtherance thereof, including without limitation,
the following:
(i) Each Administrative Trustee shall have the power and
authority to act on behalf of the Issuer Trust with respect to the
following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Issuer Trust to enter into, and to
execute and deliver on behalf of the Issuer Trust, the Expense
Agreement and such other agreements as may be necessary or
desirable in connection with the purposes and function of the
Issuer Trust;
(C) assisting in the registration of the Capital
Securities under the Securities Act and under applicable state
securities or blue sky laws, and the qualification of this
Trust Agreement as a trust indenture under the Trust Indenture
Act;
(D) assisting in the listing of the Capital
Securities upon such securities exchange or exchanges as shall
be determined by the Depositor, with the registration of the
Capital Securities under the Exchange Act, and the preparation
and filing of all periodic and other reports and other
documents pursuant to the foregoing;
(E) the sending of notices (other than notices of
default) and other information regarding the Trust Securities
and the Debentures to the Holders in accordance with this
Trust Agreement;
(F) the consent to the appointment of a Paying Agent
and Securities Registrar in accordance with this Trust
Agreement (which consent shall not be unreasonably withheld);
(G) the execution of the Trust Securities in
accordance with this Trust Agreement;
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(H) the execution and delivery of closing
certificates pursuant to the Underwriting Agreement and the
application for a taxpayer identification number for the
Issuer Trust;
(I) to the extent provided in this Trust Agreement,
the winding up of the affairs of and liquidation of the Issuer
Trust and the preparation and filing of the certificate of
cancellation with the Secretary of State of the State of
Delaware;
(J) unless otherwise required by applicable law, to
execute on behalf of the Issuer Trust (either acting alone or
together with any or all of the Administrative Trustees) any
documents that the Administrative Trustees have the power to
execute pursuant to this Trust Agreement; and
(K) the taking of any action incidental to the
foregoing as the Administrative Trustees may from time to time
determine is necessary or advisable to give effect to the
terms of this Trust Agreement for the benefit of the Holders
(without consideration of the effect of any such action on any
particular Holder).
(ii) The Property Trustee shall have the power, duty and
authority to act on behalf of the Issuer Trust with respect to the
following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any
other payments made in respect of the Debentures and the
holding of such amounts in the Payment Account;
(D) the distribution through the Paying Agent of
amounts distributable to the Holders in respect of the Trust
Securities;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Debentures;
(F) the sending of notices of default and other
information regarding the Trust Securities and the Debentures
to the Holders in accordance with this Trust Agreement;
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(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement,
the winding up of the affairs of and liquidation of the Issuer
Trust and the execution and filing of the certificate of
cancellation with the Secretary of State of the State of
Delaware;
(I) after an Event of Default (other than under
paragraph (b), (c), (d) or (e) of the definition of such term
if such Event of Default is by or with respect to the Property
Trustee) the taking of any action incidental to the foregoing
as the Property Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this
Trust Agreement and protect and conserve the Trust Property
for the benefit of the Holders (without consideration of the
effect of any such action on any particular Holder); and
(J) any of the duties, liabilities, powers or the
authority of the Administrative Trustees set forth herein; and
in the event of a conflict between the action of the
Administrative Trustees and the action of the Property
Trustee, the action of the Property Trustee shall prevail.
(b) So long as this Trust Agreement remains in effect, the Issuer Trust
(or the Issuer Trustees or Administrative Trustees acting on behalf of the
Issuer Trust) shall not undertake any business, activities or transaction except
as expressly provided herein or contemplated hereby. In particular, neither the
Issuer Trustees nor the Administrative Trustees shall (i) acquire any
investments or engage in any activities not authorized by this Trust Agreement,
(ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise
dispose of any of the Trust Property or interests therein, including to Holders,
except as expressly provided herein, (iii) take any action that would reasonably
be expected to cause the Issuer Trust to be classified as an association taxable
as a corporation or as other than a grantor trust for United States federal
income tax purposes, (iv) incur any indebtedness for borrowed money or issue any
other debt or (v) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property. The Property Trustee shall, at
the sole cost and expense of the Issuer Trust, defend all claims and demands of
all Persons at any time claiming any Lien on any of the Trust Property adverse
to the interest of the Issuer Trust or the Holders in their capacity as Holders.
(c) In connection with the issue and sale of the Capital Securities,
the Depositor shall have the right and responsibility to assist the Issuer Trust
with respect to, or effect on behalf of the Issuer Trust, the following (and any
actions taken by the Depositor in furtherance of
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the following prior to the date of this Trust Agreement are hereby ratified and
confirmed in all respects):
(i) the preparation and filing by the Issuer Trust with the
Commission and the execution on behalf of the Issuer Trust of a
registration statement on the appropriate form in relation to the
Capital Securities, including any amendments thereto, and the taking of
any action necessary or desirable to sell the Capital Securities in a
transaction or a series of transactions pursuant thereto;
(ii) the determination of the States in which to take
appropriate action to qualify or register for sale all or part of the
Capital Securities and the determination of any and all such acts,
other than actions which must be taken by or on behalf of the Issuer
Trust, and the advice to the Issuer Trust of actions they must take on
behalf of the Issuer Trust, and the preparation for execution and
filing of any documents to be executed and filed by the Issuer Trust or
on behalf of the Issuer Trust, as the Depositor deems necessary or
advisable in order to comply with the applicable laws of any such
States in connection with the sale of the Capital Securities;
(iii) if the Depositor shall desire, the preparation for
filing by the Issuer Trust and execution on behalf of the Issuer Trust
of an application to the New York Stock Exchange or any other national
stock exchange or the Nasdaq National Market for listing, upon notice
of issuance, of any Capital Securities;
(iv) the preparation for filing by the Issuer Trust with the
Commission and the execution on behalf of the Issuer Trust of a
registration statement on Form 8-A relating to the registration of the
Capital Securities under Section 12(b) or 12(g) of the Exchange Act,
including any amendments thereto;
(v) the preparation and execution of a Letter of
Representations to the Depository Trust Company on behalf of the Issuer
Trust; and
(vi) the negotiation of the terms of, and the execution and
delivery of, the Underwriting Agreement providing for the sale of the
Capital Securities; and
(vii) the taking of any other actions necessary or desirable
to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Issuer
Trustees are authorized and directed to conduct the affairs of the Issuer Trust
and to operate the Issuer Trust so that the Issuer Trust will not be deemed to
be an "investment company" required to be registered under the 1940 Act, or to
be classified as an association taxable as a corporation or as other than a
grantor trust for United States federal income tax purposes and
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so that the Debentures will be treated as indebtedness of the Depositor for
United States federal income tax purposes. In this connection, the
Administrative Trustees, the Property Trustee and the Holder of a majority of
the Common Securities are authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that each of
any Administrative Trustee, Property Trustee and the holders of a majority of
Common Securities determines in its discretion to be necessary or desirable for
such purposes, as long as such action does not adversely affect in any material
respect the interests of the Holders of the Capital Securities. In no event
shall the Issuer Trustees be liable to the Issuer Trust or the Holders for any
failure to comply with this section that results from a change in law or
regulation or interpretation thereof.
SECTION 2.8. Assets of Trust.
The assets of the Issuer Trust shall consist of the Trust Property.
SECTION 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Issuer Trust and the Holders in
accordance with this Trust Agreement.
ARTICLE III.
PAYMENT ACCOUNT
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal with
respect to the Payment Account for the purpose of making deposits in and
withdrawals from the Payment Account in accordance with this Trust Agreement.
All monies and other property deposited or held from time to time in the Payment
Account shall be held by the Property Trustee in the Payment Account for the
exclusive benefit of the Holders and for distribution as herein provided,
including (and subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
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ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in
the Trust Property, and Distributions (including Additional Amounts) will be
made on the Trust Securities at the rate and on the dates that payments of
interest (including of Additional Interest, as defined in the Indenture) are
made on the Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative,
and will accumulate whether or not there are funds of the Issuer Trust
available for the payment of Distributions. Distributions shall accrue
from June ____, 1999, and, except in the event (and to the extent) that
the Depositor exercises its right to defer the payment of interest on
the Debentures pursuant to the Indenture, shall be payable
semi-annually in arrears on _________ and ___________ of each year,
commencing on __________, 1999. If any date on which a Distribution is
otherwise payable on the Trust Securities is not a Business Day, then
the payment of such Distribution shall be made on the next succeeding
day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, payment of such Distribution shall
be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on the date such payment was
originally payable (each date on which Distributions are payable in
accordance with this Section 4.1(a), a "Distribution Date").
(ii) Distributions shall accumulate in respect of the Capital
Securities at a rate of ____% per annum of the Liquidation Amount of
the Trust Securities. The amount of Distributions payable for any
period less than a full Distribution period shall be computed on the
basis of a 360-day year of twelve 30-day months and the actual number
of days elapsed in a partial month in a period. Distributions payable
for each full Distribution period will be computed by dividing the rate
per annum by two. The amount of Distributions payable for any period
shall include any Additional Amounts in respect of such period.
(iii) Distributions on the Trust Securities shall be made by
the Property Trustee from the Payment Account and shall be payable on
each Distribution Date only to the extent that the Issuer Trust has
funds then on hand and available in the Payment Account for the payment
of such Distributions.
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(b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities at the close of business on the
relevant record date, which shall be _________ or _______________ next preceding
the relevant Distribution Date.
SECTION 4.2. Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of the
Debentures, the Issuer Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price or, if the Redemption Price cannot
be calculated prior to the time the notice is required to be sent, the
estimate of the Redemption Price provided pursuant to the Indenture
together with a statement that it is an estimate and that the actual
Redemption Price will be calculated on the third Business Day prior to
the Redemption Date (and if an estimate is provided, a further notice
shall be sent of the actual Redemption Price on the date that notice of
such actual Redemption Price is received pursuant to the Indenture);
(iii) the CUSIP number or CUSIP numbers of the Capital
Securities affected;
(iv) if less than all the Outstanding Trust Securities are to
be redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will
become due and payable upon each such Trust Security to be redeemed and
that Distributions thereon will cease to accumulate on or after said
date, except as provided in Section 4.2(d) below; and
(vi) the place or places where the Trust Securities are to be
surrendered for the payment of the Redemption Price.
The Issuer Trust in issuing the Trust Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall
indicate the "CUSIP" numbers of the
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Trust Securities in notices of redemption and related materials as a convenience
to Holders; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Trust
Securities or as contained in any notice of redemption and related materials.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the extent
that the Issuer Trust has funds then on hand and available in the Payment
Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Capital Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, with
respect to Book-Entry Capital Securities, irrevocably deposit with the Clearing
Agency for such Book-Entry Capital Securities, to the extent available therefor,
funds sufficient to pay the applicable Redemption Price and will give such
Clearing Agency irrevocable instructions and authority to pay the Redemption
Price to the Owners thereof. With respect to Capital Securities that are not
Book-Entry Capital Securities, the Property Trustee, subject to Section 4.2(c),
will irrevocably deposit with the Paying Agent, to the extent available
therefor, funds sufficient to pay the applicable Redemption Price and will give
the Paying Agent irrevocable instructions and authority to pay the Redemption
Price to the Holders thereof upon surrender of their Capital Securities
Certificates. Notwithstanding the foregoing, Distributions payable on or prior
to the Redemption Date for any Trust Securities called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the Securities
Register for the Trust Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of Holders
of Trust Securities so called for redemption will cease, except the right of
such Holders to receive the Redemption Price including any unpaid Distribution
payable on or prior to the Redemption Date, but without interest, and such Trust
Securities will cease to be Outstanding. In the event that any date on which any
Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), 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. In the event
that payment of the Redemption Price in respect of any Trust Securities called
for redemption is improperly withheld or refused and not paid either by the
Issuer Trust or by the Depositor pursuant to the Guarantee, Distributions on
such Trust Securities will continue to accumulate as set forth in Section 4.1,
from the Redemption Date originally established by the Issuer Trust for such
Trust Securities to the date such Redemption Price is actually paid, in which
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case the actual payment date will be the date fixed for redemption for purposes
of calculating the Redemption Price.
(e) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Capital Securities. The particular Capital Securities to be redeemed shall
be selected on a pro rata basis (based upon Liquidation Amounts) not more than
60 days prior to the Redemption Date by the Property Trustee from the
Outstanding Capital Securities not previously called for redemption, provided
that, so long as the Capital Securities are in book-entry-only form, such
selection shall be made in accordance with the customary procedures for the
Clearing Agency for the Capital Securities. The Property Trustee shall promptly
notify the Securities Registrar in writing of the Capital Securities selected
for redemption and, in the case of any Capital Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
this Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Capital Securities shall relate, in the case of
any Capital Securities redeemed or to be redeemed only in part, to the portion
of the Liquidation Amount of Capital Securities that has been or is to be
redeemed.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including any Additional Amounts) on, and
the Redemption Price of, the Trust Securities, as applicable, shall be made,
subject to Section 4.2(e), pro rata (based on Liquidation Amounts) among the
Common Securities and the Capital Securities; provided, however, that if on any
Distribution Date or Redemption Date any Event of Default resulting from a
Debenture Event of Default shall have occurred and be continuing, no payment of
any Distribution (including any Additional Amounts) on, or Redemption Price of,
any Common Security, and no other payment on account of the redemption,
liquidation or other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions (including
any Additional Amounts) on all Outstanding Capital Securities for all
Distribution periods terminating on or prior thereto, or in the case of payment
of the Redemption Price the full amount of such Redemption Price on all
Outstanding Capital Securities, shall have been made or provided for, and all
funds immediately available to the Property Trustee shall first be applied to
the payment in full in cash of all Distributions (including any Additional
Amounts) on, or the Redemption Price of, Capital Securities then due and
payable.
(b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holder of Common Securities will be
deemed to have waived any right to act with respect to any such Event of Default
under this Trust Agreement until the effect of all such Events of Default with
respect to the Capital Securities have been
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cured, waived or otherwise eliminated. Until any such Event of Default under
this Trust Agreement with respect to the Capital Securities has been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on behalf
of the Holders of the Capital Securities and not on behalf of the Holder of the
Common Securities, and only the Holders of the Capital Securities will have the
right to direct the Property Trustee to act on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable)
in respect of the Capital Securities shall be made by check mailed to the
address of the Holder entitled thereto as such address shall appear on the
Securities Register or, if the Capital Securities are held by a Clearing Agency,
such Distributions shall be made to the Clearing Agency in immediately available
funds, which shall credit the relevant Holders' accounts at such Clearing Agency
on the applicable Distribution Dates. Payments in respect of the Common
Securities shall be made in such manner as shall be mutually agreed between the
Property Trustee and the Holder of the Common Securities.
SECTION 4.5. Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States federal, state and local tax
and information returns and reports required to be filed by or in respect of the
Issuer Trust. In this regard, the Administrative Trustees shall (a) prepare and
file (or cause to be prepared and filed) the appropriate Internal Revenue
Service Form required to be filed in respect of the Issuer Trust in each taxable
year of the Issuer Trust and (b) prepare and furnish (or cause to be prepared
and furnished) to each Holder the appropriate Internal Revenue Service form
required to be provided by the Issuer Trust. The Administrative Trustees shall
provide the Depositor and the Property Trustee with a copy of all such returns
and reports promptly after such filing or furnishing. The Property Trustee shall
comply with United States federal withholding and backup withholding tax laws
and information reporting requirements with respect to any payments to Holders
under the Trust Securities.
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Issuer Trust.
Upon receipt under the Debentures of Additional Sums, the Property
Trustee shall promptly pay any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Issuer Trust by
the United States or any other taxing authority.
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SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Capital Securities shall
be reduced by the amount of any corresponding payment such Holder (or an Owner
with respect to the Holder's Capital Securities) has directly received pursuant
to Section 5.8 of the Indenture or Section 5.13 of this Trust Agreement.
SECTION 4.8. Liability of the Holder of Common Securities.
Any Holder of the Common Securities shall be liable for the debts and
obligations of the Issuer Trust in the manner and to the extent set forth in the
Expense Agreement and agrees that it shall be subject to all liabilities to
which the Holder of the Common Securities may be subject, and shall make all
payments that the Holder of the Common Securities is required to make, under the
terms of the Expense Agreement.
SECTION 4.9. Exchanges.
(a) If at any time the Depositor or any of its Affiliates (in either
case, a "Depositor Affiliated Owner/Holder") is the Owner or Holder of any
Capital Securities, such Depositor Affiliated Owner/Holder shall have the right
to deliver to the Property Trustee all or such portion of its Capital Securities
as it elects and receive, in exchange therefor, a Like Amount of Debentures.
Such election (i) shall be exercisable effective on any Distribution Date by
such Depositor Affiliated Owner/Holder delivering to the Property Trustee a
written notice of such election specifying the Liquidation Amount of the
Capital Securities with respect to which such election is being made and the
Distribution Date on which such exchange shall occur, which Distribution Date
shall be not less than ten Business Days after the date of receipt by the
Property Trustee of such election notice and (ii) shall be conditioned upon such
Depositor Affiliated Owner/Holder having delivered or caused to be delivered to
the Property Trustee or its designee the Capital Securities which are the
subject of such election by 10:00 A.M. New York time, on the Distribution Date
on which such exchange is to occur. After the exchange, such Capital Securities
will be cancelled and will no longer be deemed to be Outstanding and all rights
of the Depositor or its Affiliate(s) with respect to such Capital Securities
will cease.
(b) In the case of an exchange described in Section 4.9(a), the Issuer
Trust will, on the date of such exchange, exchange Debentures having a principal
amount equal to a proportional amount of the aggregate Liquidation Amount of the
Outstanding Common Securities, based on the ratio of the aggregate Liquidation
Amount of the Capital Securities exchanged pursuant to Section 4.9(a) divided by
the aggregate Liquidation Amount of the Capital Securities Outstanding
immediately prior to such exchange, for such proportional amount of Common
Securities held by the Depositor (which contemporaneously shall be cancelled and
no longer be deemed to be Outstanding); provided, that the Depositor delivers or
causes to be delivered to the Property Trustee or its designee the required
amount of Common Securities to be exchanged by 10:00 A.M. on New York time, on
the Distribution Date on which such exchange is to occur.
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ARTICLE V.
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership.
Upon the creation of the Issuer Trust and the contribution by the
Depositor pursuant to Section 2.3 and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are outstanding,
the Depositor shall be the sole beneficial owner of the Issuer Trust.
SECTION 5.2. The Trust Securities Certificates.
(a) The Capital Securities Certificates and the Common Securities
Certificates shall be issued in denominations of $1,000 Liquidation Amount and
integral multiples thereof. The Trust Securities Certificates shall be executed
on behalf of the Issuer Trust by manual or facsimile signature of at least one
Administrative Trustee. Trust Securities Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Issuer Trust, shall
be validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Holder, and shall be entitled to the rights and subject to the obligations of a
Holder hereunder, upon due registration of such Trust Securities Certificate in
such transferee's name pursuant to Section 5.5.
(b) Upon their original issuance, Capital Securities Certificates shall
be issued in the form of one or more Global Capital Securities Certificates
registered in the name of DTC, as Clearing Agency, or its nominee and deposited
with DTC or a custodian for DTC for credit by DTC to the respective accounts of
the Owners thereof (or such other accounts as they may direct).
(c) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.3. Execution and Delivery of Trust Securities Certificates.
At the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Issuer Trust by manual or
facsimile signature and delivered to or
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upon the written order of the Depositor, signed by its chairman of the board,
its president, any executive vice president or any vice president, treasurer or
assistant treasurer or controller without further corporate action by the
Depositor, in authorized denominations.
SECTION 5.4. Book-Entry Capital Securities.
As provided in Section 5.2(b), Capital Securities, upon original
issuance, will be issued in the form of Global Capital Securities Certificates
representing Book-Entry Capital Securities, to be delivered to DTC or its
nominee by, or on behalf of, the Issuer Trust. Such Global Capital Securities
Certificates shall initially be registered on the Securities Register in the
name of Cede & Co., the nominee of DTC, and no Owner will receive a Definitive
Capital Securities Certificate representing such Owner's interest in such
Capital Securities, except as provided in this Section 5.4.
(a) Each Global Capital Securities Certificate issued under this Trust
Agreement shall be registered in the name of the Clearing Agency or a nominee
thereof designated by the Depositor for the related Book-Entry Capital
Securities and delivered to such Clearing Agency or a nominee thereof or
custodian therefor and each such Global Capital Securities Certificate shall
constitute a single Capital Securities Certificate for all purposes of this
Trust Agreement.
(b) Notwithstanding any other provision in this Trust Agreement, no
Global Capital Securities Certificate may be exchanged in whole or in part for
Capital Securities Certificates registered, and no transfer of a Global Capital
Securities Certificate in whole or in part may be registered, in the name of any
Person other than the Clearing Agency for such Global Capital Securities
Certificate or a nominee thereof unless (i) the Clearing Agency advises the
Depositor and the Property Trustee in writing that the Clearing Agency is no
longer willing or able to properly discharge its responsibilities with respect
to the Global Capital Securities Certificates, and the Depositor is unable to
locate a qualified successor, (ii) the Depositor at its option advises the
Clearing Agency in writing that it elects to terminate the book-entry system
through the Clearing Agency, or (iii) a Debenture Event of Default has occurred
and is continuing and the Holders of a majority in Liquidation Amount of the
Capital Securities determine to discontinue the book-entry system through the
Clearing Agency. Upon the occurrence of any event specified in clause (i), (ii)
or (iii) above, the Administrative Trustees shall notify the Clearing Agency and
the Clearing Agency shall notify all Owners of Book-Entry Capital Securities,
the Property Trustee and the Administrative Trustees of the occurrence of such
event and of the availability of the Definitive Capital Securities Certificates
to Owners of such class or classes, as applicable, requesting the same.
(c) If any Global Capital Securities Certificate is to be exchanged for
other Capital Securities Certificates or cancelled in part, or if another
Capital Securities Certificate is to be exchanged in whole or in part for a
beneficial interest in any Global Capital Securities
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Certificate, then either (i) such Global Capital Securities Certificate shall be
so surrendered for exchange or cancellation as provided in this Article Five or
(ii) the aggregate Liquidation Amount represented by such Global Capital
Securities Certificate shall be reduced, subject to Section 5.2, or increased by
an amount equal to the Liquidation Amount represented by that portion of the
Global Capital Securities Certificate to be so exchanged or cancelled, or equal
to the Liquidation Amount represented by such other Capital Securities
Certificates to be so exchanged for Global Capital Securities represented
thereby, as the case may be, by means of an appropriate adjustment made on the
records of the Securities Registrar, whereupon the Property Trustee, in
accordance with the Applicable Procedures, shall instruct the Clearing Agency or
its authorized representative to make a corresponding adjustment to its records.
Upon surrender to the Administrative Trustees or the Securities Registrar of the
Global Capital Securities Certificate or Certificates by the Clearing Agency,
accompanied by registration instructions, the Administrative Trustees, or any
one of them, shall execute the Definitive Capital Securities Certificates in
accordance with the instructions of the Clearing Agency. None of the Securities
Registrar, the Issuer Trustees or the Administrative Trustees shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Capital Securities Certificates, the Issuer Trustees and
Administrative Trustees shall recognize the Holders of the Definitive Capital
Securities Certificates as Holders. The Definitive Capital Securities
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Administrative Trustees, as
evidenced by the execution thereof by the Administrative Trustees or any one of
them.
(d) Every Capital Securities Certificate executed and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global Capital
Securities Certificate or any portion thereof, whether pursuant to this Article
Five or Article Four or otherwise, shall be executed and delivered in the form
of, and shall be, a Global Capital Securities Certificate, unless such Capital
Securities Certificate is registered in the name of a Person other than the
Clearing Agency for such Global Capital Securities Certificate or a nominee
thereof.
(e) The Clearing Agency or its nominee, as registered owner of a Global
Capital Securities Certificate, shall be the Holder of such Global Capital
Securities Certificate for all purposes under this Trust Agreement and the
Global Capital Securities Certificate, and Owners with respect to a Global
Capital Securities Certificate shall hold such interests pursuant to the
Applicable Procedures. The Securities Registrar, the Administrative Trustees and
the Issuer Trustees shall be entitled to deal with the Clearing Agency for all
purposes of this Trust Agreement relating to the Book-Entry Capital Securities
(including the payment of the Liquidation Amount of and Distributions on the
Capital Securities evidenced by Book-Entry Capital Securities and the giving of
instructions or directions to Owners of Capital Securities evidenced by
Book-Entry Capital Securities) as the sole Holder of Capital Securities
evidenced by the Book-Entry Capital Securities and shall have no obligations to
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the Owners thereof. Neither the Property Trustee nor the Securities Registrar
shall have any liability in respect of any transfers effected by the Clearing
Agency.
The rights of the Owners of the Book-Entry Capital Securities shall be
exercised only through the Clearing Agency and shall be limited to those
established by law, the Applicable Procedures and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
Certificate Depository Agreement, unless and until Definitive Capital Securities
Certificates are issued pursuant to Section 5.4(b), the initial Clearing Agency
will make book-entry transfers among the Clearing Agency Participants and
receive and transmit payments on the Capital Securities to such Clearing Agency
Participants, and none of the Depositor, the Administrative Trustees or the
Issuer Trustees shall have any responsibility or obligation with respect
thereto.
SECTION 5.5. Registration of Transfer and Exchange of Capital
Securities Certificates.
(a) The Property Trustee shall keep or cause to be kept, at the office
or agency maintained pursuant to Section 5.9, a register or registers for the
purpose of registering Trust Securities Certificates and transfers and exchanges
of Capital Securities Certificates (the "Securities Register") in which the
registrar designated by the Property Trustee (the "Securities Registrar") with
the reasonable consent of the Administrative Trustees, subject to such
reasonable regulations as it may prescribe, shall provide for the registration
of Capital Securities Certificates and Common Securities Certificates (subject
to Section 5.11 in the case of the Common Securities Certificates) and
registration of transfers and exchanges of Capital Securities Certificates as
herein provided. The Bank shall be the initial Securities Registrar.
Upon surrender for registration of transfer of any Capital Securities
Certificate at the office or agency maintained pursuant to Section 5.9, the
Administrative Trustees or any one of them shall execute by manual or facsimile
signature and deliver to the Property Trustee for further delivery, in the name
of the designated transferee or transferees, one or more new Capital Securities
Certificates in authorized denominations of a like aggregate Liquidation Amount
dated the date of execution by such Administrative Trustee.
The Securities Registrar shall not be required to register the transfer
of any Capital Securities that have been called for redemption. At the option of
a Holder, Capital Securities Certificates may be exchanged for other Capital
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Capital Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.9.
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Every Capital Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Securities Registrar duly
executed by the Holder or his attorney duly authorized in writing. Each Capital
Securities Certificate surrendered for registration of transfer or exchange
shall be cancelled and subsequently disposed of by the Property Trustee or
Securities Registrar in accordance with such Person's customary practice.
No service charge shall be made for any registration of transfer or
exchange of Capital Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Capital Securities
Certificates.
The provisions of Sections 8.1, 8.3 and 8.6 herein shall apply to the
Bank also in its role as Securities Registrar, for so long as the Bank shall act
as Securities Registrar.
Whenever this Trust Agreement makes reference to the execution of Trust
Securities Certificates, such reference to execution shall mean manual execution
by an Administrative Trustee or, in the alternative, execution by facsimile
signature by an Administrative Trustee and authentication by the Property
Trustee.
Capital Securities Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper Administrative
Trustees of the Issuer Trust shall bind the Issuer Trust, notwithstanding that
such individuals or any of them have ceased to hold such office prior to the
authentication and delivery of such Capital Securities Certificates or did not
hold such offices at the date of such Capital Securities Certificates.
Each Capital Securities Certificate that is executed by facsimile and
authenticated by the Property Trustee shall be dated the date of its
authentication.
(b) Certain Transfers and Exchanges. Notwithstanding any other
provision of this Trust Agreement, transfers and exchanges of Capital Securities
Certificates and beneficial interests in Book-Entry Capital Securities of the
kinds specified in this Section 5.5(b) shall be made only in accordance with
this Section 5.5(b).
(i) Non-Global Capital Securities Certificate to Global
Capital Securities Certificate. If the Holder of a Capital Securities
Certificate (other than a Global Capital Securities Certificate) wishes
at any time to transfer all or any portion of the Capital Securities
represented thereby to a Person who wishes to take delivery thereof in
the form of Book-Entry Capital Securities represented by a Global
Capital Securities Certificate, such transfer may be effected only in
accordance with the provisions of this Clause (b)(i) and subject to the
Applicable Procedures. Upon receipt by the Securities Registrar of such
Capital Securities Certificate as provided
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in Section 5.5(a) and instructions satisfactory to the Securities
Registrar directing that a specified number of Capital Securities to be
represented by the Global Capital Securities Certificate not greater
than the number of Capital Securities represented by such Capital
Securities Certificate be credited to a specified Clearing Agency
Participant's account and then the Securities Registrar shall cancel
such Capital Securities Certificate (and issue a new Capital Securities
Certificate in respect of any untransferred portion thereof) as
provided in Section 5.5(a) and increase the aggregate Liquidation
Amount of the Global Capital Securities Certificate by the Liquidation
Amount represented by such Capital Securities so transferred as
provided in Section 5.4(c).
(ii) Non-Global Capital Securities Certificate to Non-Global
Capital Securities Certificate. Capital Securities other than
Book-Entry Capital Securities may be transferred, in whole or in part,
to a Person who takes delivery in the form of a Capital Securities
Certificate that is not a Global Capital Securities Certificate as
provided in Section 5.5(a).
(iii) Global Capital Securities Certificate to Non-Global
Capital Securities Certificate. Capital Securities represented by a
Global Capital Securities Certificate may be exchanged for a Capital
Securities Certificate that is not a Global Capital Securities
Certificate as provided in Section 5.4.
Before registering for transfer or exchange any Capital Securities
Certificates issued in certificated fully registered form as provided in
Sections 5.2, 5.4 or 5.5 of the Trust Agreement, the Property Trustee as
Securities Registrar may require an Opinion of Counsel or other evidence
satisfactory to it (which may include a certificate from such purchaser or
Holder) that such purchaser or Holder is eligible for the exemptive relief
available under U.S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") 96-23, 95-60, 91- 38, 90-1 or 84-14 or another applicable exemption
with respect to such purchase or holding and, in the case of any purchaser or
Holder relying on any exemption other than PTCE 96-23, 95-60, 91-38, 90-1 or
84-14, an Opinion of Counsel or other evidence satisfactory to the Property
Trustee with respect to the availability of such exemption. Any purchaser or
Holder of any Capital Securities or any interest therein will be deemed to have
represented by its purchase and holding thereof that it either (i) is not a Plan
or a Plan Asset Entity and is not purchasing such Capital Securities on behalf
of or with "plan assets" of any Plan, or (ii) is eligible for the exemptive
relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another
applicable exemption with respect to such purchase or holding.
(c) The Property Trustee shall not be required to insure or verify
compliance with securities laws, including the Securities Act, Exchange Act and
1940 Act, in connection with transfers and exchanges of Capital Securities
Certificates.
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SECTION 5.6. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Issuer Trust shall execute and make available for delivery, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Trust Securities
Certificate, a new Trust Securities Certificate of like class, tenor and
denomination. In connection with the issuance of any new Trust Securities
Certificate under this Section, the Administrative Trustees or the Securities
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Trust Securities Certificate issued pursuant to this Section shall constitute
conclusive evidence of an undivided beneficial interest in the assets of the
Issuer Trust, as if originally issued, whether or not the lost, stolen or
destroyed Trust Securities Certificate shall be found at any time.
SECTION 5.7. Persons Deemed Holders.
The Issuer Trustees, the Administrative Trustees or the Securities
Registrar shall treat the Person in whose name any Trust Securities Certificate
shall be registered in the Securities Register as the owner of such Trust
Securities Certificate for the purpose of receiving Distributions and for all
other purposes whatsoever, and neither the Issuer Trustees, the Administrative
Trustees nor the Securities Registrar shall be bound by any notice to the
contrary.
SECTION 5.8. Access to List of Holders' Names and Addresses.
Each Holder and each Owner shall be deemed to have agreed not to hold
the Depositor, the Property Trustee, the Delaware Trustee or the Administrative
Trustees accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION 5.9. Maintenance of Office or Agency.
The Property Trustee shall designate, with the consent of the
Administrative Trustees, which consent shall not be unreasonably withheld, an
office or offices or agency or agencies where Capital Securities Certificates
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Issuer Trustees in respect of the Trust Securities
Certificates may be served. The Corporate Trust Office of the Property
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Trustee is initially designated the office for such purpose. The Administrative
Trustees or the Property Trustee shall give prompt written notice to the
Depositor and to the Holders of any change in the location of the Securities
Register or any such office or agency.
SECTION 5.10. Appointment of Paying Agent.
The Paying Agent shall make Distributions to Holders from the Payment
Account and shall report the amounts of such Distributions to the Property
Trustee and the Administrative Trustees. Any Paying Agent shall have the
revocable power to withdraw funds from the Payment Account for the purpose of
making the Distributions referred to above. The Property Trustee may revoke such
power and remove the Paying Agent in its sole discretion. The Paying Agents
shall initially be the Bank and Credit Suisse First Boston Corporation, and any
co-paying agent chosen by the Bank, and reasonably acceptable to the
Administrative Trustees. Any Person acting as Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Administrative
Trustees and the Property Trustee. In the event that the Bank shall no longer be
the Paying Agent or a successor Paying Agent shall resign or its authority to
act be revoked, the Property Trustee shall appoint a successor that is
reasonably acceptable to the Administrative Trustees to act as Paying Agent
(which shall be a bank or trust company). Such successor Paying Agent or any
additional Paying Agent shall execute and deliver to the Issuer Trustees an
instrument in which such successor Paying Agent or additional Paying Agent shall
agree with the Issuer Trustees that as Paying Agent, such successor Paying Agent
or additional Paying Agent will hold all sums, if any, held by it for payment to
the Holders in trust for the benefit of the Holders entitled thereto until such
sums shall be paid to such Holders. The Paying Agent shall return all unclaimed
funds to the Property Trustee and upon removal of a Paying Agent such Paying
Agent shall also return all funds in its possession to the Property Trustee. The
provisions of Sections 8.1, 8.3 and 8.6 herein shall apply to the Bank also in
its role as Paying Agent, for so long as the Bank shall act as Paying Agent and,
to the extent applicable, to any other paying agent appointed hereunder. Any
reference in this Trust Agreement to the Paying Agent shall include any
co-paying agent unless the context requires otherwise.
SECTION 5.11. Ownership of Common Securities by Depositor.
At the Closing Date, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. Neither the Depositor nor any
successor Holder of the Common Securities may transfer less than all the Common
Securities, and the Depositor and any successor Holder may transfer the Common
Securities only (i) in connection with a consolidation or merger of the
Depositor into another Person, or any conveyance, transfer or lease by the
Depositor of its properties and assets substantially as an entirety to any
Person, pursuant to Section 8.1 of the Indenture, or (ii) to the Depositor or an
Affiliate of the Depositor in compliance with applicable law (including the
Securities Act and applicable State securities and blue sky laws), and in either
case only upon an effective assignment and
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delegation by the Holder of all the Common Securities to its transferee of all
of its rights and obligations under the Expense Agreement. To the fullest extent
permitted by law, any attempted transfer of the Common Securities other than as
set forth in the next preceding sentence shall be void. The Administrative
Trustees shall cause each Common Securities Certificate issued to the Depositor
to contain a legend stating substantially "THIS CERTIFICATE IS NOT TRANSFERABLE
EXCEPT IN COMPLIANCE WITH SECTION 5.11 OF THE TRUST AGREEMENT AND ONLY IN
CONNECTION WITH A SIMULTANEOUS DELEGATION AND ASSIGNMENT OF THE EXPENSE
AGREEMENT REFERRED TO THEREIN."
SECTION 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Capital
Securities Certificates shall have been issued to all Owners pursuant to Section
5.4(b), the Issuer Trustees and Administrative Trustees shall give all such
notices and communications specified herein to be given to Owners to the
Clearing Agency, and shall have no obligations to the Owners.
SECTION 5.13. Rights of Holders.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Holders shall not have any right or title therein other than the undivided
beneficial interest in the assets of the Issuer Trust conferred by their Trust
Securities and they shall have no right to call for any partition or division of
property, profits or rights of the Issuer Trust except as described below. The
Trust Securities shall be personal property giving only the rights specifically
set forth therein and in this Trust Agreement. The Trust Securities shall have
no preemptive or similar rights and, except to the extent set forth in Section
4.8, when issued and delivered to Holders against payment of the purchase price
therefor will be fully paid and nonassessable undivided beneficial interests in
Trust Property. Except as set forth in Section 4.8, the Holders, in their
capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
(b) For so long as any Capital Securities remain Outstanding, if, upon
a Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in aggregate principal amount of the outstanding Debentures fail
to declare the principal of all of the Debentures to be immediately due and
payable, the Holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities then Outstanding shall have such right by a notice in writing
to the Depositor and the Debenture Trustee with a copy to the Property Trustee;
and upon any such declaration such principal amount of and the accrued interest
on
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all of the Debentures shall become immediately due and payable, provided that
the payment of principal and interest on such Debentures shall remain
subordinated to the extent provided in the Indenture.
At any time after such a declaration of acceleration with respect to
the Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, the Holders of at least a majority in aggregate Liquidation Amount of
the Capital Securities, by written notice to the Property Trustee, the Depositor
and the Debenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Depositor has paid or deposited with the Debenture
Trustee a sum sufficient to pay
(A) all overdue installments of interest (including
any Additional Interest (as defined in the Indenture)) on all
of the Debentures,
(B) the principal of (and premium, if any, on) any
Debentures which have become due otherwise than by such
declaration of acceleration and interest and Additional
Interest thereon at the rate borne by the Debentures, and
(C) all sums paid or advanced by the Debenture
Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Debenture Trustee
and the Property Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Debentures,
other than the non-payment of the principal of the Debentures which has
become due solely by such acceleration, have been cured or waived as
provided in Section 5.13 of the Indenture.
The Holders of at least a majority in aggregate Liquidation Amount of
the Capital Securities may, on behalf of the Holders of all the Capital
Securities, waive any past default under the Indenture, except a default in the
payment of principal or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Debenture. No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such
an acceleration, or rescission and annulment thereof, by Holders of the Capital
Securities all or part of which
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is represented by Book-Entry Capital Securities, a record date shall be
established for determining Holders of Outstanding Capital Securities entitled
to join in such notice, which record date shall be at the close of business on
the day the Property Trustee receives such notice. The Holders on such record
date, or their duly designated proxies, and only such Persons, shall be entitled
to join in such notice, whether or not such Holders remain Holders after such
record date; provided, that, unless such declaration of acceleration, or
rescission and annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice prior to the day
which is 90 days after such record date, such notice of declaration of
acceleration, or rescission and annulment, as the case may be, shall
automatically and without further action by any Holder be canceled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.13(b).
(c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Debenture Event of Default specified in Section 5.1(1)
or 5.1(2) of the Indenture, any Holder of Capital Securities shall have the
right to institute a proceeding directly against the Depositor, pursuant to
Section 5.8 of the Indenture, for enforcement of payment to such Holder of the
principal amount of or interest on Debentures having a principal amount equal to
the Liquidation Amount of the Capital Securities of such Holder (a "Direct
Action"). Except as set forth in this Section 5.13, the Holders of Capital
Securities shall have no right to exercise directly any right or remedy
available to the holders of, or in respect of, the Debentures.
ARTICLE VI.
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Voting Rights.
(a) Except as expressly provided in this Trust Agreement and in the
Indenture and as otherwise required by law, no Holder of Capital Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Issuer Trust or the obligations
of the parties hereto, nor shall anything herein set forth, or contained in the
terms of the Trust Securities Certificates, be construed so as to constitute the
Holders from time to time as partners or members of an association.
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(b) So long as any Debentures are held by the Issuer Trust, the
Property Trustee shall not (i) direct the time, method or place of conducting
any proceeding for any remedy available to the Debenture Trustee, or executing
any trust or power conferred on the Property Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 5.13 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable or (iv) consent to
any amendment, modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case, obtaining the prior
approval of the Holders of at least a majority in Liquidation Amount of all
Outstanding Capital Securities, provided, however, that where a consent under
the Indenture would require the consent of each holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior written consent of each Holder of Capital Securities. The Issuer Trustees
shall not revoke any action previously authorized or approved by a vote of the
Holders of Capital Securities, except by a subsequent vote of the Holders of
Capital Securities. The Property Trustee shall notify all Holders of the Capital
Securities of any notice of default received from the Debenture Trustee with
respect to the Debentures. In addition to obtaining the foregoing approvals of
the Holders of the Capital Securities, prior to taking any of the foregoing
actions, the Property Trustee shall, at the expense of the Depositor, obtain an
Opinion of Counsel experienced in such matters to the effect that such action
shall not cause the Issuer Trust to be classified as an association taxable as a
corporation or as other than a grantor trust for United States Federal income
tax purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Issuer Trustees otherwise propose to effect, (i) any action that would
adversely affect in any material respect the powers, preferences or special
rights of the Capital Securities, whether by way of amendment to this Trust
Agreement or otherwise, or (ii) the dissolution, winding-up or termination of
the Issuer Trust, other than pursuant to the terms of this Trust Agreement, then
the Holders of Outstanding Capital Securities as a class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a majority in
Liquidation Amount of the Outstanding Capital Securities. Notwithstanding any
other provision of this Trust Agreement, no amendment to this Trust Agreement
may be made if, as a result of such amendment, it would cause the Issuer Trust
to be classified as an association taxable as a corporation or as other than a
grantor trust for United States federal income tax purposes.
SECTION 6.2. Notice of Meetings.
Notice of all meetings of Holders of Capital Securities, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each such Holder at such Holder's address as it
appears in the Securities Register as of the record date for such meeting. Such
notice shall be sent, first-class mail, at least 15 days and not more than 90
days before the meeting. At any such meeting, any business properly before
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the meeting may be so considered whether or not stated in the notice of the
meeting. Any adjourned meeting may be held as adjourned without further notice.
SECTION 6.3. Meetings of Holders of Capital Securities.
No annual meeting of Holders is required to be held. The Property
Trustee, however, shall call a meeting of Holders of Capital Securities to vote
on any matter upon the written request of the Holders of record of at least 25%
of the aggregate Liquidation Amount of Outstanding Capital Securities) and the
Administrative Trustees or the Property Trustee may, at any time in their
discretion, call a meeting of Holders of Capital Securities to vote on any
matters as to which Holders of Capital Securities are entitled to vote.
Holders of at least 50% of the aggregate Liquidation Amount of
Outstanding Capital Securities, present in person or by proxy, shall constitute
a quorum at any meeting of Holders of Capital Securities.
If a quorum is present at a meeting, an affirmative vote by the Holders
of record present, in person or by proxy, holding at least a majority of the
Liquidation Amount of Outstanding Capital Securities held by the Holders of
record present, either in person or by proxy, at such meeting shall constitute
the action of the Holders of Capital Securities, unless this Issuer Trust
Agreement requires a greater number of affirmative votes.
SECTION 6.4. Voting Rights.
In respect of any matter as to which a Holder is entitled to vote, such
Holder shall be entitled to one vote for each $1,000 in Liquidation Amount of
Trust Securities held of record by such Holder.
SECTION 6.5 Proxies, Etc.
At any meeting of Holders, any Holder entitled to vote thereat may vote
by proxy, provided that no proxy shall be voted at any meeting unless it shall
have been placed on file with the Property Trustee, or with such other officer
or agent of the Issuer Trust as the Property Trustee may direct, for
verification prior to the time at which such vote shall be taken. Pursuant to a
resolution of the Property Trustee, proxies may be solicited in the name of the
Property Trustee or one or more officers of the Property Trustee. Only Holders
of record shall be entitled to vote. When Trust Securities are held jointly by
several Persons, any one of them may vote at any meeting in person or by proxy
in respect of such Trust Securities, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Holder shall be deemed valid unless challenged at or prior
to
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its exercise, and the burden of proving invalidity shall rest on the challenger.
No proxy shall be valid more than three years after its date of execution.
SECTION 6.6. Holder Action by Written Consent.
Any action which may be taken by Holders at a meeting may be taken
without a meeting if Holders holding a majority of the aggregate Liquidation
Amount of the Outstanding Trust Securities entitled to vote in respect of such
action (or such larger proportion thereof as shall be required by any express
provision of this Trust Agreement) shall consent to the action in writing.
SECTION 6.7. Record Date for Voting and Other Purposes.
For the purpose of determining the Holders who are entitled to notice
of and to vote at any meeting or to act by written consent, or to participate in
any Distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees or Property Trustee may from time to
time fix a date, not more than 90 days prior to the date of any meeting of
Holders or the payment of a Distribution or other action, as the case may be, as
a record date for the determination of the identity of the Holders of record for
such purposes.
SECTION 6.8. Acts of Holders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Holders or Owners may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders or Owners in
person or by an agent duly appointed in writing; and, except as otherwise
expressly provided herein, such action shall become effective when such
instrument or instruments are delivered to the Property Trustee. Such instrument
or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders or Owners signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Trust Agreement and (subject to Section 8.1) conclusive in favor of the Issuer
Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness to 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
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executing the same, may also be proved in any other manner which any Issuer
Trustee receiving the same deems sufficient.
The ownership of Capital Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Trust Security shall bind every future Holder
of the same Trust Security and the Holder of every Trust Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Issuer
Trustees or the Issuer Trust in reliance thereon, whether or not notation of
such action is made upon such Trust Security.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the Liquidation Amount of such Trust Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Holders and the Administrative
Trustees or among such Holders or Issuer Trustees with respect to the
authenticity, validity or binding nature of any request, demand, authorization,
direction, consent, waiver or other Act of such Holder or Issuer Trustee under
this Article VI, then the determination of such matter by the Property Trustee
shall be conclusive with respect to such matter.
SECTION 6.9. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Issuer Trust shall be open to inspection by Holders
during normal business hours for any purpose reasonably related to such Holder's
interest as a Holder.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee and
the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf
of and as to itself, hereby represents and warrants for the benefit of the
Depositor and the Holders that:
(a) the Property Trustee is a New York banking corporation;
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(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) the Delaware Trustee is a banking corporation duly organized,
validly existing;
(d) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and the Delaware Trustee and constitutes the
valid and legally binding agreement of each of the Property Trustee and the
Delaware Trustee enforceable against each of them in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(f) the execution, delivery and performance of this Trust Agreement has
been duly authorized by all necessary corporate or other action on the part of
the Property Trustee and the Delaware Trustee and does not require any approval
of stockholders of the Property Trustee or the Delaware Trustee and such
execution, delivery and performance will not (i) violate the Charter or By-laws
of the Property Trustee or the Delaware Trustee, (ii) violate any provision of
any indenture, mortgage, credit agreement, license or other agreement or
instrument to which the Property Trustee or the Delaware Trustee is a party or
by which it is bound, which violation would materially and adversely affect the
Issuer Trust, the Holders or the ability of the Property Trustee or the Delaware
Trustee to enter into or perform their obligations under the Trust Agreement, or
result in the creation, or imposition of any Lien on any properties included in
the Trust Property, or (iii) violate any law, governmental rule or regulation of
the United States, the State of New York or the State of Delaware, as the case
may be, governing the banking, trust or general powers of the Property Trustee
or the Delaware Trustee (as appropriate in context) or any order, judgment or
decree applicable to the Property Trustee or the Delaware Trustee;
(g) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context) contemplated herein requires the consent or approval of,
the giving of notice to, the registration with or the taking of any other action
with respect to any governmental authority or agency under any existing federal
law governing the banking, trust or general powers of the Property Trustee or
the Delaware Trustee, as the case may be, under the laws of the United States,
the State of New York or the State of Delaware;
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(h) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal which, in
the good faith judgment of the Property Trustee or the Delaware Trustee, as the
case may be, as amended individually or in the aggregate, would materially and
adversely affect the Issuer Trust or the right, power and authority of the
Property Trustee or the Delaware Trustee, as the case may be, to enter into or
perform its obligations as one of the Issuer Trustees under this Trust
Agreement.
SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Holders that the Trust Securities Certificates issued on the Closing Date on
behalf of the Issuer Trust have been duly authorized and will have been, duly
and validly executed, issued and delivered by the Issuer Trustees pursuant to
the terms and provisions of, and in accordance with the requirements of, this
Trust Agreement and the Holders will be, as of each such date, entitled to the
benefits of this Trust Agreement.
ARTICLE VIII.
THE ISSUER TRUSTEES
SECTION 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Issuer Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require any of the Issuer Trustees to expend or risk their
own funds or otherwise incur any financial liability in the performance of any
of their duties hereunder, or in the exercise of any of their rights or powers,
if they shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity reasonably satisfactory to it against such risk or
liability is not reasonably assured to it. Whether or not therein expressly so
provided, every provision of this Trust Agreement relating to the conduct or
affecting the liability of or affording protection to the Issuer Trustees shall
be subject to the provisions of this Article. Nothing in this Trust Agreement
shall be construed to release an Administrative Trustee from liability for its
own gross negligent action, its own gross negligent failure to act, or its own
willful misconduct. To the extent that, at law or in equity, an Issuer Trustee
has duties and liabilities relating thereto to the Issuer Trust or to the
Holders, such Issuer Trustee shall not be liable to the Issuer Trust or to any
Holder for such Issuer Trustee's good faith reliance on the provisions of this
Trust Agreement. The provisions of this Trust Agreement, to the extent that they
restrict the duties and liabilities of the Issuer Trustees otherwise existing at
law or
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in equity, are agreed by the Depositor and the Holders to replace such other
duties and liabilities of the Issuer Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each Holder,
by its acceptance of a Trust Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Issuer Trustees are not
personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.1(b) does not limit the liability of the Issuer Trustees expressly set
forth elsewhere in this Trust Agreement or, in the case of the Property Trustee,
in the Trust Indenture Act.
(c) If an Event of Default has occurred and is continuing, the Property
Trustee shall enforce this Trust Agreement for the benefit of the Holders.
(d) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee or the Delaware Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
majority in Liquidation Amount of the Trust Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Payment Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement and the
Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Depositor; and money held
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by the Property Trustee need not be segregated from other funds held by
it except in relation to the Payment Account maintained by the Property
Trustee pursuant to Section 3.1 and except to the extent otherwise
required by law; and
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Trust Agreement, nor
shall the Property Trustee be liable for the default or misconduct of
the Administrative Trustees or the Depositor.
(e) The Administrative Trustees shall not be responsible for monitoring
the compliance by the other Issuer Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall either Administrative
Trustee be liable for the default or misconduct of any other Administrative
Trustee, the other Issuer Trustees or the Depositor.
SECTION 8.2. Certain Notices.
Within five Business Days after the occurrence of any Event of Default
actually known to a Responsible Officer of the Property Trustee, the Property
Trustee shall transmit, in the manner and to the extent provided in Section
10.8, notice of such Event of Default to the Holders, the Administrative
Trustees and the Depositor, unless such Event of Default shall have been cured
or waived.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Indenture, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such exercise
to the Holders, unless such exercise shall have been revoked.
SECTION 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may conclusively rely and shall be protected
in acting or refraining from acting in good faith upon any resolution, Opinion
of Counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action or
(ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with any other provisions
contained herein or (iii) the Property Trustee is unsure
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of the application of any provision of this Trust Agreement, then, except as to
any matter as to which the Holder of Capital Securities is entitled to vote
under the terms of this Trust Agreement, the Property Trustee shall deliver a
notice to the Depositor requesting the Depositor's direction as to the course of
action to be taken and, if not so directed, the Property Trustee shall take such
action, or refrain from taking such action, as the Property Trustee shall deem
advisable and in the best interests of the Holders, in which event the Property
Trustee shall have no liability except for its own bad faith, negligence or
willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and rely upon an Officers' Certificate as to
factual matters (other than the interpretation of this Agreement) which, upon
receipt of such request, shall be promptly delivered by the Depositor or the
Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel (which counsel may be
counsel to the Depositor or any of its Affiliates, and may include any of its
employees) and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon and in accordance with
such advice; the Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Holders pursuant to this Trust Agreement, unless such
Holders shall have offered to the Property 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; provided
that, nothing contained in this Section 8.3(g) shall be taken to relieve the
Property Trustee, upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this Trust Agreement;
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(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Holders, but the Property
Trustee may make such further inquiry or investigation into such facts or
matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys and the Property Trustee shall not be responsible for any
misconduct or negligence on the part of, or for the supervision of, any such
agent or attorney appointed with due care by it hereunder;
(j) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the Property
Trustee (i) may request instructions from the Holders of the Trust Securities
which instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii) shall
be fully protected in acting in accordance with such instructions;
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement;
(l) when the Property Trustee incurs expenses or renders services in
connection with a Bankruptcy Event, such expenses (including the fees and
expenses of its counsel) and the compensation for such services are intended to
constitute expenses of administration under any bankruptcy law or law relating
to creditors rights generally; and
(m) the Property Trustee shall not be charged with knowledge of an
Event of Default unless a Responsible Officer of the Property Trustee obtains
actual knowledge of such event or the Property Trustee receives written notice
of such event from Holders holding more than a majority of Capital Securities
(based upon Liquidation Amount).
No provision of this Trust Agreement shall be deemed to impose any duty
or obligation on any Issuer 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 any Issuer 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.
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No permissive power or authority available to any Issuer Trustee shall be
construed to be a duty.
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Issuer Trust, and the Issuer Trustees do
not assume any responsibility for their correctness. The Issuer Trustees shall
not be accountable for the use or application by the Depositor of the proceeds
of the Debentures.
SECTION 8.5. May Hold Securities.
Any Issuer Trustee or any other agent of any Issuer Trustee or the
Issuer Trust, in its individual or any other capacity, may become the owner or
pledgee of Trust Securities and, subject to Sections 8.8 and 8.13 and except as
provided in the definition of the term "Outstanding" in Article I, may otherwise
deal with the Issuer Trust with the same rights it would have if it were not an
Issuer Trustee or such other agent.
SECTION 8.6. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to the Issuer Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Issuer Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Issuer Trustees in accordance with any
provision of this Trust Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, bad faith or
willful misconduct; and
(c) to the fullest extent permitted by applicable law, to indemnify and
hold harmless (i) each Issuer Trustee, (ii) each Paying Agent, (iii) any
Affiliate of any Issuer Trustee, (iv) any officer, director, shareholder,
employee, representative or agent of any Issuer Trustee, and (v) any employee or
agent of the Issuer Trust or its Affiliates (referred to herein as an
"Indemnified Person") from and against any loss, damage, liability, tax,
penalty, expense or claim of any kind or nature whatsoever incurred by such
Indemnified Person by reason of the creation, operation or termination of the
Issuer Trust or any act or omission performed or omitted by such Indemnified
Person in good faith on behalf of the Issuer Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of
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authority conferred on such Indemnified Person by this Trust Agreement, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence, bad faith or willful misconduct with respect to such acts or
omissions.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement or the earlier resignation or removal of any Issuer
Trustee.
No Issuer Trustee may claim any Lien on any Trust Property as a result
of any amount due pursuant to this Section 8.6.
The Depositor and any Issuer Trustee (in the case of the Property
Trustee, subject to Section 8.8 hereof) 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 Issuer Trust, and the
Issuer Trust and the Holders of Trust Securities shall have no rights by virtue
of this Trust Agreement 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 Issuer Trust, shall not be deemed wrongful
or improper. None of the Depositor or any Issuer Trustee, shall be obligated to
present any particular investment or other opportunity to the Issuer Trust even
if such opportunity is of a character that, if presented to the Issuer Trust,
could be taken by the Issuer Trust, and the Depositor or any Issuer 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 Issuer Trustee may engage or be interested in any financial or
other transaction with the Depositor or any Affiliate of the Depositor, or may
act as depository for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Depositor or its Affiliates.
SECTION 8.7. Corporate Property Trustee Required; Eligibility of Issuer
Trustees.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
a national or state chartered bank and eligible pursuant to the Trust Indenture
Act to act as such, and has a combined capital and surplus of at least
$50,000,000. If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Property Trustee with respect to the Trust Securities shall cease to be
eligible in accordance with the provisions of this Section and the Trust
Indenture Act, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article. At the time of appointment, the Property
Trustee must have
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securities rated in one of the three highest rating categories by a nationally
recognized statistical rating organization.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.
SECTION 8.8. Conflicting Interests.
(a) If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement.
(b) The Guarantee Agreement and the Indenture shall be deemed to be
specifically described in this Trust Agreement for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Property Trustee shall have power to
appoint, and upon the written request of the Property Trustee, the Depositor and
the Administrative Trustees shall for such purpose join in the execution,
delivery, and performance of all instruments and agreements necessary or proper
to appoint, one or more Persons approved by the Property Trustee either to act
as co-trustee, jointly with the Property Trustee, of all or any part of such
Trust Property, or to the extent required by law to act as separate trustee of
any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. Any co-trustee or separate
trustee appointed pursuant to this Section shall either be (i) a natural person
who is at least 21 years of age and a resident of the United States or (ii) a
legal entity with its principal place of business in the United States that
shall act through one or more persons authorized to bind such entity.
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Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) The Trust Securities shall be executed by at least one
Administrative Trustee and the Trust Securities shall be delivered by the
Property Trustee and all rights, powers, duties, and obligations hereunder in
respect of the custody of securities, cash and other personal property held by,
or required to be deposited or pledged with, the Issuer Trustees specified
hereunder shall be exercised solely by such Issuer Trustees and not by such
co-trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section, and, in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee shall have power to accept the resignation of,
or remove, any such co-trustee or separate trustee without the concurrence of
the Depositor. Upon the written request of the Property Trustee, the Depositor
shall join with the Property Trustee in the execution, delivery and performance
of all instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee so
resigning or removed may be appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
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(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Issuer Trustee (the "Relevant
Trustee") and no appointment of a successor Issuer Trustee pursuant to this
Article shall become effective until the acceptance of appointment by the
successor Issuer Trustee in accordance with the applicable requirements of
Section 8.11.
Subject to the immediately preceding paragraph, a Relevant Trustee may
resign at any time by giving written notice thereof to the Holders and by
appointing a successor Relevant Trustee. The Property Trustee shall appoint a
successor by requesting from at least three Persons meeting the eligibility
requirements, its expenses and charges to serve as the Property Trustee on a
form provided by the Administrative Trustees, and selecting the Person who
agrees to the lowest expenses and charges. If the instrument of acceptance by
the successor Issuer Trustee required by Section 8.11 shall not have been
delivered to the Relevant Trustee within 60 days after the giving of such notice
of resignation, the Relevant Trustee may petition, at the expense of the Issuer
Trust, any court in the State of Delaware for the appointment of a successor
Relevant Trustee. Subject to the provisions of Section 8.1(d)(i), the Property
Trustee shall not be liable for its selection of any successor pursuant to this
Section 8.10.
The Property Trustee or the Delaware Trustee, or both of them, may be
removed by Act of the Holders of at least a majority in aggregate Liquidation
Amount of the Outstanding Capital Securities, delivered to the Relevant Trustee
(in its individual capacity and on behalf of the Issuer Trust) (i) upon the
occurrence of an Event of Default described in subparagraph (d) of the
definition thereof with respect to the Relevant Trustee, (ii) if a Debenture
Event of Default shall have occurred and be continuing at any time, with or
without cause or (iii) for cause.
If an Issuer Trustee shall resign, such Issuer Trustee shall appoint
its successor Relevant Trustee, and such successor Issuer Trustee shall comply
with the applicable requirements of Section 8.11. If the retiring Issuer Trustee
fails to appoint a successor Relevant Trustee, the Holders of at least 25% in
Liquidation Amount of the Outstanding Capital Securities may appoint a successor
Relevant Trustee, and such successor Issuer Trustee shall comply with the
applicable requirements of Section 8.11.
If any Issuer Trustee shall be removed or become incapable of acting as
Issuer Trustee, or if a vacancy shall occur in the office of any Issuer Trustee
for any cause, the Holders of the Capital Securities, by Act of the Holders of
at least 25% in Liquidation Amount of the Capital Securities then Outstanding
delivered to the retiring Relevant Trustee,
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shall promptly appoint a successor Relevant Trustee or Trustees, and such
successor Issuer Trustee shall comply with the applicable requirements of
Section 8.11. If no successor Relevant Trustee shall have been so appointed by
the Holders of the Capital Securities and accepted appointment in the manner
required by Section 8.11, any Holder may, on behalf of himself and all others
similarly situated, or the remaining Issuer Trustee(s), may petition a court in
the State of Delaware for the appointment of a successor Relevant Trustee.
The Property Trustee shall give notice of each resignation and each
removal of an Issuer Trustee and each appointment of a successor Issuer Trustee
to all Holders in the manner provided in Section 10.8 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee who is a natural person dies
or becomes, in the opinion of the Holder of Common Securities, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by appointment by the remaining Administrative Trustees.
SECTION 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Trust Securities shall execute and deliver an amendment hereto wherein
each successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Issuer Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Issuer Trust by more than one Relevant
Trustee, it being understood that nothing herein or in such amendment shall
constitute such Relevant Trustees co-trustees and upon the execution and
delivery of such amendment the resignation or removal of the retiring Relevant
Trustee shall become effective to the extent provided therein and each such
successor Relevant Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Relevant Trustee; but, on request of the Issuer Trust or any successor Relevant
Trustee such retiring Relevant Trustee shall duly assign, transfer and deliver
to such successor Relevant Trustee all Trust Property, all proceeds thereof and
money held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Issuer Trust.
Upon request of any such successor Relevant Trustee, the Issuer Trust
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such
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successor Relevant Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION 8.12. Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, provided such Person shall be otherwise
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
SECTION 8.13. Preferential Collection of Claims Against Depositor or
the Issuer Trust.
If and when the Property Trustee shall be or become a creditor
of the Depositor or the Issuer Trust (or any other obligor upon the Capital
Securities), the Property Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Depositor or
the Issuer Trust (or any such other obligor).
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other similar judicial proceeding relative to the Issuer Trust or any other
obligor upon the Trust Securities or the property of the Issuer Trust or of such
other obligor or their creditors, the Property Trustee (irrespective of whether
any Distributions on the Trust Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Property Trustee shall have made any demand on the Issuer Trust for the payment
of any past due Distributions) shall be entitled and empowered, to the fullest
extent permitted by law, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Property Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Property Trustee, its agents and counsel) and of the
Holders allowed in such judicial proceeding, and
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(b) to collect and receive any moneys 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 Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 8.14. Reports by Property Trustee.
(a) Not later than May 31 of each year commencing with May 31, 2000,
the Property Trustee shall transmit to all Holders in accordance with Section
10.8, and to the Depositor, a brief report dated as of the immediately preceding
March 31, with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if
to the best of its knowledge it has continued to be eligible under said
Section, a written statement to such effect;
(ii) its knowledge of such Property Trustee's compliance with
all conditions and covenants under this Agreement; and
(iii) any change in the property and funds in its possession
as Property Trustee since the date of its last report and any action
taken by the Property Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to Holders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market or such other interdealer quotation system or
self-regulatory organization upon which the Trust Securities are listed or
traded, with the Commission and with the Depositor.
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SECTION 8.15. Reports to the Property Trustee.
The Depositor and the Administrative Trustees on behalf of the Issuer
Trust shall provide to the Property Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and
the compliance certificate required by Section 314(a) of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 8.16. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the
Issuer Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Trust Agreement that
relate to any of the matters set forth in Section 314 (c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) or Section 314(e) of the Trust Indenture Act shall be given in
the form of an Officers' Certificate.
SECTION 8.17. Number of Issuer Trustees.
(a) The number of Issuer Trustees shall be four. The Property Trustee
and the Delaware Trustee may be the same Person.
(b) If an Issuer Trustee ceases to hold office for any reason, a
vacancy shall occur. The vacancy shall be filled with an Issuer Trustee
appointed in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of an Issuer Trustee shall not
operate to dissolve, terminate or annul the Issuer Trust.
SECTION 8.18. Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.7(a), including any registration statement or amendment thereto filed with the
Commission, or making any other govern mental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Issuer Trust or the
names of the Administrative Trustees or otherwise as the Administrative Trustees
may deem expedient, to the extent such
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delegation is not prohibited by applicable law or contrary to the provisions of
this Trust Agreement, as set forth herein.
SECTION 8.19. Appointment of Administrative Trustees.
(a) The Administrative Trustees shall initially be Daniel R. Stolzer,
an individual, and Louis D. Raffis, an individual, and their successors shall be
appointed by the Holder of the Common Securities and may be removed by the
Holder of the Common Securities at any time. Each Administrative Trustee shall
sign an agreement agreeing to comply with the terms of this Trust Agreement. If
at any time there is no Administrative Trustee, the Property Trustee or any
Holder who has been a Holder of Trust Securities for at least six months may
petition any court of competent jurisdiction for the appointment of one or more
Administrative Trustee.
(b) Whenever a vacancy in the number of Administrative Trustees shall
occur, until such vacancy is filled by the appointment of an Administrative
Trustee in accordance with this Section 8.19, the Administrative Trustees in
office, regardless of their number (and notwithstanding any other provision of
this Agreement), shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Trust Agreement.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee who is a natural person dies
or becomes, in the opinion of the Holder of Common Securities, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by the unanimous act of the remaining Administrative Trustees if there
were at least two of them prior to such vacancy (with the successor in each case
being a Person who satisfies the eligibility requirement for Administrative
Trustees set forth in Section 8.7).
ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Dissolution Upon Expiration Date.
Unless earlier dissolved, the Issuer Trust shall automatically dissolve
on April 1, 2030 (the "Expiration Date").
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SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early
Termination Event," upon the occurrence of which the Issuer Trust shall
dissolve:
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Holder of the Common Securities;
(b) the written direction to the Property Trustee from the
Holder of the Common Securities at any time to dissolve the Issuer
Trust and, after satisfaction of liabilities to creditors of the Issuer
Trust as provided by applicable law, distribute Debentures to Holders
in exchange for the Capital Securities;
(c) the redemption of all of the Capital Securities in
connection with the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Issuer Trust
by a court of competent jurisdiction.
SECTION 9.3. Termination.
The respective obligations and responsibilities of the Issuer Trustees
and the Issuer Trust created and continued hereby shall terminate upon the
latest to occur of the following: (a) the distribution by the Property Trustee
to Holders upon the liquidation of the Issuer Trust pursuant to Section 9.4, or
upon the redemption of all of the Trust Securities pursuant to Section 4.2, of
all amounts required to be distributed hereunder upon the final payment of the
Trust Securities; (b) the payment of any expenses owed by the Issuer Trust; and
(c) the discharge of all administrative duties of the Administrative Trustees,
including the performance of any tax reporting obligations with respect to the
Issuer Trust or the Holders.
SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs, or upon the Expiration Date, the Issuer Trust shall be
liquidated by the Property Trustee as expeditiously as the Property Trustee
determines to be possible by distributing, after satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, to each Holder a
Like Amount of Debentures, subject to Section 9.4(d). Notice of liquidation
shall be given by the Property Trustee by first-class mail, postage prepaid
mailed not later than 30 nor more than 60 days prior to the Liquidation Date to
each Holder of Trust Securities at such Holder's address appearing in the
Securities Register. All notices of liquidation shall:
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(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.4(d) applies receive a Liquidation
Distribution, as the Property Trustee (after consultation with the
Administrative Trustees) shall deem appropriate.
(b) Unless Section 9.2(c) or 9.4(d) applies, in order to effect the
liquidation of the Issuer Trust and the distribution of Debentures to Holders,
the Property Trustee shall establish a record date for such distribution (which
shall be not more than 45 days prior to the Liquidation Date) and, either itself
acting as exchange agent or through the appointment of a separate exchange
agent, shall establish such procedures as it shall deem appropriate to effect
the distribution of Debentures in exchange for the Outstanding Trust Securities
Certificates.
(c) Unless Section 9.2(c) or 9.4(d) applies, after the Liquidation
Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii)
certificates representing a Like Amount of Debentures will be issued to Holders
of Trust Securities Certificates, upon surrender of such certificates to the
exchange agent for exchange, (iii) the Depositor shall use its best efforts to
have the Debentures listed on the New York Stock Exchange or on such other
exchange, interdealer quotation system or self-regulatory organization as the
Capital Securities are then listed, (iv) any Trust Securities Certificates not
so surrendered for exchange will be deemed to represent a Like Amount of
Debentures, accruing interest at the rate provided for in the Debentures from
the last Distribution Date on which a Distribution was made on such Trust
Securities Certificates until such certificates are so surrendered (and until
such certificates are so surrendered, no payments of interest or principal will
be made to Holders of Trust Securities Certificates with respect to such
Debentures) and (v) all rights of Holders holding Trust Securities will cease,
except the right of such Holders to receive Debentures upon surrender of Trust
Securities Certificates.
(d) If, notwithstanding the other provisions of this Section 9.4,
whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner provided
herein is determined by the Property Trustee not to be practical, then the Trust
Property shall be liquidated, and the Issuer Trust shall be wound-up by the
Property Trustee in such manner as the Property Trustee determines. In such
event, on the date of the dissolution of the Issuer Trust, Holders will be
entitled to receive out of the assets of the Issuer Trust available for
distribution to
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Holders, after satisfaction of liabilities to creditors of the Issuer Trust as
provided by applicable law, an amount equal to the Liquidation Amount per Trust
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If, upon any such
winding up, the Liquidation Distribution can be paid only in part because the
Issuer Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then, subject to the next succeeding sentence, the
amounts payable by the Issuer Trust on the Trust Securities shall be paid on a
pro rata basis (based upon Liquidation Amounts). The Holders of the Common
Securities will be entitled to receive Liquidation Distributions upon any such
dissolution or winding-up pro rata (determined as aforesaid) with Holders of
Capital Securities, except that, if a Debenture Event of Default specified in
Section 5.1(1) or 5.1(2) of the Indenture has occurred and is continuing, the
Capital Securities shall have a priority over the Common Securities as provided
in Section 4.3.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of
the Issuer Trust.
The Issuer Trust may not merge with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any entity, except pursuant to this Article
Nine. At the request of the Holder of the Common Securities and with the consent
of the Holders of a majority (based on Liquidation Amounts) of the Capital
Securities, the Issuer Trust may merge with or into, consolidate, amalgamate, or
be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of any
State; provided, that (i) such successor entity either (a) expressly assumes all
of the obligations of the Issuer Trust with respect to the Capital Securities or
(b) substitutes for the Capital Securities other securities having substantially
the same terms as the Capital Securities ("Successor Securities") so long as the
Successor Securities rank the same as the Capital Securities rank in priority
with respect to distributions and payments upon liquidation, redemption and
otherwise, (ii) a trustee of such successor entity possessing the same powers
and duties as the Property Trustee is appointed as the holder of the Debentures,
(iii) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Capital Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holder of the Capital Securities (including any Successor
Securities) in any material respect, (v) such successor entity has a purpose
substantially identical to that of the Issuer Trust, (vi) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Issuer Trust has received an Opinion of Counsel to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the Holders
of the Capital Securities (including any Successor Securities) in any material
respect, and (b)
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<PAGE> 66
following such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the Issuer Trust nor such successor entity will be
required to register as an investment company under the 1940 Act and (vii) the
Depositor owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding the
foregoing, the Issuer Trust shall not, except with the consent of Holders of all
Outstanding Capital Securities, consolidate, amalgamate, merge with or into, or
be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other Person or permit any other Person to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Issuer Trust or the successor Person to be classified as an
association taxable as a corporation or as other than a grantor trust for United
States federal income tax purposes.
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Holders.
The death or incapacity, or the dissolution, liquidation, termination,
or the bankruptcy of any Person having an interest, beneficial or otherwise, in
Trust Securities shall not operate to terminate this Trust Agreement, nor
entitle the legal representatives, successors or heirs of such person or any
Holder for such person, to claim an accounting, take any action or bring any
proceeding in any court for a partition or winding up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
SECTION 10.2. Amendment.
(a) This Trust Agreement may be amended from time to time by the
Property Trustee, the Delaware Trustee and the Holder of the Common Securities
without the consent of any Holder of the Capital Securities, (i) to cure any
ambiguity, correct or supplement any provision herein which may be inconsistent
with any other provision herein, or to make any other provisions with respect to
matters or questions arising under this Trust Agreement, which shall not be
inconsistent with the other provisions of this Trust Agreement, or (ii) to
modify, eliminate or add to any provisions of this Trust Agreement to such
extent as shall be necessary to ensure that the Issuer Trust will not be
classified for United States federal income tax purposes as an association
taxable as a corporation or as other than a grantor trust at any times that any
Trust Securities are outstanding or to ensure that the Issuer Trust will not be
required to register as an investment company under the 1940 Act; provided,
however,
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<PAGE> 67
that such action shall not adversely affect in any material respect the
interests of any Holder, and any such amendments of this Trust Agreement shall
become effective when notice thereof is given to the Holders.
(b) Except as provided in Section 10.2(c) hereof, any provision of this
Trust Agreement may be amended by the Issuer Trustees and the Holder of the
Common Securities and with (i) the consent of Holders of at least a majority in
aggregate Liquidation Amount of the Outstanding Trust Securities and (ii)
receipt by the Issuer Trustees of an Opinion of Counsel to the effect that such
amendment or the exercise of any power granted to the Issuer Trustees in
accordance with such amendment will not affect the Issuer Trust's status as a
grantor trust or cause the Issuer Trust to be an association taxable as a
corporation for United States federal income tax purposes or the Issuer Trust's
exemption from status of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each Holder (such consent being obtained
in accordance with Section 6.3 or 6.6 hereof), this Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution or otherwise
adversely affect the amount of any Distribution required to be made as of a
specified date or (ii) restrict the right of a Holder to institute suit for the
enforcement of any such payment on or after such date; notwithstanding any other
provision herein, without the unanimous consent of the Holders (such consent
being obtained in accordance with Section 6.3 or 6.6 hereof), this paragraph (c)
of this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Issuer Trustee shall enter into or consent to any amendment to this Trust
Agreement which would cause the Issuer Trust to be classified as an association
taxable as a corporation or not to be a grantor trust for United States federal
income tax purposes or to fail or cease to qualify for the exemption from status
of an investment company under the 1940 Act.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation or liability on the Depositor.
(f) If any amendment to this Trust Agreement is made, the
Administrative Trustees or the Property Trustee shall promptly provide to the
Depositor a copy of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement or would otherwise
expose the Property Trustee to any liability or be contrary to applicable law.
The Property Trustee shall be entitled to
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<PAGE> 68
receive an Opinion of Counsel and an Officers' Certificate stating that any
amendment to this Trust Agreement is in compliance with this Trust Agreement.
SECTION 10.3. Separability.
If any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 10.4. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
HOLDERS, THE ISSUER TRUST AND THE ISSUER TRUSTEES WITH RESPECT TO THIS TRUST
AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.
THE PROVISIONS OF SECTION 3540 AND SECTION 3561 OF TITLE 12 OF THE
DELAWARE CODE SHALL NOT APPLY TO THIS ISSUER TRUST.
SECTION 10.5. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no interest shall
accrue thereon for the period after such date.
SECTION 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Issuer Trust or the Relevant
Trustee, including any successor by operation of law. Except in connection with
a consolidation, merger or sale involving the Depositor that is permitted under
Article Eight of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
SECTION 10.7. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
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<PAGE> 69
SECTION 10.8. Reports, Notices and Demands.
Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Holder or the Depositor may be given or served in writing by
deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Holder of Capital Securities, to such Holder as such Holder's name and address
may appear on the Securities Register; and (b) in the case of the Holder of the
Common Securities or the Depositor, to KeyCorp, 127 Public Square, Cleveland,
Ohio 44114, Attention: General Counsel, facsimile no.: (216) 689-4121. Such
notice, demand or other communication to or upon a Holder shall be deemed to
have been sufficiently given or made, for all purposes, upon hand delivery,
mailing or transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Issuer Trust, the Property Trustee, the Delaware Trustee or the
Administrative Trustees shall be given in writing addressed (until another
address is published by the Issuer Trust) as follows: (a) with respect to the
Property Trustee to Bankers Trust Company, Four Albany Street, 4th Floor, New
York, NY 10006, Attention: Corporate Trust Administration, Corporate Market
Services; (b) with respect to the Delaware Trustee, to Bankers Trust (Delaware),
E.A. Delle Donne Corporate Center, Montgomery Bldg., 1011 Centre Road, Suite
200, Wilmington, Delaware 19805-1266, and (c) with respect to the Administrative
Trustees, to them at the address above for notices to the Depositor, marked
"Attention Administrative Trustees of KeyCorp Capital III." Such notice, demand
or other communication to or upon the Issuer Trust or the Property Trustee shall
be deemed to have been sufficiently given or made only upon actual receipt of
the writing by the Issuer Trust or the Property Trustee.
SECTION 10.9 Agreement Not to Petition.
Each of the Issuer Trustees and the Depositor agree for the benefit of
the Holders that, until at least one year and one day after the Issuer Trust has
been terminated in accordance with Article Nine, they shall not file, or join in
the filing of, a petition against the Issuer Trust under any bankruptcy,
insolvency, reorganization or other similar law (including, without limitation,
the United States Bankruptcy Code) (collectively, "Bankruptcy Laws") or
otherwise join in the commencement of any proceeding against the Issuer Trust
under any Bankruptcy Law. In the event the Depositor takes action in violation
of this Section 10.9, the Property Trustee agrees, for the benefit of Holders,
that at the expense of the Depositor, it shall file an answer with the
bankruptcy court or otherwise properly contest the filing of such petition by
the Depositor against the Issuer Trust or the commencement of such action and
raise the defense that the Depositor has agreed in writing not to take such
action and should be stopped and precluded therefrom and such other
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<PAGE> 70
defenses, if any, as counsel for the Issuer Trustees or the Issuer Trust may
assert. The provisions of this Section 10.9 shall survive the termination of
this Trust Agreement.
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Issuer Trustee which is
deemed a trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Trust Agreement as so modified
or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Issuer Trust.
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY
OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT TO THE
SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE INDENTURE AND
TO THE TERMS AND PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT, AND SHALL
CONSTITUTE THE AGREEMENT OF THE ISSUER TRUST, SUCH HOLDER AND SUCH OTHERS THAT
THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND THE REGISTRATION RIGHTS
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE ISSUER TRUST
AND SUCH HOLDER AND SUCH OTHERS.
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<PAGE> 71
SECTION 10.12. Counterparts.
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.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 72
IN WITNESS WHEREOF, the undersigned have executed this Amended and
Restated Trust Agreement as of the date first above written.
KEYCORP
By:
-----------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Property Trustee
By:
-----------------------
Name:
Title:
BANKERS TRUST (DELAWARE),
as Delaware Trustee
By:
-----------------------
Name:
Title:
By:
-----------------------
Name: Louis D. Raffis
as Administrative Trustee
By:
-----------------------
Name: Daniel R. Stolzer
as Administrative Trustee
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<PAGE> 73
EXHIBIT A
CERTIFICATE OF TRUST
OF
KEYCORP CAPITAL III
THIS CERTIFICATE OF TRUST of KeyCorp Capital III (the
"Trust"), dated as of April 13, 1999, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. C. Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby is
KeyCorp Capital III.
2. Delaware Trustee. The name and business address of the
trustee of the Trust, with a principal place of business in the State of
Delaware, are Bankers Trust (Delaware), E.A. Delle Donne Corporate Center,
Montgomery Bldg., 1011 Centre Road, Suite 200, Wilmington, Delaware 19805-1266.
3. Effective Date. This Certificate of Trust shall be
effective as of its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned have duly executed this
Certificate of Trust in accordance with Section 3811(a)(1) of the Act as of the
date first above written.
BANKERS TRUST (DELAWARE), not in its
individual capacity, but solely as Trustee
By: /s/ M. Lisa Wilkins
-----------------------------
Name: M. Lisa Wilkins
Title: Assistant Secretary
DANIEL R. STOLZER, not in his individual
capacity, but solely as Trustee
By: /s/ Daniel R. Stolzer
-----------------------------
Name: Daniel R. Stolzer
<PAGE> 74
EXHIBIT B
Standard Form
DTC LETTER OF REPRESENTATIONS
B-1
<PAGE> 75
EXHIBIT C
[FORM OF COMMON SECURITIES CERTIFICATE]
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE
WITH SECTION 5.11 OF THE TRUST AGREEMENT
AND ONLY IN CONNECTION WITH A SIMULTANEOUS DELEGATION AND
ASSIGNMENT OF THE EXPENSE AGREEMENT REFERRED TO THEREIN
CERTIFICATE NUMBER NUMBER OF COMMON SECURITIES
C- __________
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
KEYCORP CAPITAL III
____% COMMON SECURITIES
(LIQUIDATION AMOUNT $1,000 PER COMMON SECURITY)
KeyCorp Capital III, a business trust created under the laws of the
State of Delaware (the "Issuer Trust"), hereby certifies that KeyCorp, an Ohio
corporation (the "Holder"), is the registered holder of
__________________________ (______) common securities of the Issuer Trust,
representing undivided beneficial interests in the assets of the Issuer Trust
and designated the ____% Common Securities (Liquidation Amount $1,000 per Common
Security) (the "Common Securities"). Except as provided in Section 5.11 of the
Trust Agreement (as defined below) the Common Securities are not transferable
and any attempted transfer hereof shall be null and void. The designations,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Issuer Trust, dated as of June ____, 1999, as the same may be amended from time
to time (the "Trust Agreement"), including the designation of the terms of the
Common Securities as set forth therein. The Issuer Trust will furnish a copy of
the Trust Agreement to the Holder without charge upon written request to the
Issuer Trust at its principal place of business.
BY RECEIPT AND ACCEPTANCE OF THIS CERTIFICATE, THE HOLDER AGREES TO BE
BOUND BY THE TRUST AGREEMENT AND IS ENTITLED TO THE BENEFITS THEREUNDER.
<PAGE> 76
Terms used but not defined herein have the meanings set forth in the
Trust Agreement.
IN WITNESS WHEREOF, the undersigned Administrative Trustee of the
Issuer Trust has executed this certificate as of the ____ day of __________,
______.
KEYCORP CAPITAL III
By:
-----------------------------
Name:
Administrative Trustee
C-2
<PAGE> 77
EXHIBIT D
[FORM OF EXPENSE AGREEMENT]
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT AS TO EXPENSES AND LIABILITIES, dated as of June ____, 1999,
between KeyCorp, an Ohio corporation, in its capacity as Holder (as defined in
the Trust Agreement referred to below) of the Common Securities referred to
below (in such capacity, and together with its successors in such capacity, the
"Common Securityholder"), and KeyCorp Capital III, a Delaware business trust
(the "Issuer Trust").
W I T N E S S E T H :
WHEREAS, the Issuer Trust intends to issue its Common Securities (the
"Common Securities") to and receive junior subordinated debentures from KeyCorp
and to issue and sell ____% Capital Securities (the "Capital Securities") with
such powers, preferences and special rights and restrictions as are set forth in
the Amended and Restated Trust Agreement of the Issuer Trust, dated as of June
____, 1999, as the same may be amended from time to time (the "Trust
Agreement"); and
WHEREAS, the Common Securityholder will own all of the Common
Securities of the Issuer Trust;
WHEREAS, terms used but not defined herein have the meanings set forth
in the Trust Agreement;
NOW, THEREFORE, for good and valid consideration, the receipt and
sufficiency of which are hereby acknowledged:
ARTICLE I.
SECTION 1.1 Guarantee by the Common Securityholder.
Subject to the terms and conditions hereof, the Common Securityholder
hereby irrevocably and unconditionally guarantees to each person or entity to
whom the Issuer Trust is now or hereafter becomes indebted or liable (the
"Beneficiaries") the full payment, when and as due, of any and all Obligations
(as hereinafter defined) to such Beneficiaries. As used herein, "Obligations"
means any costs, expenses or liabilities of
<PAGE> 78
the Issuer Trust, other than obligations of the Issuer Trust to pay to holders
of any Trust Securities the amounts due such holders pursuant to the terms of
the Trust Securities. This Agreement is intended to be for the benefit of, and
to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries
have received notice hereof.
SECTION 1.2 Subordination of Guarantee. The guarantee and other
liabilities and obligations of the Common Securityholder under this Agreement
shall constitute unsecured obligations of the Common Securityholder and shall
rank subordinate and junior in right of payment to all Senior Indebtedness (as
defined in the Indenture) of the Common Securityholder to the extent and in the
manner set forth in the Indenture with respect to the Debentures, and the
provisions of Article XIII of the Indenture will apply, mutatis mutandis, to the
obligations of the Common Securityholder hereunder. The obligations of the
Common Securityholder hereunder do not constitute Senior Indebtedness (as
defined in the Indenture) of the Common Securityholder.
SECTION 1.3 Term of Agreement.
This Agreement shall terminate and be of no further force or effect
upon the later of (a) the date on which full payment has been made of all
amounts payable to all holders of all the Capital Securities (whether upon
redemption, liquidation, exchange or otherwise) and (b) the date on which there
are no Beneficiaries remaining; provided, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any holder of Capital Securities or any Beneficiary must restore payment of
any sums paid in respect of the Capital Securities, under any Obligation, under
the Guarantee Agreement dated the date hereof by the Common Securityholder and
Bankers Trust Company, as guarantee trustee, or under this Agreement for any
reason whatsoever.
This Agreement shall be continuing, irrevocable, unconditional and
absolute.
SECTION 1.4 Waiver of Notice.
The Common Securityholder hereby waives notice of acceptance of this
Agreement and of any Obligation to which it applies or may apply, and the Common
Securityholder hereby waives presentment, demand for payment, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 1.5 No Impairment.
The obligations, covenants, agreements and duties of the Common
Securityholder under this Agreement shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
D-2
<PAGE> 79
1. the extension of time for the payment by the Issuer Trust
of all or any portion of the Obligations or for the performance of any other
obligation under, arising out of, or in connection with, the Obligations;
2. any failure, omission, delay or lack of diligence on the
part of the Beneficiaries to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Beneficiaries with respect to the Obligations
or any action on the part of the Issuer Trust granting indulgence or extension
of any kind; or
3. 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 Trust or any of
the assets of the Issuer Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Common Securityholder with respect to the happening of any
of the foregoing.
SECTION 1.6 Enforcement.
A Beneficiary may enforce this Agreement directly against the Common
Securityholder and the Common Securityholder waives any right or remedy to
require that any action be brought against the Issuer Trust or any other person
or entity before proceeding against the Common Securityholder.
SECTION 1.7 Subrogation.
The Common Securityholder shall be subrogated to all (if any) rights of
the Issuer Trust in respect of any amounts paid to the Beneficiaries by the
Common Securityholder under this Agreement; provided, however, that the Common
Securityholder shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights which it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Agreement.
D-3
<PAGE> 80
ARTICLE II.
SECTION 2.1 Binding Effect.
This Agreement shall bind the successors, receivers, trustees and
representatives of the Common Securityholder and shall inure to the benefit of
the Beneficiaries.
SECTION 2.2 Amendment.
So long as there shall remain any Beneficiary or any Capital Securities
of any series shall be outstanding, this Agreement may not be modified or
amended in any manner adverse to such Beneficiary or to the holders of the
Capital Securities, as the case may be.
SECTION 2.3 Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or by registered
or certified mail, addressed as follows (and if so given, shall be deemed given
when mailed or upon receipt of an answer-back, if sent by telex):
KeyCorp Capital III
c/o KeyCorp
127 Public Square
Cleveland, Ohio 44114
Facsimile No.: (216) 689-4121
Attention: General Counsel
KeyCorp
127 Public Square
Cleveland, Ohio 44114
Facsimile No.: (216) 689-4121
Attention: General Counsel
SECTION 2.4 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.
D-4
<PAGE> 81
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
KEYCORP
By:
---------------------------------
Name:
Title:
KEYCORP CAPITAL III
By:
---------------------------------
Name:
Administrative Trustee
D-5
<PAGE> 82
EXHIBIT E
[FORM OF CAPITAL SECURITIES CERTIFICATE]
[NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"), NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE
UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE DEEMED TO
HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT EITHER (A) IS NOT A
PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING THIS SECURITY ON BEHALF OF OR
WITH "PLAN ASSETS" OF ANY PLAN OR (B) IS ELIGIBLE FOR THE EXEMPTIVE RELIEF
AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH
PURCHASE OR HOLDING.]
[IF THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITIES CERTIFICATE,
THEN INSERT--This Capital Security is a Global Capital Securities Certificate
within the meaning of the Trust Agreement hereinafter referred to and is
registered in the name of a clearing agency or a nominee thereof. This Capital
Security may not be exchanged in whole or in part for a Capital Security
registered, and no transfer of this Capital Security in whole or in part may be
registered, in the name of any person other than such clearing agency or a
nominee thereof, except in the limited circumstances described in the Trust
Agreement.]
[IF THE SECURITY IS A GLOBAL CAPITAL SECURITY AND THE DEPOSITORY TRUST
COMPANY IS TO BE THE CLEARING AGENCY THEREFOR, THEN INSERT--Unless this Capital
Security is presented by an authorized representative of The Depository Trust
Company (55 Water Street, New York) to KeyCorp Capital III or its agent for
registration of transfer, exchange or payment, and any Capital Security issued
is registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The 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 inasmuch as the registered owner hereof, Cede
& Co., has an interest herein.]
<PAGE> 83
CERTIFICATE NUMBER NUMBER OF CAPITAL SECURITIES
P- [___________]
CUSIP NO. ____________
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
KEYCORP CAPITAL III
____% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
KeyCorp Capital III, a business trust created under the laws of the
State of Delaware (the "Issuer Trust"), hereby certifies that (the "Holder") is
the registered owner of ( ) capital securities of the Issuer Trust representing
an undivided preferred beneficial interest in the assets of the Issuer Trust and
designated the KeyCorp Capital III ____% Capital Securities (Liquidation Amount
$1,000 per Capital Security) (the "Capital Securities"). The Capital Securities
are transferable on the books and records of the Issuer Trust, in person or by a
duly authorized attorney, upon surrender of this certificate duly endorsed and
in proper form for transfer as provided in Section 5.5 of the Trust Agreement
(as defined below). The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities are set
forth in, and this certificate and the Capital Securities represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Trust Agreement of the Issuer Trust, dated as of June
_______, 1999, as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of Capital Securities as set
forth therein. The Holder is entitled to the benefits of the Guarantee Agreement
entered into by KeyCorp, an Ohio corporation, and Bankers Trust Company, as
guarantee trustee, dated as of June _____, 1999, (the "Guarantee"), to the
extent provided therein. The Issuer Trust will furnish a copy of the Trust
Agreement and the Guarantee to the Holder without charge upon written request to
the Issuer Trust at its principal place of business or registered office.
BY RECEIPT AND ACCEPTANCE OF THIS CERTIFICATE, THE HOLDER AGREES TO BE
BOUND BY THE TRUST AGREEMENT AND IS ENTITLED TO THE BENEFITS THEREUNDER.
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<PAGE> 84
IN WITNESS WHEREOF, the undersigned Administrative Trustee of the
Issuer Trust has executed this certificate as of the ____ day of _________,
__________.
KEYCORP CAPITAL III
By:
-----------------------------
Name:
Administrative Trustee
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<PAGE> 85
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Capital Securities Certificate on the books of the Issuer
Trust. The agent may substitute another to act for him or her.
Date: ________________
Signature:
- --------------------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Capital Security Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
E-4
<PAGE> 1
EXHIBIT 4(f)
================================================================================
GUARANTEE AGREEMENT
between
KEYCORP,
as Guarantor,
and
BANKERS TRUST COMPANY,
as Guarantee Trustee
-------------------------------------
KEYCORP CAPITAL III
-------------------------------------
Dated as of June _________, 1999
================================================================================
<PAGE> 2
KEYCORP CAPITAL III
Certain Sections of this Guarantee Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Section of Section of
Trust Indenture Act Guarantee Agreement
- ------------------- -------------------
<S> <C>
310(a).........................................................................................4.1(a)
(b).........................................................................................4.1(c), 2.8
(c).........................................................................................Inapplicable
311(a).........................................................................................2.2(b)
(b).........................................................................................2.2(b)
(c).........................................................................................Inapplicable
312(a).........................................................................................2.2(a)
(b).........................................................................................2.2(b)
313............................................................................................2.3
314(a).........................................................................................2.4
(b).........................................................................................Inapplicable
(c).........................................................................................2.5
(d).........................................................................................Inapplicable
(e).........................................................................................1.1, 2.5, 3.2
(f).........................................................................................2.1, 3.2
315(a).........................................................................................3.1(d)
(b).........................................................................................2.7
(c).........................................................................................3.1(c)
(d).........................................................................................3.1(d)
316(a).........................................................................................1.1, 2.6, 5.4
(b).........................................................................................5.3, 5.7
(c).........................................................................................8.2
317(a).........................................................................................Inapplicable
(b).........................................................................................Inapplicable
318(a).........................................................................................2.1(b)
(b).........................................................................................2.1
(c).........................................................................................2.1(a)
</TABLE>
- ----------
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Guarantee Agreement and shall not affect the interpretation of
any of its terms or provisions.
i
<PAGE> 3
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.1. Interpretation................................................. 2
SECTION 1.2. Definitions.................................................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application............................... 6
SECTION 2.2. List of Holders................................................ 6
SECTION 2.3. Reports by the Guarantee Trustee............................... 6
SECTION 2.4. Periodic Reports to Guarantee Trustee.......................... 7
SECTION 2.5. Evidence of Compliance with Conditions Precedent............... 7
SECTION 2.6. Events of Default; Waiver...................................... 7
SECTION 2.7. Event of Default; Notice....................................... 7
SECTION 2.8. Conflicting Interests.......................................... 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee..................... 8
SECTION 3.2. Certain Rights of Guarantee Trustee............................ 9
SECTION 3.3. Compensation; Indemnity; Fees.................................. 11
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility................................. 12
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trust.... 12
ii
<PAGE> 4
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee...................................................... 13
SECTION 5.2. Waiver of Notice and Demand.................................... 13
SECTION 5.3. Obligations Not Affected....................................... 13
SECTION 5.4. Rights of Holders.............................................. 14
SECTION 5.5. Guarantee of Payment........................................... 15
SECTION 5.6. Subrogation.................................................... 15
SECTION 5.7. Independent Obligations........................................ 15
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.................................................. 15
SECTION 6.2. Pari Passu Guarantees.......................................... 16
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.................................................... 16
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns......................................... 16
SECTION 8.2. Amendments..................................................... 16
SECTION 8.3. Notices........................................................ 17
SECTION 8.4. Benefit........................................................ 18
SECTION 8.5. Governing Law.................................................. 18
SECTION 8.6. Counterparts................................................... 18
iii
<PAGE> 5
GUARANTEE AGREEMENT, dated as of June ________, 1999, is executed and
delivered by KEYCORP, an Ohio corporation (the "Guarantor") having its principal
office at 127 Public Square, Cleveland, Ohio 44114-1306, and BANKERS TRUST
COMPANY, a banking corporation organized under the laws of the State of New
York, as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Capital Securities (as defined herein)
of KEYCORP CAPITAL III, a Delaware statutory business trust (the "Issuer
Trust").
W I T N E S S E T H :
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of June ___________, 1999 (the "Trust Agreement"), among the Guarantor, as
Depositor, the Property Trustee, the Delaware Trustee and the Administrative
Trustees named therein and the Holders from time to time of undivided beneficial
interests in the assets of the Issuer Trust, the Issuer Trust is issuing
$250,000,000 aggregate Liquidation Amount (as defined in the Trust Agreement) of
its ____% Capital Securities, Liquidation Amount $1,000 per Capital Security
(the "Capital Securities"), representing preferred undivided beneficial
interests in the assets of the Issuer Trust and having the terms set forth in
the Trust Agreement;
WHEREAS, the Capital Securities will be issued by the Issuer Trust and
the proceeds thereof, together with the proceeds from the issuance of the Issuer
Trust's Common Securities (as defined below), will be used to purchase the
Junior Subordinated Debentures (as defined in the Trust Agreement) of the
Guarantor which will be deposited with Bankers Trust Company, as Property
Trustee under the Trust Agreement, as trust assets;
WHEREAS, as an incentive for the Holders to purchase the Capital
Securities, the Guarantor irrevocably and unconditionally agrees, to the extent
set forth herein, to pay to the Holders of the Capital Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Capital Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement to
provide as follows for the benefit of the Holders from time to time of the
Capital Securities:
ARTICLE I
INTERPRETATION AND DEFINITIONS
<PAGE> 6
SECTION 1.1. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to
them in Section 1.2;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and
vice-versa; and
(g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 1.2. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings:
"Allocable Amounts", when used with respect to any Senior
Subordinated Debt, means the amount necessary to pay all principal of
(and premium, if any) and interest, if any, on such Senior Subordinated
Debt in full less, if applicable, any portion of such amounts which
would have been paid to, and retained by, the holders of such Senior
Subordinated Debt (whether as a result of the receipt of payments by
the holders of such Senior Subordinated Debt from the Guarantor or any
other obligor thereon or from any holders of, or trustee in respect of,
other indebtedness that is subordinate and junior in right of payment
to such Senior Subordinated Debt pursuant to any provision of such
indebtedness for the payment over of amounts received on account of
such indebtedness to the holders of such Senior Subordinated Debt) but
for the fact that such Senior Subordinated Debt is subordinate or
junior in
2
<PAGE> 7
right of payment to trade accounts payable or accrued liabilities
arising in the ordinary course of business.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person; provided, however,
that the Issuer Trust shall not be deemed to be an Affiliate of the
Guarantor. 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.
"Board of Directors" means either the board of directors of
the Guarantor or any committee of that board duly authorized to act
hereunder.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer Trust.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement;
provided, however, that, except with respect to a default in payment of
any Guarantee Payments, the Guarantor shall have received notice of
default and shall not have cured such default within 30 days after
receipt of such notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital
Securities, to the extent not paid or made by or on behalf of the
Issuer Trust: (i) any accumulated and unpaid Distributions (as defined
in the Trust Agreement) required to be paid on the Capital Securities,
to the extent the Issuer Trust shall have funds on hand available
therefor at such time, (ii) the redemption price, including all
accumulated and unpaid Distributions to the date of redemption (the
"Redemption Price"), with respect to any Capital Securities called for
redemption by the Issuer Trust, to the extent the Issuer Trust shall
have funds on hand available therefor at such time, and (iii) upon a
voluntary or involuntary termination, winding up or liquidation of the
Issuer Trust, unless Junior Subordinated Debentures are distributed to
the Holders, the lesser of (a) the aggregate of the Liquidation Amount
of $1,000 per Capital Security plus accumulated and unpaid
Distributions on the Capital Securities to the date of payment to the
extent that the Issuer Trust shall have funds available therefor at
such time and (b) the amount of assets of the Issuer Trust remaining
available for distribution to Holders in liquidation of the Issuer
Trust (in either case, the "Liquidation Distribution").
3
<PAGE> 8
"Guarantee Trustee" means Bankers Trust Company, until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement, and
thereafter means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and
records of the Issuer Trust, of any Capital Securities; provided,
however, that in determining whether the holders of the requisite
percentage of Capital Securities have given any request, notice,
consent or waiver hereunder, "Holder" shall not include the Guarantor,
the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Indenture dated as of December 4, 1996,
as supplemented and amended between the Guarantor and Bankers Trust
Company, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Capital Securities"
means, except as provided by the Trust Indenture Act, a vote by the
Holder(s), voting separately as a class, of more than 50% of the
Liquidation Amount of all then outstanding Capital Securities issued by
the Issuer Trust.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman or a Vice Chairman of the Board of
Directors of such Person or the President or a Vice President of such
Person, and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary of such Person, and delivered to the Guarantee
Trustee. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Guarantee Agreement
shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and
the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each 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
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
4
<PAGE> 9
company, trust, unincorporated association, or government or any agency
or political subdivision thereof, or any other entity of whatever
nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any Senior Vice President, any Vice President, any Assistant
Vice President, the Secretary, any Assistant Secretary, the Treasurer,
any Assistant Treasurer, any Trust Officer or Assistant Trust Officer
or any other officer of the Corporate Trust Department of the Guarantee
Trustee 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.
"Senior Debt" means any obligation of the Guarantor to its
creditors, whether now outstanding or subsequently incurred, other than
any obligation as to which, in the instrument creating or evidencing
the obligation or pursuant to which the obligation is outstanding, it
is provided that such obligation is not Senior Debt. Senior Debt does
not include Senior Subordinated Debt or the Junior Subordinated
Debentures.
"Senior Indebtedness" means (i) Senior Debt (but excluding
trade accounts payable and accrued liabilities arising in the ordinary
course of business) and (ii) the Allocable Amounts of Senior
Subordinated Debt.
"Senior Subordinated Debt" means any obligation of the
Guarantor to its creditors, whether now outstanding or subsequently
incurred, where the instrument creating or evidencing the obligation or
pursuant to which the obligation is outstanding, provides that it is
subordinate and junior in right of payment to Senior Debt. Senior
Subordinated Debt includes the Guarantor's outstanding subordinated
debt securities and any subordinated debt securities issued in the
future with substantially similar subordination terms and does not
include the Junior Subordinated Debentures or any subordinated debt
securities issued in the future or the past with substantially similar
subordination terms.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under
Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.
5
<PAGE> 10
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act through the operation of Section 318(c)
thereof, such imposed duties shall control. If any provision of this Guarantee
Agreement modifies or excludes any provision of the Trust Indenture Act which
may be so modified or excluded, the latter provision shall be deemed to apply to
this Guarantee Agreement as so modified or to be excluded, as the case may be.
SECTION 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before June 30 and December 31 of each
year, a list, in such form as the Guarantee Trustee may reasonably require, of
the names and addresses of the Holders (the "List of Holders") as of a date not
more than 15 days prior to the delivery thereof, and (b) at such other times as
the Guarantee Trustee may request in writing, within 30 days after the receipt
by the Guarantor of any such request, a List of Holders as of a date not more
than 15 days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and is
not identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than May 31 of each year, commencing May 31, 2000, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
The Guarantor will notify the Guarantee Trustee if and when any Capital
Securities are listed on any stock exchange.
6
<PAGE> 11
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the Securities
and Exchange Commission and the Holders such documents, reports and information,
if any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer of the Guarantor pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Capital
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notices of all Events of Default known to the Guarantee Trustee, unless
such defaults have been cured before the giving of such notice, provided, that,
except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of
Default.
7
<PAGE> 12
SECTION 2.8. Conflicting Interests.
The Trust Agreement and the Indenture shall be deemed to be
specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
8
<PAGE> 13
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act are specifically required
to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Capital Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement;
and
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Guarantee Agreement or adequate indemnity
against such risk or liability is not reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
9
<PAGE> 14
(i) The Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party
or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate which, upon
receipt of such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and
the written advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or opinion.
Such legal counsel may be legal counsel to the Guarantor or any of its
Affiliates and may be one of its employees. The Guarantee Trustee shall
have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such Holder
shall have provided to the Guarantee Trustee such adequate security and
indemnity as would satisfy a reasonable person in the position of the
Guarantee Trustee, against the costs, expenses (including attorneys'
fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Guarantee Trustee; provided that,
nothing contained in this Section 3.2(a)(v) shall be taken to relieve
the Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
10
<PAGE> 15
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee shall not
be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders, (B) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received, and (C) shall be protected in acting in accordance with such
instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Compensation; Indemnity; Fees.
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall
not be limited by any provisions of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Guarantee Trustee upon request for all reasonable expenses, disbursements and
advances incurred or made by the Guarantee Trustee in accordance with any
provision of this Guarantee Agreement (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify the Guarantee Trustee and its directors, officers,
agents and employees for, and to hold it harmless against, any loss, liability
or expense incurred without negligence or bad faith on the part of the Guarantee
Trustee, arising out of or in connection with the acceptance or administration
of this Guarantee Agreement, including the costs and
11
<PAGE> 16
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The
Guarantee Trustee will not claim or exact any lien or charge on any Guarantee
Payments as a result of any amount due to it under this Guarantee Agreement.
The provisions of this Section 3.3. shall survive the termination of
this Guarantee Agreement or the earlier resignation or removal of the Guarantee
Trustee.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of
at least $50,000,000, and shall be a corporation meeting the
requirements of Section 310(a) of the Trust Indenture Act. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining
authority, then, for the purposes of this Section 4.1 and to the extent
permitted by the Trust Indenture Act, the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
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<PAGE> 17
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer Trust), as and when due, regardless of any
defense, right of set-off or counterclaim which the Issuer Trust may have or
assert, except the defense of payment. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer Trust to pay such amounts
to the Holders.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer Trust or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.
13
<PAGE> 18
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer Trust of any express or
implied agreement, covenant, term or condition relating to the Capital
Securities to be performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust
of all or any portion of the Distributions (other than an extension of
time for payment of Distributions that results from the extension of
any interest payment period on the Junior Subordinated Debentures as
provided in the Indenture), Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Capital Securities or
the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Capital Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Capital Securities, or any action on the part of the
Issuer Trust granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer Trust or any of the assets of the Issuer Trust;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor
(other than payment of the underlying obligation), it being the intent
of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
14
<PAGE> 19
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer Trust) or upon distribution of Junior Subordinated Debentures to
Holders as provided in the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all rights (if any) of the Holders
against the Issuer Trust in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer Trust pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
15
<PAGE> 20
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Indebtedness of the Guarantor. The
obligations of the Guarantor under this Guarantee Agreement do not constitute
Senior Indebtedness, Senior Debt or Senior Subordinated Debt.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar
guarantee agreements issued by the Guarantor on behalf of the holders of
preferred or capital securities issued by any KeyCorp Trust (as defined in the
Indenture).
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Capital Securities,
(ii) the distribution of Junior Subordinated Debentures to the Holders in
exchange for all of the Capital Securities or (iii) full payment of the amounts
payable in accordance with the Trust Agreement upon liquidation of the Issuer
Trust. Notwithstanding the foregoing, this Guarantee Agreement will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid with respect to Capital Securities
or this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
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<PAGE> 21
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its obligations hereunder.
SECTION 8.2. Amendments.
Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of the Capital Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below
or such other address, facsimile number or to the attention of such
other Person as the Guarantor may give notice to the Holders:
KeyCorp
127 Public Square
Cleveland, Ohio 44114-1306
Facsimile No.: (216) 689-4121
Attention: General Counsel
(b) if given to the Issuer Trust, in care of the Guarantee
Trustee, at the Issuer Trust's (and the Guarantee Trustee's) address
set forth below or such other address as the Guarantee Trustee on
behalf of the Issuer Trust may give notice to the Holders:
KeyCorp Capital III
c/o KeyCorp
127 Public Square
Cleveland, Ohio 44114-1306
17
<PAGE> 22
Facsimile No.: (216) 689-4121
Attention: General Counsel
with a copy to:
Bankers Trust Company
Four Albany Street
Mail Stop 5041
New York, New York 10006
Facsimile No.: (212) 250-6657
Attention: Marc Parilla
(c) if given to any Holder, at the address set forth on the
books and records of the Issuer Trust.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital Securities.
SECTION 8.5. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
SECTION 8.6. Counterparts.
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.
18
<PAGE> 23
IN WITNESS WHEREOF, the undersigned have executed this Guarantee
Agreement as of the date first above written.
KEYCORP
By:_______________________
Name:
Title:
BANKERS TRUST COMPANY,
as Guarantee Trustee
By:_______________________
Name:
Title:
19
<PAGE> 1
EXHIBIT 4(g)
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")(EACH, A "PLAN"), NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE
UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
96- 23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING.
ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE DEEMED
TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT EITHER (A) IS
NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING THIS SECURITY ON BEHALF
OF OR WITH "PLAN ASSETS" OF ANY PLAN OR (B) IS ELIGIBLE FOR THE EXEMPTIVE RELIEF
AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH
PURCHASE OR HOLDING.
KEYCORP
__% JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES DUE JUNE ____, 20__
No. 1 $257,800,000
KEYCORP, a corporation organized and existing under the laws of Ohio
(hereinafter called the "Company", which term includes any successor corporation
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to Bankers Trust Company, as Property Trustee of KeyCorp Capital
III (the "Issuer Trust"), or registered assigns, the principal sum of Two
Hundred Fifty Seven Million Eight Hundred Thousand Dollars ($257,800,000) on
June ____, 20__, or such other principal amount represented hereby as may be set
forth in the records of the Securities Registrar hereinafter referred to in
accordance with the Indenture. The Company further promises to pay interest on
said principal sum from ____, 1999 or from the most recent interest payment date
(each such date, an "Interest Payment Date") to which interest has been paid or
duly provided for, semi-annually (subject to deferral as set forth herein) in
arrears on ________ and ____________ of each year, commencing ____________,
1999, at the rate of __% per annum, together with Additional Sums, if any, as
provided in Section 10.6 of the Indenture, until the principal hereof shall have
become due and payable, plus Additional Interest, if any, until the principal
hereof is paid or duly provided for or made available for payment and on any
overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at
<PAGE> 2
the rate of __% per annum, compounded semi-annually. The amount of interest
payable for any period less than a full interest period shall be computed on the
basis of twelve 30-day months and a 360-day year and the actual number of days
elapsed in a partial month in such period. The amount of interest payable for
any full interest period will be computed by dividing the rate per annum by two.
In the event that any date on which interest is payable on this Security is
not a Business Day, then a payment of the interest payable on such date will be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), 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 the date the payment was originally payable. A "Business
Day" shall mean any day other than (a) a Saturday or Sunday, (b) a day on which
banking institutions in The City of New York are authorized or required by law
or executive order to remain closed or (c) a day on which the Corporate Trust
Office of the Trustee or the principal office of the Property Trustee under the
Trust Agreement hereinafter referred to for the Issuer Trust, is closed for
business. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest installment, which shall be the _______ or ___________, as the
case may be, next preceding such Interest Payment Date. Any such interest
installment not so punctually paid or duly provided for shall forthwith cease to
be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
So long as no Event of Default has occurred and is continuing, the Company
shall have the right at any time during the term of this Security to defer
payment of interest on this Security, at any time or from time to time, for up
to ten (10) consecutive semi-annual interest payment periods with respect to
each deferral period (each an "Extension Period"), during which Extension Period
the Company shall have the right to make partial payments of interest on any
Interest Payment Date, and at the end of which the Company shall pay all
interest then accrued and unpaid (together with Additional Interest thereon to
the extent permitted by applicable law); provided, however, that no Extension
Period shall extend beyond the Stated Maturity of the principal of this
Security; provided, further, that during any such Extension Period, the Company
shall not, and shall not permit any Subsidiary of the Company to, (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt security of the Company that ranks pari passu with
or junior in interest to this Security or make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any
Subsidiaries of the Company if such guarantee ranks pari passu in all respects
with or junior in interest to this Security (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection
-2-
<PAGE> 3
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of any one or more employees, officers, directors or
consultants, in connection with a dividend reinvestment or shareholder stock
purchase plan or in connection with the issuance of capital stock of the Company
(or securities convertible into or exercisable for such stock) as consideration
in an acquisition transaction entered into prior to the Extension Period, (b) 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 of
any class or series of the Company's indebtedness for any class or series of the
Company's capital stock, (c) 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, (d) any
declaration of a dividend in connection with the implementation or amendment of
the Company shareholders' rights plan (or any successor thereto), or the
issuance of rights, stock or other property under any such rights plan, or the
redemption or repurchase of rights pursuant thereto, or (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks pari passu with
or junior to such stock). Prior to the termination of any such Extension Period,
the Company may further extend the interest payment period, provided that no
Extension Period shall exceed ten (10) consecutive semi-annual periods or extend
beyond the Stated Maturity of the principal of this Security. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, the Company may elect to
begin a new Extension Period, subject to the above conditions. No interest shall
be due and payable during an Extension Period except at the end thereof. The
Company shall give the Issuer Trustees notice of its election to begin any
Extension Period at least one Business Day prior to the earlier of (i) the date
the Distributions on the Capital Securities would have been payable except for
the election to begin such Extension Period, or (ii) the date the Property
Trustee is required to give notice to any securities exchange or other
applicable self-regulatory organization or to the holders of such Capital
Securities of the record date or the date such Distributions are payable, but in
any event not less than one Business Day prior to such record date. The Property
Trustee shall give notice of the Company's election to begin a new Extension
Period to the holders of the Capital Securities. For purposes hereof, neither
the Company's Senior Debt nor its Senior Subordinated Debt shall be deemed to be
pari passu with this Security.
Payment of the principal of (and premium, if any) and interest (including
Additional Interest) on this Security will be made at the office or agency of
the Company maintained for that purpose in the United States, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Securities Register or (ii) by wire transfer in immediately available funds at
such place and to such account as may be designated by the Person entitled
thereto as specified in the Securities Register.
The indebtedness evidenced by this 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, 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
-3-
<PAGE> 4
the Trustee on his behalf to take such actions as may be necessary or
appropriate to effectuate the subordination so provided and (c) appoints the
Trustee his attorney-in-fact for any and all such purposes. Each Holder hereof,
by his acceptance hereof, waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
KEYCORP
By:
---------------------------------
Name:
Title:
Attest:
- --------------------------
Trustee's Certificate of Authentication.
This is one of the Securities referred to in the within mentioned
Indenture.
Dated: June __, 1999
BANKERS TRUST COMPANY,
as Trustee
By:
----------------------------------
Authorized Signatory
-5-
<PAGE> 6
Reverse of Security
-------------------
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of December 4, 1996 (herein called the
"Indenture"), between the Company and Bankers Trust Company, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Trustee, the Company and the Holders of
the Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $257,800,000.
All terms used in this Security that are defined in the Indenture or in the
Amended and Restated Trust Agreement, dated as of June ____, 1999, as amended
(the "Trust Agreement"), for the Issuer Trust, among KEYCORP, as Depositor, and
the Trustees named therein, shall have the meanings assigned to them in the
Indenture or the Trust Agreement, as the case may be.
The Company may at any time, at its option, and subject to the terms and
conditions of Article XI of the Indenture, redeem this Security in whole at any
time or in part from time to time at a Redemption Price equal to the greater of
(i) 100% of the principal amount of the Security being redeemed or (ii) as
determined by a Quotation Agent, the sum of the present values of scheduled
payments of principal and interest from the Redemption Date to June ____, 20__
(the "Remaining Life"), discounted to the Redemption Date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined below) plus .__%, plus, in the case of either (i) or (ii),
accrued and unpaid interest on such Securities to the Redemption Date.
In addition, if either a Tax Event or a Capital Treatment Event (as defined
below) shall occur and be continuing, subject to the terms and conditions of
Article XI of the Indenture, the Company may, at its option, redeem this
Security in whole (but not in part) at any time within 90 days of the occurrence
of such Tax Event or Capital Treatment Event, at a Redemption Price equal to the
greater of (i) 100% of the principal amount of this Security or (ii) as
determined by a Quotation Agent, the sum of the present values of scheduled
payments of principal and interest for the Remaining Life, discounted to the
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus .__%, plus, in the case of
either (i) or (ii), accrued and unpaid interest on this Security to the
Redemption Date.
As used herein:
"Capital Treatment Event" means the reasonable determination by the Company
that, as a result of the occurrence of any amendment to, or change (including
any announced prospective change) in, the laws (or any rules or regulations
thereunder) of the United States or any political subdivision thereof or
therein, or as a result of any official or administrative pronouncement or
action or judicial decision interpreting or applying such laws or regulations,
which amendment or change is effective or such pronouncement, action or decision
is announced on or after the date of issuance of the Capital
<PAGE> 7
Securities under the Trust Agreement, there is more than an insubstantial risk
that the Company will not be entitled to treat an amount equal to the
Liquidation Amount of the Capital Securities as "Tier 1 Capital" (or the then
equivalent thereof) for purposes of the applicable capital adequacy guidelines
of the Board of Governors of the Federal Reserve System, as then in effect.
"Comparable Treasury Issue" means with respect to any Redemption Date the
United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after June _______, 20__, the
two most closely corresponding United States Treasury securities shall be used
as the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
"Comparable Treasury Price" means (A) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (B) if the Debenture
Trustee obtains fewer than five such Reference Treasury Dealer Quotations, the
average of all such Quotations.
"Quotation Agent" means _________________________________________ and its
successors; provided, however, that if the foregoing shall cease to be a primary
United States Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.
"Tax Event" means the receipt by the Company and the Trust of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to or change (including any announced prospective change) in the laws
or any regulations thereunder of the United States or any political subdivision
or taxing authority thereof or therein, or as a result of any official
administrative pronouncement (including any private letter ruling, technical
advice memorandum, field service advice, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or judicial decision
interpreting or applying such laws or regulations, regardless of whether such
Administrative Action or judicial decision is issued to or in connection with a
proceeding involving the Company or the Trust and whether or not subject to
review or appeal, which amendment, clarification, change,
-2-
<PAGE> 8
Administrative Action or decision is enacted, promulgated or announced, in each
case on or after the date of issuance, there is more than an insubstantial risk
that: (i) the Trust is, or will be within 90 days of the date of such opinion,
subject to United States federal income tax with respect to income received or
accrued on the Debentures; (ii) interest payable by the Company on the
Debentures is not, or within 90 days of the date of such opinion, will not be,
deductible by the Company, in whole or in part, for United States federal income
tax purposes; or (iii) the Trust is, or will be within 90 days of the date of
such opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Treasury Rate" means (i) the yield, under the heading which represents the
average for the week immediately prior to the date of calculation, appearing in
the most recently published statistical release designated H.15(519) or any
successor publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities", for the
maturity corresponding to the Remaining Life (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date.
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.
The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by the Company with certain
conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of each series to be affected by such supplemental indenture. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
-3-
<PAGE> 9
As provided in and subject to the provisions of the Indenture, if an Event
of Default with respect to the Securities of this series at the time Outstanding
occurs and is continuing, then and in every such case the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Securities of this
series may declare the principal amount of all the Securities of this series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), provided that, in the case of the Securities
of this series issued to a KeyCorp Trust, if upon an Event of Default, the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of this series fails to declare the principal of all the
Securities of this series to be immediately due and payable, the holders of at
least 25% in aggregate Liquidation Amount of the Capital Securities of such
KeyCorp Trust then outstanding shall have such right by a notice in writing to
the Company and the Trustee; and upon any such declaration the principal amount
of and the accrued interest (including any Additional Interest) on all the
Securities of this series shall become immediately due and payable, provided
that the payment of principal and interest (including any Additional Interest)
on such Securities shall remain subordinated to the extent provided in Article
XIII of the Indenture.
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 (including any Additional Interest) on this Security at the times,
place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Securities Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company maintained under Section 10.2 of the Indenture duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee shall treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiples thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
-4-
<PAGE> 10
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States federal, state and local
tax purposes it is intended that this Security constitute indebtedness.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
-5-
<PAGE> 1
[KeyCorp letterhead]
Exhibit 5(a)
June 8, 1999
KeyCorp
127 Public Square
Cleveland, Ohio 44114
RE: Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
I am Vice President and Associate General Counsel of KeyCorp,
an Ohio corporation (the "Corporation"), and I have acted as counsel to the
Corporation in connection with the Registration Statement on Form S-3 filed on
April 20, 1999 (and all amendments thereto) with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Act of 1933, as amended
(the "Act") (the "Registration Statement"). The Registration Statement covers
the registration of Junior Subordinated Deferrable Interest Debentures (the
"Debt Securities") of the Corporation, $250,000,000 aggregate liquidation amount
of Capital Securities (the "Capital Securities") of KeyCorp Capital III, a
business trust created under the laws of the State of Delaware (the "Issuer"),
and the Guarantee with respect to the Capital Securities (the "Guarantee") to be
executed and delivered by the Corporation for the benefit of the holders from
time to time of the Capital Securities.
I am familiar with the corporate proceedings of the
Corporation and the Issuer to date with respect to the proposed issuance of the
Debt Securities, the Capital Securities and the Guarantee, and I have examined
such corporate records, certificates and other documents as I have considered
necessary or appropriate for the purposes of this opinion.
In rendering this opinion, I have assumed, without any
independent investigation, that (i) all documents that have been submitted to me
as originals are authentic, and that all documents that have been submitted to
me as copies conform to authentic, original documents and (ii) all persons
executing agreements, instruments of documents examined or relied upon by me had
the capacity to sign such agreements, instruments or documents, and all such
signatures are genuine.
<PAGE> 2
KeyCorp
Page 2
I have assumed that each of the documents have been duly
authorized, executed and delivered by each of the parties thereto other than the
Corporation and the Issuer and constitute valid and legally binding obligations
of such parties enforceable in accordance with their respective terms, except as
limited by Title II of the United States Code (Bankruptcy) and other applicable
bankruptcy, insolvency, reorganization, arrangement, fraudulent transfer,
moratorium or other laws relating to or affecting creditors' rights generally
and general principles of equity, constitutional rights and public policy,
regardless of whether enforceability is considered in a proceeding at law or in
equity and except that the provisions requiring payment of attorneys' fees may
not be enforced by courts applying Ohio law.
Upon the basis of such examination, I advise you that, in my
opinion, when the Registration Statement relating to the Debt Securities, the
Capital Securities and the Guarantee has become effective under the Act, the
Debt Securities have been duly executed and authenticated in accordance with the
Indenture and issued and delivered as contemplated in the Registration
Statement, the Guarantee Agreement relating to the Guarantee with respect to the
Capital Securities of the Issuer has been duly executed and delivered, the
Capital Securities have been duly executed in accordance with the Amended and
Restated Trust Agreement of the Issuer and issued and delivered as contemplated
in the Registration Statement, the terms of the Debt Securities and the
Guarantee and of their issuance and delivery have been duly established in
conformity with the Indenture and the Guarantee Agreement, respectively, so as
not to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Corporation and so as to comply with
any requirement or restriction imposed by any court or governmental body having
jurisdiction over the Corporation, and the terms of the Capital Securities of
the Issuer and of their issuance and delivery have been duly established in
conformity with the Amended and Restated Trust Agreement of the Issuer so as not
to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Issuer and so as to comply with any
requirement or restriction imposed by any court or governmental body having
jurisdiction over the Issuer, the Debt Securities and the Guarantee relating to
the Capital Securities of the Issuer will constitute valid and legally binding
obligations of the Corporation, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
The foregoing opinion is limited to the federal laws of the
United States, the laws of the State of New York and the laws of the State of
Ohio, and I am expressing no opinion as to the effect of the laws of any other
jurisdiction.
I understand that you have received an opinion regarding the
Capital Securities from Richards, Layton & Finger, P.A., special Delaware
counsel for the Corporation and the Issuer. I am expressing no opinion with
respect to the matters contained in such opinion.
This opinion is intended solely for your use in connection
with the Corporation's and Issuer's Registration Statement and may not be
reproduced, filed publicly or
<PAGE> 3
KeyCorp
Page 3
relied upon by you for any other purpose or by any other person for any purpose
without my prior written consent.
I hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement and to the use of my name
therein.
Very truly yours,
/S/ Daniel R. Stolzer
Daniel R. Stolzer
Vice President and
Associate General Counsel
<PAGE> 1
Exhibit 5(b)
[Letterhead of Richards, Layton & Finger, P.A.]
June 8,1999
KeyCorp Capital III
c/o KeyCorp
127 Public Square
Cleveland, Ohio 44114-1306
RE: KEYCORP CAPITAL III
-------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for KeyCorp, an Ohio
corporation (the "Company"), and KeyCorp Capital III, a Delaware business trust
(the "Trust"), in connection with the matters set forth herein. At your request,
this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of April 13, 1999
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on April 13, 1999;
(b) The Trust Agreement of the Trust, dated as of April 13, 1999, among
the Company and the trustees of the Trust named therein;
(c) Amendment No. 1 to the Registration Statement (the "Registration
Statement") on Form S-3, including a preliminary prospectus (the "Prospectus"),
relating to the ___% Capital Securities of the Trust representing preferred
undivided beneficial interests in the assets of the Trust (each, a "Capital
Security" and collectively, the "Capital Securities"), as proposed to be filed
by the Company and the Trust with the Securities and Exchange Commission on or
about June 8, 1999;
(d) A form of Amended and Restated Trust Agreement of the Trust, to be
entered into among the Company, as depositor, the trustees of the Trust named
therein, and the
<PAGE> 2
KeyCorp Capital III
June 8, 1999
Page 2
holders, from time to time, of undivided beneficial interests in the assets of
the Trust (including Exhibits A, C, and E thereto) (the "Trust Agreement"),
attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated June 8, 1999,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us under
the laws of the jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are parties to the documents
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to execute and deliver, and to perform its
obligations under, such documents, (v) the due authorization, execution and
delivery by all parties thereto of all documents examined by us, (vi) the
receipt by each Person to whom a Capital Security is to be issued by the Trust
(collectively, the "Capital Security Holders") of a Capital Securities
Certificate for such Capital Security and the payment for the Capital Security
acquired by it, in accordance with the Trust Agreement and the Registration
Statement, and (vii) that the Capital Securities are issued and sold to the
Capital Security Holders in accordance with the Trust Agreement and the
Registration Statement. We have not participated in the preparation of the
Registration Statement and assume no responsibility for its contents.
<PAGE> 3
KeyCorp Capital III
June 8, 1999
Page 3
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal
laws and rules and regulations relating thereto. Our opinions are rendered only
with respect to Delaware laws and rules, regulations and orders thereunder that
are currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. The Capital Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Capital Security Holders, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Capital Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the use of our name under the heading "Validity of Securities" in
the Prospectus. In giving the foregoing consents, we do not thereby admit that
we come within the category of Persons whose consent is required under section
7 of the Securities Act of 1933, as amended, or the rules and regulations of
the Securities and Exchange Commission thereunder. Except as stated above,
without our prior written consent, this opinion may not be furnished or quoted
to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
<PAGE> 1
Exhibit 8
[Sullivan & Cromwell letterhead]
June 8, 1999
KeyCorp Capital III,
c/o KeyCorp,
127 Public Square,
Cleveland, Ohio 44114.
Ladies and Gentlemen:
As special tax counsel to KeyCorp Capital III (the "Trust")
and KeyCorp in connection with the issuance of $250,000,000 aggregate
liquidation amount of the Capital Securities of the Trust, we hereby confirm to
you our opinion as set forth under the heading "U.S. Federal Income Tax
Considerations" in the Prospectus which forms a part of the Registration
Statement of the Trust to which this opinion is filed as an exhibit, subject to
the limitations set forth therein.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the references to us under the headings
"U.S. Federal Income Tax Considerations" and "Validity of Securities" in the
Prospectus. In giving such consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ SULLIVAN & CROMWELL
<PAGE> 1
Exhibit 12(b)
KEYCORP
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1999 1998
-------- --------
<S> <C> <C>
COMPUTATION OF EARNINGS
Net income $ 293 $ 235
Add: Provision for income taxes 142 108
Less: Extraordinary net gain -- --
------ ------
Income before income taxes and
extraordinary net gain 435 343
Fixed charges, excluding interest on deposits 398 338
------ ------
Total earnings for computation,
excluding interest on deposits 833 681
Interest on deposits 309 347
------ ------
Total earnings for computation,
including interest on deposits $1,142 $1,028
====== ======
COMPUTATION OF FIXED CHARGES
Net rental expense $ 45 $ 32
====== ======
Portion of net rental expense deemed
representative of interest $ 11 $ 8
Interest on short-term borrowed funds 173 191
Interest on long-term debt, including cap securities 214 139
------ ------
Total fixed charges, excluding interest
on deposits 398 338
Interest on deposits 309 347
------ ------
Total fixed charges, including interest
on deposits $ 707 $ 685
====== ======
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Preferred stock dividend requirement on
a pre-tax basis -- --
Total fixed charges, excluding interest on deposits $ 398 $ 338
------ ------
Combined fixed charges and preferred stock
dividends, excluding interest on deposits 398 338
Interest on deposits 309 347
------ ------
Combined fixed charges and preferred stock
dividends, including interest on deposits $ 707 $ 685
====== ======
RATIO OF EARNINGS TO FIXED CHARGES
Excluding deposit interest 2.09x 2.01x
Including deposit interest 1.62x 1.50x
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
Excluding deposit interest 2.09x 2.01x
Including deposit interest 1.62x 1.50x
</TABLE>
<PAGE> 1
Exhibit 15
ACKNOWLEDGMENT LETTER OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
KeyCorp
We are aware of the incorporation by reference in Amendment No. 1 to the
Registration Statement (Form S-3 Nos. 333-76619 and 333-76619-01) and related
Prospectus of KeyCorp and KeyCorp Capital III of our report, dated April 13,
1999, relating to the unaudited condensed consolidated interim financial
statements of KeyCorp, included in the Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999.
Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a part
of the Registration Statements prepared or certified by accountants within the
meaning of Section 7 or 11 of the Securities Act of 1933.
/s/ Ernst & Young LLP
Cleveland, Ohio
June 4, 1999
<PAGE> 1
Exhibit 23 (a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Amendment
No.1 to the Registration Statement (Form S-3 Nos. 333-76619 and 333-76619-01)
and related Prospectus of KeyCorp and KeyCorp Capital III and to the
incorporation by reference therein of our report dated January 14, 1999, with
respect to the consolidated financial statements of KeyCorp incorporated by
reference in its Annual Report (Form 10-K) for the year ended December 31, 1998,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Cleveland, Ohio
June 4, 1999
<PAGE> 1
Exhibit 25
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)____________
---------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET 10006
NEW YORK, NEW YORK (Zip Code)
(Address of principal
executive offices)
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212)250-2201
(Name, address and telephone number of agent for service)
---------------------
<TABLE>
<CAPTION>
<S> <C>
KEYCORP KEYCORP CAPITAL III
(Exact name of obligor as specified in its charter) (Exact name of Co-Registrant as specified in its charter)
OHIO 34-6542451 DELAWARE 34-1891371
(State or other jurisdiction of (I.R.S. employer (State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.) Incorporation or organization) Identification no.)
c/o KEYCORP
127 PUBLIC SQUARE 127 PUBLIC SQUARE
CLEVELAND, OHIO 44114-1306 CLEVELAND, OHIO 44114-1306
(Address, including zip code (Address, including zip code
of principal executive offices) of principal executive offices)
</TABLE>
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES OF KEYCORP
CAPITAL SECURITIES OF KEYCORP CAPITAL III
KEYCORP GUARANTEE WITH RESPECT TO CAPITAL SECURITIES
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority
to which it is subject.
Name Address
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each
such affiliation.
None.
ITEM 3.-15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1- Restated Organization Certificate of Bankers Trust
Company dated August 7, 1990, Certificate of
Amendment of the Organization Certificate of Bankers
Trust Company dated June 21, 1995 - Incorporated
herein by reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33-65171, Certificate of
Amendment of the Organization Certificate of Bankers
Trust Company dated March 20, 1996, incorporate by
referenced to Exhibit 1 filed with Form T-1
Statement, Registration No. 333-25843 and
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated June 19,
1997, copy attached.
EXHIBIT 2- Certificate of Authority to commence business -
Incorporated herein by reference to Exhibit 2
filed with Form T-1 Statement, Registration
No. 33-21047.
EXHIBIT 3- Authorization of the Trustee to exercise corporate
trust powers - Incorporated herein by reference to
Exhibit 2 filed with Form T-1 Statement,
Registration No. 33-21047.
EXHIBIT 4- Existing By-Laws of Bankers Trust Company, as
amended on November 18, 1997. Copy attached.
-2-
<PAGE> 3
EXHIBIT 5- Not applicable.
EXHIBIT 6- Consent of Bankers Trust Company required by Section
321(b) of the Act.- Incorporated herein by
reference to Exhibit 4 filed with Form T-1 Statement,
Registration No. 22-18864.
EXHIBIT 7- The latest report of condition of Bankers Trust
Company dated as of December 31, 1998. Copy attached.
EXHIBIT 8- Not Applicable.
EXHIBIT 9- Not Applicable.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 25th day
of May, 1999.
BANKERS TRUST COMPANY
By: /s/ Marc Parilla
-------------------
Marc Parilla
Assistant Vice President
-4-
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this
statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State of New York,
on the 25th day of May, 1999.
BANKERS TRUST COMPANY
By: /s/ Marc Parilla
----------------
Marc Parilla
Assistant Vice President
-5-
<PAGE> 6
STATE OF NEW YORK,
BANKING DEPARTMENT
I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New York,
DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF AMENDMENT OF
THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION 8005 OF THE
BANKING LAW," dated June 19, 1997, providing for an increase in authorized
capital stock from $1,601,666,670 consisting of 100,166,667 shares with a par
value of $10 each designated as Common Stock and 600 shares with a par value of
$1,000,000 each designated as Series Preferred Stock to $2,001,666,670
consisting of 100,166,667 shares with a par value of $10 each designated as
Common Stock and 1,000 shares with a par value of $1,000,000 each designated as
Series Preferred Stock.
WITNESS, my hand and official seal of the Banking Department at the City of New
York,
this 27th day of June in the Year of our Lord one thousand nine
---- ----
hundred and ninety-seven.
Manuel Kursky
------------------------
Deputy Superintendent of Banks
<PAGE> 7
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
----------------------
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby
certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of March, 1903.
3. The organization certificate as heretofore amended is hereby amended
to increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock
in conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock
outstanding, which reads as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Six Hundred and One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,601,666,670), divided into One
Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common
Stock and 600 shares with a par value of One Million Dollars ($1,000,000)
each designated as Series Preferred Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is Two Billion One Million, Six Hundred Sixty-Six Thousand, Six
Hundred Seventy Dollars ($2,001,666,670), divided into One Hundred Million,
One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (100,166,667)
shares with a par value of $10 each designated as Common Stock and 1000
shares with a par value of One Million Dollars ($1,000,000) each designated
as Series Preferred Stock."
<PAGE> 8
5. The foregoing amendment of the organization certificate was authorized
by unanimous written consent signed by the holder of all outstanding shares
entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this 19th
day of June, 1997.
James T. Byrne, Jr.
------------------------
James T. Byrne, Jr.
Managing Director
Lea Lahtinen
-------------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an Assistant
Secretary of Bankers Trust Company, the corporation described in the foregoing
certificate; that she has read the foregoing certificate and knows the contents
thereof, and that the statements herein contained are true.
Lea Lahtinen
-------------------------
Lea Lahtinen
Sworn to before me this 19th day
of June, 1997.
Sandra L. West
- -----------------------
Notary Public
SANDRA L. WEST
Notary Public State of New York
No. 31-4942101
Qualified in New York County
Commission Expires September 19, 1998
<PAGE> 9
BY-LAWS
NOVEMBER 18, 1997
BANKERS TRUST COMPANY
NEW YORK
<PAGE> 10
BY-LAWS
OF
BANKERS TRUST COMPANY
ARTICLE I
MEETINGS OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of this Company shall be held
at the office of the Company in the Borough of Manhattan, City of New York, on
the third Tuesday in January of each year, for the election of directors and
such other business as may properly come before said meeting.
SECTION 2. Special meetings of stockholders other than those regulated by
statute may be called at any time by a majority of the directors. It shall be
the duty of the Chairman of the Board, the Chief Executive Officer or the
President to call such meetings whenever requested in writing to do so by
stockholders owning a majority of the capital stock.
SECTION 3. At all meetings of stockholders, there shall be present, either in
person or by proxy, stockholders owning a majority of the capital stock of the
Company, in order to constitute a quorum, except at special elections of
directors, as provided by law, but less than a quorum shall have power to
adjourn any meeting.
SECTION 4. The Chairman of the Board or, in his absence, the Chief Executive
Officer or, in his absence, the President or, in their absence, the senior
officer present, shall preside at meetings of the stockholders and shall
direct the proceedings and the order of business. The Secretary shall act as
secretary of such meetings and record the proceedings.
ARTICLE II
DIRECTORS
SECTION 1. The affairs of the Company shall be managed and its corporate powers
exercised by a Board of Directors consisting of such number of directors, but
not less than ten nor more than twenty-five, as may from time to time be fixed
by resolution adopted by a majority of the directors then in office, or by the
stockholders. In the event of any increase in the number of directors,
additional directors may be elected within the limitations so fixed, either by
the stockholders or within the limitations imposed by law, by a majority of
directors then in office. One-third of the number of directors, as fixed from
time to time, shall constitute a quorum. Any one or more members of the Board
of Directors or any Committee thereof may participate in a meeting of the Board
of Directors or Committee thereof by means of a conference telephone or similar
communications equipment which allows all persons participating in the meeting
to hear each other at the same time. Participation by such means shall
constitute presence in person at such a meeting.
<PAGE> 11
All directors hereafter elected shall hold office until the next annual meeting
of the stockholders and until their successors are elected and have qualified.
No person who shall have attained age 72 shall be eligible to be elected or
re-elected a director. Such director may, however, remain a director of the
Company until the next annual meeting of the stockholders of Bankers Trust New
York Corporation (the Company's parent) so that such director's retirement will
coincide with the retirement date from Bankers Trust New York Corporation.
No Officer-Director who shall have attained age 65, or earlier relinquishes his
responsibilities and title, shall be eligible to serve as a director.
SECTION 2. Vacancies not exceeding one-third of the whole number of the Board
of Directors may be filled by the affirmative vote of a majority of the
directors then in office, and the directors so elected shall hold office for
the balance of the unexpired term.
SECTION 3. The Chairman of the Board shall preside at meetings of the Board of
Directors. In his absence, the Chief Executive Officer or, in his absence,
such other director as the Board of Directors from time to time may designate
shall preside at such meetings.
SECTION 4. The Board of Directors may adopt such Rules and Regulations for the
conduct of its meetings and the management of the affairs of the Company as it
may deem proper, not inconsistent with the laws of the State of New York, or
these By-Laws, and all officers and employees shall strictly adhere to, and be
bound by, such Rules and Regulations.
SECTION 5. Regular meetings of the Board of Directors shall be held from time
to time on the third Tuesday of the month. If the day appointed for holding such
regular meetings shall be a legal holiday, the regular meeting to be held on
such day shall be held on the next business day thereafter. Special meetings of
the Board of Directors may be called upon at least two day's notice whenever it
may be deemed proper by the Chairman of the Board or, the Chief Executive
Officer or, in their absence, by such other director as the Board of Directors
may have designated pursuant to Section 3 of this Article, and shall be called
upon like notice whenever any three of the directors so request in writing.
SECTION 6. The compensation of directors as such or as members of committees
shall be fixed from time to time by resolution of the Board of Directors.
<PAGE> 12
ARTICLE III
COMMITTEES
SECTION 1. There shall be an Executive Committee of the Board consisting of
not less than five directors who shall be appointed annually by the Board of
Directors. The Chairman of the Board shall preside at meetings of the Executive
Committee. In his absence, the Chief Executive Officer or, in his absence, such
other member of the Committee as the Committee from time to time may designate
shall preside at such meetings.
The Executive Committee shall possess and exercise to the extent permitted by
law all of the powers of the Board of Directors, except when the latter is in
session, and shall keep minutes of its proceedings, which shall be presented to
the Board of Directors at its next subsequent meeting. All acts done and powers
and authority conferred by the Executive Committee from time to time shall be
and be deemed to be, and may be certified as being, the act and under the
authority of the Board of Directors.
A majority of the Committee shall constitute a quorum, but the Committee may
act only by the concurrent vote of not less than one-third of its members, at
least one of whom must be a director other than an officer. Any one or more
directors, even though not members of the Executive Committee, may attend any
meeting of the Committee, and the member or members of the Committee present,
even though less than a quorum, may designate any one or more of such directors
as a substitute or substitutes for any absent member or members of the
Committee, and each such substitute or substitutes shall be counted for quorum,
voting, and all other purposes as a member or members of the Committee.
SECTION 2. There shall be an Audit Committee appointed annually by resolution
adopted by a majority of the entire Board of Directors which shall consist of
such number of directors, who are not also officers of the Company, as may from
time to time be fixed by resolution adopted by the Board of Directors. The
Chairman shall be designated by the Board of Directors, who shall also from
time to time fix a quorum for meetings of the Committee. Such Committee shall
conduct the annual directors' examinations of the Company as required by the
New York State Banking Law; shall review the reports of all examinations made
of the Company by public authorities and report thereon to the Board of
Directors; and shall report to the Board of Directors such other matters as it
deems advisable with respect to the Company, its various departments and the
conduct of its operations.
In the performance of its duties, the Audit Committee may employ or retain,
from time to time, expert assistants, independent of the officers or personnel
of the Company, to make studies of the Company's assets and liabilities as the
Committee may request and to make an examination of the accounting and auditing
methods of the Company and its system of internal protective controls to the
extent considered necessary or advisable in order to determine that the
operations of the Company, including its fiduciary departments, are being
audited by the General Auditor in such a manner as to provide prudent and
adequate protection. The Committee also may direct the General Auditor to make
such investigation as it deems necessary or advisable with respect to the
Company, its various departments and the conduct of its operations. The
Committee shall hold regular quarterly meetings and during the intervals
thereof shall meet at other times on call of the Chairman.
<PAGE> 13
SECTION 3. The Board of Directors shall have the power to appoint any other
Committees as may seem necessary, and from time to time to suspend or continue
the powers and duties of such Committees. Each Committee appointed pursuant to
this Article shall serve at the pleasure of the Board of Directors.
ARTICLE IV
OFFICERS
SECTION 1. The Board of Directors shall elect from among their number a
Chairman of the Board and a Chief Executive Officer, and shall also elect a
President, and may also elect a Senior Vice Chairman, one or more Vice
Chairmen, one or more Executive Vice Presidents, one or more Senior Managing
Directors, one or more Managing Directors, one or more Senior Vice Presidents,
one or more Principals, one or more Vice Presidents, one or more General
Managers, a Secretary, a Controller, a Treasurer, a General Counsel, one or
more Associate General Counsels, a General Auditor, a General Credit Auditor,
and one or more Deputy Auditors, who need not be directors. The officers of the
corporation may also include such other officers or assistant officers as shall
from time to time be elected or appointed by the Board. The Chairman of the
Board or the Chief Executive Officer or, in their absence, the President, the
Senior Vice Chairman or any Vice Chairman, may from time to time appoint
assistant officers. All officers elected or appointed by the Board of Directors
shall hold their respective offices during the pleasure of the Board of
Directors, and all assistant officers shall hold office at the pleasure of the
Board or the Chairman of the Board or the Chief Executive Officer or, in their
absence, the President, the Senior Vice Chairman or any Vice Chairman. The
Board of Directors may require any and all officers and employees to give
security for the faithful performance of their duties.
SECTION 2. The Board of Directors shall designate the Chief Executive Officer
of the Company who may also hold the additional title of Chairman of the Board,
President, Senior Vice Chairman or Vice Chairman and such person shall have,
subject to the supervision and direction of the Board of Directors or the
Executive Committee, all of the powers vested in such Chief Executive Officer
by law or by these By-Laws, or which usually attach or pertain to such office.
The other officers shall have, subject to the supervision and direction of the
Board of Directors or the Executive Committee or the Chairman of the Board or,
the Chief Executive Officer, the powers vested by law or by these By-Laws in
them as holders of their respective offices and, in addition, shall perform
such other duties as shall be assigned to them by the Board of Directors or the
Executive Committee or the Chairman of the Board or the Chief Executive Officer.
The General Auditor shall be responsible, through the Audit Committee, to the
Board of Directors for the determination of the program of the internal audit
function and the evaluation of the adequacy of the system of internal controls.
Subject to the Board of Directors, the General Auditor shall have and may
exercise all the powers and shall perform all the duties usual to such office
and shall have such other powers as may be prescribed or assigned to him
from time to time by the Board of Directors or vested in him by law or by these
By-Laws. He shall perform such other duties and shall make such investigations,
examinations and reports as may be prescribed or required by the Audit
Committee. The General Auditor shall have unrestricted access to all records
and premises of the Company and shall delegate such authority to his
subordinates. He shall have the duty to report to the Audit Committee on all
matters concerning the internal audit
<PAGE> 14
program and the adequacy of the system of internal controls of the Company
which he deems advisable or which the Audit Committee may request.
Additionally, the General Auditor shall have the duty of reporting
independently of all officers of the Company to the Audit Committee at least
quarterly on any matters concerning the internal audit program and the adequacy
of the system of internal controls of the Company that should be brought to the
attention of the directors except those matters responsibility for which has
been vested in the General Credit Auditor. Should the General Auditor deem any
matter to be of special immediate importance, he shall report thereon forthwith
to the Audit Committee. The General Auditor shall report to the Chief Financial
Officer only for administrative purposes.
The General Credit Auditor shall be responsible to the Chief Executive Officer
and, through the Audit Committee, to the Board of Directors for the systems of
internal credit audit, shall perform such other duties as the Chief Executive
Officer may prescribe, and shall make such examinations and reports as may be
required by the Audit Committee. The General Credit Auditor shall have
unrestricted access to all records and may delegate such authority to
subordinates.
SECTION 3. The compensation of all officers shall be fixed under such plan or
plans of position evaluation and salary administration as shall be approved
from time to time by resolution of the Board of Directors.
SECTION 4. The Board of Directors, the Executive Committee, the Chairman of
the Board, the Chief Executive Officer or any person authorized for this
purpose by the Chief Executive Officer, shall appoint or engage all other
employees and agents and fix their compensation. The employment of all such
employees and agents shall continue during the pleasure of the Board of
Directors or the Executive Committee or the Chairman of the Board or the Chief
Executive Officer or any such authorized person; and the Board of Directors,
the Executive Committee, the Chairman of the Board, the Chief Executive Officer
or any such authorized person may discharge any such employees and agents at
will.
<PAGE> 15
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
SECTION 1. The Company shall, to the fullest extent permitted by Section 7018 of
the New York Banking Law, indemnify any person who is or was made, or threatened
to be made, a party to an action or proceeding, whether civil or criminal,
whether involving any actual or alleged breach of duty, neglect or error, any
accountability, or any actual or alleged misstatement, misleading statement or
other act or omission and whether brought or threatened in any court or
administrative or legislative body or agency, including an action by or in the
right of the Company to procure a judgment in its favor and an action by or in
the right of any other corporation of any type or kind, domestic or foreign, or
any partnership, joint venture, trust, employee benefit plan or other
enterprise, which any director or officer of the Company is servicing or served
in any capacity at the request of the Company by reason of the fact that he, his
testator or intestate, is or was a director or officer of the Company, or is
serving or served such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against judgments,
fines, amounts paid in settlement, and costs, charges and expenses, including
attorneys' fees, or any appeal therein; provided, however, that no
indemnification shall be provided to any such person if a judgment or other
final adjudication adverse to the director or officer establishes that (i) his
acts were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
SECTION 2. The Company may indemnify any other person to whom the Company is
permitted to provide indemnification or the advancement of expenses by
applicable law, whether pursuant to rights granted pursuant to, or provided by,
the New York Banking Law or other rights created by (i) a resolution of
stockholders, (ii) a resolution of directors, or (iii) an agreement providing
for such indemnification, it being expressly intended that these By-Laws
authorize the creation of other rights in any such manner.
SECTION 3. The Company shall, from time to time, reimburse or advance to any
person referred to in Section 1 the funds necessary for payment of expenses,
including attorneys' fees, incurred in connection with any action or proceeding
referred to in Section 1, upon receipt of a written undertaking by or on behalf
of such person to repay such amount(s) if a judgment or other final adjudication
adverse to the director or officer establishes that (i) his acts were committed
in bad faith or were the result of active and deliberate dishonesty and, in
either case, were material to the cause of action so adjudicated, or (ii) he
personally gained in fact a financial profit or other advantage to which he was
not legally entitled.
SECTION 4. Any director or officer of the Company serving (i) another
corporation, of which a majority of the shares entitled to vote in the election
of its directors is held by the Company, or (ii) any employee benefit plan of
the Company or any corporation referred to in clause (i) in any capacity shall
be deemed to be doing so at the request of the Company. In all other cases, the
provisions of this Article V will apply (i) only if the person serving another
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise so served at the specific request of the Company, evidenced by
a written communication signed by the Chairman of the Board, the Chief Executive
Officer or the
<PAGE> 16
President, and (ii) only if and to the extent that, after making such efforts
as the Chairman of the Board, the Chief Executive Officer or the President shall
deem adequate in the circumstances, such person shall be unable to obtain
indemnification from such other enterprise or its insurer.
SECTION 5. Any person entitled to be indemnified or to the reimbursement or
advancement of expenses as a matter of right pursuant to this Article V may
elect to have the right to indemnification (or advancement of expenses)
interpreted on the basis of the applicable law in effect at the time of
occurrence of the event or events giving rise to the action or proceeding, to
the extent permitted by law, or on the basis of the applicable law in effect at
the time indemnification is sought.
SECTION 6. The right to be indemnified or to the reimbursement or advancement of
expense pursuant to this Article V (i) is a contract right pursuant to which the
person entitled thereto may bring suit as if the provisions hereof were set
forth in a separate written contract between the Company and the director or
officer, (ii) is intended to be retroactive and shall be available with respect
to events occurring prior to the adoption hereof, and (iii) shall continue to
exist after the rescission or restrictive modification hereof with respect to
events occurring prior thereto.
SECTION 7. If a request to be indemnified or for the reimbursement or
advancement of expenses pursuant hereto is not paid in full by the Company
within thirty days after a written claim has been received by the Company, the
claimant may at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled also to be paid the expenses of prosecuting such
claim. Neither the failure of the Company (including its Board of Directors,
independent legal counsel, or is stockholders) to have made a determination
prior to the commencement of such action that indemnification of or
reimbursement or advancement of expenses to the claimant is proper in the
circumstance, nor an actual determination by the Company (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant is
not entitled to indemnification or to the reimbursement or advancement of
expenses, shall be a defense to the action or create a presumption that the
claimant is not so entitled.
SECTION 8. A person who has been successful, on the merits or otherwise, in the
defense of a civil or criminal action or proceeding of the character described
in Section 1 shall be entitled to indemnification only as provided in Sections 1
and 3, notwithstanding any provision of the New York Banking Law to the
contrary.
<PAGE> 17
ARTICLE VI
SEAL
SECTION 1. The Board of Directors shall provide a seal for the Company, the
counterpart dies of which shall be in the charge of the Secretary of the
Company and such officers as the Chairman of the Board, the Chief Executive
Officer or the Secretary may from time to time direct in writing, to be affixed
to certificates of stock and other documents in accordance with the directions
of the Board of Directors or the Executive Committee.
SECTION 2. The Board of Directors may provide, in proper cases on a specified
occasion and for a specified transaction or transactions, for the use of a
printed or engraved facsimile seal of the Company.
ARTICLE VII
CAPITAL STOCK
SECTION 1. Registration of transfer of shares shall only be made upon the books
of the Company by the registered holder in person, or by power of attorney, duly
executed, witnessed and filed with the Secretary or other proper officer of the
Company, on the surrender of the certificate or certificates of such shares
properly assigned for transfer.
ARTICLE VIII
CONSTRUCTION
SECTION 1. The masculine gender, when appearing in these By-Laws, shall be
deemed to include the feminine gender.
ARTICLE IX
AMENDMENTS
SECTION 1. These By-Laws may be altered, amended or added to by the Board of
Directors at any meeting, or by the stockholders at any annual or special
meeting, provided notice thereof has been given.
<PAGE> 18
I, Marc J. Parilla, Assistant Vice President of Bankers Trust Company, New
York, New York, hereby certify that the foregoing is a complete, true and
correct copy of the By-Laws of Bankers Trust Company, and that the same are in
full force and effect at this date.
/s/ Marc J. Parilla
--------------------------
Marc J. Parilla
Assistant Treasurer
DATED: May 25, 1999
<PAGE> 19
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 12/31/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: |0|0|6|2|3
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise indicated,
reported the amount outstanding as of the last business day of the quarter.
</TABLE>
SCHEDULE RC-BALANCE SHEET
<TABLE>
<CAPTION>
------------------
| C400 |
----------------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
- -------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS | ////////////////// |
1. Cash and balances due from depository institutions (from Schedule RC-A): | //////////////////
a. Noninterest-bearing balances and currency and coin (1)................ | 0081 2,772,000 |1.a.
b. Interest-bearing balances (2)......................................... | 0071 2,497,000 |1.b.
2. Securities: | ////////////////// |
a. Held-to-maturity securities (from Schedule RC-B, column A)............ | 1754 0 |2.a.
b. Available-for-sale securities (from Schedule RC-B, column D).......... | 1773 8,907,000 |2.b.
3. Federal funds sold and securities purchased under agreements to resell... | 1350 22,851,000 |3.
4. Loans and lease financing receivables: | ////////////////// |
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 21,882,000 | ////////////////// |4.a.
b. LESS: Allowance for loan and lease losses.....................RCFD 3123 620,000 | ////////////////// |4.b.
c. LESS: Allocated transfer risk reserve.........................RCFD 3128 0 | ////////////////// |4.c.
d. Loans and leases, net of unearned income, | ////////////////// |
allowance, and reserve (item 4.a minus 4.b and 4.c)................... | 2125 21,262,000 |4.d.
5. Trading Assets (from schedule RC-D)...................................... | 3545 39,983,000 |5.
6. Premises and fixed assets (including capitalized leases)................. | 2145 974,000 |6.
7. Other real estate owned (from Schedule RC-M)............................. | 2150 80,000 |7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) | 2130 97,000 |8.
9. Customers' liability to this bank on acceptances outstanding............. | 2155 232,000 |9.
10. Intangible assets (from Schedule RC-M)................................... | 2143 278,000 |10.
11. Other assets (from Schedule RC-F)........................................ | 2160 4,625,000 |11.
12. Total assets (sum of items 1 through 11)................................. | 2170 104,558,000 |12.
--------------------------
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 20
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 12/31/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State Zip: New York, NY 10006 12
FDIC Certificate No.: |0|0|6|2|3
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
----------------------------
Dollar Amounts in Thousands | //////// Bil Mil Thou |
- -------------------------------------------------------------------------------------------------------------------------
<S> <C>
LIABILITIES | ////////////////// |
13. Deposits: | ////////////////// |
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part 1) | RCON 2200 20,409,000 |
(1) Noninterest-bearing(1)..............RCON 6631 3,124,000............. | ////////////////// |
(2) Interest-bearing....................RCON 6636 17,285,000............. | ////////////////// |
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from | ////////////////// |
Schedule RC-E part II) | RCFN 2200 20,167,000 |13.b.
(1) Noninterest-bearing.................RCFN 6631 1,781,000............. | ////////////////// |
(2) Interest-bearing....................RCFN 6636 18,386,000............. | ////////////////// |
14. Federal funds purchased and securities sold under agreements to repurchase.... | RCFD 2800 13,919,000 |14.
15. a. Demand notes issued to the U.S. Treasury................................... | RCON 2840 0 |
b. Trading liabilities (from Schedule RC-D)................................... | RCFD 3548 26,175,000 |15.b.
16. Other borrowed money (includes mortgage indebtedness and obligations under | ////////////////// |
capitalized leases):.......................................................... | ////////////////// |
a. With a remaining maturity of one year or less.............................. | RCFD 2332 5,422,000 |
b. With a remaining maturity of more than one year through three years........ | A547 1,766,000 |16.b.
c. With a remaining maturity of more than three years......................... | A548 2,884,000 |16.c.
17. Not Applicable. | ////////////////// |
18. Bank's liability on acceptances executed and outstanding..................... | RCFD 2920 232,000 |
19. Subordinated notes and debentures(2).......................................... | RCFD 3200 984,000 |
20. Other liabilities (from Schedule RC-G)........................................ | RCFD 2930 5,657,000 |
21. Total liabilities (sum of items 13 through 20)................................ | RCFD 2948 97,615,000 |
22. Not applicable. | ////////////////// |
| ////////////////// |
EQUITY CAPITAL | ////////////////// |
23. Perpetual preferred stock and related surplus................................. | RCFD 3838 1,500,000 |
24. Common stock.................................................................. | RCFD 3230 2,127,000 |
25. Surplus (excludes all surplus related to preferred stock)..................... | RCFD 3839 541,000 |
26. a. Undivided profits and capital reserves..................................... | RCFD 3632 3,200,000 |
b. Net unrealized holding gains (losses) on available-for-sale securities..... | RCFD 8434 ( 36,000)|
27. Cumulative foreign currency translation adjustments........................... | RCFD 3284 ( 389,000)|27.
28. Total equity capital (sum of items 23 through 27)............................. | RCFD 3210 6,943,000 |28.29. T
(sum of items 21 and 28).......................................................... | RCFD 3300 104,558,000 |29.
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Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the Number
most comprehensive level of auditing work performed for the bank by independent external -------------------
auditors as of any date during 1998........................................... | RCFD 6724 N/A |M.1.
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1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
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(1) Including total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
