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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 28, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TEXAS INSTRUMENTS INCORPORATED DELAWARE 75-0289970
TEXAS INSTRUMENTS FINANCIAL TRUST DELAWARE TO BE APPLIED FOR
(Exact name of each Registrant as (State or other jurisdiction of (I.R.S. employer
specified incorporation or organization) identification number)
in its charter or trust agreement)
</TABLE>
13500 NORTH CENTRAL EXPRESSWAY
P.O. BOX 655474
DALLAS, TEXAS 75265-5474
(214) 995-2551
(Address, including zip code, and telephone number, including area code, of
Registrants' principal executive offices)
RICHARD J. AGNICH, SECRETARY
TEXAS INSTRUMENTS INCORPORATED
13500 NORTH CENTRAL EXPRESSWAY
P.O. BOX 655474
DALLAS, TEXAS 75265-5474
(214) 995-2551
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
Edwin Deane Leonard, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this registration statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities being offered only in connection with dividend or
interest reinvestment plans, please check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
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If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
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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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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
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Texas Instruments Financial Trust Preferred Securities.... $400,000,000(6) 100% $400,000,000(6) $137,932
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Texas Instruments Incorporated Guarantee of Texas
Instruments Financial Trust Preferred
Securities(2)(3)........................................
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Texas Instruments Incorporated Junior Subordinated
Deferrable Interest Debentures(4).......................
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Texas Instruments Incorporated Common Stock(5)............
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933.
(2) No separate consideration will be received for the Guarantee.
(3) This Registration Statement is deemed to cover the rights of holders of the
Preferred Securities under the Guarantee and certain backup undertakings as
described herein.
(4) The Junior Subordinated Deferrable Interest Debentures will be purchased by
Texas Instruments Financial Trust with the proceeds of the sale of the
Preferred Securities.
(5) Such indeterminate number of shares of Common Stock as may be issuable from
time to time upon conversion of Junior Subordinated Deferrable Interest
Debentures being registered hereunder.
(6) Such amount represents the initial offering price of the Preferred
Securities. It is also equal to the purchase price of the Junior
Subordinated Deferrable Interest Debentures. No separate consideration will
be received for the Guarantee or Junior Subordinated Deferrable Interest
Debentures in connection with an issuance of Preferred Securities by Texas
Instruments Financial Trust.
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME A FINAL *
* PROSPECTUS SUPPLEMENT IS DELIVERED. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY *
* NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH *
* SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
* REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH *
* STATE. *
* *
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SUBJECT TO COMPLETION, DATED JUNE 28, 1996
LOGO
TEXAS INSTRUMENTS TEXAS INSTRUMENTS
FINANCIAL TRUST INCORPORATED
PREFERRED SECURITIES GUARANTEED JUNIOR
TO THE EXTENT THE ISSUER HAS SUBORDINATED
FUNDS AS SET FORTH HEREIN BY DEFERRABLE
TEXAS INSTRUMENTS INCORPORATED INTEREST
DEBENTURES
Texas Instruments Financial Trust, a trust formed under the laws of the
State of Delaware (the "Issuer"), may offer, from time to time, preferred
securities (the "QUIPS") representing preferred undivided beneficial interests
in the assets of the Issuer. Texas Instruments Incorporated ("Texas
Instruments") will be the owner of the common securities (the "Common
Securities") of the Issuer. The payment of periodic cash distributions
("Distributions") with respect to the QUIPS and payments on liquidation or
redemption with respect to such QUIPS, in each case to the extent of funds held
by the Issuer, are each irrevocably guaranteed by Texas Instruments as described
herein (the "Guarantee"). See "Description of Guarantee". The obligations of
Texas Instruments under the Guarantee will be subordinate and junior in right of
payment to all Senior Debt of Texas Instruments.
Concurrently with the issuance by the Issuer of its QUIPS, the Issuer will
invest the proceeds thereof and any contributions made by Texas Instruments in
respect of Texas Instruments' purchase of the Common Securities in a
corresponding series of Texas Instruments' junior subordinated deferrable
interest debentures (such debentures being called "QUIDS" and, with respect to
those in such corresponding series, the "Corresponding QUIDS") with terms
corresponding to the terms of the Issuer's QUIPS. The Corresponding QUIDS will
be the sole assets of the Issuer, and payments under the Corresponding QUIDS and
the Expense Agreement (as defined herein) will be the only revenue of the
Issuer.
(Continued on next page)
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS , 1996.
$
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(Continued from previous page)
The QUIDS will be unsecured and subordinate and junior in right of payment
to Senior Debt (as defined in "Description of QUIDS -- Subordination") of Texas
Instruments. Texas Instruments may redeem the Corresponding QUIDS (and cause the
redemption of the related QUIPS) or may terminate the Issuer and cause the
Corresponding QUIDS to be distributed to the holders of QUIPS in liquidation of
their interests in the Issuer. See "Description of QUIPS -- Liquidation
Distribution Upon Termination".
Holders of the QUIPS will be entitled to receive preferential cumulative
cash Distributions accumulating from the date of original issuance and payable
periodically as specified in an accompanying Prospectus Supplement. If provided
in an accompanying Prospectus Supplement, Texas Instruments will have the right
to defer payments of interest on any series of Corresponding QUIDS at any time
or from time to time for one or more Extension Periods (as defined herein)
(which shall not extend beyond the stated maturity (the "Stated Maturity") of
the Corresponding QUIDS). See "Description of QUIDS -- Option To Extend Interest
Payment Date." If interest payments are so deferred, Distributions on the
corresponding series of QUIPS will also be deferred, and Texas Instruments will
not be permitted, subject to certain exceptions set forth herein, to declare or
pay any cash distributions with respect to Texas Instruments' capital stock or
debt securities that rank pari passu with or junior to the Corresponding QUIDS.
During an Extension Period, interest on the Corresponding QUIDS will continue to
accrue (and the amount of Distributions to which holders of the QUIPS are
entitled will accumulate at the rate per annum set forth in the related
Prospectus Supplement). See "Description of QUIPS -- Distributions."
Taken together, Texas Instruments' obligations under each series of QUIDS,
the Indenture, the Trust Agreement, the Expense Agreement and the Guarantee
(each, as defined herein), in the aggregate, provide a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the related series of QUIPS. See "Relationship Among the QUIPS, the
Corresponding QUIDS and the Guarantee -- Full and Unconditional Guarantee".
Texas Instruments may also offer one or more series of QUIDS, as provided
in an accompanying Prospectus Supplement.
The QUIPS and the QUIDS may be offered in amounts, at prices and on terms
to be determined at the time of offering, provided that the aggregate initial
public offering price of all QUIPS and QUIDS (other than Corresponding QUIDS)
issued pursuant to the Registration Statement of which this Prospectus forms a
part shall not exceed $400,000,000.
Certain specific terms of the QUIPS and the QUIDS in respect of which this
Prospectus is being delivered will be described in an accompanying Prospectus
Supplement, including without limitation and where applicable and to the extent
not set forth herein, (a) in the case of QUIPS, the specific title, aggregate
amount, stated liquidation preference, number of securities, Distribution rate
or method of calculating such rate, applicable Extension Period or Distribution
deferral terms, if any, place or places where Distributions will be payable, any
terms of redemption, conversion or exchange into Common Stock, $1.00 par value
per share, of Texas Instruments ("Texas Instruments Common Stock" or "Common
Stock") or other securities, initial offering or purchase price, methods of
distribution and any other special terms and (b) in the case of QUIDS, the
specific designation, aggregate principal amount, denominations, maturity
(including any extension thereof), interest payment dates, interest rate (which
may be fixed or variable) or method of calculating interest, if any, applicable
Extension Period or interest deferral terms, if any, place or places where
principal, premium, if any, and interest, if any, will be payable, terms of
redemption, if any, sinking fund provisions, if any, terms for conversion or
exchange into shares of Texas Instruments Common Stock or other securities, if
any, initial offering or purchase price, methods of distribution and any other
special terms.
The Prospectus Supplement also will contain information, as applicable,
about certain United States federal income tax consequences relating to the
QUIPS and the QUIDS (collectively, the "Offered Securities").
The Offered Securities may be sold to or through underwriters, through
dealers, remarketing firms or agents or directly to purchasers. See "Plan of
Distribution". The names of any underwriters, dealers,
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remarketing firms or agents involved in the sale of the Offered Securities in
respect of which this Prospectus is being delivered and any applicable fee,
commission or discount arrangements with them will be set forth in a Prospectus
Supplement. The Prospectus Supplement will state whether the Offered Securities
will be listed on the New York Stock Exchange (the "NYSE") or on any national
securities exchange or on the Nasdaq National Market. If the Offered Securities
are not listed on the NYSE or on any national securities exchange or on the
Nasdaq National Market, there can be no assurance that there will be a liquid
secondary market for the Offered Securities.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR
ANY ACCOMPANYING PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFER MADE HEREBY
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY TEXAS INSTRUMENTS, THE ISSUER OR ANY
UNDERWRITER, DEALER OR AGENT. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY
ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN OR IN ANY ACCOMPANYING PROSPECTUS SUPPLEMENT IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE HEREOF OR THEREOF OR THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF TEXAS INSTRUMENTS SINCE THE DATE HEREOF OR THEREOF.
NEITHER THIS PROSPECTUS NOR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT CONSTITUTES
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
AVAILABLE INFORMATION
Texas Instruments is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). The registration
statement of which this Prospectus forms a part, as well as reports, proxy
statements and other information filed by Texas Instruments, may be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, 7 World Trade Center, New York,
New York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. Texas Instruments' Common Stock is
listed on the New York Stock Exchange and reports and other information herein
and therein concerning Texas Instruments can also be inspected at the office of
the New York Stock Exchange, 20 Broad Street, New York, New York 10005. Such
material may also be accessed electronically by means of the Commission's home
page on the Internet at http://www.sec.gov.
Texas Instruments and the Issuer have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered hereby.
This Prospectus and the accompanying Prospectus Supplement omit, in accordance
with the rules and regulations of the Commission, certain of the information
contained in the Registration Statement. Reference is hereby made to the
Registration Statement and the exhibits and the financial statements, notes and
schedules filed as a part thereof or incorporated by reference therein for
further information with respect to Texas Instruments, the Issuer and the
securities offered hereby. Statements contained herein concerning the provisions
of any document are not necessarily complete and, in each instance, where a copy
of such document has been filed as an exhibit to the Registration Statement or
otherwise has been filed with the Commission, reference is made to the copy so
filed. Each such statement is qualified in its entirety by such reference.
No separate financial statements of the Issuer have been included herein.
Texas Instruments and the Issuer do not consider that such financial statements
would be material to holders of the QUIPS because the
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Issuer is a newly formed special purpose entity, has no operating history or
independent operations and is not engaged in and does not propose to engage in
any activity other than holding as trust assets the Corresponding QUIDS of Texas
Instruments and issuing the QUIPS and Common Securities. See "The Issuer",
"Description of QUIPS", "Description of Guarantee" and "Description of
Corresponding QUIDS".
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents have been filed by Texas Instruments with the
Commission pursuant to the Exchange Act and are hereby incorporated herein by
reference and made a part of this Prospectus:
(a) Texas Instruments' Annual Report on Form 10-K for the year ended
December 31, 1995 (as amended by the Form 10-K/A filed June 21, 1996);
(b) Texas Instruments' Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996;
(c) Texas Instruments' Current Reports on Form 8-K dated January 2,
1996, January 18, 1996, January 24, 1996, January 25, 1996, February 5,
1996, March 6, 1996, May 30, 1996 and June 24, 1996.
All documents filed by Texas Instruments with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the Securities
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statements so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Texas Instruments will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon written
or oral request of such person, a copy of any or all of the documents referred
to above which have been or may be incorporated by reference in this Prospectus
(not including the exhibits to such documents, unless such exhibits are
specifically incorporated by reference in such documents). Requests for such
documents should be directed to Texas Instruments Incorporated, 13500 North
Central Expressway, Post Office Box 655474, Dallas, Texas 75265-5474, Attention:
Manager of Investor Relations, telephone (214) 995-3773.
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TEXAS INSTRUMENTS INCORPORATED
Texas Instruments Incorporated ("Texas Instruments") was incorporated in
the State of Delaware in 1938, and has its principal executive offices in
Dallas, Texas. Texas Instruments is engaged in the development, manufacture and
sale of a variety of products in the electrical and electronics industry for
industrial, government and consumer markets. These products consist of
components, defense electronics and digital products. Texas Instruments also
produces metallurgical materials. Texas Instruments' business is based
principally on its broad semiconductor technology and application of this
technology to selected electronic end-equipment markets.
The mailing address of Texas Instruments' principal executive offices is
Post Office Box 655474, Dallas, Texas 75265-5474, and its telephone number is
(214) 995-2551.
THE ISSUER
The Issuer is a statutory business trust formed under Delaware law pursuant
to (i) a trust agreement executed by Texas Instruments, as sponsor of the
Issuer, and the Property Trustee, the Delaware Trustee and the Administrative
Trustees (as defined herein) of the Issuer and (ii) the filing of a certificate
of trust with the Delaware Secretary of State. The trust agreement will be
amended and restated in its entirety (as so amended and restated, the "Trust
Agreement") substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The Trust Agreement will be
qualified as an indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The Issuer exists for the exclusive purposes of (i)
issuing and selling its QUIPS and Common Securities, (ii) using the proceeds
from the sale of such QUIPS and Common Securities to acquire a corresponding
series of Corresponding QUIDS issued by Texas Instruments and (iii) engaging in
only those other activities necessary, convenient or incidental thereto.
Accordingly, the Corresponding QUIDS will be the sole assets of the Issuer, and
payments under the Corresponding QUIDS and the Expense Agreement will be the
sole revenue of the Issuer.
All of the Common Securities will be owned by Texas Instruments. The Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the QUIPS, except that upon the occurrence and continuance of an event of
default under a Trust Agreement resulting from a Debenture Event of Default (as
defined herein), the rights of Texas Instruments as holder of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption or otherwise will be subordinated to the rights of the holders of the
QUIPS. See "Description of QUIPS -- Subordination of Common Securities". Texas
Instruments will acquire Common Securities in an aggregate Liquidation Amount
(as defined herein) equal to not less than 3% of the total capital of the
Issuer.
Unless otherwise specified in the applicable Prospectus Supplement, the
Issuer has a term of approximately 55 years, but may terminate earlier as
provided in the applicable Trust Agreement. The Issuer's business and affairs
are conducted by its trustees, which will be appointed by Texas Instruments as
holder of the Common Securities.
Unless otherwise specified in the applicable Prospectus Supplement, the
trustees shall be The First National Bank of Chicago ("FNBC"), as the Property
Trustee (the "Property Trustee") and First Chicago Delaware Inc., as the
Delaware Trustee (the "Delaware Trustee"), and two individual trustees (the
"Administrative Trustees") who are employees or officers of or affiliated with
Texas Instruments (collectively, the "Issuer Trustees"). FNBC, as Property
Trustee, will act as sole indenture trustee under the Trust Agreement for
purposes of compliance with the Trust Indenture Act. FNBC will also act as
trustee under the Guarantee and the Indenture (each as defined herein). See
"Description of Guarantee" and "Description of QUIDS". The holder of the Common
Securities, or the holders of a majority in Liquidation Amount of the QUIPS if
any Debenture Event of Default has occurred and is continuing, will be entitled
to appoint, remove or replace the Property Trustee and/or the Delaware Trustee.
In no event will the holders of the QUIPS have the right to vote to appoint,
remove or replace the Administrative Trustees; such voting rights are vested
exclusively in the holder of the Common Securities. The duties and obligations
of the Issuer Trustees are governed by the Trust Agreement. Texas Instruments
will pay all fees and expenses related to the Issuer and
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the offering of the QUIPS and will pay, directly or indirectly, all ongoing
costs, expenses and liabilities of the Issuer. The principal executive office of
the Issuer is 13500 North Central Expressway, Post Office Box 655474, Dallas,
Texas 75265-5474, Attention: Secretary, and its telephone number is (214)
995-2551.
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement,
Texas Instruments intends to use the proceeds from the sale of its QUIDS
(including Corresponding QUIDS issued to the Issuer in connection with the
investment by the Issuer of all of the proceeds from the sale of QUIPS) for
general corporate purposes, including possible acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows the ratio of earnings to fixed charges for each
of the years ended December 31, 1991 through 1995 and for the three months ended
March 31, 1996.
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YEARS ENDED DECEMBER 31, THREE MONTHS
-------------------------------- ENDED
1991 1992 1993 1994 1995 MARCH 31, 1996
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Ratio of earnings to fixed charges(1)............... (2) 4.8 x 8.5 x 11.6x 15.6x 12.2x
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(1) For the purpose of computing the above ratios, "earnings" consist of income
(loss) before provision for income taxes, interest expense, amortization of
capitalized interest and that portion of rental and lease expense which is
representative of interest; and "fixed charges" consist of interest
incurred (expensed and capitalized) and that portion of rental and lease
expense which is representative of interest.
(2) Not meaningful because of losses for 1991. The coverage deficiency (amount
by which "fixed charges" exceed "earnings") for 1991 was $309 million.
DESCRIPTION OF QUIPS
Pursuant to the terms of the Trust Agreement, the Issuer Trustees on behalf
of the Issuer will issue the QUIPS and the Common Securities. The QUIPS of a
particular issue will represent preferred undivided beneficial interests in the
assets of the Issuer and the holders thereof will be entitled to a preference in
certain circumstances with respect to Distributions and amounts payable on
redemption or liquidation over the Common Securities, as well as other benefits
as described in the Trust Agreement. This summary of certain provisions of the
QUIPS and the Trust Agreement does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, all the provisions of the
Trust Agreement, including the definitions therein of certain terms, and the
Trust Indenture Act. Wherever particular defined terms of the Trust Agreement
(as supplemented or amended from time to time) are referred to herein or in a
Prospectus Supplement, such defined terms are incorporated herein or therein by
reference. The form of the Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
Reference is made to the Prospectus Supplement relating to the particular
series of QUIPS being offered thereby for the specific terms thereof, including:
(i) the identity of the Issuer issuing such series of QUIPS; (ii) the initial
public offering price of such series of QUIPS; (iii) the specific designation of
such series of QUIPS; (iv) the number of QUIPS included in such series, which
number may be increased or decreased from time to time unless otherwise provided
by the Issuer Trustees in creating the series; (v) the annual Distribution rate
of QUIPS of such series (or method of determining such rate) and when
Distributions will accrue and be payable; (vi) whether Distributions on QUIPS of
such series shall be cumulative, and, if so, the date or dates or method of
determining the date or dates from which Distributions on QUIPS of such series
shall be cumulative; (vii) the amount or amounts which shall be paid out of the
assets of the Issuer to the holders of QUIPS of such series upon voluntary or
involuntary liquidation, dissolution or winding-up of the Issuer; (viii) if
applicable, the price or prices at which, the date or dates on which, the period
or periods within which and the terms and conditions upon which QUIPS of such
series may be redeemed or purchased, in
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whole or in part, at the option of the Issuer or the Issuer Trustees; (ix) the
obligation, if any, of the Issuer to purchase or redeem QUIPS of such series and
the price or prices at which, the date or dates on which, the period or periods
within which and the terms and conditions upon which QUIPS of such series shall
be purchased or redeemed, in whole or in part, pursuant to such obligation; (x)
the voting rights, if any, of QUIPS of such series in addition to those required
by law, including the number of votes per QUIPS of such series and any
requirement for the approval by the holders of a certain specified percentage of
QUIPS of such series as a condition to specified action or amendments to the
Trust Agreement; (xi) the terms and conditions, if any, under which QUIPS of
such series may be converted into shares of Texas Instruments Common Stock,
including the conversion price per share and the circumstances, if any, under
which any such conversion right shall expire; (xii) the terms and conditions, if
any, upon which the related series of QUIDS may be distributed to holders of
QUIPS of such series; (xiii) if applicable, any securities exchange upon which
the QUIPS of such series shall be listed; and (xiv) any other rights,
preferences, privileges, limitations or restrictions of the QUIPS of such series
(and such Prospectus Supplement may state that any of the terms set forth herein
are inapplicable to QUIPS of such series or are modified to the extent described
therein).
GENERAL
The QUIPS will rank pari passu, and payments will be made thereon pro rata,
with the Common Securities except as described under "-- Subordination of Common
Securities". Legal title to the Corresponding QUIDS will be held by the Property
Trustee in trust for the benefit of the holders of the related QUIPS and Common
Securities. The Guarantee Agreement executed by Texas Instruments for the
benefit of the holders of the QUIPS (the "Guarantee") will be a guarantee on a
subordinated basis with respect to the related QUIPS but will not guarantee
payment of Distributions or amounts payable on redemption or liquidation of such
QUIPS when the Issuer does not have funds on hand available to make such
payments. See "Description of Guarantee".
DISTRIBUTIONS
The Issuer's QUIPS represent preferred undivided beneficial interests in
the assets of the Issuer, and the Distributions on each QUIPS will be payable at
a rate specified in the Prospectus Supplement for such QUIPS. The amount of
Distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months unless otherwise specified in the applicable
Prospectus Supplement. Distributions to which holders of QUIPS are entitled will
accumulate additional Distributions at the rate per annum if and as specified in
the applicable Prospectus Supplement. The term "Distributions" as used herein
includes any such additional Distributions unless otherwise stated.
Distributions on the QUIPS will be cumulative, will accrue from the date of
original issuance and will be payable on such dates as specified in the
applicable Prospectus Supplement. In the event that any date on which
Distributions are payable on the QUIPS is not a Business Day (as defined below),
payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect to 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 such date (each date on which Distributions are payable in
accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than a Saturday or a Sunday, or a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to remain closed or a day on which the corporate trust office of
the Property Trustee or the Debenture Trustee (as defined herein) is closed for
business.
If provided in the applicable Prospectus Supplement, Texas Instruments has
the right under the Indenture, pursuant to which it will issue the Corresponding
QUIDS, to defer the payment of interest at any time or from time to time on any
series of the Corresponding QUIDS for a period which will be specified in such
Prospectus Supplement relating to such series (each, an "Extension Period"),
provided that no Extension Period may extend beyond the Stated Maturity of such
series of QUIDS. As a consequence of any such extension, Distributions on the
corresponding QUIPS would be deferred (but the QUIPS would continue to
accumulate additional Distributions thereon at the rate per annum set forth in
the Prospectus
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Supplement for such QUIPS) by the Issuer during any such Extension Period.
During such Extension Period Texas Instruments may not, and may not permit any
subsidiary of Texas Instruments to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of Texas Instruments' capital stock or (ii) make any
payment of principal, interest or premium, if any, on or repay, repurchase or
redeem any debt securities of Texas Instruments that rank pari passu with or
junior in interest to the Corresponding QUIDS or make any guarantee payments
with respect to any guarantee by Texas Instruments of the debt securities of any
subsidiary of Texas Instruments if such guarantee ranks pari passu with or
junior in interest to the Corresponding QUIDS (other than (a) dividends or
distributions in Texas Instruments Common Stock, (b) redemptions or purchases of
any rights pursuant to Texas Instruments' Shareholders Rights Plan, or any
successor to such Shareholders Rights Plan, and the declaration of a dividend of
such rights or the issuance of Preferred Stock under such plans in the future,
(c) payments under the Guarantee, (d) purchases of Common Stock related to the
issuance of Common Stock under any of Texas Instruments' benefit plans for its
directors, officers or employees and (e) purchases of Common Stock required to
prevent the loss or secure the renewal or reinstatement of any government
license or franchise held by Texas Instruments or any of its subsidiaries).
The funds of the Issuer available for distribution to holders of its QUIPS
will be limited to payments under the Corresponding QUIDS in which the Issuer
will invest the proceeds from the issuance and sale of its QUIPS and its Common
Securities. See "Description of Corresponding QUIDS". If Texas Instruments does
not make interest payments on such Corresponding QUIDS, the Property Trustee
will not have funds available to pay Distributions on the related QUIPS. The
payment of Distributions (if and to the extent the Issuer has funds legally
available for the payment of such Distributions and cash sufficient to make such
payments) is guaranteed by Texas Instruments on a limited basis as set forth
herein under "Description of Guarantee".
Distributions on the QUIPS will be payable to the holders thereof as they
appear on the register of the Issuer on the relevant record dates, which, as
long as the QUIPS remain in book-entry form, will be one Business Day prior to
the relevant Distribution Date. Subject to any applicable laws and regulations
and the provisions of the applicable Trust Agreement, each such payment will be
made as described under "-- Book-Entry Issuance". In the event any QUIPS are not
in book-entry form, the relevant record date for such QUIPS shall be a date at
least 15 days prior to the relevant Distribution Date, as specified in the
applicable Prospectus Supplement.
REDEMPTION OR EXCHANGE
Mandatory Redemption. If provided in the applicable Prospectus Supplement,
upon the repayment or redemption, in whole or in part, of any Corresponding
QUIDS, whether at maturity or upon earlier redemption as provided in the
Indenture, the proceeds from such repayment or redemption shall be applied by
the Property Trustee to redeem a Like Amount (as defined below) of the related
QUIPS and the Common Securities, upon not less than 30 nor more than 60 days
notice, at a redemption price (the "Redemption Price") equal to the aggregate
Liquidation Amount of such QUIPS plus accumulated and unpaid Distributions
thereon to the date of redemption (the "Redemption Date") and the related amount
of the premium, if any, paid by Texas Instruments upon the concurrent redemption
of such Corresponding QUIDS. If less than all of any series of Corresponding
QUIDS are to be repaid or redeemed on a Redemption Date, then the proceeds from
such repayment or redemption shall be allocated to the redemption pro rata of
the related QUIPS and the Common Securities. The amount of premium, if any, paid
by Texas Instruments upon the redemption of all or any part of any series of any
Corresponding QUIDS to be repaid or redeemed on a Redemption Date shall be
allocated to the redemption pro rata of the related QUIPS and the Common
Securities.
Reference is made to the Prospectus Supplement relating to the particular
series of QUIPS being offered thereby for additional or alternative provisions
relating to mandatory redemption.
Texas Instruments will have the right to redeem any series of Corresponding
QUIDS (i) in whole at any time or in part from time to time, subject to the
conditions described under "Description of Corresponding
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QUIDS -- Optional Redemption", (ii) at any time, in whole (but not in part),
upon the occurrence of a Tax Event or an Investment Company Event (each as
defined below, a "Special Event") and subject to the further conditions
described under "Description of Corresponding QUIDS -- Optional Redemption", or
(iii) as may be otherwise specified in the applicable Prospectus Supplement.
Special Event Redemption or Distribution of Corresponding QUIDS. If
provided in the applicable Prospectus Supplement, if a Special Event in respect
of a series of QUIPS and Common Securities shall occur and be continuing, Texas
Instruments has the right to redeem the Corresponding QUIDS in whole (but not in
part) and thereby cause a mandatory redemption of such QUIPS and Common
Securities in whole (but not in part) at the Redemption Price within 90 days
following the occurrence of such Special Event. At any time, Texas Instruments
has the right to terminate the Issuer and, after satisfaction of liabilities to
creditors of the Issuer as provided by applicable law, cause such Corresponding
QUIDS to be distributed to the holders of such QUIPS and Common Securities in
liquidation of the Issuer. If Texas Instruments does not elect either option
described above, the applicable series of QUIPS will remain outstanding and, in
the event a Tax Event has occurred and is continuing, Additional Sums (as
defined below) may be payable on the Corresponding QUIDS.
Reference is made to the Prospectus Supplement relating to the particular
series of QUIPS being offered thereby for additional or alternative provisions
relating to optional redemption or exchange.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by the Issuer on the
outstanding QUIPS and Common Securities shall not be reduced as a result of any
additional taxes, duties and other governmental charges to which the Issuer has
become subject as a result of a Tax Event.
"Investment Company Event" means the receipt by the Issuer of an opinion of
counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of the occurrence of a change in law
or regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), the Issuer is or will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended (the "Investment Company Act"), which Change in 1940 Act Law
becomes effective on or after the date of original issuance of the series of
QUIPS issued by the Issuer.
"Like Amount" means (i) with respect to a redemption of any series of
QUIPS, QUIPS of such series and the Common Securities having a Liquidation
Amount (as defined below) equal to that portion of the principal amount of
Corresponding QUIDS to be contemporaneously redeemed in accordance with the
Indenture allocated 3% to the Common Securities and 97% to the QUIPS of such
series and the proceeds of which will be used to pay the Redemption Price of
such QUIPS and to redeem such Common Securities, and (ii) with respect to a
distribution of Corresponding QUIDS to holders of any series of QUIPS and the
Common Securities in connection with a dissolution or liquidation of the Issuer,
Corresponding QUIDS having a principal amount equal to the Liquidation Amount of
the QUIPS and the Common Securities of the holder to whom such Corresponding
QUIDS are distributed. "Liquidation Amount" means the stated amount provided in
the applicable Prospectus Supplement per QUIPS and Common Security.
"Tax Event" means the receipt by the Issuer of an opinion of counsel,
rendered by a law firm having a national tax and securities practice, to the
effect that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of issuance of the QUIPS under the Trust Agreement, there is more than an
insubstantial risk that (i) the Issuer 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 corresponding series of Corresponding QUIDS,
(ii) interest payable by Texas Instruments on such series of Corresponding QUIDS
is not, or within 90 days of the date of such opinion, will not be, deductible
by Texas Instruments, in whole or in part, for United States federal income tax
purposes, or (iii) the Issuer is, or will be within 90 days of the date of such
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
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After the liquidation date fixed for any distribution of Corresponding
QUIDS for any series of QUIPS (i) such series of QUIPS will no longer be deemed
to be outstanding, (ii) The Depository Trust Company ("DTC") or its nominee, as
the record holder of such series of QUIPS, will receive a registered global
certificate or certificates representing the Corresponding QUIDS to be delivered
upon such distribution and (iii) any certificates representing such series of
QUIPS not held by DTC or its nominee will be deemed to represent the
Corresponding QUIDS having a principal amount equal to the Liquidation Amount of
such series of QUIPS, and bearing accrued and unpaid interest in an amount equal
to the accrued and unpaid Distributions on such series of QUIPS until such
certificates are presented to the Administrative Trustees or their agent for
transfer or reissuance.
There can be no assurance as to the market prices for the QUIPS or the
Corresponding QUIDS that may be distributed in exchange for QUIPS if a
dissolution and liquidation of the Issuer were to occur. Accordingly, the QUIPS
that an investor may purchase, or the Corresponding QUIDS that the investor may
receive on dissolution and liquidation of the Issuer, may trade at a discount to
the price that the investor paid to purchase the QUIPS offered hereby.
REDEMPTION PROCEDURES
The following redemption procedures shall apply unless otherwise provided
in the Prospectus Supplement relating to the particular series of QUIPS being
offered thereby.
QUIPS redeemed on each Redemption Date shall be redeemed at the Redemption
Price with the applicable proceeds from the contemporaneous redemption of the
Corresponding QUIDS. Redemptions of the QUIPS shall be made and the Redemption
Price shall be payable on each Redemption Date only to the extent that the
Issuer has funds on hand available for the payment of such Redemption Price. See
also "-- Subordination of Common Securities".
Notice of any redemption of QUIPS (which notice will be irrevocable) will
be given by the Issuer to Texas Instruments and each record holder of QUIPS that
are being redeemed not fewer than 30 nor more than 60 days prior to the
Redemption Date. If the Issuer gives a notice of redemption in respect of its
QUIPS, then, by 12:00 noon, New York City time, on the Redemption Date, to the
extent funds are available, the Property Trustee will deposit irrevocably with
DTC funds sufficient to pay the applicable Redemption Price and will give DTC
irrevocable instructions and authority to pay the Redemption Price to the
holders of such QUIPS. See "-- Book-Entry Issuance". If such QUIPS are no longer
in book-entry form, the Issuer, to the extent funds are available, will
irrevocably deposit with the paying agent for such QUIPS funds sufficient to pay
the applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing such QUIPS. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
QUIPS called for redemption shall be payable to the holders of such QUIPS as of
the relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then upon the
date of such deposit, all rights of the holders of such QUIPS so called for
redemption will cease, except the right of the holders of such QUIPS to receive
the Redemption Price, but without interest on such Redemption Price, and such
QUIPS will cease to be outstanding. In the event that any date fixed for
redemption of QUIPS is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day. In the event that
payment of the Redemption Price in respect of QUIPS called for redemption is
improperly withheld or refused and not paid either by the Issuer or by Texas
Instruments pursuant to the Guarantee as described under "Description of
Guarantee", Distributions on such QUIPS will continue to accrue at the then
applicable rate, from the Redemption Date originally established by the Issuer
to the date such Redemption Price is actually paid, in which case the actual
payment date will be the date fixed for redemption for purposes of calculating
the Redemption Price.
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Subject to applicable law (including, without limitation, United States
federal securities law), Texas Instruments or its subsidiaries may at any time
and from time to time purchase outstanding QUIPS by tender, in the open market
or by private agreement.
Payment of the Redemption Price on the QUIPS and any distribution or
exchange of Corresponding QUIDS to holders of QUIPS shall be made to the
applicable record holders thereof as they appear on the register for such QUIPS
on the relevant record date, which shall be one Business Day prior to the
relevant Redemption Date or liquidation date, as applicable; provided, however,
that in the event that any QUIPS are not in book-entry form, the relevant record
date for such QUIPS shall be a date at least 15 days prior to the Redemption
Date or liquidation date, as applicable, as specified in the applicable
Prospectus Supplement.
If less than all of the QUIPS and Common Securities issued by the Issuer
are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount
of such QUIPS and Common Securities to be redeemed shall be allocated pro rata
among the QUIPS and the Common Securities. The particular QUIPS to be redeemed
shall be selected on a pro rata basis not more than 60 days prior to the
Redemption Date by the Property Trustee from the outstanding QUIPS not
previously called for redemption, by such method as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $50 or an integral multiple of $50 in excess thereof) of
the Liquidation Amount of the QUIPS. The Property Trustee shall promptly notify
the trust registrar in writing of the QUIPS selected for redemption and, in the
case of any QUIPS selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of the Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of QUIPS
shall relate, in the case of any QUIPS redeemed or to be redeemed only in part,
to the portion of the aggregate Liquidation Amount of QUIPS which has been or is
to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of QUIDS to be redeemed at its
registered address. Unless Texas Instruments defaults in payment of the
Redemption Price, on and after the Redemption Date interest ceases to accrue on
such QUIDS or portions thereof called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the QUIPS and
Common Securities, as applicable shall be made pro rata based on the Liquidation
Amount of such QUIPS and Common Securities; provided, however, that if on any
Distribution Date or Redemption Date a Debenture Event of Default shall have
occurred and be continuing, no payment of any Distribution on, or Redemption
Price of, any of the Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of such Common Securities, shall be
made unless payment in full in cash of all accumulated and unpaid Distributions
on all of the outstanding QUIPS for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the full amount
of such Redemption Price on all of the outstanding QUIPS then called for
redemption, shall have been made or provided for, and all funds available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions on, or Redemption Price of, the QUIPS then due and payable.
In the case of any Event of Default resulting from a Debenture Event of
Default, Texas Instruments as holder of the Common Securities will be deemed to
have waived any right to act with respect to any such Event of Default under the
applicable Trust Agreement until all such Events of Default with respect to such
QUIPS have been cured, waived or otherwise eliminated. Until any such Events of
Default under the applicable Trust Agreement with respect to the QUIPS have been
so cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the holders of such QUIPS and not on behalf of Texas Instruments as
holder of the Common Securities, and only the holders of such QUIPS will have
the right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to the Trust Agreement, the Issuer shall automatically terminate
upon expiration of its term and shall terminate on the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of Texas
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Instruments; (ii) if applicable, the distribution of a Like Amount of the
Corresponding QUIDS to the holders of its QUIPS and Common Securities, if Texas
Instruments, as Depositor, has given written direction to the Property Trustee
to terminate the Issuer (which direction is optional and wholly within the
discretion of Texas Instruments, as Depositor); (iii) the redemption,
conversion, if applicable, or exchange, if applicable, of all of the QUIPS and
Common Securities; and (iv) the entry by a court of competent jurisdiction of an
order for the dissolution of the Issuer.
If an early termination occurs as described in clause (i), (ii) or (iv)
above, the Issuer shall be liquidated by the Issuer Trustees as expeditiously as
the Issuer Trustees determine to be possible by distributing, after satisfaction
of liabilities to creditors of the Issuer as provided by applicable law, to the
holders of such QUIPS and Common Securities a Like Amount of the Corresponding
QUIDS, unless such distribution is determined by the Property Trustee not to be
practical, in which event such holders will be entitled to receive out of the
assets of the Issuer available for distribution to holders, after satisfaction
of liabilities to creditors of the Issuer as provided by applicable law, an
amount equal to, in the case of holders of QUIPS the aggregate of the
Liquidation Amount plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If such Liquidation
Distribution can be paid only in part because the Issuer has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Issuer on its QUIPS shall be paid on a pro rata
basis. The holder(s) of the Common Securities will be entitled to receive
distributions upon any such liquidation pro rata with the holders of its QUIPS,
except that if a Debenture Event of Default has occurred and is continuing, the
QUIPS shall have a priority over the Common Securities. A supplemental Indenture
may provide that if an early termination occurs as described in clause (iv)
above, the Corresponding QUIDS may be subject to optional redemption in whole
(but not in part).
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under the
Trust Agreement (an "Event of Default") with respect to the QUIPS issued
thereunder (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the Indenture
(see "Description of QUIDS -- Debenture Events of Default"); or
(ii) default by the Property Trustee in the payment of any
Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any QUIPS or Common Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Issuer Trustees in the Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Trustees by the holders of at least 25% in aggregate Liquidation
Amount of the outstanding QUIPS of the Issuer, a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" under the Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by Texas Instruments to
appoint a successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the QUIPS, the Administrative
Trustees and Texas Instruments, as Depositor, unless such Event of Default shall
have been cured or waived. Texas Instruments, as Depositor, and the
Administrative Trustees are required to file
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annually with the Property Trustee a certificate as to whether or not they are
in compliance with all the conditions and covenants applicable to them under the
Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the QUIPS
shall have a preference over the Common Securities upon termination of the
Issuer as described above. See "-- Liquidation Distribution Upon Termination".
The existence of an Event of Default does not entitle the holders of QUIPS to
accelerate the maturity thereof.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF QUIPS
If an Event of Default has occurred and is continuing, then the holders of
QUIPS would rely on the enforcement by the Debenture Trustee of its rights as a
holder of the Corresponding QUIDS against Texas Instruments. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of Texas Instruments to pay interest or principal
on the Corresponding QUIDS on the date such interest or principal is otherwise
payable (or in the case of redemption, on the Redemption Date), then a holder of
QUIPS may directly institute a proceeding against Texas Instruments for
enforcement of payment to such holder of the principal of or interest on the
Corresponding QUIDS having a principal amount equal to the aggregate Liquidation
Amount of the QUIPS of such holder (a "Direct Action") after the respective due
date specified in the Corresponding QUIDS. In connection with such Direct
Action, Texas Instruments will be subrogated to the rights of such holder of
QUIPS under the Trust Agreement to the extent of any payment made by Texas
Instruments to such holder of QUIPS in such Direct Action.
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding QUIPS. In no
event will the holders of the QUIPS have the right to vote to appoint, remove or
replace the Administrative Trustees, which voting rights are vested exclusively
in Texas Instruments as the holder of the Common Securities. No resignation or
removal of an Issuer Trustee and no appointment of a successor trustee shall be
effective until the acceptance of appointment by the successor trustee in
accordance with the provisions of the applicable Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property may
at the time be located, Texas Instruments, as the holder of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any part of such Trust Property, or to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the applicable Trust Agreement. In case a Debenture
Event of Default has occurred and is continuing, the Property Trustee alone
shall have power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any corporation into which the Property Trustee, the Delaware Trustee or
any Administrative Trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of such Trustee, shall be the successor of such Trustee under the
Trust Agreement, provided such corporation shall be otherwise qualified and
eligible.
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MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUER
The Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. The Issuer may, at the request of Texas Instruments, with the
consent of the Administrative Trustees and without the consent of the holders of
the QUIPS, merge with or into, consolidate, amalgamate, be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to a trust organized as such under the laws of any State; provided that (i) such
successor entity either (a) expressly assumes all of the obligations of the
Issuer with respect to the QUIPS or (b) substitutes for the QUIPS other
securities having substantially the same terms as the QUIPS (the "Successor
Securities") so long as the Successor Securities rank the same as the QUIPS rank
in priority with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) Texas Instruments expressly appoints a trustee of
such successor entity possessing the same powers and duties as the Property
Trustee as the holder of the Corresponding QUIDS, (iii) the Successor Securities
are listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or other organization on which the
QUIPS are then listed, if any, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the QUIPS (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the QUIPS (including any Successor
Securities) in any material respect, (vi) such successor entity has a purpose
identical to that of the Issuer, (vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer, or lease, Texas Instruments has
received an opinion from independent counsel to the Issuer experienced in such
matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the QUIPS (including any Successor
Securities) in any material respect and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Issuer nor such successor entity will be required to register as an
investment company under the Investment Company Act, and (viii) Texas
Instruments or any permitted successor or assignee owns all of the Common
Securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, the Issuer shall not, except
with the consent of holders of 100% in aggregate Liquidation Amount of the
QUIPS, consolidate, amalgamate, merge with or into, be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Issuer or the successor entity to
be classified as other than a grantor trust for United States federal income tax
purposes.
VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT
Except as provided below and under "Description of Guarantee -- Amendments
and Assignment" and as otherwise required by law and the Trust Agreement, the
holders of the QUIPS will have no voting rights.
The Trust Agreement may be amended from time to time by Texas Instruments
and the Issuer Trustees, without the consent of the holders of the QUIPS (i) to
cure any ambiguity, correct or supplement any provisions in the Trust Agreement
that may be inconsistent with any other provision, or to make any other
provisions with respect to matters or questions arising under the Trust
Agreement that shall not be inconsistent with the other provisions of the Trust
Agreement, or (ii) to modify, eliminate or add to any provision of the Trust
Agreement to such extent as shall be necessary to ensure that the Issuer will be
classified for United States federal income tax purposes as a grantor trust at
all times that any QUIPS and Common Securities are outstanding or to ensure that
the Issuer will not be required to register as an "investment company" under the
Investment Company Act, provided, however, that in the case of clause (i), such
action shall not adversely affect in any material respect the interests of any
holder of QUIPS or Common Securities, and any amendments of the Trust Agreement
shall become effective when notice thereof is given to the holders of QUIPS and
Common Securities. The Trust Agreement may be amended by the Issuer Trustees
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and Texas Instruments with (i) the consent of holders representing not less than
a majority (based upon Liquidation Amounts) of the outstanding QUIPS and Common
Securities, acting as a single class, and (ii) receipt by the Issuer Trustees of
an opinion of counsel to the effect that such amendment or the exercise of any
power granted to the Issuer Trustees in accordance with such amendment will not
affect the Issuer's status as a grantor trust for United States federal income
tax purposes or the Issuer's exemption from the status of an "investment
company" under the Investment Company Act, provided further that (i) without the
consent of each holder of QUIPS and Common Securities, the Trust Agreement may
not be amended to (ii) change the amount or timing of any Distribution on the
QUIPS and Common Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the QUIPS and Common Securities
as of a specified date or (iii) restrict the right of a holder of QUIPS and
Common Securities to institute suit for the enforcement of any such payment on
or after such date.
So long as any Corresponding QUIDS are held by the Property Trustee, the
Issuer Trustees shall not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee or executing
any trust or power conferred on the Property Trustee with respect to such
Corresponding QUIDS, (ii) waive any past default that is waivable under Section
513 of the Indenture, (iii) exercise any right to rescind or annul a declaration
that the principal of all the QUIDS shall be due and payable or (iv) consent to
any amendment, modification or termination of the Indenture or such
Corresponding QUIDS, where such consent shall be required, without, in each
case, obtaining the prior approval of the holders of a majority in aggregate
Liquidation Amount of all outstanding QUIPS; provided, however, that where a
consent under the Indenture would require the consent of each holder of
Corresponding QUIDS affected thereby, no such consent shall be given by the
Property Trustee without the prior consent of each holder of the corresponding
QUIPS. The Issuer Trustees shall not revoke any action previously authorized or
approved by a vote of the holders of the QUIPS except by subsequent vote of the
holders of the QUIPS. The Property Trustee shall notify each holder of record of
the QUIPS of any notice of default with respect to the Corresponding QUIDS. In
addition to obtaining the foregoing approvals of the holders of the QUIPS, prior
to taking any of the foregoing actions, the Issuer Trustees shall obtain an
opinion of counsel experienced in such matters to the effect that the Issuer
will not be classified as a corporation for United States federal income tax
purposes on account of such action.
Any required approval of holders of QUIPS may be given at a meeting of
holders of QUIPS convened for such purpose or pursuant to written consent. The
Property Trustee will cause a notice of any meeting at which holders of QUIPS
are entitled to vote, or of any matter upon which action by written consent of
such holders is to be taken, to be given to each holder of record of QUIPS in
the manner set forth in the Trust Agreement.
No vote or consent of the holders of QUIPS will be required for an Issuer
to redeem and cancel its QUIPS in accordance with the Trust Agreement.
Notwithstanding that holders of QUIPS are entitled to vote or consent under
any of the circumstances described above, any of the QUIPS that are owned by
Texas Instruments, the Issuer Trustees or any affiliate of Texas Instruments or
any Issuer Trustees, shall, for purposes of such vote or consent, be treated as
if they were not outstanding.
PAYMENT AND PAYING AGENCY
Payments in respect of the QUIPS shall be made to DTC, which shall credit
the relevant accounts at DTC on the applicable Distribution Dates or, if the
QUIPS are not held by DTC, such payments shall be made by check mailed to the
address of the holder entitled thereto as such address shall appear on the
Register. Unless otherwise specified in the applicable Prospectus Supplement,
the paying agent (the "Paying Agent") shall initially be the Property Trustee
and any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and Texas Instruments. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Property
Trustee and Texas Instruments. In the event that the Property Trustee shall no
longer be the Paying Agent, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and Texas Instruments) to act as Paying Agent.
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BOOK-ENTRY ISSUANCE
DTC will act as securities depositary for all of the QUIPS. The QUIPS will
be issued only as fully-registered securities registered in the name of Cede &
Co. (DTC's nominee). One or more fully-registered global certificates will be
issued for the QUIPS, representing in the aggregate the total number of the
QUIPS, and will be deposited with DTC.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain custodial relationships with Direct Participants, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Commission.
Purchases of QUIPS within the DTC system must be made by or through Direct
Participants, which will receive a credit for the QUIPS on DTC's records. The
ownership interest of each actual purchaser of each QUIPS ("Beneficial Owner")
is in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchases, but Beneficial Owners are expected to receive written confirmations
providing details of the transactions, as well as periodic statements of their
holdings, from the Direct or Indirect Participants through which the Beneficial
Owners purchased QUIPS. Transfers of ownership interests in the QUIPS are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in QUIPS, except in the event that use of the
book-entry system for the QUIPS is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the QUIPS; DTC's
records reflect only the identity of the Direct Participants to whose accounts
such QUIPS are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Redemption notices shall be sent to Cede & Co. as the registered holder of
the QUIPS. If less than all of the QUIPS are being redeemed, DTC's current
practice is to determine by lot the amount of the interest of each Direct
Participant to be redeemed.
Although voting with respect to the QUIPS is limited to the holders of
record of the QUIPS, in those instances in which a vote is required, neither DTC
nor Cede & Co. will itself consent or vote with respect to QUIPS. Under its
usual procedures, DTC would mail an omnibus proxy (the "Omnibus Proxy") to the
Property Trustee as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts such QUIPS are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Distribution payments on the QUIPS will be made by the Property Trustee to
DTC. DTC's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings
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shown on DTC's records unless DTC has reason to believe that it will not receive
payments on such payment date. Payments by Participants to Beneficial Owners
will be governed by standing instructions and customary practices and will be
the responsibility of such Participant and not of DTC, the Property Trustee, the
Issuer or Texas Instruments, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payment of Distributions to DTC is the
responsibility of the Property Trustee, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursements of such payments to
the Beneficial Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositary with
respect to any of the QUIPS at any time by giving reasonable notice to the
Property Trustee and Texas Instruments. In the event that a successor securities
depositary is not obtained, definitive QUIPS certificates representing such
QUIPS are required to be printed and delivered. Texas Instruments, at its
option, may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor depositary). After a Debenture Event of Default, the
holders of a majority in Liquidation Amount of QUIPS may determine to
discontinue the system of book-entry transfers through DTC. In any such event,
definitive certificates for the QUIPS will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Issuer and Texas Instruments believe to
be accurate, but the Issuer and Texas Instruments assume no responsibility for
the accuracy thereof. Neither the Issuer nor Texas Instruments has any
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
TRANSFER AGENT, REGISTRAR AND PAYING, CONVERSION AND EXCHANGE AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as transfer agent, registrar and paying, conversion
and exchange agent for the QUIPS.
Registration of transfers of QUIPS will be effected without charge by or on
behalf of the Issuer, but upon payment of any tax or other governmental charges
that may be imposed in connection with any transfer or exchange. The Issuer will
not be required to register or cause to be registered the transfer of their
QUIPS after such QUIPS have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Trust Agreement and, after such Event of Default, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the Property
Trustee is under no obligation to exercise any of the powers vested in it by the
Trust Agreement at the request of any holder of QUIPS unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby. If no Event of Default has occurred and is continuing and the
Property Trustee is required to decide between alternative causes of action,
construe ambiguous provisions in the Trust Agreement or is unsure of the
application of any provision of the Trust Agreement, and the matter is not one
on which holders of QUIPS are entitled under the Trust Agreement to vote, then
the Property Trustee shall take such action as is directed by Texas Instruments
and if not so directed, shall take such action as it deems advisable and in the
best interests of the holders of the QUIPS and the Common Securities and will
have no liability except for its own bad faith, negligence or willful
misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuer in such a way that the Issuer will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a corporation
for United States federal income tax purposes and so that the Corresponding
QUIDS will be treated as indebtedness of Texas Instruments for United States
federal income tax purposes. In this connection, Texas
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Instruments and the Administrative Trustees are authorized to take any action,
not inconsistent with applicable law, the certificate of trust of the Issuer or
the Trust Agreement, that Texas Instruments and the Administrative Trustees
determine in their discretion to be necessary or desirable for such purposes, as
long as such action does not materially adversely affect the interests of the
holders of the related QUIPS.
Holders of the QUIPS have no preemptive or similar rights.
The Issuer may not borrow money or issue debt or mortgage or pledge any of
its assets.
DESCRIPTION OF GUARANTEE
The Guarantee will be executed and delivered by Texas Instruments
concurrently with the issuance by the Issuer of its QUIPS for the benefit of the
holders from time to time of such QUIPS. FNBC will act as indenture trustee
("Guarantee Trustee") under the Guarantee for the purposes of compliance with
the Trust Indenture Act and the Guarantee will be qualified as an Indenture
under the Trust Indenture Act. This summary of certain provisions of the
Guarantee does not purport to be complete and is subject to, and qualified in
its entirety by reference to, all of the provisions of the Guarantee, including
the definitions therein of certain terms, and the Trust Indenture Act. The form
of the Guarantee has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. Reference in this summary to QUIPS means the
QUIPS to which a Guarantee relates. The Guarantee Trustee will hold the
Guarantee for the benefit of the holders of the QUIPS.
GENERAL
Texas Instruments will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined below)
to the holders of the QUIPS, as and when due, regardless of any defense, right
of set-off or counterclaim that the Issuer may have or assert other than the
defense of payment. The following payments with respect to the QUIPS, to the
extent not paid by or on behalf of the Issuer (the "Guarantee Payments"), will
be subject to the Guarantee: (i) any accumulated and unpaid Distributions
required to be paid on such QUIPS, to the extent that the Issuer has funds on
hand available therefor at such time, (ii) the Redemption Price with respect to
any QUIPS called for redemption to the extent that the Issuer has funds on hand
available therefor at such time, or (iii) upon a voluntary or involuntary
dissolution, winding up or liquidation of the Issuer (unless the Corresponding
QUIDS are distributed to holders of such QUIPS), the lesser of (a) the
Liquidation Distribution and (b) the amount of assets of the Issuer remaining
available for distribution to holders of QUIPS. Texas Instruments' obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by Texas Instruments to the holders of the applicable QUIPS or by
causing the Issuer to pay such amounts to such holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis of
the Issuer's obligations under the QUIPS, but will apply only to the extent that
the Issuer has funds sufficient to make such payments, and is not a guarantee of
collection.
If Texas Instruments does not make interest payments on the Corresponding
QUIDS held by the Issuer, the Issuer will not be able to pay Distributions on
the QUIPS and will not have funds legally available therefor. The Guarantee will
rank subordinate and junior in right of payment to all Senior Debt of Texas
Instruments. See "-- Status of the Guarantee". Except as otherwise provided in
the applicable Prospectus Supplement, the Guarantee does not limit the
incurrence or issuance of other secured or unsecured debt of Texas Instruments,
whether under the Indenture or any existing or other indenture that Texas
Instruments may enter into in the future or otherwise.
Texas Instruments has, through the applicable Guarantee, the applicable
Trust Agreement, the QUIDS, the Indenture and the Expense Agreement, taken
together, fully, irrevocably and unconditionally guaranteed all of the Issuer's
obligations under the QUIPS. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of
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the Issuer's obligations under the QUIPS. See "Relationship Among the QUIPS, the
QUIDS and the Guarantee -- General".
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of Texas Instruments
and will rank subordinate and junior in right of payment to all Senior Debt.
The Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). The
Guarantee will be held for the benefit of the holders of the related QUIPS. The
Guarantee will not be discharged except by payment of the Guarantee Payments in
full to the extent not paid by the Issuer or upon distribution to the holders of
the QUIPS of the Corresponding QUIDS. The Guarantee does not place a limitation
on the amount of additional Senior Debt that may be incurred by Texas
Instruments. On May 13, 1996, Texas Instruments filed a universal shelf
registration statement covering $500,000,000 of debt securities, preferred
stock, depositary shares and Texas Instruments Common Stock.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the related QUIPS (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of not less than a majority in aggregate Liquidation Amount of such
outstanding QUIPS. The manner of obtaining any such approval will be as set
forth under "Description of the QUIPS -- Voting Rights; Amendment of The Trust
Agreement". All guarantees and agreements contained in the Guarantee shall bind
the successors, assigns, receivers, trustees and representatives of Texas
Instruments and shall inure to the benefit of the holders of the related QUIPS
then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of
Texas Instruments to perform any of its payment or other obligations thereunder.
The holders of not less than a majority in aggregate Liquidation Amount of the
related QUIPS have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee in respect of
the Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the Guarantee.
Any holder of the QUIPS may institute a legal proceeding directly against
Texas Instruments to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Issuer, the Guarantee Trustee or any
other person or entity.
Texas Instruments, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not Texas Instruments is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by Texas Instruments in performance of the Guarantee, undertakes to
perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to the Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of any QUIPS unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
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TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the related QUIPS, upon full payment of
the amounts payable upon liquidation of the Issuer, upon the distribution, if
any, of Texas Instruments Common Stock to the holders of QUIPS in respect of the
conversion of all such holders' QUIPS into Texas Instruments Common Stock or
upon distribution of Corresponding QUIDS to the holders of the related QUIPS.
The Guarantee will continue to be effective or will be reinstated, as the case
may be, if at any time any holder of the related QUIPS must restore payment of
any sums paid under such QUIPS or the Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
THE EXPENSE AGREEMENT
Pursuant to an Expense Agreement entered into by Texas Instruments under
the Trust Agreement (the "Expense Agreement"), Texas Instruments will
irrevocably and unconditionally guarantee to each person or entity to whom the
Issuer becomes indebted or liable, the full payment of any costs, expenses or
liabilities of the Issuer, other than obligations of the Issuer to pay to the
holders of any QUIPS or other similar interests in the Issuer the amounts due
such holders pursuant to the terms of the QUIPS or such other similar interests,
as the case may be.
DESCRIPTION OF QUIDS
The QUIDS are to be issued in one or more series under a Junior
Subordinated Indenture, as supplemented from time to time (as so supplemented,
the "Indenture"), between Texas Instruments and FNBC, as trustee (the "Debenture
Trustee"). This summary of certain terms and provisions of the QUIDS and the
Indenture does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, the Indenture, the form of which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part, and
to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
Whenever particular defined terms of the Indenture (as supplemented or amended
from time to time) are referred to herein or in a Prospectus Supplement, such
defined terms are incorporated herein or therein by reference.
GENERAL
Each series of QUIDS will rank pari passu with all other series of QUIDS,
and will be unsecured and subordinate and junior in right of payment to the
extent and in the manner set forth in the Indenture to all Senior Debt (as
defined below) of Texas Instruments. See "-- Subordination". Except as otherwise
provided in the applicable Prospectus Supplement, the Indenture does not limit
the incurrence or issuance of other secured or unsecured debt of Texas
Instruments, whether under the Indenture or any existing or other indenture that
Texas Instruments may enter into in the future or otherwise. See
"-- Subordination" and the Prospectus Supplement relating to any offering of
Securities.
The QUIDS will be issuable in one or more series pursuant to an indenture
supplemental to the Indenture or a resolution of Texas Instruments' board of
directors or a committee thereof.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the QUIDS: (1) the title of the QUIDS; (2) any
limit upon the aggregate principal amount of the QUIDS; (3) the date or dates on
which the principal of the QUIDS is payable or the method of determination
thereof; (4) the rate or rates, if any, at which the QUIDS shall bear interest,
the Interest Payment Dates on which any such interest shall be payable, the
right, if any, of Texas Instruments to defer or extend an Interest Payment Date,
and the Regular Record Date for any interest payable on any Interest Payment
Date or the method by which any of the foregoing shall be determined; (5) the
place or places where, subject to the terms of the Indenture as described below
under "Payment and Paying Agents", the principal of and premium, if any, and
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interest on the QUIDS will be payable and where, subject to the terms of the
Indenture as described below under "Denominations, Registration and Transfer",
the QUIDS may be presented for registration of transfer or exchange and the
place or places where notices and demands to or upon Texas Instruments in
respect of the QUIDS and the Indenture may be made ("Place of Payment"); (6) any
period or periods within or date or dates on which, the price or prices at which
and the terms and conditions upon which QUIDS may be redeemed, in whole or in
part, at the option of Texas Instruments or a holder thereof; (7) the obligation
or the right, if any, of Texas Instruments to redeem, purchase or repay the
QUIDS and the period or periods within which, the price or prices at which, the
currency or currencies (including currency unit or units) in which and the other
terms and conditions upon which the QUIDS shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation; (8) the
denominations in which any QUIDS shall be issuable if other than denominations
of $50 and any integral multiple thereof; (9) if other than in U.S. Dollars, the
currency or currencies (including currency unit or units) in which the principal
of and premium, if any, and interest, if any, on the QUIDS shall be payable, or
in which the QUIDS shall be denominated; (10) any additions, modifications or
deletions in the Events of Default or covenants of Texas Instruments specified
in the Indenture with respect to the QUIDS; (11) if other than the principal
amount thereof, the portion of the principal amount of QUIDS that shall be
payable upon declaration of acceleration of the maturity thereof; (12) any
additions or changes to the Indenture with respect to a series of QUIDS as shall
be necessary to permit or facilitate the issuance of such series in bearer form,
registrable or not registrable as to principal, and with or without interest
coupons; (13) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the QUIDS and the manner in which such
amounts will be determined; (14) the terms and conditions relating to the
issuance of a temporary Global Security representing all of the QUIDS of such
series and the exchange of such temporary Global Security for definitive QUIDS
of such series; (15) subject to the terms described under "Global QUIDS",
whether the QUIDS of the series shall be issued in whole or in part in the form
of one or more Global Securities and, in such case, the Depositary for such
Global Securities, which Depositary shall be a clearing agency registered under
the Exchange Act; (16) the appointment of any Paying Agent or Agents; (17) the
terms and conditions of any obligation or right of Texas Instruments or a holder
to convert or exchange the QUIDS into shares of Texas Instruments Common Stock,
including the conversion price and the circumstances under which any such
conversion right shall expire; and (18) any other terms of the QUIDS not
inconsistent with the provisions of the Indenture.
QUIDS may be sold at a substantial discount below their stated principal
amount, bearing no interest or interest at a rate which at the time of issuance
is below market rates. Certain United States federal income tax consequences and
special considerations applicable to any such QUIDS will be described in the
applicable Prospectus Supplement.
If the purchase price of any of the QUIDS is payable in one or more foreign
currencies or currency units or if any QUIDS are denominated in one or more
foreign currencies or currency units or if the principal of, premium, if any, or
interest, if any, on any QUIDS is payable in one or more foreign currencies or
currency units, the restrictions, elections, certain United States federal
income tax consequences, specific terms and other information with respect to
such issue of QUIDS and such foreign currency or currency units will be set
forth in the applicable Prospectus Supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of QUIDS, special United States
federal income tax, accounting and other considerations applicable thereto will
be described in the applicable Prospectus Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
QUIDS will be issuable only in registered form without coupons in denominations
of $50 and any integral multiple thereof. QUIDS of any series will be
exchangeable for other QUIDS of the same issue and series, of any authorized
denominations, of a like aggregate principal amount, of the same Original Issue
Date and Stated Maturity and bearing the same interest rate.
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QUIDS may be presented for exchange as provided above, and may be presented
for registration of transfer (with the form of transfer endorsed thereon, or a
satisfactory written instrument of transfer, duly executed), at the office of
the appropriate Securities Registrar or at the office of any transfer agent
designated by Texas Instruments for such purpose with respect to any series of
QUIDS and referred to in the applicable Prospectus Supplement, without service
charge and upon payment of any taxes and other governmental charges as described
in the Indenture. Texas Instruments will appoint the Debenture Trustee as
Securities Registrar under the Indenture. If the applicable Prospectus
Supplement refers to any transfer agents (in addition to the Securities
Registrar) initially designated by Texas Instruments with respect to any series
of QUIDS, Texas Instruments may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, provided that Texas Instruments maintains a transfer agent
in each Place of Payment for such series. Texas Instruments may at any time
designate additional transfer agents with respect to any series of QUIDS.
In the event of any redemption, neither Texas Instruments nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
QUIDS of any series during a period beginning at the opening of business 15 days
before the day of selection for redemption of QUIDS of that series and ending at
the close of business on the day of mailing of the relevant notice of redemption
or (ii) transfer or exchange any QUIDS so selected for redemption, except, in
the case of any QUIDS being redeemed in part, any portion thereof not to be
redeemed.
GLOBAL QUIDS
The QUIDS of a series may be issued in whole or in part in the form of one
or more Global QUIDS that will be deposited with, or on behalf of, a depositary
(the "Depositary") identified in the Prospectus Supplement relating to such
series. Global QUIDS may be issued only in fully registered form and in either
temporary or permanent form. Unless and until it is exchanged in whole or in
part for the individual QUIDS represented thereby, a Global QUIDS may not be
transferred except as a whole by the Depositary for such Global QUIDS to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by the Depositary or any nominee to a
successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of QUIDS will be described in the Prospectus Supplement relating to such series.
Texas Instruments anticipates that the following provisions will generally apply
to depositary arrangements.
Upon the issuance of a Global QUIDS and the deposit of such Global QUIDS
with or on behalf of the Depositary, the Depositary for such Global QUIDS or its
nominee will credit on its book-entry registration and transfer system the
respective principal amounts of the individual QUIDS represented by such Global
QUIDS to the accounts of persons that have accounts with such Depositary
("Participants"). Such accounts shall be designated by the dealers, underwriters
or agents with respect to such QUIDS or by Texas Instruments if such QUIDS are
offered and sold directly by Texas Instruments. Ownership of beneficial
interests in a Global QUIDS will be limited to Participants or persons that may
hold interests through Participants. Ownership of beneficial interests in such
Global QUIDS will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of Participants) and the records of
Participants (with respect to interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global QUIDS.
So long as the Depositary for a Global QUIDS, or its nominee, is the
registered owner of such Global QUIDS, such Depositary or such nominee, as the
case may be, will be considered the sole owner or holder of the QUIDS
represented by such Global QUIDS for all purposes under the Indenture governing
such QUIDS. Except as provided below, owners of beneficial interests in a Global
QUIDS will not be entitled to have any of the individual QUIDS of the series
represented by such Global QUIDS registered in their names, will not
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receive or be entitled to receive physical delivery of any such QUIDS of such
series in definitive form and will not be considered the owners or holders
thereof under the Indenture.
Payments of principal of and premium, if any, and interest on individual
QUIDS represented by a Global QUIDS registered in the name of a Depositary or
its nominee will be made to the Depositary or its nominee, as the case may be,
as the registered owner of the Global QUIDS representing such QUIDS. None of
Texas Instruments, the Debenture Trustee, any Paying Agent or the Securities
Registrar for such QUIDS will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global QUIDS representing such QUIDS or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
Texas Instruments expects that the Depositary for a series of QUIDS or its
nominee, upon receipt of any payment of principal, premium, if any, or interest
in respect of a permanent Global QUIDS representing any of such QUIDS,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount of
such Global QUIDS representing such QUIDS as shown on the records of such
Depositary or its nominee. Texas Instruments also expects that payments by
Participants to owners of beneficial interests in such Global QUIDS held through
such Participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers
in bearer form or registered in "street name". Such payments will be the
responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of QUIDS is at any time unwilling, unable or ineligible
to continue as depositary and a successor depositary is not appointed by Texas
Instruments within 90 days, Texas Instruments will issue individual QUIDS of
such series in exchange for the Global QUIDS representing such series of QUIDS.
In addition, Texas Instruments may at any time and in its sole discretion,
subject to any limitations described in the Prospectus Supplement relating to
such QUIDS, determine not to have any QUIDS of such series represented by one or
more Global QUIDS and, in such event, will issue individual QUIDS of such series
in exchange for the Global QUIDS representing such series of QUIDS. Further, if
Texas Instruments so specifies with respect to the QUIDS of a series, an owner
of a beneficial interest in a Global QUIDS representing QUIDS of such series
may, on terms acceptable to Texas Instruments, the Debenture Trustee and the
Depositary for such Global QUIDS, receive individual QUIDS of such series in
exchange for such beneficial interests, subject to any limitations described in
the Prospectus Supplement relating to such QUIDS. In any such instance, an owner
of a beneficial interest in a Global QUIDS will be entitled to physical delivery
of individual QUIDS of the series represented by such Global QUIDS equal in
principal amount to such beneficial interest and to have such QUIDS registered
in its name. Individual QUIDS of such series so issued will be issued in
denominations, unless otherwise specified by Texas Instruments, of $50 and
integral multiples thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of and premium, if any, and any interest on QUIDS will be made at
the office of the Debenture Trustee in the City of New York or at the office of
such Paying Agent or Paying Agents as Texas Instruments may designate from time
to time in the applicable Prospectus Supplement, except that at the option of
Texas Instruments payment of any interest may be made (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Securities Register or (ii) by transfer to an account maintained by the Person
entitled thereto as specified in the Securities Register, provided that proper
transfer instructions have been received by the Regular Record Date. Unless
otherwise indicated in the applicable Prospectus Supplement, payment of any
interest on QUIDS will be made to the Person in whose name such QUIDS is
registered at the close of business on the Regular Record Date for such
interest, except in the case of Defaulted Interest. Texas Instruments may at any
time designate additional Paying Agents or rescind the designation of any Paying
Agent; however, Texas Instruments will at all times be required to maintain a
Paying Agent in each Place of Payment for each series of QUIDS.
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Any monies deposited with the Debenture Trustee or any Paying Agent, or
then held by Texas Instruments in trust, for the payment of the principal of and
premium, if any, or interest on any QUIDS and remaining unclaimed for two years
after such principal and premium, if any, or interest has become due and payable
shall, at the request of Texas Instruments, be repaid to Texas Instruments and
the holder of such QUIDS shall thereafter look, as a general unsecured creditor,
only to Texas Instruments for payment thereof.
REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement, QUIDS
will not be subject to any sinking fund.
Unless otherwise indicated in the applicable Prospectus Supplement, Texas
Instruments may, at its option, redeem the QUIDS of any series in whole at any
time or in part from time to time. QUIDS in denominations larger than $50 may be
redeemed in part but only in integral multiples of $50. Except as otherwise
specified in the applicable Prospectus Supplement, the redemption price for any
QUIDS so redeemed shall equal any accrued and unpaid interest thereon to the
Redemption Date, plus the principal amount thereof.
Except as otherwise specified in the applicable Prospectus Supplement, if a
Debenture Tax Event (as defined below) in respect of a series of QUIDS shall
occur and be continuing, Texas Instruments may, at its option, redeem such
series of QUIDS in whole (but not in part) at any time within 90 days of the
occurrence of such Debenture Tax Event, at a redemption price equal to 100% of
the principal amount of such QUIDS then outstanding plus accrued and unpaid
interest to the date fixed for redemption.
"Debenture Tax Event" means the receipt by Texas Instruments of an opinion
of counsel, rendered by a law firm having a recognized national tax and
securities practice, to the effect that, as a result of any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
applicable series of QUIDS under the Indenture, there is more than an
insubstantial risk that interest payable by Texas Instruments on such series of
QUIDS is not, or within 90 days of the date of such opinion, will not be,
deductible by Texas Instruments, in whole or in part, for United States federal
income tax purposes.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of QUIDS to be redeemed at its
registered address. Unless Texas Instruments defaults in payment of the
redemption price, on and after the Redemption Date interest ceases to accrue on
such QUIDS or portions thereof called for redemption.
OPTION TO EXTEND INTEREST PAYMENT DATE
If provided in the applicable Prospectus Supplement, Texas Instruments
shall have the right at any time and from time to time during the term of any
series of QUIDS to defer payment of interest for such number of consecutive
interest payment periods as may be specified in the applicable Prospectus
Supplement (each, an "Extension Period"), subject to the terms, conditions and
covenants, if any, specified in such Prospectus Supplement, provided that such
Extension Period may not extend beyond the Stated Maturity of such series of
QUIDS. Certain United States federal income tax consequences and special
considerations applicable to any such QUIDS will be described in the applicable
Prospectus Supplement.
During such Extension Period Texas Instruments may not, and may not permit
any subsidiary of Texas Instruments to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of Texas Instruments' capital stock or (ii) make any
payment of principal, interest or premium, if any, on or repay, repurchase or
redeem any debt securities of Texas Instruments that rank pari passu with or
junior in interest to the QUIDS or make any guarantee payments with respect to
any guarantee by Texas Instruments of the debt securities of any subsidiary of
Texas
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Instruments if such guarantee ranks pari passu with or junior in interest to the
QUIDS (other than (a) dividends or distributions in Common Stock of Texas
Instruments, (b) redemptions or purchases of any rights pursuant to Texas
Instruments' Shareholders Rights Plan, or any successor to such Shareholders
Rights Plan, and the declaration of a dividend of such rights or the issuance of
Preferred Stock under such plans in the future, (c) payments under the
Guarantee, (d) purchases of Common Stock related to the issuance of Common Stock
under any of Texas Instruments' benefit plans for its directors, officers or
employees and (e) purchases of Common Stock required to prevent the loss or
secure the renewal or reinstatement of any government license or franchise held
by Texas Instruments or any of its subsidiaries).
MODIFICATION OF INDENTURE
From time to time, Texas Instruments and the Debenture Trustee may, without
the consent of the holders of any series of QUIDS, amend, waive or supplement
the Indenture for specified purposes, including, among other things, curing
ambiguities, defects or inconsistencies (provided that any such action does not
materially adversely affect the interest of the holders of any series of QUIDS
or, in the case of Corresponding QUIDS, the holders of the corresponding series
of QUIPS so long as they remain outstanding) and qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting Texas Instruments and the Debenture Trustee, with
the consent of the holders of not less than a majority in principal amount of
each outstanding series of QUIDS affected, to modify the Indenture in a manner
affecting the rights of the holders of such series of the QUIDS; provided that
no such modification may, without the consent of the holder of each outstanding
QUIDS so affected, (i) change the Stated Maturity of any series of QUIDS, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon or impair any right to institute suit for the
conversion of any QUIDS, or adversely affect any right to convert any QUIDS
(except such change or extension as is contemplated hereby) or (ii) reduce the
percentage of principal amount of QUIDS of any series, the holders of which are
required to consent to any such modification of the Indenture, provided that, in
the case of Corresponding QUIDS, so long as any of the related series of QUIPS
remain outstanding, no such modification may be made that adversely affects the
holders of such QUIPS in any material respect, and no termination of the
Indenture may occur, and no waiver of any Debenture Event of Default or
compliance with any covenant under the Indenture may be effective, without the
prior consent of the holders of at least a majority in aggregate Liquidation
Amount of such QUIPS unless and until the principal of the Corresponding QUIDS
and all accrued and unpaid interest thereon have been paid in full and certain
other conditions are satisfied. In addition, Texas Instruments and the Debenture
Trustee may execute, without the consent of any holder of QUIDS, any
supplemental Indenture for the purpose of creating any new series of QUIDS.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of QUIDS that has occurred and is continuing
constitutes a "Debenture Event of Default" with respect to such series of QUIDS:
(i) failure for 30 days to pay any interest on such series of the
QUIDS, when due (subject to the deferral of any due date in the case of an
Extension Period); or
(ii) failure to pay any principal or premium, if any, on such series
of QUIDS when due whether at maturity, upon redemption by declaration or
otherwise; or
(iii) if applicable, failure by Texas Instruments to deliver shares of
Texas Instruments Common Stock upon an appropriate election by holders of
QUIDS to convert such QUIDS; or
(iv) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice
to Texas Instruments from the Debenture Trustee or the holders of at least
25% in aggregate outstanding principal amount of such series of outstanding
QUIDS; or
(v) certain events in bankruptcy, insolvency or reorganization of
Texas Instruments.
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The holders of a majority in aggregate outstanding principal amount of such
series of QUIDS have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee. The
Debenture Trustee or the holders of not less than 25% in aggregate outstanding
principal amount of such series of QUIDS may declare the principal due and
payable immediately upon a Debenture Event of Default, and, in the case of
Corresponding QUIDS, should the Debenture Trustee or such holders of such
Corresponding QUIDS fail to make such declaration, the holders of at least 25%
in aggregate Liquidation Amount of the related series of QUIPS shall have such
right. The holders of a majority in aggregate outstanding principal amount of
such series of QUIDS may annul such declaration and waive the default if the
default (other than the non-payment of the principal of such series of QUIDS
which has become due solely by such acceleration) has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee
and, in the case of Corresponding QUIDS, should the holders of such
Corresponding QUIDS fail to annul such declaration and waive such default, the
holders of a majority in aggregate Liquidation Amount of the related series of
QUIPS shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
QUIDS affected thereby may, on behalf of the holders of all the QUIDS, waive any
past default, except a default in the payment of principal or interest (unless
such default has been cured and a sum sufficient to pay all matured installments
of interest and principal due otherwise than by acceleration has been deposited
with the Debenture Trustee) or a default in respect of a covenant or provision
which under the Indenture cannot be modified or amended without the consent of
the holder of each outstanding QUIDS and, in the case of Corresponding QUIDS,
should the holders of such Corresponding QUIDS fail to annul such declaration
and waive such default, the holders of a majority in aggregate Liquidation
Amount of the related series of QUIPS shall have such right. Texas Instruments
is required to file annually with the Debenture Trustee a certificate as to
whether or not Texas Instruments is in compliance with all the conditions and
covenants applicable to it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing as to a
series of Corresponding QUIDS, the Property Trustee will have the right to
declare the principal of and the interest on such Corresponding QUIDS and any
other amounts payable under the Indenture, to be forthwith due and payable and
to enforce its other rights as a creditor with respect to such Corresponding
QUIDS.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF QUIPS
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of Texas Instruments to pay interest or
principal on the Corresponding QUIDS on the date such interest or principal is
otherwise payable, a holder of QUIPS may institute a Direct Action (as defined
herein under "Description of QUIPS -- Enforcement of Certain Rights by Holders
of QUIPS") for payment after the respective due date specified in the
Corresponding QUIDS. Texas Instruments may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all of the QUIPS. Notwithstanding any payment made to such holder
of QUIPS by Texas Instruments in connection with a Direct Action, Texas
Instruments shall remain obligated to pay the principal of or interest on the
Corresponding QUIDS held by the Issuer or the Property Trustee and Texas
Instruments shall be subrogated to the rights of the holder of such QUIPS with
respect to payments on the QUIPS to the extent of any payments made by Texas
Instruments to such holder in any Direct Action. The holders of QUIPS will not
be able to exercise directly any other remedy available to the holders of the
Corresponding QUIDS.
The holders of the QUIPS would not be able to exercise any remedies
available to the holders of the QUIDS other than those set forth in the
preceding paragraph unless the Property Trustee or the Debenture Trustee, acting
for the benefit of the Property Trustee, fails to do so for 60 days. In such
event, the holders of at least 25% in aggregate Liquidation Amount of the
outstanding QUIPS would have such right to institute proceedings.
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CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that Texas Instruments shall not consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets substantially or as an entirety to any Person, and no Person shall
consolidate with or merge into Texas Instruments or convey, transfer or lease
its properties and assets substantially or as an entirety to Texas Instruments,
unless (i) in case Texas Instruments consolidates with or merges into another
Person or conveys, transfers or leases its properties and assets substantially
as an entirety to any Person, the successor Person is organized under the laws
of the United States or any state or the District of Columbia, and such
successor Person expressly assumes Texas Instruments' obligations on the QUIDS
issued under the Indenture; (ii) immediately after giving effect thereto, no
Debenture Event of Default, and no event which, after notice or lapse of time or
both, would become a Debenture Event of Default, shall have happened and be
continuing; (iii) in the case of Corresponding QUIDS, such transaction is
permitted under the Trust Agreement or Guarantee and does not give rise to any
breach or violation of the Trust Agreement and Guarantee; and (iv) certain other
conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the QUIDS
protection in the event of a highly leveraged or other transaction involving
Texas Instruments that may adversely affect holders of the QUIDS.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all QUIDS not
previously delivered to the Debenture Trustee for cancellation (i) have become
due and payable or (ii) will become due and payable at their Stated Maturity
within one year, and Texas Instruments deposits or causes to be deposited with
the Debenture Trustee trust funds, in trust, for the purpose and in an amount in
the currency or currencies in which the QUIDS are payable sufficient to pay and
discharge the entire indebtedness on the QUIDS not previously delivered to the
Debenture Trustee for cancellation, for the principal and premium, if any, and
interest to the date of the deposit or to the Stated Maturity, as the case may
be, then the Indenture will cease to be of further effect (except as to Texas
Instruments' obligations to pay all other sums due pursuant to the Indenture and
to provide the officers' certificates and opinions of counsel described
therein), and Texas Instruments will be deemed to have satisfied and discharged
the Indenture.
SUBORDINATION
In the Indenture, Texas Instruments has covenanted and agreed that any
QUIDS issued thereunder will be subordinate and junior in right of payment to
all Senior Debt to the extent provided in the Indenture. Upon any payment or
distribution of assets to creditors upon any liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors, marshaling
of assets or any bankruptcy, insolvency, debt restructuring or similar
proceedings in connection with any insolvency or bankruptcy proceeding of Texas
Instruments, the holders of Senior Debt will first be entitled to receive
payment in full of principal of and premium, if any, and interest, if any, on
such Senior Debt before the holders of QUIDS or, in the case of Corresponding
QUIDS, the Property Trustee on behalf of the holders, will be entitled to
receive or retain any payment in respect of the principal of and premium, if
any, or interest, if any, on the QUIDS.
In the event of the acceleration of the maturity of any QUIDS, the holders
of all Senior Debt outstanding at the time of such acceleration will first be
entitled to receive payment in full of all amounts due thereon (including any
amounts due upon acceleration) before the holders of QUIDS will be entitled to
receive or retain any payment in respect of the principal of or premium, if any,
or interest, if any, on the QUIDS.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the QUIDS may be made if there shall have occurred and be
continuing a default in any payment with respect to Senior Debt, or an event of
default with respect to any Senior Debt resulting in the acceleration of the
maturity thereof, or if any judicial proceeding shall be pending with respect to
any such default.
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every
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obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the acquisition
of property, assets or businesses; (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person; (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business); (v) every capital lease obligation of such Person;
and (vi) every guarantee of or responsibility or liability for, direct or
indirect, as obligor or otherwise of (a) any obligation of the types referred to
in clauses (i) through (v) of another Person or (b) the payment of any dividends
of another Person.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to Texas Instruments whether or not
such claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the QUIDS or to other Debt which is pari passu
with, or subordinated to, the QUIDS; provided, however, that Senior Debt shall
not be deemed to include:
(i) any Debt of Texas Instruments which when incurred and without
respect to any election under Section 1111 (b) of the Bankruptcy Code, was
without recourse to Texas Instruments,
(ii) any Debt of Texas Instruments to any of its subsidiaries,
(iii) Debt to any employee of Texas Instruments,
(iv) any liability for taxes, and
(v) indebtedness or monetary obligations to trade creditors or assumed
by Texas Instruments or any of its subsidiaries in the ordinary course of
business in connection with the obtaining of materials or services.
Senior Debt includes the 2 3/4% Convertible Subordinated Debentures due 2002 of
Texas Instruments.
The Indenture places no limitation on the amount of additional Senior Debt
that may be incurred by Texas Instruments.
The Indenture provides that the foregoing subordination provisions, insofar
as they relate to any particular issue of QUIDS, may be changed prior to such
issuance. Any such change would be described in the applicable Prospectus
Supplement.
GOVERNING LAW
The Indenture and the QUIDS will be governed by and construed in accordance
with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of QUIDS, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The Debenture Trustee is not required to expend or risk its own funds
or otherwise incur personal financial liability in the performance of its duties
if the Debenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
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DESCRIPTION OF CORRESPONDING QUIDS
The Corresponding QUIDS are to be issued in one or more series under the
Indenture with terms corresponding to the terms of the related QUIPS. See
"Description of QUIDS". This summary of certain terms and provisions of, or
relating to, Corresponding QUIDS and the Indenture does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the Indenture, the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and to the Trust Indenture Act.
Whenever particular defined terms of the Indenture (as supplemented or amended
from time to time) are referred to herein or in a Prospectus Supplement, such
defined terms are incorporated herein or therein by reference.
GENERAL
Concurrently with the issuance of the QUIPS, the Issuer will invest the
proceeds thereof and the consideration paid by Texas Instruments for the Common
Securities in a series of Corresponding QUIDS issued by Texas Instruments to the
Issuer. Each series of Corresponding QUIDS will be in the principal amount equal
to the aggregate stated Liquidation Amount of the related QUIPS plus Texas
Instruments' concurrent investment in the Common Securities and will rank pari
passu with all other series of QUIDS. The Corresponding QUIDS will be unsecured
and subordinate and junior in right of payment to the extent and in the manner
set forth in the Indenture to all Senior Debt of Texas Instruments. See
"Description of QUIDS -- Subordination" and the Prospectus Supplement relating
to any offering of related QUIPS.
OPTIONAL REDEMPTION
Unless otherwise specified in the applicable Prospectus Supplement, Texas
Instruments may, at its option, redeem the Corresponding QUIDS of any series in
whole at any time or in part from time to time. Except as otherwise set forth in
the applicable Prospectus Supplement, the redemption price for any Corresponding
QUIDS so redeemed shall be equal to any accrued and unpaid interest thereon to
the date fixed for redemption, plus the principal amount thereof. See
"Description of QUIDS -- Redemption".
If a Special Event in respect of an Issuer shall occur and be continuing,
Texas Instruments may, at its option, redeem the Corresponding QUIDS at any time
within 90 days of the occurrence of such Special Event, in whole but not in
part, subject to the provisions of the Indenture. The redemption price for any
Corresponding QUIDS shall be equal to 100% of the principal amount of such
Corresponding QUIDS then outstanding plus accrued and unpaid interest to the
date fixed for redemption.
For so long as the Issuer is the holder of all the outstanding series of
Corresponding QUIDS, the proceeds of any such redemption will be used by the
Issuer to redeem the corresponding QUIPS in accordance with their terms. Texas
Instruments may not redeem a series of Corresponding QUIDS in part unless all
accrued and unpaid interest has been paid in full on all outstanding
Corresponding QUIDS of such series for all interest periods terminating on or
prior to the Redemption Date.
CERTAIN COVENANTS OF TEXAS INSTRUMENTS
Texas Instruments will covenant in the Guarantee as to each series of
Corresponding QUIDS that if and so long as (i) the Issuer is the holder of all
such Corresponding QUIDS, (ii) a Tax Event in respect of the Issuer has occurred
and is continuing and (iii) Texas Instruments has elected, and has not revoked
such election, to pay Additional Sums in respect of such QUIPS and Common
Securities, Texas Instruments will pay to the Issuer such Additional Sums. Texas
Instruments will also covenant, as to each series of Corresponding QUIDS, that
it will not, and will not permit any subsidiary of Texas Instruments to, (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire,
or make a liquidation payment with respect to, any of Texas Instruments' capital
stock or (ii) make any payment of principal, interest or premium, if any, on or
repay or repurchase or redeem any debt securities (including other Corresponding
QUIDS) that rank pari passu with or junior in interest to the Corresponding
QUIDS or make any guarantee payments with respect to the foregoing (other than
(a) dividends or distributions in Common Stock of Texas Instruments, (b)
redemptions or purchases of any rights pursuant to Shareholders Rights Plan, or
any successor to such
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Shareholders Rights Plan, and the declaration of a dividend of such rights or
the issuance of Preferred Stock under such plans in the future, (c) payments
under the Guarantee, (d) purchases of Common Stock related to the issuance of
Common Stock under any of Texas Instruments' benefit plans for its directors,
officers or employees and (e) purchases of Common Stock required to prevent the
loss or secure the renewal or reinstatement of any government license or
franchise held by Texas Instruments or any of its subsidiaries) if at such time
(i) there shall have occurred any event of which Texas Instruments has actual
knowledge that (a) with the giving of notice or the lapse of time, or both,
would constitute an "Event of Default" under the Indenture with respect to
Corresponding QUIDS of such series and (b) in respect of which Texas Instruments
shall not have taken reasonable steps to cure, (ii) Texas Instruments shall be
in default with respect to its payment of any obligations under the Guarantee or
(iii) Texas Instruments shall have given notice of its selection of an Extension
Period as provided in the Indenture with respect to Corresponding QUIDS of such
series and shall not have rescinded such notice, or such Extension Period, or
any extension thereof, shall be continuing. Texas Instruments will also
covenant, as to each series of Corresponding QUIDS, (i) to maintain directly or
indirectly 100% ownership of the Common Securities, provided that certain
successors which are permitted pursuant to the Indenture may succeed to Texas
Instruments' ownership of the Common Securities, (ii) not to voluntarily
terminate, wind-up or liquidate the Issuer, except (a) in connection with a
distribution of Corresponding QUIDS to the holders of the QUIPS in liquidation
of the Issuer or (b) in connection with certain mergers, consolidations or
amalgamations permitted by the Trust Agreement, (iii) if applicable, to maintain
the reservation for issuance of the number of shares of Texas Instruments Common
Stock that would be required from time to time upon the conversion of all the
QUIDS then outstanding, (iv) to use its reasonable efforts, consistent with the
terms and provisions of the Trust Agreement, to cause the Issuer to remain
classified as a grantor trust and not as an association taxable as a corporation
for United States federal income tax purposes and (v) if so provided in the
Prospectus Supplement relating to the particular series of QUIPS being offered
thereby, to deliver shares of Texas Instruments Common Stock upon an election by
the holders of such QUIPS to convert such series of QUIDS.
As part of the Guarantee, if applicable, Texas Instruments will agree that
it will honor all obligations described therein relating to the conversion or
exchange of the QUIPS into or for Texas Instruments Common Stock or QUIDS.
RELATIONSHIP AMONG THE QUIPS, THE CORRESPONDING QUIDS
AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the QUIPS (to the extent
the Issuer has funds available for the payment of such Distributions) are
irrevocably guaranteed by Texas Instruments as and to the extent set forth under
"Description of Guarantee". Taken together, Texas Instruments' obligations under
each series of QUIDS, the Indenture, the Trust Agreement, the Expense Agreement
and the Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the related series of QUIPS. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Issuer's obligations under the QUIPS. If and to the extent that Texas
Instruments does not make payments on any series of Corresponding QUIDS, the
Issuer will not pay Distributions or other amounts due on related QUIPS. The
Guarantee does not cover payment of Distributions when the Issuer does not have
sufficient funds to pay such Distributions. In such event, a holder of a series
of QUIPS may institute a legal proceeding directly against Texas Instruments to
enforce payment of such Distributions to such holder after the respective due
dates. The obligations of Texas Instruments under the Guarantee are subordinate
and junior in right of payment to all Senior Debt of Texas Instruments.
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SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
each series of Corresponding QUIDS, such payments will be sufficient to cover
Distributions and other payments due on the related QUIPS, primarily because (i)
the aggregate principal amount of each series of Corresponding QUIDS will be
equal to the sum of the aggregate stated Liquidation Amount of the related QUIPS
and related Common Securities; (ii) the interest rate and interest and other
payment dates on each series of Corresponding QUIDS will match the Distribution
rate and Distribution and other payment dates for the related QUIPS; (iii) Texas
Instruments shall pay for all and any costs, expenses and liabilities of the
Issuer except the Issuer's obligations to holders of its QUIPS under such QUIPS;
and (iv) the Trust Agreement further provides that the Issuer will not engage in
any activity that is not consistent with the limited purposes of the Issuer.
Notwithstanding anything to the contrary in the Indenture, Texas
Instruments has the right to set-off any payment it is otherwise required to
make thereunder with and to the extent Texas Instruments has theretofore made,
or is concurrently on the date of such payment making, a payment under the
Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF QUIPS
A holder of any related QUIPS may institute a legal proceeding directly
against Texas Instruments to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
or any other person or entity.
A default or event of default under any Senior Debt of Texas Instruments
will not constitute a default or Event of Default under the Indenture. However,
in the event of payment defaults under, or acceleration of, Senior Debt of Texas
Instruments, the subordination provisions of the Indenture provide that no
Payments may be made in respect of the Corresponding QUIDS until such Senior
Debt has been paid in full or any payment default thereunder has been cured or
waived. Failure to make required payments on any series of Corresponding QUIDS
would constitute an Event of Default under the Indenture.
LIMITED PURPOSE OF ISSUER
The QUIPS evidence a beneficial interest in the Issuer, and the Issuer
exists for the sole purpose of issuing its QUIPS and Common Securities and
investing the proceeds thereof in Corresponding QUIDS. A principal difference
between the rights of a holder of a QUIPS and a holder of a Corresponding QUIDS
is that a holder of a Corresponding QUIDS is entitled to receive from Texas
Instruments the principal amount of and interest accrued on Corresponding QUIDS
held, while a holder of QUIPS is entitled to receive Distributions from the
Issuer (or from Texas Instruments under the applicable Guarantee) if and to the
extent the Issuer has funds available for the payment of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
the Issuer involving the liquidation of the Corresponding QUIDS, the holders of
the related QUIPS will be entitled to receive, out of assets held by the Issuer,
the Liquidation Distribution in cash. See "Description of QUIPS -- Liquidation
Distribution Upon Termination". Upon any voluntary or involuntary liquidation or
bankruptcy of Texas Instruments, the Property Trustee, as holder of the
Corresponding QUIDS, would be a subordinated creditor of Texas Instruments,
subordinated in right of payment to all Senior Debt, but entitled to receive
payment in full of principal and interest before any stockholders of Texas
Instruments receive payments or distributions. Since Texas Instruments is the
guarantor under the Guarantee and has agreed to pay for all costs, expenses and
liabilities of the Issuer (other than the Issuer's obligations to the holders of
its QUIPS), the positions of a holder of such QUIPS and a holder of such
Corresponding QUIDS relative to other creditors and to stockholders of Texas
Instruments in the event of liquidation or bankruptcy of Texas Instruments would
be substantially the same.
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DESCRIPTION OF TEXAS INSTRUMENTS CAPITAL STOCK
GENERAL
The authorized capital stock of Texas Instruments consists of 500,000,000
shares of Texas Instruments Common Stock and 10,000,000 shares of Preferred
Stock, par value $25.00 per share (the "Preferred Stock"). As of March 31, 1996,
there were issued 189,626,360 shares of Texas Instruments Common Stock, of which
140,725 were treasury shares and 189,485,635 were outstanding, and Texas
Instruments had no Preferred Stock issued or outstanding.
The following summary of the terms of Texas Instruments' capital stock does
not purport to be complete and is qualified in its entirety by reference to the
applicable provisions of Delaware law and Texas Instruments' Restated
Certificate of Incorporation, as amended (the "Charter").
TEXAS INSTRUMENTS COMMON STOCK
The holders of shares of Texas Instruments Common Stock, subject to the
preferential rights of the holders of any shares of Preferred Stock of Texas
Instruments, are entitled to dividends when and as declared by the Board of
Directors. The holders of the Texas Instruments Common Stock have one vote per
share on all matters submitted to a vote of the shareholders, and the right to
the net assets of Texas Instruments in liquidation after payment of any amounts
due to creditors and in respect of any Preferred Stock of Texas Instruments.
Holders of shares of Texas Instruments Common Stock are not entitled as a matter
of right to any preemptive or subscription rights and are not entitled to
cumulative voting for directors. All outstanding shares of Texas Instruments
Common Stock are, and the shares of Texas Instruments Common Stock issued
hereunder upon any conversion of QUIDS will be, fully paid and nonassessable.
The By-Laws of Texas Instruments provide that the annual meeting of
shareholders shall be held on such day in the month of April of each year as is
designated by the Board of Directors and as stated in a written notice, which
notice is mailed or delivered to each shareholder at least 10 days prior to any
shareholder meeting.
Texas Instruments is authorized to issue additional shares of common stock
without further stockholder approval (except as may be required by applicable
law or stock exchange regulations).
The Transfer Agent and Registrar for Texas Instruments Common Stock is
Harris Trust and Savings Bank, 311 West Monroe Street, Chicago, Illinois 60690.
PREFERRED STOCK
Under the Charter, Texas Instruments is authorized to issue up to
10,000,000 shares of Preferred Stock, in one or more series, with such
designations and such relative voting, dividend, liquidation, conversion and
other rights, preferences and limitations as are stated in the Charter or any
Certificate of Designation establishing such series adopted by the Board of
Directors of Texas Instruments. The 10,000,000 authorized but unissued shares of
Preferred Stock may be issued pursuant to resolution of the Board of Directors
without the vote of the holders of any capital stock of Texas Instruments.
Shares of Preferred Stock of Texas Instruments may be issued in one or more
series and the shares of all series will rank pari passu and be identical in all
respects, except that with respect to each series the Board of Directors may
fix, among other things: the rate of dividends payable thereon; the time and
prices of redemption; the amount payable upon voluntary liquidation; the
retirement or sinking fund, if any; the conversion rights, if any; the voting
rights, if any, in addition to the voting right described below; the
restrictions, if any, upon creation of indebtedness of Texas Instruments, or any
subsidiary thereof, or the issuance of stock ranking on a parity with or senior
to the shares of Preferred Stock either as to dividends or upon liquidation; the
restrictions, if any, on the payment of dividends upon, or on the acquisition
of, the Texas Instruments Common Stock or upon any other class or classes of
stock of Texas Instruments (other than Preferred Stock) ranking on a parity with
or junior to the shares of Preferred Stock either as to dividends or upon
liquidation; and the number of shares to comprise such series. Each series of
Preferred Stock will be
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entitled to receive an amount payable upon liquidation, dissolution or winding
up, fixed for each series, plus all dividends accumulated to the date of final
distribution, before any payment or distribution of assets of Texas Instruments
is made on Texas Instruments Common Stock. Shares of Preferred Stock that have
been issued and reacquired in any manner by Texas Instruments (including shares
redeemed, shares purchased and retired and shares that have been converted into
shares of another series or class) may be reissued as part of the same or
another series of Preferred Stock.
SHAREHOLDERS RIGHTS PLAN
In June 1988, the Board of Directors of Texas Instruments adopted a
Shareholders Rights Plan and declared a dividend distribution of one preferred
share purchase right (a "Right") for each outstanding share of Texas Instruments
Common Stock. As a result of a two-for-one stock split announced June 15, 1995,
half a Right is attached to each outstanding share of Texas Instruments Common
Stock. When exercisable, each Right entitles the registered holder to purchase
from Texas Instruments a unit consisting of one one-hundredth of a share (a
"Unit") of Participating Cumulative Preferred Stock, par value $25.00 per share
(the "Cumulative Preferred Stock"), at a purchase price (the "Purchase Price")
of $200 per Unit, subject to adjustment. The description and terms of the Rights
are set forth in the Rights Agreement between Texas Instruments and Harris Trust
and Savings Bank, as Rights Agent. The Rights Agreement contains provisions that
could have the effect of delaying, deferring or preventing a merger, tender
offer or other takeover attempt of Texas Instruments.
The Rights are attached to all outstanding shares of Texas Instruments
Common Stock, and no separate Rights certificates will be distributed. The
Rights will separate from the Texas Instruments Common Stock and a Distribution
Date will occur upon the earlier of: (i) 10 days following the date (the "Stock
Acquisition Date") of any public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired beneficial
ownership of 20% or more of the outstanding shares of Texas Instruments Common
Stock, or (ii) 10 business days following the commencement of a tender offer or
exchange offer that would result in a person or group becoming an Acquiring
Person. Until the Distribution Date (or earlier redemption or expiration of the
Rights), (i) the Rights will be evidenced by the Texas Instruments Common Stock
certificates and will be transferred with and only with such Texas Instruments
Common Stock certificates, (ii) new Texas Instruments Common Stock certificates
issued after June 30, 1988 will contain a notation incorporating the Rights
Agreement by reference, and (iii) the surrender for transfer of any certificates
for Texas Instruments Common Stock will also constitute the transfer of the
Rights associated with the Texas Instruments Common Stock represented by such
certificates.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on June 17, 1998 unless previously redeemed by Texas
Instruments as described below.
As soon as practicable after the Distribution Date, Rights certificates
will be mailed to holders of record of Texas Instruments Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, with certain exceptions, only shares of Texas
Instruments Common Stock issued prior to the Distribution Date will be issued
with Rights.
In the event that any person becomes an Acquiring Person, proper provision
will be made so that each holder of a Right, other than Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by an Acquiring Person (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of shares of
Texas Instruments Common Stock having a market value of two times the Purchase
Price of the Right. In the event that, at any time following the Stock
Acquisition Date, (i) Texas Instruments is acquired in a merger or other
business combination transaction or (ii) 50% or more of Texas Instruments'
assets or earning power is sold, each holder of a Right shall thereafter have
the right to receive, upon exercise, Texas Instruments Common Stock of the
acquiring company having a value equal to two times the Purchase Price of the
Right. The events described in this paragraph are referred to as "Triggering
Events."
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The Purchase Price payable, and the number of Units of Cumulative Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Cumulative Preferred Stock, (ii) if holders of the Cumulative Preferred Stock
are granted certain rights or warrants to subscribe for Cumulative Preferred
Stock or convertible securities at less than the current market price of the
Cumulative Preferred Stock, or (iii) upon the distribution to holders of the
Cumulative Preferred Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Cumulative Preferred Stock on
the last trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a price of $.01
per Right by the Board of Directors at any time until the tenth day after the
Stock Acquisition Date (or such later date as a majority of the Continuing
Directors (as defined below) then in office may determine). Under certain
circumstances set forth in the Rights Agreement, the decision to redeem shall
require the concurrence of a majority of the Continuing Directors. Immediately
upon the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and thereafter the only right of the holders of Rights
will be to receive the redemption price.
The term "Continuing Director" means (i) any member of the Board of
Directors who was a member of the Board prior to the time the Acquiring Person
becomes such, and (ii) any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Continuing
Directors. Continuing Directors do not include an Acquiring Person, or an
affiliate or associate of an Acquiring Person, or any representative of the
foregoing entities.
Until a Right is exercised, the holder will have no rights as a shareholder
of Texas Instruments (beyond those as an existing shareholder), including the
right to vote or to receive dividends.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of Texas Instruments prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, to correct or supplement any provision
contained therein which may be defective or inconsistent with any other
provisions, to make changes which do not adversely affect the interests of
holders of Rights or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that the Rights Agreement may not be amended to
lengthen (i) a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable or (ii) any other time period unless
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or benefits to, the holders of Rights.
PLAN OF DISTRIBUTION
The Offered Securities may be sold in a public offering to or through
underwriters or dealers designated from time to time. Texas Instruments and the
Issuer may sell the Offered Securities as soon as practicable after
effectiveness of the Registration Statement of which the Prospectus is a part.
The names of any underwriters or dealers involved in the sale of the Offered
Securities in respect of which this Prospectus is delivered, the amount or
number of Offered Securities to be purchased by any such underwriters and any
applicable commissions or discounts will be set forth in the Prospectus
Supplement.
Underwriters may offer and sell Offered Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. In connection with the sale of QUIPS, underwriters may be
deemed to have received compensation from Texas Instruments and/or the Issuer in
the form of underwriting discounts or commissions and may also receive
commissions. Underwriters may sell Offered Securities to or through
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dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters.
Any underwriting compensation paid by Texas Instruments and/or the Issuer
to underwriters in connection with the offering of Offered Securities, and any
discounts, concessions or commissions allowed by such underwriters to
participating dealers, will be described in a Prospectus Supplement.
Underwriters and dealers participating in the distribution of Offered Securities
may be deemed to be underwriters, and any discounts and commissions received by
them and any profit realized by them on resale of such Offered Securities may be
deemed to be underwriting discounts and commissions, under the Securities Act.
Underwriters and dealers may be entitled, under agreement with Texas Instruments
and the Issuer, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act, and to
reimbursement by Texas Instruments for certain expenses.
In connection with the offering of the QUIPS, the Issuer may grant to the
underwriters an option to purchase additional QUIPS to cover over-allotments, if
any, at the initial public offering price (with an additional underwriting
commission), as may be set forth in the accompanying Prospectus Supplement. If
the Issuer grants any over-allotment option, the terms of such over-allotment
option will be set forth in the Prospectus Supplement for such QUIPS.
Underwriters and dealers may engage in transactions with, or perform
services for, Texas Instruments and/or the Issuer and/or any of their affiliates
in the ordinary course of business.
The Offered Securities will be new issues of securities and will have no
established trading market. Any underwriters to whom Offered Securities are sold
for public offering and sale may make a market in such Offered Securities, but
such underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. Such Offered Securities may or may not be
listed on a national securities exchange or the New York Stock Exchange, as set
forth in the applicable Prospectus Supplement. No assurance can be given as to
the liquidity of or the existence of trading markets for any Offered Securities.
LEGAL OPINIONS
Unless otherwise set forth in the applicable Prospectus Supplement, certain
matters of Delaware law relating to the legality of the QUIPS, the validity of
the Trust Agreement and the formation of the Issuer will be passed upon by
Richards, Layton & Finger, special Delaware counsel to Texas Instruments and the
Issuer. The legality of the Guarantee, the Texas Instruments Common Stock and
the QUIDS will be passed upon for Texas Instruments by Richard J. Agnich, Senior
Vice President, Secretary and General Counsel of Texas Instruments, and for the
Underwriters by Davis Polk & Wardwell, New York, New York. Certain matters
relating to United States federal income tax considerations will be passed upon
for Texas Instruments by Davis Polk & Wardwell.
EXPERTS
The audited consolidated financial statements of Texas Instruments
incorporated herein by reference to Texas Instruments' Annual Report on Form
10-K for the fiscal year ended December 31, 1995 (as amended by the Form 10-K/A
filed June 21, 1996) have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such financial statements are, and audited financial
statements to be included in subsequently filed documents will be, incorporated
herein in reliance upon the reports of Ernst & Young LLP pertaining to such
financial statements (to the extent covered by consents filed with the
Commission) and upon such reports given on the authority of such firm as experts
in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Registration fees................................................................. $137,932
Trustee's fees.................................................................... 8,500
Costs of printing and engraving................................................... 35,000
Legal fees........................................................................ 30,000
Accounting fees................................................................... 30,000
Blue sky fees and expenses........................................................ 25,000
New York Stock Exchange Listing Fee............................................... 58,300
Rating Agency Fees................................................................ 125,000
Miscellaneous..................................................................... 5,268
--------
Total................................................................... $455,000
========
</TABLE>
All amounts estimated except for registration fees.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The General Corporation Law of the State of Delaware, at Section 145,
provides, in pertinent part, that a corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as the
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful. In
addition, the indemnification of expenses (including attorneys' fees) is allowed
in derivative actions, except no indemnification is allowed in respect to any
claim, issue or matter as to which any such person has been adjudged to be
liable to the corporation, unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought decides that
indemnification is proper. To the extent that any such person succeeds on the
merits or otherwise, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith. The determination that the person to be indemnified met the
applicable standard of conduct, if not made by a court, is made by the directors
of the corporation by a majority vote of the directors not party to such an
action, suit or proceeding even though less than a quorum or, if there are no
such directors, or if such directors so direct, by independent legal counsel in
a written opinion or by the stockholders. Expenses may be paid in advance upon
the receipt, in the case of officers and directors, of undertakings to repay
such amount if it shall ultimately be determined that the person is not entitled
to be indemnified by the corporation as authorized in this section. A
corporation may purchase indemnity insurance.
The above described indemnification and advancement of expenses, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and inure to the benefit of
such person's heirs, executors and administrators.
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Article VI, Section 2 of the Texas Instruments' By-laws provides that Texas
Instruments shall indemnify its officers and directors for such expenses,
judgments, fines and amounts paid in settlement to the full extent permitted by
the laws of the State of Delaware.
Section 102(b)(7) of the Delaware General Corporation Law, as amended,
permits a corporation to provide in its certificate of incorporation that a
director of the corporation shall not be personally liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit. Article Seventh of Texas Instruments' Restated Certificate of
Incorporation contains such a provision.
Under insurance policies of Texas Instruments, directors and officers of
Texas Instruments may be indemnified against certain losses arising from certain
claims, including claims under the Securities Act of 1933, which may be made
against such persons by reason of their being such directors or officers.
See the form of proposed Underwriting Agreement filed as Exhibit 1 for
certain indemnification provisions.
Under the Trust Agreement, Texas Instruments will agree to indemnify each
of the Trustees of Texas Instruments Financial Trust or any predecessor Trustee
for Texas Instruments Financial Trust, and to hold each of the Trustees harmless
against, any loss, damage, claims, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the Trust Agreement, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties under the Trust
Agreement.
ITEM 16. EXHIBITS
<TABLE>
<S> <C> <C>
Exhibit 1 -- Form of proposed Underwriting Agreement (to be filed as an Exhibit to a
Current Report on Form 8-K and incorporated herein by reference).
Exhibit -- Form of Junior Subordinated Indenture dated as of , 1996
4(a) between the Company and The First National Bank of Chicago, as Debenture
Trustee.
Exhibit -- Certificate of Trust of Texas Instruments Financial Trust.
4(b)
Exhibit -- Trust Agreement of Texas Instruments Financial Trust.
4(c)
Exhibit -- Form of Amended and Restated Trust Agreement of Texas Instruments Financial
4(d) Trust.
Exhibit -- Form of Preferred Security Certificate for Texas Instruments Financial Trust
4(e) (included as Exhibit E of Exhibit 4(d) hereto).
Exhibit -- Form of Guarantee Agreement.
4(f)
Exhibit -- Rights Agreement dated as of June 17, 1988 between Texas Instruments
4(g) Incorporated and Harris Trust and Savings Bank, as successor to Morgan
Shareholder Services Trust Company (incorporated by reference to Exhibits 1
and 2 to Texas Instruments' Report on Form 8-A, dated June 21, 1988).
Exhibit -- Form of Supplemental Indenture between Texas Instruments and The First
4(h) National Bank of Chicago, as Debenture Trustee (to be filed as an Exhibit to
a Current Report on Form 8-K and incorporated herein by reference).
Exhibit -- Opinion of Richard J. Agnich, Esq., relating to the legality of the
5(a) Guarantee, the Common Stock and the Junior Subordinated Deferrable Interest
Debentures (to be filed as an Exhibit to a Current Report on Form 8-K and
incorporated herein by reference).
</TABLE>
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<TABLE>
<S> <C> <C>
Exhibit -- Opinion of Richards, Layton & Finger, special Delaware counsel, relating to
5(b) the legality of the Preferred Securities of Texas Instruments Financial Trust
(to be filed as an Exhibit to a Current Report on Form 8-K and incorporated
herein by reference).
Exhibit 8 -- Opinion of Davis Polk & Wardwell as to certain United States federal income
tax matters (to be filed as an Exhibit to a Current Report on Form 8-K and
incorporated herein by reference).
Exhibit 12 -- Computation of Ratio of Earnings to Fixed Charges (incorporated by reference
to Exhibit 12 to Texas Instruments' Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996).
Exhibit -- Consent of Independent Public Accountants.
23(a)
Exhibit -- Consent of Richard J. Agnich, Esq. (to be included in Exhibit 5(a)).
23(b)
Exhibit -- Consent of Richards, Layton & Finger, special Delaware counsel (to be
23(c) included in Exhibit 5(b)).
Exhibit -- Consent of Davis Polk & Wardwell (to be included in Exhibit 8).
23(d)
Exhibit 24 -- Powers of Attorney for the Directors of the Company.
Exhibit -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture
25(a) Act of 1939 of The First National Bank of Chicago, as Trustee for the Junior
Subordinated Indenture and as Guarantee Trustee for the Guarantee for Texas
Instruments Financial Trust.
Exhibit -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture
25(b) Act of 1939 of The First National Bank of Chicago, as Property Trustee for
the Amended and Restated Trust Agreement of Texas Instruments Financial
Trust.
</TABLE>
ITEM 17. UNDERTAKINGS. The Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that the undertakings set forth in paragraph (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrants pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The Registrants hereby further undertake that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Registrants'
annual reports pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee
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benefit plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) 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
of 1933 may be permitted to trustees, directors, officers and controlling
persons of the Registrants pursuant to the provisions set forth or described in
Item 15 of this registration statement, or otherwise (but that term shall not
include the insurance policies referred to in Item 15), the Registrants have
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrants of expenses incurred or paid by a trustee, director, officer or
controlling person of the Registrants in the successful defense of any action,
suit or proceeding) is asserted against the Registrants by such trustee,
director, officer or controlling person, in connection with the securities
registered hereby, the Registrants will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-4
<PAGE> 41
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Texas
Instruments certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dallas, State of Texas, on the 28th day of June,
1996.
TEXAS INSTRUMENTS INCORPORATED
By: /s/ WILLIAM A. AYLESWORTH
------------------------------------
William A. Aylesworth
Senior Vice President, Treasurer and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 28th day of June, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- - - - ----------------------------------------------- --------------------------------------------
<C> <S>
/s/ JAMES R. ADAMS* Chairman of the Board; Director
- - - - -----------------------------------------------
James R. Adams
/s/ DAVID L. BOREN* Director
- - - - -----------------------------------------------
David L. Boren
/s/ JAMES B. BUSEY IV* Director
- - - - -----------------------------------------------
James B. Busey IV
/s/ THOMAS J. ENGIBOUS* President; Chief Executive Officer; Director
- - - - -----------------------------------------------
Thomas J. Engibous
/s/ GERALD W. FRONTERHOUSE* Director
- - - - -----------------------------------------------
Gerald W. Fronterhouse
/s/ DAVID R. GOODE* Director
- - - - -----------------------------------------------
David R. Goode
/s/ WILLIAM S. LEE* Director
- - - - -----------------------------------------------
William S. Lee
/s/ WILLIAM B. MITCHELL* Vice Chairman; Director
- - - - -----------------------------------------------
William B. Mitchell
/s/ GLORIA M. SHATTO* Director
- - - - -----------------------------------------------
Gloria M. Shatto
/s/ WILLIAM P. WEBER* Vice Chairman; Director
- - - - -----------------------------------------------
William P. Weber
Director
- - - - -----------------------------------------------
Clayton K. Yeutter
</TABLE>
II-5
<PAGE> 42
<TABLE>
<CAPTION>
SIGNATURE TITLE
- - - - ----------------------------------------------- --------------------------------------------
<C> <S>
/s/ WILLIAM A. AYLESWORTH Senior Vice President; Treasurer; Chief
- - - - ----------------------------------------------- Financial Officer
William A. Aylesworth
/s/ MARVIN M. LANE, JR.* Vice President; Corporate Controller
- - - - -----------------------------------------------
Marvin M. Lane, Jr.
*By: /s/ WILLIAM A. AYLESWORTH
- - - - -----------------------------------------------
William A. Aylesworth
Attorney-in-Fact
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, Texas
Instruments Financial Trust certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dallas, State of Texas, on the 28th
day of June, 1996.
TEXAS INSTRUMENTS FINANCIAL TRUST
(Registrant)
By: Texas Instruments Incorporated,
as Depositor
By: /s/ WILLIAM A. AYLESWORTH
----------------------------------
William A. Aylesworth
Senior Vice President, Treasurer
and
Chief Financial Officer
II-6
<PAGE> 43
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- - - - --------------
<S> <C> <C>
Exhibit 1 -- Form of proposed Underwriting Agreement (to be filed as an Exhibit to a
Current Report on Form 8-K and incorporated herein by reference).
Exhibit 4(a) -- Form of Junior Subordinated Indenture dated as of , 1996 between
the Company and The First National Bank of Chicago, as Debenture Trustee.
Exhibit 4(b) -- Certificate of Trust of Texas Instruments Financial Trust.
Exhibit 4(c) -- Trust Agreement of Texas Instruments Financial Trust.
Exhibit 4(d) -- Form of Amended and Restated Trust Agreement for Texas Instruments Financial
Trust.
Exhibit 4(e) -- Form of Preferred Security Certificate for Texas Instruments Financial Trust
(included as Exhibit E of Exhibit 4(d) hereto).
Exhibit 4(f) -- Form of Guarantee Agreement.
Exhibit 4(g) -- Rights Agreement dated as of June 17, 1988 between Texas Instruments
Incorporated and Harris Trust and Savings Bank, as successor to Morgan
Shareholder Services Trust Company (incorporated by reference to Exhibits 1
and 2 to Texas Instruments' Report on Form 8-A, dated June 21, 1988).
Exhibit 4(h) -- Form of Supplemental Indenture between Texas Instruments and The First
National Bank of Chicago, as Debenture Trustee (to be filed as an Exhibit to
a Current Report on Form 8-K and incorporated herein by reference).
Exhibit 5(a) -- Opinion of Richard J. Agnich, Esq., relating to the legality of the
Guarantee, the Common Stock and the Junior Subordinated Deferrable Interest
Debentures (to be filed as an Exhibit to a Current Report on Form 8-K and
incorporated herein by reference).
Exhibit 5(b) -- Opinion of Richards, Layton & Finger, special Delaware counsel, relating to
the legality of the Preferred Securities of Texas Instruments Financial
Trust (to be filed as an Exhibit to a Current Report on Form 8-K and
incorporated herein by reference).
Exhibit 8 -- Opinion of Davis Polk & Wardwell as to certain United States federal income
tax matters (to be filed as an Exhibit to a Current Report on Form 8-K and
incorporated herein by reference).
Exhibit 12 -- Computation of Ratio of Earnings to Fixed Charges (incorporated by reference
to Exhibit 12 to Texas Instruments' Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996).
Exhibit 23(a) -- Consent of Independent Public Accountants.
Exhibit 23(b) -- Consent of Richard J. Agnich, Esq. (to be included in Exhibit 5(a)).
Exhibit 23(c) -- Consent of Richards, Layton & Finger, special Delaware counsel (to be
included in Exhibit 5(b)).
Exhibit 23(d) -- Consent of Davis Polk & Wardwell (to be included in Exhibit 8).
Exhibit 24 -- Powers of Attorney for the Directors of the Company.
Exhibit 25(a) -- Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of The First National Bank of Chicago, as Trustee for
the Junior Subordinated Indenture and as Guarantee Trustee for the Guarantee
for Texas Instruments Financial Trust.
Exhibit 25(b) -- Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of The First National Bank of Chicago, as Property
Trustee for the Amended and Restated Trust Agreement of Texas Instruments
Financial Trust.
</TABLE>
<PAGE> 1
EXHIBIT 4(a)
- - - - --------------------------------------------------------------------------------
TEXAS INSTRUMENTS INCORPORATED
to
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
JUNIOR SUBORDINATED INDENTURE
Dated as of _______ __, 1996
- - - - --------------------------------------------------------------------------------
<PAGE> 2
TEXAS INSTRUMENTS INCORPORATED
Reconciliation and tie between the Trust Indenture Act of 1939 (including
cross-references to provisions of Sections 310 to and including 317 which,
pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended by
the Trust Reform Act of 1990, are a part of and govern the Indenture whether or
not physically contained therein) and the Junior Subordinated Indenture, dated
as of ________ __, 1996.
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
Section 310(a)(1), (2) and (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13(b)
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(a)(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(a)(2)
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(a), 7.03(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(c)
Section 314(a)(1), (2) and (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.04
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.06
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.02
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(a)(6)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(c)
(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(a)(1)
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
(d)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(c)(2)
(d)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(c)(3)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.14
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.12
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.08
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.04(f)
Section 317 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03
Section 318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.07
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Junior Subordinated Indenture.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Compliance Certificate and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 1.03. Forms of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 1.04. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.05. Notices, Etc. to Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 1.06. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 1.07. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.08. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.09. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.10. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.11. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.12. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.13. Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 2
DEBENTURE FORM
SECTION 2.01. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.02. Form of Face of Debenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.03. Form of Reverse of Debenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.04. Additional Provisions Required in Global Debenture . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.05. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 3
THE DEBENTURES
SECTION 3.01. Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.02. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.03. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.04. Temporary Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.05. Registration, Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Debentures . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.07. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.08. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.09. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.10. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.11. Deferrals of Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
i
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 3.12. Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.13. Agreed Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.14. Cusip Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.02. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.03. Satisfaction, Discharge and Defeasance of Debentures of Any Series . . . . . . . . . . . . . 33
ARTICLE 5
REMEDIES
SECTION 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . . . 37
SECTION 5.04. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.05. Trustee May Enforce Claim Without Possession of Debentures . . . . . . . . . . . . . . . . . 39
SECTION 5.06. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.07. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.08. Unconditional Right of Holders to Receive Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.09. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.10. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.11. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.12. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.13. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.14. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.15. Waiver of Usury, Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE 6
THE TRUSTEE
SECTION 6.01. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.02. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.03. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.04. Not Responsible for Recitals or Issuance of Debentures . . . . . . . . . . . . . . . . . . . 46
SECTION 6.05. May Hold Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.06. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.07. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.08. Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.09. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
</TABLE>
ii
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 6.10. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.11. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . 50
SECTION 6.13. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.14. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders . . . . . . . . . . . . . . . . . . 52
SECTION 7.02. Preservation of Information; Communications to Holders . . . . . . . . . . . . . . . . . . . 53
SECTION 7.03. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 7.04. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.02. Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . 55
SECTION 9.02. Supplemental Indentures with Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 9.03. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 9.04. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 9.05. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 9.06. Reference in Debentures to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE 10
COVENANTS
SECTION 10.01. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.02. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.03. Money for Debenture Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.04. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.05. Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.06. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.07. Additional Sums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.08. Additional Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
</TABLE>
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<TABLE>
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ARTICLE 11
REDEMPTION OF DEBENTURES
SECTION 11.01. Applicability of this Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 11.02. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 11.03. Selection of Debentures to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 11.04. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 11.05. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.06. Debentures Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.07. Company's Right of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE 12
SINKING FUNDS
SECTION 12.01. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 12.02. Satisfaction of Sinking Fund Payments With Debentures . . . . . . . . . . . . . . . . . . . 67
SECTION 12.03. Redemption of Debentures for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE 13
SUBORDINATION OF DEBENTURES
SECTION 13.01. Debentures Subordinate to Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 13.02. Payment Over of Proceeds upon Dissolution, Etc . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 13.03. Prior Payment to Senior Debt upon Acceleration of Debentures . . . . . . . . . . . . . . . . 70
SECTION 13.04. No Payment When Senior Debt in Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 13.05. Payment Permitted If No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 13.06. Subrogation to Rights of Holders of Senior Debt . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 13.07. Provisions Solely to Define Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 13.08. Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 13.09. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 13.10. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 13.11. Reliance on Judicial Order or Certificate of Liquidating Agent . . . . . . . . . . . . . . . 73
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 13.13. Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 13.14. Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 13.15. Certain Conversions or Exchanges Deemed Payment . . . . . . . . . . . . . . . . . . . . . . 74
</TABLE>
iv
<PAGE> 8
JUNIOR SUBORDINATED INDENTURE, dated as of ________ __, 1996 between
TEXAS INSTRUMENTS INCORPORATED, a Delaware corporation (hereinafter called the
"Company") having its principal office at 13500 North Central Expressway,
Dallas, Texas 75265, and THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association duly organized and existing under the laws of the United States, as
Trustee (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured junior
subordinated debt securities in series (hereinafter called the "Debentures") of
substantially the tenor hereinafter provided, including, without limitation,
securities issued to evidence loans made to the Company of the proceeds from
the issuance from time to time by a business trust (the "Texas Instruments
Trust") of preferred trust interests in the Texas Instruments Trust (the
"Preferred Securities") and common interests in the Texas Instruments Trust
(the "Common Securities"), and to provide the terms and conditions upon which
the Debentures are to be authenticated, issued and delivered.
All things necessary to make the Debentures, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Debentures by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Debentures or of any
series thereof, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions. For all purpose of this Indenture, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
<PAGE> 9
(c) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with generally
accepted accounting principles, and the term "generally accepted
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles which are
generally accepted at the date or time of such computation; and
(d) the words "herein" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article 6, are defined in that
Article.
"Act", when used with respect to any Holder, has the meaning specified
in Section 1.04.
"Additional Interest" means the interest, if any, that shall accrue on
any interest on the Debentures of any series that is in arrears for more than
one interest payment period or not paid during any Extension Period, which in
either case shall accrue at the rate per annum specified or determined as
specified in such Debenture.
"Additional Sums" has the meaning specified in Section 10.07.
"Additional Taxes" means the sum of any additional taxes, duties and
other governmental charges to which the Texas Instruments Trust has become
subject from time to time as a result of a Tax Event.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Company shall not be deemed to include the Texas Instruments Trust to which
Debentures have been issued. For the purposes of this definition, "control"
when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Debentures of one or more series.
"Board of Directors" means either the board of directors of the
Company or any committee of that board duly authorized to act hereunder.
2
<PAGE> 10
"Board Resolution" means a copy of the resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of the Company to which authority to act on behalf of the Board of Directors
has been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or a day on which the
Corporate Trust Office of the Trustee, or, with respect to the Debentures of a
series issued to the Texas Instruments Trust, the principal office of the
Property Trustee under the Trust Agreement, is closed for business.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
"Common Securities" has the meaning specified in the first recital of
this Indenture.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" and "Company Order" means, respectively, the written
request or order signed in the name of the Company by its Chairman of the
Board, its Vice Chairman, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Controller, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be
administered.
"Corporation" includes corporations, associations, companies and
business trusts.
"Debentures" or "Debenture" means any debt securities or debt
security, as the case may be, authenticated and delivered under this Indenture.
"Debt" means, with respect to any Person, whether recourse is to all
or a portion of the assets of such Person and whether or not contingent, (i)
every obligation of such Person for money borrowed; (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such
3
<PAGE> 11
Person; (iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business); (v) every
capital lease obligation of such Person; and (vi) every obligation of the type
referred to in clauses (i) through (v) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or is responsible or liable, directly or indirectly, as obligor or otherwise.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Depositary" means, with respect to the Debentures of any series
issuable or issued in whole or in part in the form of one or more Global
Debentures, the Person designated as Depositary by the Company pursuant to
Section 3.01 with respect to such series (or any successor thereto).
"Dollar" means the currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debts.
"Establishing Documents" means with respect to Debentures of any
series, the Board Resolution and, if applicable, the other instrument or
instruments executed pursuant thereto and related Officers' Certificate, or the
supplemental Indenture, in which the terms of such Debentures were established.
"Events of Default" has the meaning specified in Article Five subject
to any changes set forth in the Establishing Documents.
"Extension Period" has the meaning specified in Section 3.11.
"Foreign Currency" means any currency issued by the government of one
or more countries other than the United States of America or by any recognized
confederation or association of such governments.
"Global Debenture" means a Debenture in the form prescribed in Section
2.04 evidencing all or part of a series of Debentures, issued to the Depositary
or its nominee for such series, and registered in the name of such Depositary
or its nominee.
"Government Obligations" means, securities which are (i) direct
obligations of the United States of America or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the timely payment of which is unconditionally
guaranteed by the United States of America and which, in either case, are full
faith and credit obligations of the United States of America and are not
callable or redeemable at the option of the issuer thereof and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such
4
<PAGE> 12
Government Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian
in respect of the Government Obligation or the specific payment of interest on
or principal of the Government Obligation evidenced by such depository receipt.
"Holder" means a Person in whose name a Debenture is registered in the
Securities Register.
"Junior Subordinated Payment" has the meaning specified in Section
13.02.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of each particular series of Debentures established
as contemplated by Section 3.01.
"Interest Payment Date" means as to each series of Debentures the
Stated Maturity of an installment of interest on such Debentures.
"Interest Rate" means the rate of interest specified or determined as
specified in each Debenture as being the rate of interest payable on such
Debenture.
"Investment Company Event" means, in respect of the Texas Instruments
Trust, the receipt by the Texas Instruments Trust of an Opinion of Counsel,
rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of the occurrence of a change in law
or regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), the Texas Instruments Trust is or will be considered
an "investment company" that is required to be registered under the 1940 Act,
which Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities of such Texas Instruments Trust.
"Lien" means any mortgage, pledge, lien, security interest or other
encumbrance.
"Maturity" when used with respect to any Debenture, means the date on
which the principal of such Debenture becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call or redemption or otherwise.
"1940 Act" means the Investment Company Act of 1940, as amended.
"Notice of Default" has the meaning specified in Section 5.01(c).
5
<PAGE> 13
"Officers' Certificate" means a certificate signed by (i) the
Chairman, Chief Executive Officer, President or a Vice President, and by (ii)
the Treasurer, an Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, the Texas Instruments Trust, or the Trustee, and who
may be an employee thereof, and who shall be acceptable to the Trustee.
"Original Issue Date" means the date of issuance specified as such in
each Debenture.
"Original Issue Discount Security" means any security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 5.02.
"Outstanding" means, as of the date of determination, all Debentures
theretofore authenticated and delivered under this Indenture, except:
(i) Debentures theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Debentures for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent in trust for the Holders of such Debentures; and
(iii) Debentures in substitution for or in lieu of which
other Debentures have been authenticated and delivered or which have
been paid pursuant to Section 3.06, unless proof satisfactory to the
Trustee is presented that any Debentures are held by Holders in whose
hands such Debentures are valid, binding and legal obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Debentures have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Debentures owned
by the Company or any other obligor upon the Debentures or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Debentures which the Trustee knows to be so owned shall
be so disregarded. Debentures so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such Debentures
and that the pledgee is not the Company or any other obligor upon the
Debentures or any Affiliate of the Company or such other obligor. Upon request
of the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all
6
<PAGE> 14
Debentures, if any, known by the Company to be owned or held by or for the
account of the Company, or any other obligor on the Debentures or any Affiliate
of the Company or such obligor, and, subject to the provisions of Section 6.01,
the Trustee shall be entitled to accept such Officers' Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Debentures not listed therein are Outstanding for the purpose of any such
determination.
"Paying Agent" means the Trustee or any Person authorized by the
Company to pay the principal of or interest on any Debentures on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Place of Payment" means, with respect to the Debentures of any
series, the place or places where the principal of (and premium, if any) and
interest on the Debentures of such series are payable pursuant to Section 3.01
or 3.11.
"Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 3.06 in
lieu of a lost, destroyed or stolen Debenture shall be deemed to evidence the
same debt as the lost, destroyed or stolen Debenture.
"Preferred Securities" has the meaning specified in the first recital
of this Indenture.
"Proceeding" has the meaning specified in Section 13.02.
"Property Trustee" means, in respect of the Texas Instruments Trust,
the commercial bank or trust company identified as the "Property Trustee" in
the Trust Agreement, solely in its capacity as Property Trustee of the Texas
Instruments Trust under the Trust Agreement and not in its individual capacity,
or its successor in interest in such capacity, or any successor property
trustee appointed as therein provided.
"Redemption Date", when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Debentures of a series means, unless otherwise
provided pursuant to Section 3.01 with respect to Debentures of a series, the
date which is fifteen days next preceding such Interest Payment Date (whether
or not a Business Day).
7
<PAGE> 15
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee assigned by the Trustee from time to time to administer
its corporate trust matters, or any other officer to whom such matters may be
referred.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.05.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Debentures or to other Debt which is pari
passu with, or subordinated to, the Debentures, provided, however, that Senior
Debt shall not be deemed to include (a) any Debt of the Company which when
incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Reform Act of 1978, was without recourse to the Company, (b) any
Debt of the Company to any of its Subsidiaries, (c) Debt to any employee of
the Company, (d) any liability for taxes, (e) Debt or other monetary
obligations to trade creditors created or assumed by the Company or any of its
Subsidiaries in the ordinary course of business in connection with the
obtaining of goods, materials or services and (f) the Debentures. Without
limiting the generality of the foregoing, Senior Debt shall include the 2 3/4%
Convertible Subordinated Debentures due 2002 of the Company.
"Special Event" means a Tax Event or an Investment Company Event.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity" when used with respect to any Debenture or any
installment of principal thereof or interest thereon means the date specified
in such Debenture as the fixed date on which the principal of such Debenture or
such installment of interest is due and payable.
"Subsidiary" means any corporation of which at the time of
determination the Company and/or one or more Subsidiaries owns or controls
directly or indirectly more than 50% of the outstanding shares of voting stock.
For purposes of this definition, "voting stock" means stock which has voting
power for the election of directors, whether at all times or only so long as no
senior class of stock has such voting power by reason of any contingency.
8
<PAGE> 16
"Tax Event" means the receipt by the Texas Instruments Trust of an
Opinion of Counsel, rendered by a law firm having a recognized national tax and
securities practice, to the effect that, as a result of any amendment to, or
change (including any announced prospective change) in, the laws, (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein affecting taxation, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the date of issuance of
the Preferred Securities of the Texas Instruments Trust, there is more than an
insubstantial risk that (i) the Texas Instruments Trust is, or will be within
90 days of the date thereof, subject to United States Federal income tax with
respect to income received or accrued on the corresponding series of
Debentures, (ii) interest payable by the Company on the corresponding series of
Debentures is not, or within 90 days of the date thereof will not be,
deductible, in whole or in part, for United States Federal income tax purposes
or (iii) the Texas Instruments Trust is, or will be within 90 days of the date
thereof, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Texas Instruments Common Stock" means common stock, par value $1.00,
of the Company.
"Texas Instruments Guarantee" means the guarantee by the Company of
distributions on the Preferred Securities of the Texas Instruments Trust to the
extent provided in the Guarantee Agreement, substantially in the form attached
hereto as Annex C, or substantially in such form as may be specified as
contemplated by Section 3.01 with respect to the Debentures of any series, in
each case as amended from time to time.
"Texas Instruments Trust" has the meaning specified in the first
recital of this Indenture.
"Trust Agreement" means the Trust Agreement substantially in the form
attached hereto as Annex A, as amended by the form of Amended and Restated
Trust Agreement substantially in the form attached hereto as Annex B, or
substantially in such form as may be specified as contemplated by Section 3.01
with respect to the Debentures of any series, in each case as amended from time
to time.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder
and, if at any time there is more than one such Person, "Trustee" as used with
respect to the Debentures of any series shall mean the Trustee with respect to
Debentures of that series.
9
<PAGE> 17
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbb), as amended and as in effect on the date as of this
Indenture, except as provided in Section 9.05.
"Vice President" when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added
before or after the title "vice president".
SECTION 1.02. Compliance Certificate and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent (including
covenants, compliance with which constitutes a condition precedent), if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent (including covenants compliance with
which constitute a condition precedent), if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.05) shall include:
(a) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 1.03. Forms of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to
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other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given to or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments is or are delivered to the Trustee, and, where
it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01) conclusive in favor of the Trustee and the
Company and any agent of the Trustee or the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a Person acting in other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
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(d) The ownership of Debentures shall be proved by the Securities
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder or any Debenture shall bind every future
Holder of the same Debenture and the Holder of every Debenture issued upon the
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Debenture.
(f) The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to take any action under
this Indenture by vote or consent. Except as otherwise provided herein, such
record date shall be the later of 30 days prior to the first solicitation of
such consent or vote or the date of the most recent list of Holders furnished
to the Trustee pursuant to Section 7.01 prior to such solicitation. If a
record date is fixed, those persons who were Holders at such record date (or
their duly designated proxies), and only those persons, shall be entitled to
take such action by vote or consent or to revoke any vote or consent previously
given, whether or not such persons continue to be Holders after such record
date, provided, however, that unless such vote or consent is obtained from the
Holders (or their duly designated proxies) of the requisite principal amount of
Outstanding Debentures prior to the date which is the 120th day after such
record date, any such vote or consent previously given shall automatically and
without further action by any Holder be canceled and of no further effect.
SECTION 1.05. Notices, Etc. to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given
or furnished to, or filed with
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
or
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose (except as otherwise provided in Section
5.01 hereof) hereunder if in writing and mailed, first class, postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing to the Trustee
by the Company.
SECTION 1.06. Notice to Holders; Waiver. Where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first class postage prepaid, to each Holder affected by such event, at the
address of such Holder as it appears in the Securities Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
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<PAGE> 20
with respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
SECTION 1.07. Conflict with Trust Indenture Act. If any provisions
of this Indenture limits, qualifies or conflicts with the duties imposed by any
of Sections 310 to 317, inclusive, of the Trust Indenture Act through operation
of Section 318(c) thereof, such imposed duties shall control.
SECTION 1.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and agreements
in this Indenture by the Company shall bind its successors and assigns, whether
so expressed or not.
SECTION 1.10. Separability Clause. In case any provision in this
Indenture or in the Debentures shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or
in the Debentures, express or implied, shall give to any Person, other than the
parties thereto, any Paying Agent and their successors and assigns and the
Holders of the Debentures, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 1.12. Governing Law. This Indenture and the Debentures
shall be governed by and construed in accordance with the laws of the State of
New York.
SECTION 1.13. Non-Business Days. In any case where any Interest
Payment Date, Redemption Date, or Stated Maturity of any Debenture shall not be
a Business Day, then (notwithstanding any other provision of this Indenture or
the Debentures) payment of interest or principal need not be made on such date,
but may be made on the next succeeding Business Day and no interest shall
accrue for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be, until the next succeeding Business
Day, in each case with the same force and effect as if made on the Interest
Payment Date or Redemption Date or at the Stated Maturity, except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day.
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ARTICLE 2
DEBENTURE FORM
SECTION 2.01. Forms Generally. The Debentures of each series and the
Trustee's certificate of authentication shall be in substantially the forms
sets forth in this Article, or in such other form or forms as shall be
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with applicable tax laws or the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Debentures,
as evidenced by their execution of the Debentures. If the form of Debentures
of any series is established by action taken pursuant to a Board Resolution, a
copy of an appropriate record of such action shall be certified by the
Secretary or an Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Company Order contemplated by Section 3.03
with respect to the authentications and delivery of such Debentures.
The Trustee's certificates of authentication shall be substantially in
the form set forth in this Article.
The definitive Debentures shall be printed, lithographed or engraved
or produced by any combination of these methods, if required by any Debentures
exchange on which the Debentures may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Debentures may be listed, all as
determined by the officers executing such Debentures, as evidenced by their
execution of such Debentures.
SECTION 2.02. Form of Face of Debenture. If the Debenture is an
Original Issue Discount Security, insert -- This Debenture was issued with
original issue discount for United States Federal income tax purposes. For
further information, please contact [name and title of a representative of the
Company], 13500 North Central Expressway, Dallas, Texas 75205 [telephone number
of a representative of the Company].
TEXAS INSTRUMENTS INCORPORATED
(Title of Debenture)
No. __________ $__________
CUSIP_____
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<PAGE> 22
TEXAS INSTRUMENTS INCORPORATED, a corporation organized and existing
under the laws of Delaware (hereinafter called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to_______________, or assigns,
(the principal sum of Dollars on , ), to pay interest on
said principal sum from _____, ____ or from the most recent interest payment
date (each such date, an "Interest Payment Date") on which interest has been
paid or duly provided for, [monthly] [quarterly] [semi-annually] [if
applicable, insert - plus Additional Interest, if any] until the principal
hereof is paid or duly provided for or made available for payment [if
applicable insert- (subject to deferral as set forth herein)] in arrears on
[insert applicable Interest Payment Dates] of each year, commencing ______,
___, at the rate of __% per annum, until the principal hereof shall have become
due and payable, [if applicable, insert - 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 the
rate of __% per annum, compounded [monthly] [quarterly] [annually]. The amount
of interest payable for any period will be computed on the basis of [twelve
30-day months] and a [360-day] year. In the event that any date on which
interest is payable on this Debenture is not a Business Day, then a payment of
the interest on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), 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 day on
which banking institutions in the City of New York are authorized or required
by law or executive order to remain closed or a day on which the Corporate
Trust Office of the Trustee [if applicable, insert - , or the principal office
of the Property Trustee under the Trust Agreement hereinafter referred to for
Texas Instruments Financial 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 Debenture (or one or more Predecessor Debentures, as defined
in the Indenture) is registered at the close of business on the Regular Record
Date, for such interest installment which shall be the [insert Regular Record
Dates] (whether or not a Business Day)] [close of business on the Business Day]
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 Debenture (or one or more Predecessor Debentures) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Debentures 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
Debentures of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.
[If applicable, insert - The Company shall have the right at any time
during the term of this Debenture, from time to time, to extend the interest
payment period of such Debenture for up
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<PAGE> 23
to consecutive [months] [quarters] with respect to each deferral period
(each an "Extension Period"), during which periods the Company shall have the
right not to make payments of interest on any Interest Payment Date, and at the
end of which the Company shall pay all interest then accrued and unpaid hereon
(together with Additional Interest thereon to the extent permitted by
applicable law); provided that during any such Extension Period, the Company
will not, and will not permit any Subsidiary to (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 outstanding capital
stock, (ii) make any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities that rank pari passu with or
junior in interest to this Debenture or make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any
Subsidiary if such guarantee ranks pari passu or junior in interest to the
Debentures or (iii) cause the conversion rights, if any, of the Holders of the
Debentures to expire (other than (a) dividends or distributions in common stock
of the Company, (b) redemptions or purchases of any rights pursuant to the
Company's Shareholders Rights Plan, or any successor to such Shareholders
Rights Plan, and the declaration of a dividend of such rights in the future,
(c) payments under the Texas Instruments Guarantee (as defined in the
Indenture), (d) purchases of Texas Instruments Common Stock related to the
issuance of Texas Instruments Common Stock under any of the Company's benefit
plans for its directors, officers or employees and (e) purchases of Texas
Instruments Common Stock required to prevent loss or secure the renewal or
reinstatement of any government license or franchise held by the Company or its
Subsidiaries). Prior to the termination of any such Extension Period, the
Company may further extend the interest payment period, provided that such
Extension Period together with all such previous and further extensions of such
Extension Period shall not exceed ___ consecutive [months] [quarters] or extend
beyond the Maturity of this Debenture. Upon the termination of any such
Extension Period and upon the payment of all accrued and unpaid interest and
any Additional Interest then due, the Company may select a new Extension
Period, subject to the above requirements. No interest shall be due and
payable during an Extension Period except at the end thereof. The Company
shall give the Holder of this Debenture and the Trustee notice of its selection
of an Extension Period at least one Business Day prior to [the Interest Payment
Date] [the earlier of (i) the date the Distributions on the Preferred
Securities are payable or (ii) the date the Property Trustee is required to
give notice to the New York Stock Exchange or other applicable self- regulatory
organization or to holders of such Preferred 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.]]
Payment of the principal of (and premium, if any) and interest on this
Debenture 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 [if applicable, insert -, 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
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transfer in immediately available funds at such place and to such account as
may be designated by the Person entitled thereto as specified in the Securities
Register].
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and subject in right of payments to the
prior payment in full of all Senior Debt, and this Debenture is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
actions as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney- in-fact for any and all
such purposes. Each Holder hereof, by his acceptance hereof, waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Debt, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this Debenture
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentification hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Debenture shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated
TEXAS INSTRUMENTS INCORPORATED
By:
[President or Vice President]
Attest:
[Secretary or Assistant Secretary]
SECTION 2.03. Form of Reverse of Debenture. This Debenture is one of
a duly authorized issue of debentures of the Company, (herein called the
"Debentures"), issued and to be issued in one or more series under a Junior
Subordinated Indenture, dated as of ___________
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<PAGE> 25
__, 1996 (herein called the "Indenture"), between the Company and The First
National Bank of Chicago, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which the Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Trustee, the Company and the Holders of the Debentures, and of the terms
upon which the Debentures are, and are to be, authenticated and delivered.
This Debenture is one of the series designated on the face hereof.
All terms used in this Debenture that are defined in the Indenture or
in the Establishing Documents (as defined in the Indenture) shall have the
meanings assigned to them in the Indenture or the Establishing Documents, as
the case may be.
[If applicable, insert- At any time on or after ________ __, ____, the
Company may, at its option, subject to the terms and conditions of Article
Eleven of the Indenture, redeem this Debenture on any Interest Payment Date
with respect thereto in whole at any time or in part from time to time, without
premium or penalty, at a redemption price equal to 100% of the principal amount
thereof plus the accrued and unpaid interest [if applicable, insert-, including
Additional Interest, if any,] to the date fixed for redemption.]
[If applicable, insert- If a Special Event in respect of the Texas
Instruments Trust shall occur and be continuing, the Company may, at its
option, redeem the corresponding series of Debentures on any Interest Payment
Date falling within 90 days of the occurrence of such Special Event, in whole
but not in part, subject to the provisions of Section 11.07 and the other
provisions of Article Eleven of the Indenture. The redemption price for any
Debenture so redeemed shall be equal to 100% of the principal amount thereof
plus accrued and unpaid interest, including Additional Interest, if any, to the
date fixed for redemption.]
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will
be issued in the name of the Holder hereof upon the cancellation hereof.
[If the Debenture is not an Original Issue Discount Security, - If an
Event of Default with respect to Debentures of this series shall occur and be
continuing, the principal of the Debentures of this series may be declared due
and payable in the manner, with the effect and subject to the conditions
provided in the Indenture.]
[If the Debenture is an Original Issue Discount Security, - If an
Event of Default with respect to Debentures of this series shall occur and be
continuing, an amount of principal of the Debentures of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture. Such amount shall be equal to [ - insert
formula for determining the amount]. Upon payment (i) of the amount of
principal so declared due and payable and (ii) of interest on any overdue
principal and overdue interest (in each case to
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<PAGE> 26
the extent that the payment of such interest shall be legally enforceable), all
of the Company's obligations in respect of the payment of the principal of and
interest, if any, on the Debentures of this series shall terminate.]
The Indenture contains provisions for satisfaction, discharge and
defeasance at any time of the entire indebtedness of this Debenture upon
compliance by the Company with certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debentures of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in principal amount of the Debentures
of each series at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Debentures of each series at the time Outstanding,
on behalf of the Holders of all Debentures 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 shall be conclusive and binding upon the Holder of this Debenture and
upon all future Holders of this Debenture and of any Debenture issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Debenture.
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to Debentures of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Debentures of that series may declare the principal amount (or, if the
Debentures of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
the Debentures of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), provided that,
in the case of the Debentures of a series issued to the Texas Instruments
Trust, if upon an Event of Default, the Trustee or the Holders of not less than
25% in principal amount of the Outstanding Debentures of that series fail to
declare the principal of all the Debentures of that series to be immediately
due and payable, the holders of at least 25% in aggregate liquidation amount of
the corresponding series of Preferred Securities then outstanding shall have
such right by a notice in writing to the Company and the Trustee; and upon any
such declaration such principal amount (or specified amount) of and the accrued
interest (including any Additional Interest) on all the Debentures of such
series shall become immediately due and payable, provided that the payment of
principal and interest (including any Additional Interest) on such Debentures
shall remain subordinated to the extent provided in Article Thirteen of the
Indenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and
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<PAGE> 27
unconditional, to pay the principal of (and premium, if any) and interest on
this Debenture at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Debenture is registrable in the
Securities Register, upon surrender of this Debenture for registration of
transfer at the office or agency of the Company maintained under Section 10.02
of the Indenture duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of 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 Debenture for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Debenture is registered as the owner
hereof for all purposes, whether or not this Debenture be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Debentures of this series are issuable only in registered form
without coupons in denominations of $50 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Debentures of this series are exchangeable for a like aggregate principal
amount of Debentures of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
[If applicable, insert- The Company and, by its acceptance of this
Debenture or a beneficial interest therein, the Holder of, and any Person that
acquires a beneficial interest in, this Debenture agree that for United States
Federal, state and local tax purposes it is intended that this Debenture
constitute indebtedness.]
THE INDENTURE AND THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES THEREOF.
SECTION 2.04. Additional Provisions Required in Global Debenture.
Any Global Debenture issued hereunder shall, in addition to the provisions
contained in Sections 2.02 and 2.03 bear a legend in substantially the
following form:
"This Debenture is a Global Debenture within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee of a Depositary. This Debenture is exchangeable for Debentures
registered in the name of a person other than the
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<PAGE> 28
Depositary or its nominee only in the limited circumstances described in the
Indenture and may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary."
SECTION 2.05. Form of Trustee's Certificate of Authentication. This
is one of the Debentures of the series designated in the within mentioned
Indenture referred to therein.
--------------------------------------
as Trustee
By:
Authorized officer
ARTICLE 3
THE DEBENTURES
SECTION 3.01. Title and Terms. The aggregate principal amount of
Debentures which may be authenticated and delivered under this Indenture is
unlimited.
The Debentures may be issued in one or more series. There shall be
established in the Establishing Documents prior to the issuance of Debentures
of a series:
(a) the title of the Debentures of such series, which
shall distinguish the Debentures of the series from all other
Debentures;
(b) the limit, if any, upon the aggregate principal
amount of the Debentures of such series which may be authenticated and
delivered under this Indenture (except for Debentures authenticated
and delivered upon registration of transfer of, or in exchange for, or
in lieu of, other Debentures of the series pursuant to Section 3.04,
3.05, 3.06, 9.06 or 11.06); provided, however, that the authorized
aggregate principal amount of such series may be increased above such
amount by a Board Resolution to such effect;
(c) the Stated Maturity or Maturities on which the
principal of the Debentures of such series is payable or the method of
determination thereof;
(d) the rate or rates, if any, at which the Debentures of
such series shall bear interest, if any, the rate or rates and extent
to which Additional Interest, if any, shall be payable in respect of
any Debentures of such series, the Interest Payment Dates on which
such interest shall be payable, the right, pursuant to Section 3.11 or
as otherwise set forth therein, of the Company to defer or extend an
Interest Payment Date, and the Regular
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Record Date for the interest payable on any Interest Payment Date or
the method by which any of the foregoing shall be determined;
(e) the place or places where the principal of (and
premium, if any) and interest on the Debentures of such series shall
be payable, the place or places where the Debentures of such series
may be presented for registration of transfer or exchange, and the
place or places where notices and demands to or upon the Company in
respect of the Debentures of such series may be made;
(f) the period or periods within or the date or dates on
which, if any, the price or prices at which and the terms and
conditions upon which the Debentures of such series may be redeemed,
in whole or in part, at the option of the Company;
(g) the obligation or the right, if any, of the Company
to redeem, repay or purchase the Debentures of such series pursuant to
any sinking fund, amortization or analogous provisions or at the
option of a Holder thereof and the period or periods within which, the
price or prices at which, the currency or currencies (including
currency unit or units) in which and the other terms and conditions
upon which Debentures of the series shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
(h) the denominations in which any Debentures of such
series shall be issuable, if other than denominations of $50 and any
integral multiple thereof;
(i) if other than Dollars, the currency or currencies
(including currency unit or units) in which the principal of (and
premium, if any) and interest, if any, on the Debentures of the series
shall be payable, or in which the Debentures of the series shall be
denominated;
(j) the additions, modifications or deletions, if any, in
the Events of Default or covenants of the Company set forth herein
with respect to the Debentures of such series;
(k) if other than the principal amount thereof, the
portion of the principal amount of Debentures of such series that
shall be payable upon declaration of acceleration of the Maturity
thereof;
(l) the additions or changes, if any, to this Indenture
with respect to the Debentures of such series as shall be necessary to
permit or facilitate the issuance of the Debentures of such series in
bearer form, registrable or not registrable as to principal, and with
or without interest coupons;
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(m) any index or indices used to determine the amount of
payments of principal of and premium, if any, on the Debentures of
such series or other manner in which such amounts will be determined;
(n) the issuance of a temporary Global Debenture
representing all of the Debentures of such series and exchange of such
temporary Global Debenture for definitive Debentures of such series;
(o) whether the Debentures of the series shall be issued
in whole or in part in the form of one or more Global Debentures and,
in such case, the Depositary for such Global Debentures, which
Depositary shall be a clearing agency registered under the Securities
Exchange Act of 1934, as amended;
(p) the appointment of any Paying Agent or Agents for the
Debentures of such series;
(q) the terms and conditions if any, upon which such
Debentures may be convertible into or exchanged for Texas Instruments
Common Stock or other securities of any kind, including the initial
conversion or exchange period, the circumstances under which any such
conversion or exchange right may expire, and any other provision in
addition to or in lieu of those set forth in this Indenture;
(r) the form or forms of the Trust Agreement, Amended and
Restated Trust Agreement and Guarantee Agreement, if different from
the forms attached hereto as Annexes A, B and C, respectively;
(s) the relative degree, if any, to which the Debentures
of the series shall be senior to or be subordinated to other series of
Debentures in right of payment, whether such other series of
Debentures are Outstanding or not; and
(t) any other terms of the Debentures of such series
(which terms shall not be inconsistent with the provisions of this
Indenture).
All Debentures of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth in such Officers'
Certificate or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
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SECTION 3.02. Denominations. The Debentures of each series shall be
in registered form without coupons and shall be issuable in denominations of
$50 and any integral multiple thereof, unless otherwise specified as
contemplated by Section 3.01.
SECTION 3.03. Execution, Authentication, Delivery and Dating. The
Debentures shall be executed on behalf of the Company by its President or one
of its Vice Presidents under its corporate seal reproduced or impressed thereon
and attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Debentures may be manual or
facsimile.
Debentures bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures. At any time and from time to
time after the execution and delivery of this Indenture, the Company may
deliver Debentures executed by the Company to the Trustee for authentication.
Debentures may be authenticated on original issuance from time to time and
delivered pursuant to such procedures acceptable to the Trustee ("Procedures")
as may be specified from time to time by Company Order. Procedures may
authorize authentication and delivery pursuant to oral instructions of the
Company or a duly authorized agent, which instructions shall be promptly
confirmed in writing.
Prior to the delivery of a Debenture in any such form to the Trustee
for authentication, the Company shall deliver to the Trustee the following:
(a) A Company Order requesting the Trustee's authentication and
delivery or all or a portion of the Debentures of such series, and if less than
all, setting forth procedures for such authentication;
(b) The Board Resolution by or pursuant to which such form of
Debenture has been approved, and the Board Resolution, if any, by or pursuant
to which the terms of the Debentures of such series have been approved, and, if
pursuant to a Board Resolution, an Officers' Certificate describing the action
taken;
(c) An Officers' Certificate dated the date such certificate is
delivered to the Trustee, stating that all conditions precedent provided for in
this Indenture relating to the authentication and delivery of Debentures in
such form and with such terms have been complied with; and
(d) An Opinion of Counsel stating that (i) the form of such
Debentures has been duly authorized and approved in conformity with the
provisions of this Indenture; (ii) the terms of such Debentures have been duly
authorized and determined in conformity with the provisions of this Indenture,
or, if such terms are to be determined pursuant to Procedures, when so
determined
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such terms shall have been duly authorized and determined in conformity with
the provisions of this Indenture; and (iii) Debentures in such form when
completed by appropriate insertions and executed and delivered by the Company
to the Trustee for authentication in accordance with this Indenture,
authenticated and delivered by the Trustee in accordance with this Indenture
within the authorization as to aggregate principal amount established from time
to time by the Board of Directors and sold in the manner specified in such
Opinion of Counsel, will be the legal, valid and binding obligations of the
Company entitled to the benefits of this Indenture, subject to applicable
bankruptcy, reorganization, insolvency and similar laws generally affecting
creditors' rights and to general equitable principles, except as enforcement
thereof may be limited by (A) requirements that a claim with respect to any
Debentures denominated other than in Dollars (or a Foreign Currency or currency
unit judgment in respect of such claim) be converted into Dollars at a rate of
exchange prevailing on a date determined pursuant to applicable law or (B)
governmental authority to limit, delay or prohibit the making of payments in
Foreign Currencies or currency units or payments outside the United States and
subject to such other qualifications as such counsel shall conclude do not
materially affect the rights of Holders of such Debentures; provided however,
that the Trustee shall be entitled to receive the documents referred to in
clauses (b), (c) and (d) above only at or prior to the first request of the
Company to the Trustee to authenticate Debentures of such series.
Each Debenture shall be dated the date of its authentication.
No Debenture shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such
Debenture a certificate of authentication substantially in the form provided for
herein executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Debenture shall be conclusive evidence,
and the only evidence, that such Debenture has been duly authenticated and
delivered hereunder.
SECTION 3.04. Temporary Debentures. Pending the preparation of
definitive Debentures of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Debentures which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any denomination, substantially of the tenor of the definitive Debentures of
such series in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Debentures may determine, as evidenced by their execution of
such Debentures.
If temporary Debentures of any series are issued, the Company will
cause definitive Debentures of such series to be prepared without unreasonable
delay. After the preparation of definitive Debentures, the temporary
Debentures shall be exchangeable for definitive Debentures upon surrender of
the temporary Debentures at the office or agency of the Company designated for
the purpose without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Debentures, the Company shall execute and the Trustee
shall authenticate and
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deliver in exchange therefor a like principal amount of definitive Debentures
of the same series of authorized denominations having the same Original Issue
Date and Stated Maturity and having the same terms as such temporary
Debentures. Until so exchanged, the temporary Debentures shall in all respects
be entitled to the same benefits under this Indenture as definitive Debentures.
SECTION 3.05. Registration, Transfer and Exchange. The Company shall
cause to be kept at the Corporate Trust Office of the Trustee a register in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Debentures and of transfers of
Debentures. Such register is herein sometimes referred to as the "Securities
Register." The Trustee is hereby appointed "Securities Registrar" for the
purpose of registering Debentures and transfers of Debentures as herein
provided.
Upon surrender for registration of transfer of any Debenture at the
office or agency of the Company designated for that purpose the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Debentures of the same
series of any authorized denominations, of a like aggregate principal amount,
of the same Original Issue Date and Stated Maturity and having the same terms.
At the option of the Holder, Debentures may be exchanged for other
Debentures of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated Maturity
and having the same terms, upon surrender of the Debentures to be exchanged at
such office or agency. Whenever any Debentures are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Debentures which the Holder making the exchange is entitled to
receive.
All Debentures issued upon any transfer or exchange of Debentures
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such transfer or exchange.
Every Debenture presented or surrendered for transfer or exchange
shall (if so required by the Company or the Securities Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Debentures.
Notwithstanding any of the foregoing, any Global Debenture of a series
shall be exchangeable pursuant to this Section 3.05 for Debentures registered
in the names of Persons
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other than the Depositary for such Debenture or its nominee only if (a) such
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Debenture or if at any time such Depositary ceases
to be a clearing agency registered under the Securities Exchange Act of 1934,
as amended, (b) the Company executes and delivers to the Trustee a Company
Order that such Global Debenture shall be so exchangeable or (c) there shall
have occurred and be continuing an Event of Default with respect to the
Debentures of such series. Any Global Debenture that is exchangeable pursuant
to the preceding sentence shall be exchangeable for Debentures registered in
such names as such Depositary shall direct.
Notwithstanding any other provisions in this Indenture, a Global
Debenture may not be transferred except as a whole by the Depositary with
respect to such Global Debenture to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (a) to issue, transfer or exchange any Debenture of
any series during a period beginning at the opening of business 15 days before
the day of selection for redemption of Debentures pursuant to Article Eleven
and ending at the close of business on the day of mailing of notice of
redemption or (b) to transfer or exchange any Debenture so selected for
redemption in whole or in part, except, in the case of any Debenture to be
redeemed in part, any portion thereof not to be redeemed.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Debentures. If
any mutilated Debenture is surrendered to the Trustee together with such
security or indemnity as may be required by the Company or the Trustee to save
each of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Debenture of the same issue
and series of like tenor and principal amount, having the same Original Issue
Date and Stated Maturity and bearing the same Interest Rate as such mutilated
Debenture, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (a)
evidence to their satisfaction of the destruction, loss or theft of any
Debenture, and (b) such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or
the Trustee that such Debenture has been acquired by a bona fide purchaser, the
issuing Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Debenture, a new Debenture of the same issue and series of like tenor and
principal amount, having the same Original Issue Date and Stated Maturity and
bearing the same Interest Rate as such destroyed, lost or stolen Debenture, and
bearing a number not contemporaneously outstanding.
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In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Debenture, pay such Debenture.
Upon the issuance of any new Debenture under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debenture issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Debentures.
SECTION 3.07. Payment of Interest; Interest Rights Preserved.
Interest on any Debenture of any series which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date, shall be paid to the
Person in whose name that Debenture (or one or more Predecessor Debentures) is
registered at the close of business on the Regular Record Date for such
interest in respect of Debentures of such series, except that, unless otherwise
provided in the Debentures of such series, interest payable on the Stated
Maturity of a Debenture shall be paid to the Person to whom principal is paid.
The initial payment of interest on any Debenture of any series which is issued
between a Regular Record Date and the related Interest Payment Date shall be
payable as provided in the Establishing Documents pursuant to Section 3.01 with
respect to the related series of Debentures.
Any interest on any Debenture which is payable, but is not timely paid
or duly provided for, on any Interest Payment Date for Debentures of such
series (herein called "Defaulted Interest"), shall forthwith cease to be
payable to the registered Holder on the relevant Regular Record Date by virtue
of having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Debentures of
such series in respect of which interest is in default (or their
respective Predecessors Debentures) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Debenture and the date
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of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited
to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first
class, postage prepaid, to each Holder of a Debenture of such series
at the address of such Holder as it appears in the Securities Register
not less than 10 days prior to such Special Record Date. The Trustee
shall in the name and at the expense of the Company, cause a similar
notice to be published at least once in a newspaper, customarily
published in the English language on each Business Day and of general
circulation in the Borough of Manhattan, the City of New York, but
such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Persons in whose names the Debentures of such
series (or their respective Predecessor Debentures) are registered on
such Special Record Date and shall no longer be payable pursuant to
the following clause (b).
(b) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures of the
series in respect of which interest is in default may be listed and,
upon such notice as may be required by such exchange (or by the
Trustee if the Debentures are not listed), if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
Clause, such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon transfer of or in exchange for or in lieu
of any other Debenture shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Debenture.
SECTION 3.08. Persons Deemed Owners. The Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name any
Debenture is registered as the owner of such Debenture for the purpose of
receiving payment of principal of and (subject to Section 3.07) interest on
such Debenture and for all other purposes whatsoever, whether or not such
Debenture be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
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SECTION 3.09. Cancellation. All Debentures surrendered for payment,
redemption, conversion, transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee, and any such
Debentures and Debentures surrendered directly to the Trustee for any such
purpose shall be promptly canceled by it. The Company may at any time deliver
or cause to be delivered to the Trustee for cancellation any Debentures
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Debentures so delivered shall be
promptly canceled by the Trustee. No Debentures shall be authenticated in lieu
of or in exchange for any Debentures canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Debentures shall
be destroyed by the Trustee and upon request, the Trustee shall deliver to the
Company a certificate of such destruction.
SECTION 3.10. Computation of Interest. Except as otherwise
specified as contemplated by Section 3.01 for Debentures of any series,
interest on the Debentures of each series shall be computed on the basis of a
360-day year of twelve 30-day months.
SECTION 3.11. Deferrals of Interest Payment Dates. If specified as
contemplated by Section 3.01 with respect to the Debentures of a particular
series, the Company shall have the right, at any time during the term of such
series, from time to time to extend the interest payment period for such
Debentures for such period or periods as may be specified as contemplated by
Section 3.01 (each, an "Extension Period"), during which periods the Company
shall have the right not to make payments of interest on any Interest Payment
Date, and at the end of such Extension Period the Company shall pay all
interest then accrued and unpaid thereon (together with Additional Interest
thereon, if any, at the rate specified for the Securities of such series to the
extent permitted by applicable law); provided, however, that during any such
Extension Period, the Company shall not, and shall cause any Subsidiary not to,
(a) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
outstanding capital stock, (b) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities that
rank pari passu with or junior in interest to the Debentures of such series or
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any Subsidiary if such guarantee ranks pari passu or junior
in interest to the Debentures or (c) cause the Conversion Rights, if any, of
the Holders of the Debentures to expire (other than (i) dividends or
distributions in common stock of the Company, (ii) redemptions or purchases of
any rights pursuant to the Company's Shareholders Rights Plan, or any successor
to such Shareholders Rights Plan, and the declaration of a dividend of such
rights in the future, (iii) payments under the Texas Instruments Guarantee,
(iv) purchases of Texas Instruments Common Stock related to the issuance of
Texas Instruments Common Stock under any of the Company's benefit plans for its
directors, officers or employees and (v) purchases of Texas Instruments Common
Stock required to prevent loss or secure the renewal or reinstatement of any
government license or franchise held by the Company or the Subsidiaries).
Prior to the termination of any such Extension Period, the Company may further
extend the interest payment period, provided that
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such Extension Period together with all such previous and further extensions of
such Extension Period shall not exceed the period or periods so specified or
extend beyond the Maturity of such Debentures. Upon termination of any
Extension Period and upon the payment of all accrued and unpaid interest and
any Additional Interest then due, the Company may select a new Extension
Period, subject to the above requirements. No interest shall be due and
payable during an Extension Period, except at the end thereof. The Company
shall give the Holders of the Debentures of such series and the Trustee notice
of its selection of such Extension Period at least one Business Day prior to
the Interest Payment Date or, with respect to the Debentures of a series issued
to the Texas Instruments Trust, prior to the earlier of (i) the date the
Distributions on the Preferred Securities of the Texas Instruments Trust are
payable or (ii) the date the Property Trustee of the Texas Instruments Trust is
required to give notice to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of such Preferred 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 Trustee shall promptly give notice of the Company's selection of
such Extension Period to the Holders of the outstanding Debentures of such
series.
SECTION 3.12. Right of Set-off. With respect to the Debentures of a
series issued to the Texas Instruments Trust, notwithstanding anything to the
contrary in the Indenture, the Company shall have the right to set-off any
payment it is otherwise required to make thereunder in respect of any such
Debenture to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a payment relating to such Debenture under the
Texas Instruments Guarantee.
SECTION 3.13. Agreed Tax Treatment. Each Debenture issued hereunder
shall provide that the Company and, by its acceptance of a Debenture or a
beneficial interest therein, the Holder of, and any Person that acquires a
beneficial interest in, such Debenture agree that for United States Federal,
state and local tax purposes it is intended that such Debenture constitute
indebtedness.
SECTION 3.14. Cusip Numbers. The Company in issuing the Debentures
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to
the correctness of such numbers either as printed on the Debentures or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Debentures, and any such
redemption shall not be affected by any defect in or omission of such numbers.
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ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect (except as to (i) any surviving
rights of transfer, substitution and exchange of Debentures, (ii) rights
hereunder of Holders to receive payments of principal of (and premium, if any)
and interest on the Debentures and other rights, duties and obligations of the
Holders as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights and obligations of the Trustee
hereunder), and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(a) either
(i) all Debentures theretofore authenticated and
delivered (other than (i) Debentures which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section
3.06 and (ii) Debentures for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 10.03) have been delivered to the Trustee for
cancellation; or
(ii) all such Debentures not theretofore delivered to the
Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated
Maturity within one year of the date of deposit, and the
Company, in the case of (i) or (ii) above, has deposited or
caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount in the currency or currencies
in which the Debentures of such series are payable sufficient
to pay and discharge the entire indebtedness on such
Debentures not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest
(including any Additional Interest) to the date of such
deposit (in the case of Debentures which have become due and
payable) or to the Stated Maturity;
(C) have been tendered for conversion;
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
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(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money
shall have been deposited with the Trustee pursuant to subclause (ii) of clause
(a) of this Section, the obligations of the Trustee under Section 4.02 and the
last paragraph of Section 10.03 shall survive.
SECTION 4.02. Application of Trust Money. Subject to the provisions
of the last paragraph of Section 10.03, all money deposited with the Trustee
pursuant to Section 4.01 or money or Government Obligations deposited with the
Trustee pursuant to Section 4.03, or received by the Trustee in respect of
Government Obligations deposited with the Trustee pursuant to Section 4.03,
shall be held in trust and applied by it, in accordance with the provisions of
the Debentures and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money or obligations have
been deposited with or received by the Trustee; provided, however, such moneys
need not be segregated from other funds except to the extent required by law.
SECTION 4.03. Satisfaction, Discharge and Defeasance of Debentures of
Any Series. Unless otherwise provided in the Establishing Documents, the
Company shall be deemed to have paid and discharged the entire indebtedness on
all the Outstanding Debentures of any such series and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of such indebtedness, when
(a) with respect to all Outstanding Debentures of such
series,
(i) the Company has irrevocably deposited or
caused to be irrevocably deposited with the Trustee as trust
funds in trust for such purpose an amount sufficient to pay
and discharge the entire indebtedness on all Outstanding
Debentures of such series for principal (and premium, if any)
and interest (including any Additional Interest) to the Stated
Maturity or any Redemption Date as contemplated by the
penultimate paragraph of this Section 4.03, as the case may
be; or
(ii) the Company has irrevocably deposited or
caused to be irrevocably deposited with the Trustee as
obligations in trust for such purpose an amount of Government
Obligations as will, in the written opinion of independent
public accountants delivered to the Trustee, together with
predetermined and certain income to accrue thereon, without
consideration of any reinvestment thereof, be
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sufficient to pay and discharge when due the entire
indebtedness on all Outstanding Debentures of such series for
principal (and premium, if any) and interest (including any
Additional Interest) to the Stated Maturity or any Redemption
Date as contemplated by the penultimate paragraph of this
Section 4.03, as the case may be; and
(b) the Company has paid or caused to be paid all other
sums payable with respect to the Outstanding Debentures of such
series; and
(c) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of the entire indebtedness on all Outstanding Debentures
of any such series have been complied with.
Any deposits with the Trustee referred to in Section 4.03(a) above
shall be irrevocable and shall be made under the terms of an escrow trust
agreement in form and substance reasonably satisfactory to the Trustee. If any
Outstanding Debentures of such series are to be redeemed prior to their Stated
Maturity, whether pursuant to any optional redemption provisions or in
accordance with any mandatory sinking fund requirement, the applicable escrow
trust agreement shall provide therefor and the Company shall make such
arrangements as are satisfactory to the Trustee for the selection of Debentures
for Redemption and the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company. If the Debentures of such series are
not to become due and payable at their Stated Maturity or upon call for
redemption within one year of the date of deposit, then the Company shall give,
not later than the date of such deposit, notice of such deposit to the Holders
of Debentures of such series.
Upon the satisfaction of the conditions set forth in this Section 4.03
with respect to all the Outstanding Debentures of any series, the terms and
conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company; provided, that the Company shall not be discharged
from any payment obligations in respect of Debentures of such series which are
deemed not to be Outstanding under clause (iii) of the definition thereof if
such obligations continue to be valid obligations of the Company under
applicable law.
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ARTICLE 5
REMEDIES
SECTION 5.01. Events of Default. "Event of Default", wherever used
herein with respect to the Debentures of any series, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) default in the payment of any interest upon any
Debenture of that series, including any Additional Interest in respect
thereof, when it becomes due and payable, and continuance of such
default for a period of 30 days (subject to the deferral of any due
date in the case of an Extension Period); or
(b) default in the payment of the principal of (or
premium, if any, on) any Debenture of that series at its Maturity; or
(c) failure on the part of the Company duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Company with respect to that series
contained in such Debentures or otherwise established with respect to
that series of Debentures pursuant to Section 3.01 hereof or contained
in this Indenture (other than a covenant or agreement which has been
expressly included in this Indenture solely for the benefit of one or
more series of Debentures other than such series) and continuance for
such failure for a period of 90 days after the date on which written
notice of such failure, requiring the same to be remedied and stating
that such notice is a "Notice of Default" hereunder, shall have been
given to the Company by the Trustee, by registered or certified mail,
or to the Company and the Trustee by a Holder or Holders of at least
25% in aggregate principal amount of the Debentures of that series at
the time Outstanding or the holder or holders of at least 25% in
aggregate liquidation preference of Preferred Securities of the series
related to such series of Debentures;
(d) if applicable to the Debentures of that series,
failure by the Company to issue the Texas Instruments Common Stock
upon an election by the Holder or Holders of such Debentures to
convert such Debentures into shares of Texas Instruments Common Stock;
(e) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company as bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or in
respect of the Company under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or of any substantial part of
its property or
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ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(f) the institution by the Company of proceedings to be
adjudicated as bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable Federal or Sate bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the
filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property or
the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally
as they become due and its willingness to be adjudicated as bankrupt,
or the taking of corporate action by the Company in furtherance of any
such action; or
(g) any other Event of Default as set forth in the
Establishing Documents with respect to Debentures of that series.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default with respect to Debentures of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Debentures of that series may declare the principal amount (or, if the
Debentures of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
the Debentures of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), provided that,
in the case of the Debentures of a series issued to the Texas Instruments
Trust, if upon an Event of Default, the Trustee or the Holders of not less than
25% in principal amount of the Outstanding Debentures of that series fail to
declare the principal of all the Debentures of that series to be immediately
due and payable, the holders of at least 25% in aggregate liquidation amount of
the corresponding series of Preferred Securities then outstanding shall have
such right by a notice in writing to the Company and the Trustee; and upon any
such declaration such principal amount (or specified amount) of and the accrued
interest (including any Additional Interest) on all the Debentures of such
series shall become immediately due and payable, provided that the payment of
principal and interest (including any Additional Interest) on such Debentures
shall remain subordinated to the extent provided in Article Thirteen.
At any time after such a declaration of acceleration with respect to
Debentures of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Debentures of that series, or the holders of a least 25% in
aggregate liquidation amount of the corresponding series of Preferred
Securities then
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outstanding, as the case may be, by written notice to the Company and the
Trustee may rescind and annul such declaration and its consequences if:
(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest
(including any Additional Interest) on all Debentures of that
series,
(B) the principal of (and premium, if any, on)
any Debentures of that series which have become due otherwise
than by such declaration of acceleration and interest thereon
at the rate borne by the Debentures, and
(C) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(ii) all Events of Default with respect to Debentures of that
series, other than the non-payment of the principal of Debentures of that
series which has become due solely by such acceleration, have been cured or
waived as provided in Section 5.13.
The holders of a majority in aggregate liquidation preference of the
Preferred Securities may, on behalf of the holders of all the Preferred
Securities, waive any past Event of Default, except an Event of Default
described in Sections 5.01(a) and 5.01(b) (unless such Event of 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
Trustee) or an Event of Default in respect of a covenant or provision which
under this Indenture cannot be modified or amended without the consent of the
holder of each outstanding Debenture. No such rescission or waiver shall
affect any subsequent default or impair any right consequent thereon.
Upon receipt by the Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Debentures
of a series all or part of which is represented by a Global Debenture, a record
date shall be established for determining Holders of Outstanding Debentures of
such series entitled to join in such notice, which record date shall be at the
close of business on the day the Trustee receives such notice. The Holders on
such record date, or their duly designated proxies, and only such Persons,
shall be entitled to join in such notice, whether or not such Holders remain
Holders after such record date; provided, that, unless 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 5.02.
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SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if:
(a) default is made in the payment of any installment of interest
(including any Additional Interest) on any Debenture when such interest becomes
due and payable and such default continues for a period of 30 days, or
(b) default is made in the payment of the principal of (and
premium, if any, on) any Debenture at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debentures, the whole amount then due and payable on such
Debentures for principal, including any sinking fund payment or analogous
obligations (and premium, if any) and interest (including any Additional
Interest), including, to the extent that payment of such interest shall be
lawful, interest on any overdue principal (and premium, if any) and on any
overdue installments of interest (including any Additional Interest) at the
rate borne by the Debentures; and, in addition thereto, all amounts owing the
Trustee under Section 6.07.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgement or final decree, and may enforce the same
against the Company or any other obligor upon the Debentures and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Debentures, wherever
situated.
If an Event of Default with respect to Debentures of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Debentures of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Debentures or
the property of the Company or of such other obligor or their creditors:
(a) the Trustee (irrespective of whether the principal of the
Debentures of any series shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue
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principal (and premium, if any) or interest (including any Additional Interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest (including any Additional
Interest) owing and unpaid in respect to the Debentures and to file
such other papers or documents as may be necessary or advisable and to
take any and all actions as are authorized under the Trust Indenture
Act in order to have the claims of the Trustee and any predecessor to
the Trustee under Section 6.07 and of the Holders allowed in any such
judicial proceedings;
(ii) and in particular, the Trustee shall be authorized to
collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same in
accordance with Section 5.06; and
(b) any custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee for
distribution in accordance with Section 5.06, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it and any predecessor Trustee under Section
6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debentures
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 5.05. Trustee May Enforce Claim Without Possession of
Debentures. All rights of action and claims under this Indenture or the
Debentures may be prosecuted and enforced by the Trustee without the possession
of any of the Debentures or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgement
shall, after provision for the payment of all the amounts owing the Trustee and
any predecessor Trustee under Section 6.07, its agents and counsel, be for the
ratable benefit of the Holders of the Debentures in respect of which such
judgement has been recovered.
SECTION 5.06. Application of Money Collected. Any money or property
collected or to be applied by the Trustee with respect to a series of
Debentures pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money or property on account of principal (or premium, if any) or interest
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(including any Additional Interest), upon presentation of the Debentures and
the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.07;
SECOND: To the payment of the amounts then due and unpaid upon such
series of Debentures for principal (and premium, if any) and interest
(including any Additional Interest), in respect of which or for the benefit of
which such money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such series of Debentures
for principal (and premium, if any) and interest (including any Additional
Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 5.07. Limitation on Suits. No Holder of any Debentures of
any series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture or for the appointment of a receiver,
assignee, trustee, liquidator, sequestrator (or other similar official) or for
any other remedy hereunder, unless:
(a) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to the
Debentures of that series;
(b) the Holders of not less than 25% in principal amount
of the Outstanding Debentures of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(e) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Debentures of
that series;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of,
any provision of this Indenture to affect, disturb or prejudice the rights of
any other Holders of Debentures, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
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SECTION 5.08. Unconditional Right of Holders to Receive Principal,
Premium and Interest. Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right which is absolute and
unconditional to receive payment of the principal of (and premium, if any) and
(subject to Section 3.07) interest (including any Additional Interest) on such
Security on the respective Stated Maturities expressed in such Security and to
institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder. For so long as any
Preferred Securities remain Outstanding, to the fullest extent permitted by law
and subject to the terms of this Indenture and the Trust Agreement, upon an
Event by Default specified in Section 5.01 or 5.02, any holder of Preferred
Securities shall have the right to institute a proceeding directly against the
Company, for enforcement of payment to such holder of the principal amount of
or interest on Debentures having a principal amount equal to the liquidation
preference of the Preferred Securities of such holder (a "Direct Action"). In
connection with any such Direct Action, the rights of the holders of the Common
Securities will be subrogated to the rights of any holder of the Preferred
Securities to the extent of any payment made by the Company to such holder of
Preferred Securities as a result of such Direct Action. Except as set forth in
this Section, the holders of Preferred Securities shall have no right to
exercise directly any right or remedy available to the Holders of, or in
respect of, the Debentures.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every such case the Company, the Trustee and the Holders shall, subject
to any determination in such proceeding, be restored severally and respectively
to their former positions hereunder, and thereafter all rights and remedies of
the Trustee and the Holders shall continue as though no such proceeding had
been instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise
provided in the last paragraph of Section 3.06, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. Except as otherwise
provided in the last paragraph of Section 3.06, no delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
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Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. Control by Holders. The Holders of a majority in
principal amount of the Outstanding Debentures of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee, with respect to the Debentures of such series, provided that:
(a) such direction shall not be in conflict with any rule
of law or with this Indenture,
(b) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction, and
(c) subject to the provisions of Section 6.01, the
Trustee shall have the right to decline to follow such direction if
the Trustee in good faith shall, by a Responsible Officer or Officers
of the Trustee, determine that the proceeding so directed would be
unjustly prejudicial to the Holders not joining in any such direction
or would involve the Trustee in personal liability.
Upon receipt by the Trustee of any written notice directing the time,
method or place of conducting any such proceeding or exercising any such trust
or power, with respect to Debentures of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Debentures of such series entitled to join
in such notice, which record date shall be at the close of business on the day
the Trustee receives such notice. The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to join in
such notice, whether or not such Holders remain Holders after such record date;
provided, that, unless the Holders of a majority in principal amount of the
Outstanding Debentures of such series shall have joined in such notice prior to
the day which is 90 days after such record date, such notice shall
automatically and without further action by any Holder be canceled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90-day period, a new notice
identical to a notice which has been canceled pursuant to the proviso to the
preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 5.12.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less than
a majority in principal amount of the Outstanding Debentures of any series may
on behalf of the Holders of all the Debentures of such series waive any past
default hereunder with respect to such series and its consequences, except a
default:
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(a) in the payment of the principal of (or premium, if
any) or interest (including any Additional Interest) on any Debenture
of such series, or
(b) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the consent
of the Holder of each Outstanding Debenture of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Debenture by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made
by such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than 10% in principal amount of
the Outstanding Debentures of any series, or to any suit instituted by any
Holder for the enforcement of the payment of the principal of (or premium, if
any) or interest (including any Additional Interest) on any Debenture on or
after the respective Stated Maturities expressed in such Debenture.
SECTION 5.15. Waiver of Usury, Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE 6
THE TRUSTEE
SECTION 6.01. Certain Duties and Responsibilities. (a) Except
during the continuance of an Event of Default.
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(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provisions hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct except that
(i) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of Holders pursuant to Section 5.12 relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture with respect to the Debentures
of such series.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
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(e) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.02. Notice of Defaults. Within 90 days after actual
knowledge by a Responsible Officer of the Trustee of the occurrence of any
default hereunder with respect to the Debentures of any series, the Trustee
shall transmit by mail to all Holders of Debentures of such series, as their
names and addresses appear in the Securities Register, notice of such default
hereunder known to the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest (including any Additional
Interest) on any Debenture of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of Debentures of such series; and provided, further,
that, except in the case of any default of the character specified in Section
5.01(c), no such notice to Holders of Debentures of such series shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to Debentures of
such series.
SECTION 6.03. Certain Rights of Trustee. Subject to the provisions
of Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
Debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this
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Indenture, unless such holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
indenture, Debenture or other paper or document, but the Trustee in its
discretion may make such inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to make such inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on any part of any agent or attorney appointed with due care by it
hereunder.
SECTION 6.04. Not Responsible for Recitals or Issuance of Debentures.
The recitals contained herein and in the Debentures, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Debentures. The Trustee shall not be accountable for the
use or application by the Company of the Debentures or the proceeds thereof.
SECTION 6.05. May Hold Debentures. The Trustee, any Paying Agent,
Securities Registrar or any other agent of the Company, in its individual or
any other capacity, may become the owner or pledgee of Debentures and, subject
to Sections 6.08 and 6.13, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Securities Registrar
or such other agent.
SECTION 6.06. Money Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability of interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 6.07. Compensation and Reimbursement. The Company agrees
(a) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder in such amounts
as the Company and the Trustee shall agree from time to time (which
compensation shall be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
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(b) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by
the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expenses,
disbursements or advances as may be attributable to its negligence or
bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel) incurred without negligence or bad faith, arising out of or
in connection with the acceptance or administration of this trust or
the performance of its duties hereunder, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder. This indemnification shall survive the termination
of this Agreement.
To secure the Company's payment obligations in this Section, the
Company and the Holders agree that the Trustee shall have a lien prior to the
Debentures on all money or property held or collected by the Trustee. Such
lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.01(e) or (f) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Reform Act of 1978 or a successor statute.
SECTION 6.08. Disqualification; Conflicting Interests. The Trustee
for the Debentures of any series issued hereunder shall be subject to the
provisions of Section 310(b) of the Trust Indenture Act. Nothing herein shall
prevent the Trustee from filing with the Commission the application referred to
in the second to last paragraph of Section 310(b) of the Trustee Indenture Act.
The Trust Agreement and the Texas Instruments Guarantee shall be deemed to be
specifically described in this Indenture for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 6.09. Corporate Trustee Required; Eligibility. There shall
at all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the
laws of the United States of America or of any State, Territory or the
District of Columbia, authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority, or
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(b) a corporation or other Person organized and doing
business under the laws of a foreign government that is permitted to
act as Trustee pursuant to a rule, regulation or order of the
Commission, authorized under such laws to exercise corporate trust
powers, and subject to supervision or examination by authority of such
foreign government or a political subdivision thereof substantially
equivalent to supervision or examination applicable to United States
institutional trustees,
in either case having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then, to the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article. Neither the Company nor any Person
directly or indirectly controlling, controlled by or under common control with
the Company shall serve as Trustee for the Debentures of any series issued
hereunder.
SECTION 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the
Debentures of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Debentures of such series.
(c) The Trustee may be removed at any time with respect to the
Debentures of any series by Act of the Holders of a majority in principal
amount of the Outstanding Debentures of such series, delivered to the Trustee
and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 6.08
after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Debenture for at least six months, or
(ii) the Trustee shall cease to be eligible under Section
6.09 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
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(iii) the Trustee shall become incapable of acting or shall
be adjudged as bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take charge
or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by Board Resolution may remove the
Trustee, or (B) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Debenture for at least six months may, on behalf of himself and all
other similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Debentures of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee with respect to the
Debentures of that or those series. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Debentures of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Debentures of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to
the Debentures of such series and supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Debentures of any
series shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Debenture for at least six months may, subject to Section
5.14, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Debentures of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Debentures of any series and each
appointment of a successor Trustee with respect to the Debentures of any series
by mailing written notice of such event by first-class mail, postage prepaid,
to the Holders of Debentures of such series as their name and addresses appear
in the Securities Register. Each notice shall include the name of the
successor Trustee with respect to the Debentures of such series and the address
of its Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. (a) In
case of the appointment hereunder of a successor Trustee with respect to all
Debentures, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign,
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transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Debentures of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Debentures of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (i) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor Trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Debentures of that or those series to which the appointment of such
successor Trustee relates, (ii) if the retiring Trustee is not retiring with
respect to all Debentures, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Debentures of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (iii) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trust hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of the trust hereunder separate and apart from the
trust hereunder administered by any other such Trustee and upon the execution
and delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts, duties of the retiring
trustee with respect to the Debentures of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company
or any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Debentures of that or those series to
which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the
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execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Debentures shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Debentures so authenticated, and in case any Debentures shall
not have been authenticated, any successor to the Trustee may authenticate such
Debentures either in the name of any predecessor Trustee or in the name of such
successor Trustee, and in all cases the certificate of authentication shall
have the full force which it is provided anywhere in the Debentures or in this
Indenture that the certificate of the Trustee shall have.
SECTION 6.13. Preferential Collection of Claims Against Company. If
and when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Debentures), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent or Agents with respect to one or more series of
Debentures which shall be authorized to act on behalf of the Trustee to
authenticate Debentures of such series issued upon original issue and upon
exchange, registration of transfer or partial redemption thereof, and
Debentures so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Debentures by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to the Company and shall
at all times be a corporation organized and doing business under the laws of
the United States of America, or of any State, Territory or the District of
Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.
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An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.06 to all Holders of Debentures
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provision of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.07.
If an appointment with respect to one or more series is made pursuant
to this Section, the Debentures of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Debentures referred to in the within mentioned
indenture.
--------------------------------------
--------------------------------------
As Trustee
By:
-----------------------------------
As Authenticating Agent
By:
-----------------------------------
Authorized Officer
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ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders. The
Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after January 1 and July
1, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such January 1 and July 1, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished, excluding from any such list names and addresses
received by the Trustee in its capacity as Securities Registrar.
SECTION 7.02. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Debentures, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
(c) Every Holder of Debentures, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.03. Reports by Trustee. (a) The Trustee shall transmit
to Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act, at the times
and in the manner provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of
not more than 12 months shall be transmitted no later than July 15 in each
calendar year, commencing with the first July 15 after the first issuance of
Debentures under this Indenture.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange or
self regulatory organization upon which the
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Debentures are listed and also with the Commission. The Company will notify
the Trustee whenever the Debentures are listed on any stock exchange or
self-regulatory organization.
SECTION 7.04. Reports by Company. The Company shall file with the
Trustee and with the Commission, and transmit to Holders, such information,
documents and other reports, and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided in
the Trust Indenture Act; provided that any such information, documents or
reports required to be filed with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 shall be filed with the
Trustee within 15 days after the same is required to be filed with the
Commission. Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company shall continue to file with the Commission
and provide the Trustee and Holders with the annual reports and the
information, documents and other reports which are specified in Sections 13 and
15(d) of the Securities Exchange Act of 1934. The Company also shall comply
with the other provisions of Trust Indenture Act Section 314(a).
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other corporation or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and no Person shall consolidate with or merge into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless:
(a) in case the Company shall consolidate with or merge
into another corporation or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, the corporation
formed by such consolidation or into which the Company is merged or
the Person which acquires by conveyance or transfer, or which leases,
the properties and assets of the Company substantially as an entirety
shall be a corporation organized and existing under the laws of the
United States of America or any State or the District of Columbia, and
shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of (and premium, if any) and
interest (including any Additional Interest) on all the Debentures and
the performance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(b) immediately after giving effect to such transaction,
no Event of Default, and no event which, after notice or lapse of
time, or both, would become an Event of Default, shall have happened
and be continuing;
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(c) in the case of the Debentures of a series issued to
the Texas Instruments Trust, such consolidation, merger, conveyance,
transfer or lease is permitted under the Trust Agreement and Texas
Instruments Guarantee and does not give rise to any breach of
violation of the Trust Agreement or Texas Instruments Guarantee; and
(d) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and any such
supplemental indenture complies with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with; and the Trustee, subject to Section 6.01, may
rely upon such Officers' Certificate and Opinion of Counsel as
conclusive evidence that such transaction complies with this Section
8.01.
SECTION 8.02. Successor Corporation Substituted. Upon any
consolidation or merger by the Company with or into any other corporation, or
any conveyance, transfer or lease by the Company of its properties and assets
substantially as an entirety to any Person in accordance with Section 8.01, the
successor corporation formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor corporation had
been named as the Company herein; and in the event of any such conveyance,
transfer or lease the Company shall be discharged from all obligations and
covenants under the Indenture and the Debentures and may be dissolved and
liquidated.
Such successor corporation may cause to be signed, and may issue
either in its own name or in the name of the Company, any or all of the
Debentures issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee; and, upon the order of such successor
corporation instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Debentures which previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication
pursuant to such provisions and any Debentures which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee on its behalf
for the purpose pursuant to such provisions. All the Debentures so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Debentures theretofore or thereafter issued in accordance with the terms
of this Indenture as though all of such Debentures had been issued at the date
of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Debentures thereafter
to be issued as may be appropriate.
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ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Holders.
Without the consent of or notice to any Holder, the Company, when authorized by
the Establishing Documents, and the Trustee, at any time and from time to time,
may enter into one or more indentures supplemental hereto, in form satisfactory
to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Debentures contained; or
(b) to convey, transfer, assign, mortgage or pledge any
property to or with the trustee or to surrender any right or power
herein conferred upon the Company; or
(c) to establish the form or terms of Debentures of any
series as permitted by Sections 2.01 or 3.01; or
(d) to add to covenants of the Company for the benefit of
the Holders of all or any series of Debentures (and if such covenants
are to be for the benefit of less than all series of Debentures,
stating that such covenants are expressly being included solely for
the benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(e) to add any additional Events of Default; or
(f) to add, change or eliminate any of the provisions of
this Indenture, provided that any such change or elimination shall
become effective only when there is no Debenture Outstanding of any
series created prior to the execution of such supplemental indenture
which is entitled to the benefit of such provision; or
(g) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action
pursuant to this clause (g) shall not materially adversely affect the
interest of the Holders of Debentures of any series or, in the case of
the Debentures of a series issued to the Texas Instruments Trust and
for so long as any of the corresponding series of Preferred Securities
shall remain outstanding, the holders of such Preferred Securities; or
(h) to evidence and provide for the acceptance of
appointment hereunder by successor Trustee with respect to the
Debentures of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
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facilitate the administration of the Trust hereunder by more than one
Trustee, pursuant to the requirements of Section 6.11(b);
(i) to comply with the requirements of the Commission in
order to effect or maintain the qualification of this Indenture under
the Trust Indenture Act; or
(j) to make provision with respect to the conversion or
exchange rights of the Holders of any series of Debentures pursuant to
the requirements of the Establishing Documents.
SECTION 9.02. Supplemental Indentures with Consent of Holders. With
the consent of the Holders of not less than a majority in principal amount of
the Outstanding Debentures of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Debentures of such series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Debenture affected thereby,
(a) except to the extent permitted by Section 3.11 or as
otherwise specified as contemplated by Section 3.01 with respect to
the extension of the interest payment period of the Debentures of any
series, change the Stated Majority of the principal of, or any
installment of interest (including any Additional Interest) on, any
Debenture, or reduce the principal amount thereof or the rate of
interest thereon or reduce any premium payable upon the redemption
thereof, or reduce the amount of principal of an Original Issue
Discount Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.02, or
change the place of payment where, or the coin or currency in which,
any Debenture or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after
the date fixed for redemption thereof); or
(b) adversely affect any right to convert or exchange any
Debenture or modify the provisions of this Indenture with respect to
the subordination of the Debentures in a manner adverse to such
Holder; or
(c) reduce the percentage in principal amount of the
Outstanding Debentures of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
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provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture; or
(d) modify any of the provisions of this Section, Section
5.13 or Section 10.06, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Debenture
affected thereby; or
(e) modify the provisions in Article Thirteen of this
Indenture with respect to the subordination of Outstanding Debentures
of any series in a manner adverse to the Holders thereof;
provided that, in the case of the Debentures of a series issued to the Texas
Instruments Trust, so long as any of the corresponding series of Preferred
Securities remains outstanding, no such amendment shall be made that adversely
affects the holders of such Preferred Securities, and no termination of this
Indenture shall occur, and no waiver of any Event of Default or compliance with
any covenant under this Indenture shall be effective, without the prior consent
of the holders of at least a majority of the aggregate liquidation preference
of such Preferred Securities then outstanding unless and until the principal
(and premium, if any) of the Debentures of such series and all accrued and
unpaid interest (including any Additional Interest) thereon have been paid in
full.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Debentures, or which modifies
the rights of the Holders of Debentures of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Debentures of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. Execution of Supplemental Indentures. In executing or
accepting the additional trusts created by any supplemental indenture permitted
by this Article or the modifications thereby of the trust created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture, and that all conditions precedent
have been complied with. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
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SECTION 9.04. Effect of Supplemental Indentures. Upon the execution
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Debentures
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 9.05. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
SECTION 9.06. Reference in Debentures to Supplemental Indentures.
Debentures authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for
in such supplemental indenture. If the Company shall so determine, new
Debentures of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Debentures of such series.
ARTICLE 10
COVENANTS
SECTION 10.01. Payment of Principal, Premium and Interest. The
Company covenants and agrees for the benefit of each series of Debentures that
it will duly and punctually pay the principal of (and premium, if any) and
interest on the Debentures of that series in accordance with the terms of such
Debentures and this Indenture.
SECTION 10.02. Maintenance of Office or Agency. The Company will
maintain in each Place of Payment for any series, an office or agency where
Debentures of that series may be presented or surrendered for payment and an
office or agency where Debentures may be surrendered for transfer or exchange
and where notices and demands to or upon the Company in respect of the
Debentures and this Indenture may be served. The Company initially appoints
the Trustee, acting through its Corporate Trust Office, as its agent for said
purposes. The Company will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the
Company shall fail to maintain such office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the Trustee,
and the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Debentures may be presented or surrendered for
any or all of such purposes, and may
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from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in each Place of Payment for
Debentures of any series for such purposes. The Company will give prompt
written notice to the Trustee of any such designation and any change in the
location of any such office or agency.
SECTION 10.03. Money for Debenture Payments to Be Held in Trust. If
the Company shall at any time act as its own Paying Agent with respect to any
series of Debentures, it will, on or before each due date of the principal of
(and premium, if any) or interest on any of the Debentures of such series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, on
or before each due date of the principal of or interest on any Debentures,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal and premium (if any) or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(a) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest on Debentures in trust
for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company
(or any other obligor upon the Debentures) in the making of any
payment of principal (and premium, if any) or interest;
(c) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent; and
(d) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any
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Paying Agent to pay, to the Trustee all sums held in trust by the Company or
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or such Paying Agent; and,
upon such payment by the Company or any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Debenture and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall (unless otherwise required by mandatory provision of applicable escheat
or abandoned or unclaimed property law) be paid on Company Request to the
Company, or (if then held by the Company) shall (unless otherwise required by
mandatory provision of applicable escheat or abandoned or unclaimed property
law) be discharged from such trust; and the Holder of such Debenture shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid the Company.
SECTION 10.04. Payment of Taxes and Other Claims. The Company will
pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (a) all taxes, assessments and governmental charges levied
or imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (b) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity
is being contested in good faith by appropriate proceedings.
SECTION 10.05. Statement as to Compliance. The Company shall deliver
to the Trustee, within120 days after the end of each calendar year of the
Company ending after the date hereof, an Officers' Certificate (signed by at
least one of the officers referred to in Section 314(a)(4) of the Trust
Indenture Act) covering the preceding calendar year, stating whether or not to
the best knowledge of the signers thereof the Company is in default in the
performance, observance or fulfillment of or compliance with any of the terms,
provisions, covenants and conditions of this Indenture, and if the Company
shall be in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge. For the purpose of this Section
10.05,
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compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture.
SECTION 10.06. Waiver of Certain Covenants. The Company may omit in
any particular instance to comply with any covenant or condition set forth in
Section 10.04 or as specified as contemplated by Section 3.01 with respect to
the Debentures of any series, if before or after the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Debentures of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of the Company in respect of any such
covenant or condition shall remain in full force and effect.
SECTION 10.07. Additional Sums. In the case of the Debentures of a
series issued to the Texas Instruments Trust, except as otherwise specified as
contemplated by Section 3.01, in the event that (a) the Property Trustee is the
Holder of all of the Outstanding Debentures of such series, (b) a Tax Event in
respect of the Texas Instruments Trust shall have occurred and be continuing and
(c) the Company shall not have (i) redeemed the Debentures of such series
pursuant to Section 11.07(b) or (ii) terminated the Texas Instruments Trust
pursuant to Section 9.02(b) of the Trust Agreement, the Company shall pay to the
Texas Instruments Trust (and its permitted successors or assigns under the Trust
Agreement) for so long as the Property Trustee (or its permitted successor or
assignee) is the registered Holder of any Debentures of such series, such
additional amounts as may be necessary in order that the amount of distributions
(including any Additional Amounts (as defined in the Trust Agreement)) then due
and payable by the Texas Instruments Trust on the related Preferred Securities
and Common Securities that at any time remain outstanding in accord with the
terms thereof shall not be reduced as a result of any Additional Taxes (the
"Additional Sums"); provided that, if this Indenture has not been qualified
under the Trust Indenture Act, the Company shall not be required to pay such
Additional Sums until this Indenture is so qualified. Whenever in this
Indenture or the Debentures there is a reference in any context to the payment
of principal of or interest on the Debentures, such mention shall be deemed to
include mention of the payments of the Additional Sums provided for in this
paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express mention of the payment of Additional Sums (if applicable) in any
provisions hereof shall not be construed as excluding Additional Sums in those
provisions hereof where such express mention is not made, provided, however,
that the extension of an interest payment period pursuant to Section 3.11 or the
Debentures shall not extend the payment of any Additional Sums that may be due
and payable during such interest payment period.
SECTION 10.08. Additional Covenants. The Company covenants and
agrees with each Holder of Debentures of a series issued to the Texas
Instruments Trust that it will not, and it will not permit any Subsidiary to,
(a) declare or pay any dividends or distributions on, or redeem,
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purchase, acquire or make a liquidation payment with respect to, any of the
Company's outstanding capital stock, (b) make any payment of principal, interest
or premium, if any, on or repay, repurchase or redeem any debt securities that
rank pari passu with or junior in interest to the Debentures of such series or
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any Subsidiary if such guarantee ranks pari passu or junior
in interest to the Debentures or (c) cause the conversion rights, if any, of the
Holders of the Debentures to expire (other than (i) dividends or distributions
in common stock of the Company, (ii) redemptions or purchases of any rights
pursuant to the Company's Shareholders Rights Plan, or any successor to such
Shareholders Rights Plan, and the declaration of a dividend of such rights in
the future, (iii) payments under the Texas Instruments Guarantee, (iv) purchases
of Texas Instruments Common Stock related to the issuance of Texas Instruments
Common Stock under any of the Company's benefit plans for its directors,
officers or employees and (v) purchases of Texas Instruments Common Stock
required to prevent loss or secure the renewal or reinstaement of any government
license or franchise held by the Company or the Subsidiaries) if at such time
(A) there shall have occurred any event of which the Company has actual
knowledge that (1) with the giving of notice or the lapse of time or both, would
constitute an Event of Default hereunder and (2) in respect of which the Company
shall not have taken reasonable steps to cure, (B) the Company shall be in
default with respect to its payment of any obligations under the Texas
Instruments Guarantee or (C) the Company shall have given notice of its
selection of an Extension Period as provided herein and shall not have rescinded
such notice, or such period, or any extension thereof, shall be continuing.
The Company also covenants with each Holder of Debentures of a series
issued to the Texas Instruments Trust (i) to maintain directly or indirectly
100% ownership of the Common Securities of the Texas Instruments Trust;
provided, however, that any permitted successor of the Company hereunder may
succeed to the Company's ownership of such Common Securities, (ii) not to
voluntarily terminate, wind-up or liquidate the Texas Instruments Trust, except
(a) in connection with a distribution of the Debentures of such series to the
holders of Preferred Securities in liquidation of the Texas Instruments Trust
or (b) in connection with certain mergers, consolidations or amalgamations
permitted by the Trust Agreement and (iii) to use its reasonable efforts,
consistent with the terms and provisions of the Trust Agreement, to cause the
Texas Instruments Trust to remain a business trust and not to be classified as
an association taxable as a corporation for United States Federal income tax
purposes.
ARTICLE 11
REDEMPTION OF DEBENTURES
SECTION 11.01. Applicability of this Article. Redemption of
Debentures (whether by operation of a sinking fund or otherwise) as permitted
or required by any form of Debenture issued pursuant to this Indenture shall be
made in accordance with such form of Debenture and this Article; provided,
however, that if any provision of any such form of Debenture shall conflict
with any provision of this Article, the provision of such form of Debenture
shall govern. Except
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as otherwise set forth in the form of Debenture for such series, each Debenture
shall be subject to partial redemption only in the amount of $50 or, in the
case of the Debentures of a series issued to the Texas Instruments Trust, $50,
or integral multiples thereof.
SECTION 11.02. Election to Redeem; Notice to Trustee. The election
of the Company to redeem any Debentures shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Company of
less than all of the Debentures of any particular series and having the same
terms, the Company shall, not less than 45 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such date and of the principal amount of Debentures of
that series to be redeemed. In the case of any redemption of Debentures prior
to the expiration of any restriction on such redemption provided in the terms
of such Debentures, the Company shall furnish the Trustee with an Officers'
Certificate and an Opinion of Counsel evidencing compliance with such
restriction.
SECTION 11.03. Selection of Debentures to Be Redeemed. If less than
all the Debentures of any series are to be redeemed (unless all the Debentures
of a specified tenor of such series are to be redeemed or unless such
redemption affects only a single Debenture), the particular Debentures to be
redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee from the Outstanding Debentures of such series; not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of a portion
of the principal amount of any Debenture of such series; provided that the
unredeemed portion of the principal amount of any Debenture shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Debenture. If less than all the Debentures of a
specified tenor of such series are to be redeemed (unless such redemption
affects only a single Debenture), the particular Debentures to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Debentures of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Debentures selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debentures shall relate,
in the case of any Debenture redeemed or to be redeemed only in part, to the
portion of the principal amount of such Debenture which has been or is to be
redeemed. If the Company shall so direct, Debentures registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Debentures selected for redemption.
SECTION 11.04. Notice of Redemption. Notice of redemption shall be
given by first-class mail, postage prepaid, mailed not later than the thirtieth
day, and not earlier than the sixtieth day, prior to the date fixed for
redemption, to each Holder of Debentures to be redeemed, at the address of such
Holder as it appears in the Securities Register.
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With respect to Debentures of each series to be redeemed, each notice
of redemption shall state:
(a) the date fixed for redemption for Debentures of such series;
(b) the redemption price at which Debentures of such series are to
be redeemed;
(c) if less than all Outstanding Debentures of such particular
series and having the same terms are to be redeemed, the identification (and,
in the case of partial redemption, the respective principal amounts) of the
particular Debentures to be redeemed;
(d) that on the date fixed for redemption, the redemption price at
which such Debentures are to be redeemed will become due and payable upon each
such Debenture or portion thereof, and that interest thereon, if any, shall
cease to accrue on and after said date;
(e) the place or places where such Debentures are to be
surrendered for payment of the redemption price at which such Debentures are to
be redeemed;
(f) that the redemption is for a sinking fund, if such is the
case; and
(g) if the Debentures are convertible, that a Holder of Debentures
who desires to convert Debentures called for redemption must satisfy the
requirements for conversion contained in such Debentures, the then existing
conversion price or rate, and the date and time when the option to convert
shall expire.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, a failure to give such notice by mail or any defect in
the notice to the Holder of any Debenture designated for redemption as a whole
or in part shall not affect the validity of the proceedings for the redemption
of any other Debenture.
SECTION 11.05. Deposit of Redemption Price. Prior to the Redemption
Date specified in the notice of redemption given as provided in Section 11.04,
the Company will deposit with the Trustee or with one or more Paying Agents an
amount of money sufficient to redeem on the Redemption Date all the Debentures
so called for redemption at the applicable Redemption Price.
SECTION 11.06. Debentures Payable on Redemption Date. If notice of
redemption has been given as provided in Section 11.04, the Debentures so to be
redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, together with any accrued interest
(including any Additional Interest) thereon, and from and after such
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date (unless the Company shall default in the payment of the Redemption Price
or any accrued interest (including any Additional Interest)) such Debentures
shall cease to bear interest. Upon surrender of any such Debenture for
redemption in accordance with said notice, such Debenture shall be paid by the
Company at the Redemption Price, together with any accrued interest (and any
Additional Interest) to the Redemption Date; provided, however, that, except as
may be otherwise provided with respect to Debentures convertible into another
security in a supplemental indenture, Board Resolution or other instrument
authorizing such Debentures, installments of interest on Debentures whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Debentures, or one of more Predecessor Debentures, registered
as such at the close of business on the relevant Regular Record Dates or
Special Record Dates, as the case may be, according to their terms and the
provisions of Section 3.07.
If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Debenture.
SECTION 11.07. Company's Right of Redemption. (a) Unless otherwise
specified as contemplated by Section 3.01 with respect to the Debentures of a
particular series and notwithstanding any additional redemption rights that may
be so specified, the Company may, at its option, redeem the Debentures of any
series after their date of issuance in whole at any time or in part from time
to time, subject to the provisions of this clause (a) and the other provisions
of this Article Eleventh. Unless otherwise specified as contemplated by
Section 3.01 with respect to the Debentures of a particular series, the
redemption price for any Debenture so redeemed pursuant to this clause (a)
shall be equal to 100% of the principal amount of such Debentures plus any
accrued and unpaid interest, including any Additional Interest, to the date
fixed for redemption. The Company shall not redeem the Debentures in part
unless all accrued and unpaid interest (including any Additional Interest) has
been paid in full on all Debentures Outstanding.
(b) In the case of the Debentures of a series issued to the Texas
Instruments Trust, except as otherwise specified as contemplated by Section
3.01, if a Special Event in respect of the Texas Instruments Trust shall occur
and be continuing, the Company may, at its option, redeem the Debentures of
such series at any time within 90 days of the occurrence of such Special Event,
in whole but not in part, subject to the provisions of this clause (b) and the
other provisions of this Article Eleven. The redemption price for any
Debenture so redeemed pursuant to this clause (b) shall be equal to 100% of the
principal amount of such Debentures then Outstanding plus accrued and unpaid
interest, including any Additional Interest, to the date fixed for redemption.
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ARTICLE 12
SINKING FUNDS
SECTION 12.01. Applicability of Article. The provisions of this
Article shall be applicable to any sinking fund for the retirement of
Debentures of any series except as otherwise specified as contemplated by
Section 3.01 of such Debentures.
The minimum amount of any sinking fund payment provided for by the
terms of any Debentures of any series is herein referred to as a "mandatory
sinking fund payment," and any sinking fund payment in excess of such minimum
amount which is permitted to be made by the terms of such Debentures of any
series is herein referred to as an "optional sinking fund payment." If
provided for by the terms of any Debentures of any series, the cash amount of
any sinking fund payment may be subject to reduction as provided in Section
12.02. Each sinking fund payment shall be applied to the redemption of
Debentures of any series as provided for by the terms of such Debentures.
SECTION 12.02. Satisfaction of Sinking Fund Payments With Debentures
.. In lieu of making all or any part of a mandatory sinking fund payment with
respect to any Debentures of a series in cash, the Company may at its option,
at any time no more than 16 months and no less than 30 days prior to the date
on which such sinking fund payment is due, deliver to the Trustee Debentures of
such series (together with the unmatured coupons, if any, appertaining thereto)
theretofore purchased or otherwise acquired by the Company, except Debentures
of such series that have been redeemed through the application of mandatory or
optional sinking fund payments pursuant to the terms of the Debentures of such
series, accompanied by a Company Order instructing the Trustee to credit such
obligations and stating that the Debentures of such series were originally
issued by the Company by way of bona fide sale or other negotiation for value;
provided that the Debentures to be so credited have not been previously so
credited. The Debentures to be so credited shall be received and credited for
such purpose by the Trustee at the redemption price for such Debentures, as
specified in the Debentures so to be redeemed, for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be
reduced accordingly.
SECTION 12.03. Redemption of Debentures for Sinking Fund. Not less
than 60 days prior to each sinking fund payment date for any series of
Debentures, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Debentures pursuant to the terms of such Debentures, the portion thereof, if
any, which is to be satisfied by payment of cash in the currency in which the
Debentures of such series are payable (except as provided pursuant to Section
3.01) and the portion thereof, if any, which is to be satisfied by delivering
and crediting Debentures pursuant to Section 12.02 and will also deliver to the
Trustee any Debentures to be so delivered. Such Certificate shall be
irrevocable and upon its delivery the Company shall be obligated to make the
cash payment or payments therein referred to, if any, on or before the
succeeding sinking fund payment date. In the case of
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the failure of the Company to deliver such Certificate (or, as required by this
Indenture, the Debentures and coupons, if any, specified in such Certificate),
the sinking fund payment due on the succeeding sinking fund payment date or
such series shall be paid entirely in cash and shall be sufficient to redeem
the principal amount of the Debentures of such series subject to a mandatory
sinking fund payment without the right to deliver or credit Debentures as
provided in Section 12.02 and without the right to make the optional sinking
fund payment with respect to such series at such time.
Any sinking fund payment (mandatory or optional) made in cash plus any
unused balance of any preceding sinking fund payments made with respect to the
Debentures of any particular series shall be applied by the Trustee (or by the
Company if the Company is acting as its own Paying Agent) on the sinking fund
payment date on which such payment is made (or, if such payment is made before
a sinking fund payment date, on the sinking fund payment date immediately
following the date of such payment) to the redemption of Debentures of such
series at the redemption price specified in such Debentures with respect to the
sinking fund. Any sinking fund moneys not so applied or allocated by the
Trustee (or segregated and held in trust as provided in Section 10.03 by the
Company if the Company is acting as its own Paying Agent) for such series,
together with such payment (or such amount so segregated) shall be applied in
accordance with the provisions of this Section 12.03. Any and all sinking
fund moneys with respect to the Debentures of any particular series held by the
Trustee (or if the Company is acting as its own Paying Agent, segregated and
held in trust as provided in Section 10.03) on the last sinking fund payment
date with respect to Debentures of such series and not held for the payment or
redemption of particular Debentures of such series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent),
together with other moneys, if necessary, to be deposited (or segregated)
sufficient for the purpose, to the payment of the principal of the Debentures
of such series at Maturity. The Trustee shall select the Debentures to be
redeemed upon such sinking fund payment date in the manner specified in Section
11.03 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 11.04. Such
notice having been duly given, the redemption of such Debentures shall be made
upon the terms and in the manner stated in Section 11.06. On or before each
sinking fund payment date, the Company shall pay to the Trustee (or, if the
Company is acting as its own Paying Agent, the Company shall segregate and hold
in trust as provided in Section 10.03) in cash a sum in the currency in which
Debentures of such series are payable (except as provided pursuant to Section
3.01) equal to the principal and any interest accrued to the redemption date
for Debentures or portions thereof to be redeemed on such sinking fund payment
date pursuant to this Section 12.03.
Neither the Trustee nor the Company shall redeem any Debentures of a
series with sinking fund moneys or mail any notice of redemption of Debentures
of such series by operation of the sinking fund for such series during the
continuance of a default in payment of interest, if any, on any Debentures of
such series or of any Event of Default (other than an Event of Default
occurring as a consequence of this paragraph) with respect to the Debentures of
such series,
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except that if the notice of redemption shall have been provided in accordance
with the provisions hereof, the Trustee (or the Company if the Company is then
acting as its own Paying Agent) shall redeem such Debentures if cash sufficient
for that purpose shall be deposited with the Trustee (or segregated by the
Company) for that purpose in accordance with the terms of this Article Twelve.
Except as aforesaid, any moneys in the sinking fund for such series at the time
when any such default or Event of Default shall occur and any moneys thereafter
paid into such sinking fund shall, during the continuance of such default or
Event of Default, be held as security for the payment of the Debentures and
coupons, if any, of such series; provided, however, that in case such default
or Event of Default shall have been cured or waived herein, such moneys shall
thereafter be applied on the next sinking fund payment date for the Debentures
of such series on which such moneys may be applied pursuant to the provisions
of this Section 12.03.
ARTICLE 13
SUBORDINATION OF DEBENTURES
SECTION 13.01. Debentures Subordinate to Senior Debt. The Company
covenants and agrees, and each Holder of a Debenture, by its acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article, the payment of the principal of (and
premium, if any) and interest (including any Additional Interest) on each and
all of the Debentures are hereby expressly made subordinate and subject in
right of payment to the prior payment in full of all amounts then due and
payable in respect of all Senior Debt.
SECTION 13.02. Payment Over of Proceeds upon Dissolution, Etc. In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company (each such event, if any, herein sometimes
referred to as a "Proceeding"), then the holders of Senior Debt shall be
entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt, or provision shall be made for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to
the holders of Senior Debt, before the Holders of the Debentures are entitled
to receive or retain any payment or distribution of any kind or character,
whether in cash, property or Debentures (including any payment or distribution
which may be payable or deliverable by reason of the payment of any other Debt
of the Company (including any series of the Debentures) subordinated to the
payment of the Debentures, such payment or distribution being hereinafter
referred to as a "Junior Subordinated Payment"), on account of principal of (or
premium, if any) or interest (including any Additional Interest) on the
Debentures or on account of the purchase or other acquisition of Debentures by
the Company or any Subsidiary and to that end the holders of Senior Debt shall
be entitled to receive, for application to the payment thereof, any payment or
distribution of any kind of character, whether in cash, property or Debentures,
including any Junior Subordinated Payment, which may be payable or deliverable
in respect of the Debentures in any such Proceeding.
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In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Debenture shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or Debentures, including any Junior Subordinated
Payment, before all Senior Debt is paid in full or payment thereof is provided
for in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, and if such fact shall, at or prior to the time of such
payment or distribution, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment or distribution shall
be paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other Person making payment
or distribution of assets of the Company for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
For the purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or Debentures"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or Debentures of the Company or any other corporation provided for
by a plan of reorganization or readjustment which Debentures are subordinated
in right of payment to all then outstanding Senior Debt to substantially the
same extent as the Debentures are so subordinated as provided in this Article.
The consolidation of the Company with, or the merger of the Company into,
another Person or the liquidation or dissolution of the Company following the
sale of all or substantially all of its properties and assets as an entirety to
another Person or the liquidation or dissolution of the Company following the
sale of all or substantially all of its properties and assets as an entirety to
another Person upon the terms and conditions set forth in Article Eight shall
not be deemed a Proceeding for the purposes of this Section if the Person
formed by such consolidation or into which the Company is merged or the Person
which acquires by sale such properties and assets as an entirety, as the case
may be, shall, as a part of such consolidation, merger, or sale comply with the
conditions set forth in Article Eight.
SECTION 13.03. Prior Payment to Senior Debt upon Acceleration of
Debentures. In the event that any Debentures are declared due and payable
before their Maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Debentures so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Debt (including any amounts due upon acceleration), or provision shall
be made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the Holders of the
Debentures are entitled to receive any payment or distribution of any kind or
character, whether in cash, properties or Debentures (including any Junior
Subordinated Payment) by the Company on account of the principal of (or
premium, if any) or interest (including any Additional Interest) on the
Debentures or on account of the purchase or other acquisition of Debentures by
the Company or any Subsidiary; provided, however, that nothing in this Section
shall prevent the satisfaction of any sinking fund payment in accordance with
this Indenture or as otherwise specified as contemplated by Section 3.01 for
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the Debentures of any series by delivering and crediting pursuant to Section
12.02 or as otherwise specified as contemplated by Section 3.01 for the
Debentures of any series, Debentures which have been acquired (upon redemption
or otherwise) prior to such declaration of acceleration.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Debenture prohibited by
the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the
case may be, such Holder, then and in such event such payment shall be paid
over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 13.02 would be applicable.
SECTION 13.04. No Payment When Senior Debt in Default. (a) In the
event and during the continuation of any default in the payment of principal of
(or premium, if any) or interest on any Senior Debt, or in the event that any
event of default with respect to any Senior Debt shall have occurred and be
continuing and shall have resulted in such Senior Debt becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable, unless and until such event of default shall have been
cured or waived or shall have ceased to exist and such acceleration shall have
been rescinded or annulled, or (b) in the event any judicial proceeding shall
be pending with respect to any such default in payment or such event or
default, then no payment or distribution of any kind or character, whether in
cash, properties or Debentures (including any Junior Subordinated Payment)
shall be made by the Company on account of principal of (or premiums, if any)
or interest (including any Additional Interest), if any, on the Debentures or
on account of the purchase or other acquisition of Debentures by the Company or
any Subsidiary; provided, however, that nothing in this Section shall prevent
the satisfaction of any sinking fund payment in accordance with this Indenture
or as otherwise specified as contemplated by Section 3.01 for the Debentures of
any series by delivering and crediting pursuant to Section 12.02 or as
otherwise specified as contemplated by Section 3.01 for the Debentures of any
series Debentures which have been acquired (upon redemption or otherwise) prior
to such default in payment or event of default.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Debenture prohibited by
the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the
case may be, such Holder, then and in such event such payment shall be paid
over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 13.02 would be applicable.
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SECTION 13.05. Payment Permitted If No Default. Nothing contained in
this Article or elsewhere in this Indenture or in any of the Debentures shall
prevent (a) the Company, at any time except during the pendency of any
Proceeding referred to in Section 13.02 or under the conditions described in
Sections 13.03 and 13.04, from making payments at any time of principal of (and
premium, if any) or interest on the Debentures, or (b) the application by the
Trustee of any money or Government Obligations deposited with it hereunder to
the payment of or on account of the principal of (and premium, if any) or
interest (including any Additional Interest) on the Debentures or the retention
of such payment by the Holders, if, at the time of such application by the
Trustee, it did not have knowledge that such payment would have been prohibited
by the provisions of this Article.
SECTION 13.06. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all Senior Debt, or the provision for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to
the holders of Senior Debt, the Holders of the Debentures shall be subrogated
to the extent of the payments or distributions made to the holders of such
Senior Debt pursuant to the provisions of this Article (equally and ratably
with the holders of all indebtedness of the Company which by its express terms
is subordinated to Senior Debt of the Company to substantially the same extent
as the Debentures are subordinated to the Senior Debt and is entitled to like
rights of subrogation by reason of any payments or distributions made to
holders of such Senior Debt) to the rights of the holders of such Senior Debt
to receive payments and distributions of cash, property and Debentures
applicable to the Senior Debt until the principal of (and premium, if any) and
interest on the Debentures shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior Debt of
any cash, property or Debentures to which the Holders of the Debentures or the
Trustee would be entitled except for the provisions of this Article, and no
payments pursuant to the provisions of this Article to the holders of Senior
Debt by Holders of the Debentures or the Trustee, shall, as among the Company,
its creditors other than holders of Senior Debt, and the Holders of the
Debentures, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt.
SECTION 13.07. Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Debentures on the one hand
and the holders of Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Debentures is intended to or
shall (a) impair, as between the Company and the Holders of the Debentures, the
obligations of the Company, which are absolute and unconditional, to pay to the
Holders of the Debentures the principal of (and premium, if any) and interest
(including any Additional Interest) on the Debentures as and when the same
shall become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company of the Holders of the Debentures and
creditors of the Company other than their rights in relation to the holders of
Senior Debt; or (c) prevent the Trustee or the Holder of any Debenture from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture including, without limitation,
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filing and voting claims in any Proceeding, subject to the rights, if any,
under this Article of the holders of Senior Debt to receive cash, property and
Debentures otherwise payable or deliverable to the Trustee or such Holder.
SECTION 13.08. Trustee to Effectuate Subordination. Each Holder of a
Debenture by his or her acceptance thereof authorizes and directs the Trustee
on his or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination provided in this Article and
appoints the Trustee his or her attorney-in- fact for any and all such
purposes.
SECTION 13.09. No Waiver of Subordination Provisions. No right of
any present or future holder of any Senior Debt to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof that any such holder may have or be otherwise charged with.
SECTION 13.10. Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in respect of the
Debentures. Notwithstanding the provisions of this Article or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Debentures, unless and until the Trustee shall
have received written notice thereof from the Company or a holder of Senior
Debt or from any trustee, agent or representative therefor (whether or not the
facts contained in such notice are true); provided, however, that if the
Trustee shall not have received the notice provided for in this Section at
least two Business Days prior to the date upon which by the terms hereof any
monies may become payable for any purpose (including, without limitation, the
payment of the principal of (and premium, if any) or interest (including any
Additional Interest) on any Debenture), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received and shall not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date.
SECTION 13.11. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of Article
Six, and the Holders of the Debentures shall be entitled to rely upon any order
or decree entered by any court of competent jurisdiction in which a Proceeding
is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or
to the Holders of Debentures, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of the
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Senior Debt and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article.
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee, in its capacity as trustee under this Indenture, shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt and shall not be
liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Debentures or to the Company or to any other Person
cash, property or Debentures to which any holders of Senior Debt shall be
entitled by virtue of this Article or otherwise.
SECTION 13.13. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Debt which may at any time be held by it, to the same extent as any
other holder of Senior Debt, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder.
SECTION 13.14. Article Applicable to Paying Agents. In case at any
time any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term "Trustee" as used in this
Article shall in such case (unless the context otherwise requires) be construed
as extending to and including such Paying Agent within its meaning as fully for
all intent and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee.
SECTION 13.15. Certain Conversions or Exchanges Deemed Payment. For
the purpose of this Article only, (a) the issuance and delivery of junior
securities upon conversion or exchange of Debentures shall not be deemed to
constitute a payment or distribution on account of the principal of (or
premium, if any) or interest (including any Additional Interest) on Debentures
or on account of the purchase or other acquisition of Debentures, and (b) the
payment, issuance or delivery of cash, property or securities (other than
junior securities) upon conversion or exchange of a Debenture shall be deemed
to constitute payment on account of the principal of such security. For the
purpose of this Section, the term "junior securities" means (i) shares of any
stock of any class of the Company and (ii) securities of the Company which are
subordinated in right of payment to all Senior Debt which may be outstanding at
the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Debentures are so subordinated as
provided in this Article.
* * * *
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This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
TEXAS INSTRUMENTS INCORPORATED
By:
-----------------------------------
Attest:
(-----------------------------------)
as Trustee
By:
-----------------------------------
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State of :
: SS.
County of :
On the __ day of ______________, _____ before me personally came
_____________________, to me known, who being duly sworn, did depose and say
that he/she is _______________________ of Texas Instruments Incorporated, one
of the corporations described in and which executed the foregoing instrument;
that he/she knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he/she signed his/her name
thereto by like authority.
-----------------------------------
Notary Public
My Commission Expires:
State of :
: SS.
County of :
On the __ day of ______________, _____ before me personally came
_____________________, to me known, who being duly sworn, did depose and say
that he/she is _______________________ of The
(_______________________________), a [Delaware] banking corporation, described
in and which executed the foregoing instrument; that he/she knows the seal of
said association; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
association, and that he/she signed his/her name thereto by like authority.
-----------------------------------
Notary Public
My Commission Expires:
77
<PAGE> 1
CERTIFICATE OF TRUST OF
TEXAS INSTRUMENTS FINANCIAL TRUST
THIS Certificate of Trust of Texas Instruments Financial Trust
(the "Trust"), dated as of June 28, 1996, is being duly executed and filed by
the undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. C. Section 3801 (et seq.).
1. Name. The name of the business trust formed hereby
is Texas Instruments Financial Trust.
2. Delaware Trustee. The name and business address of
the trustee of the Trust with a principal place of business in the State of
Delaware is First Chicago Delaware Inc., 300 King Street, Wilmington, DE 19801.
3. Effective Date. This Certificate of Trust shall be
effective upon filing with the Secretary of State.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
By: /s/ JOHN W. PETTIJOHN
--------------------------------
John W. Pettijohn
as Administrative Trustee
By: /s/ DAVID B. WILLIS
--------------------------------
David B. Willis
as Administrative Trustee
The First National Bank of Chicago,
as Property Trustee
By: /s/ STEVEN M. WAGNER
--------------------------------
Name: Steven M. Wagner
Title: Vice President
First Chicago Delaware Inc.
as Delaware Trustee
By: /s/ L. DILLARD
--------------------------------
Name: L. Dillard
Title: Vice President
<PAGE> 1
EXHIBIT 4(c)
TRUST AGREEMENT
This TRUST AGREEMENT, dated as of June 28, 1996, among (i)
Texas Instruments Incorporated, a Delaware corporation, as "Depositor"; (ii) The
First National Bank of Chicago, a national banking association duly organized
and existing under the laws of the United States (the "Property Trustee");
(iii) First Chicago Delaware Inc., a Delaware corporation (the "Delaware
Trustee"); and (iv) John W. Pettijohn and David B. Willis (each, an
"Administrative Trustee" and with the Property Trustee and the Administrative
Trustees, the "Trustees"). The Depositor and the Trustees hereby agree as
follows:
1. The trust created hereby shall be known as Texas
Instruments Financial Trust, in which name the Trustees, or the Depositor to
the extent provided herein, may conduct the business of the Trust, make and
execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and
sets over to the Trust the sum of $10. The Trustees hereby acknowledge
receipt of such amount in trust from the Depositor, which amount shall
constitute the initial trust estate. The Trustees hereby declare that they
will hold the trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a business trust
under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801 et
seq. (the "Business Trust Act"), and that this document constitutes the
governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Delaware Secretary
of State in accordance with the provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an
amended and restated Trust Agreement, satisfactory to each such party and
substantially in the form included as Exhibit 4(d) to the 1933 Act Registration
Statement (as defined below), to provide for the contemplated operation of the
Trust created hereby and the issuance of the Preferred Securities and Common
Securities referred to therein. Prior to the execution and delivery of such
amended and restated Trust Agreement, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize and
direct the Depositor, as the sponsor of the Trust, (i) to file with the
Securities and Exchange Commission (the "Commission") and execute, in each case
on behalf of the Trust, (a) the Registration Statement on Form S-3 (the "1933
Act Registration Statement"), including any pre-effective or post-effective
amendments to such 1933 Act Registration Statement (including the prospectus
and the exhibits contained therein), relating to the registration under the
Securities Act of 1933, as amended, of the Preferred Securities of the Trust
and certain other securities and (b) a Registration Statement on Form 8-A (the
"1934 Act
<PAGE> 2
Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities of
the Trust under Section 12 of the Securities Exchange Act of 1934, as amended,
(ii) to file with one or more national securities exchanges (each, an
"Exchange") or the National Association of Securities Dealers ("NASD") and
execute on behalf of the Trust a listing application or applications and all
other applications, statements, certificates, agreements and other instruments
as shall be necessary or desirable to cause the Preferred Securities to be
listed on any such Exchange or the NASD's Nasdaq National Market ("NASDAQ"),
(iii) to file and execute on behalf of the Trust such applications, reports,
surety bonds, irrevocable consents, appointments of attorney for service of
process and other papers and documents as the Depositor, on behalf of the
Trust, may deem necessary or desirable to register the Preferred Securities
under the securities or "Blue Sky" laws, (iv) to execute on behalf of the Trust
such Underwriting Agreements with one or more underwriters relating to the
offering of the Preferred Securities as the Depositor, on behalf of the Trust,
may deem necessary or desirable. In the event that any filing referred to in
clauses (i), (ii) and (iii) above is required by the rules and regulations of
the Commission, any Exchange, the NASD or state securities or Blue Sky laws, to
be executed on behalf of the Trust by a Trustee, either Administrative Trustee,
in his capacity as an Administrative Trustee of the Trust, is hereby authorized
and directed to join in any such filing and to execute on behalf of the Trust
any and all of the foregoing, it being understood that The First National Bank
of Chicago and First Chicago Delaware Inc., in their capacities as Trustees of
the Trust, shall not be required to join in any such filing or execute on
behalf of the Trust any such document unless required by the rules and
regulations of the Commission, the New York Stock Exchange or any other
national stock exchange or state securities or Blue Sky laws. In connection
with all of the foregoing, the Depositor and each Trustee, solely in its
capacity as Trustee of the Trust hereby constitutes and appoints John W.
Pettijohn and David B. Willis and each of them, as his or its, as the case may
be, true and lawful attorneys-in-fact and agents, and each of them with full
power of substitution and resubstitution, for the undersigned to execute on
behalf of the Trust any and all of the foregoing.
5. This Trust Agreement may be executed in one or more
counterparts.
6. The number of Trustees initially shall be four (4)
and thereafter the number of Trustees shall be such number as shall be fixed
from time to time by a written instrument signed by the Depositor which may
increase or decrease the number of Trustees; provided, however, that to the
extent required by the Business Trust Act, one Trustee shall either be a
natural person who is a resident of the State of Delaware or, if not a natural
person, an entity which has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable Delaware law.
Subject to the foregoing, the Depositor is entitled to appoint or remove
without cause any Trustee at any time. The Trustees may resign upon thirty
days' prior notice to the Depositor.
2
<PAGE> 3
7. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to conflict of laws principles).
(Remainder of Page Intentionally Blank)
3
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
TEXAS INSTRUMENTS INCORPORATED,
as Depositor
By: /s/ WILLIAM A. AYLESWORTH
---------------------------------
Name: William A. Aylesworth
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
By: /s/ JOHN W. PETTIJOHN
-----------------------------------
John W. Pettijohn,
as Administrative Trustee
By: /s/ DAVID B. WILLIS
---------------------------------
David B. Willis
as Administrative Trustee
The First National Bank of Chicago,
as Property Trustee
By: /s/ STEVEN M. WAGNER
---------------------------------
Name: Steven M. Wagner
Title: Vice President
First Chicago Delaware Inc.,
as Delaware Trustee
By: /s/ L. DILLARD
---------------------------------
Name: L. Dillard
Title: Vice President
4
<PAGE> 1
EXHIBIT 4(d)
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
TEXAS INSTRUMENTS INCORPORATED,
AS DEPOSITOR,
THE FIRST NATIONAL BANK OF CHICAGO,
AS PROPERTY TRUSTEE,
FIRST CHICAGO DELAWARE INC.,
AS DELAWARE TRUSTEE,
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF ____________ __, 1996
TEXAS INSTRUMENTS FINANCIAL TRUST
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1
DEFINED TERMS
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2
ESTABLISHMENT OF THE TRUST
SECTION 2.01. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.02. Office of the Delaware Trustee; Principal Place of Business . . . . . . . . . 13
SECTION 2.03. Initial Contribution of Trust Property; Organizational Expenses . . . . . . . 13
SECTION 2.04. Issuance of the Preferred Securities . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.05. Subscription and Purchase of Debentures; Issuance of the Common Securities . . 14
SECTION 2.06. Declaration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.07. Authorization to Enter into Certain Transactions . . . . . . . . . . . . . . . 14
SECTION 2.08. Assets of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.09. Title to Trust Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 3
PAYMENT ACCOUNT
SECTION 3.01. Payment Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 4
DISTRIBUTIONS; REDEMPTION; EXCHANGE; CONVERSION
SECTION 4.01. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.02. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.03. Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.04. Exchange of Preferred Securities for Debentures . . . . . . . . . . . . . . . 27
SECTION 4.05. Subordination of Common Securities . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.06. Payment Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.07. Tax Returns and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.08. Payment of Taxes, Duties, Etc. of the Trust . . . . . . . . . . . . . . . . . 31
SECTION 4.09. Payments under Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 5
TRUST SECURITIES CERTIFICATES
SECTION 5.01. Initial Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.02. The Trust Securities Certificates . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.03. Delivery of Trust Securities Certificates. . . . . . . . . . . . . . . . . . . 32
SECTION 5.04. Registration of Transfer and Exchange of Preferred Securities Certificates . . 32
SECTION 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates . . . . . . 33
SECTION 5.06. Persons Deemed Securityholders . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.07. Access to List of Securityholders' Name and Addresses . . . . . . . . . . . . 33
SECTION 5.08. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.09. Appointment of Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.10. Ownership of Common Securities by Depositor . . . . . . . . . . . . . . . . . 35
SECTION 5.11. Book Entry Preferred Securities Certificates; Common Securities Certificate . 35
SECTION 5.12. Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.13. Definitive Preferred Securities Certificates . . . . . . . . . . . . . . . . . 36
SECTION 5.14. Rights of Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 6
ACT OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.01. Limitations on Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.02. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.03. Meetings of Preferred Securityholders . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.04. Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.05. Proxies, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.06. Securityholder Action by Written Consent . . . . . . . . . . . . . . . . . . . 39
SECTION 6.07. Record Date for Voting and Other Purposes . . . . . . . . . . . . . . . . . . 40
SECTION 6.08. Acts of Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.09. Inspection of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Bank, the Property Trustee and
the Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.02. Representations and Warranties of Depositor . . . . . . . . . . . . . . . . . 43
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 8
THE TRUSTEES
SECTION 8.01. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.02. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.03. Certain Rights of Property Trustee . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.04. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . 47
SECTION 8.05. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 8.06. Compensation; Indemnity; Fees . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 8.07. Corporate Property Trustee Required; Eligibility of Trustees . . . . . . . . . 48
SECTION 8.08. Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 8.09. Co-trustees and Separate Trustee . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 8.10. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . 51
SECTION 8.11. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . 52
SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . 53
SECTION 8.13. Preferential Collection of Claims Against Depositor or Trust . . . . . . . . . 54
SECTION 8.14. Reports by Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.15. Reports to the Property Trustee . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.16. Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . 55
SECTION 8.17. Number of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.18. Delegation of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE 9
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.01. Termination upon Expiration Date . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 9.02. Early Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 9.03. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 9.04. Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 9.05. Mergers, Consolidations, Amalgamations or Replacements of the Trust . . . . . 58
ARTICLE 10
MISCELLANEOUS PROVISIONS
SECTION 10.01. Limitation of Rights of Securityholders . . . . . . . . . . . . . . . . . . . 60
SECTION 10.02. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.03. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.04. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.05. Payments Due on Non-Business Day . . . . . . . . . . . . . . . . . . . . . . 61
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 10.06. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.07. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.08. Reports, Notices and Demands . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.09. Agreement Not to Petition . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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
EXHIBIT A - Certificate of Trust of Texas Instruments Financial Trust
EXHIBIT B - Form of Certificate Depository Agreement
EXHIBIT C - Form of Common Securities of Texas Instruments Financial Trust
EXHIBIT D - Form of Agreement As To Expenses and Liabilities
EXHIBIT E - Form of Preferred Securities of Texas Instruments Financial Trust
</TABLE>
iv
<PAGE> 6
TEXAS INSTRUMENTS FINANCIAL TRUST*
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
TRUST INDENTURE TRUST AGREEMENT
ACT SECTION SECTION
<S> <C>
Section 310 (a)(1) . . . . . . . . . . . . . . . . . 8.07
(a)(2) . . . . . . . . . . . . . . . . . 8.07
(a)(3) . . . . . . . . . . . . . . . . . 8.09
(a)(4) . . . . . . . . . . . . . . . . . 2.07(a)(ii)
(b) . . . . . . . . . . . . . . . . . 8.08
Section 311 (a) . . . . . . . . . . . . . . . . . 8.13
(b) . . . . . . . . . . . . . . . . . 8.13
Section 312 (a) . . . . . . . . . . . . . . . . . 5.07
(b) . . . . . . . . . . . . . . . . . 5.07
(c) . . . . . . . . . . . . . . . . . 5.07
Section 313 (a) . . . . . . . . . . . . . . . . . 8.14(a)
(c) . . . . . . . . . . . . . . . . . 10.08
(d) . . . . . . . . . . . . . . . . . 8.14(c)
(a)(4) . . . . . . . . . . . . . . . . . 8.14(b)
(b) . . . . . . . . . . . . . . . . . 8.14(b)
Section 314 (a) . . . . . . . . . . . . . . . . . 8.15
(b) . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . 8.16
(c)(2) . . . . . . . . . . . . . . . . . 8.16
(c)(3) . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . 1.01, 8.16
Section 315 (a) . . . . . . . . . . . . . . . . . 8.01(a), 8.03(a)
(b) . . . . . . . . . . . . . . . . . 8.02, 10.08
(c) . . . . . . . . . . . . . . . . . 8.01(a)
(d) . . . . . . . . . . . . . . . . . 8.01, 8.03
(e) . . . . . . . . . . . . . . . . . Not Applicable
Section 316 (a) . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(A) . . . . . . . . . . . . . . . . . Not Applicable
</TABLE>
- - - - ---------------
* Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
<PAGE> 7
<TABLE>
<CAPTION>
TRUST INDENTURE TRUST AGREEMENT
ACT SECTION SECTION
<S> <C>
(a)(1)(B) . . . . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . 6.07
Section 317 (a)(1) . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . 5.09
Section 318 (a) . . . . . . . . . . . . . . . . . 10.10
</TABLE>
2
<PAGE> 8
AMENDED AND RESTATED TRUST AGREEMENT, dated as of _______ __, 1996,
among (i) Texas Instruments Incorporated, a Delaware corporation (including any
successors or assigns, "the Depositor"), (ii) The First National Bank of
Chicago, a national banking association duly organized and existing under the
laws of the United States, as property trustee (in such capacity, the "Property
Trustee" and, in its personal capacity and not in its capacity as Property
Trustee, the "Bank"), (iii) First Chicago Delaware Inc., a corporation duly
organized and existing under the laws of the State of Delaware, as Delaware
trustee (in such capacity, the "Delaware Trustee"), (iv) John W. Pettijohn, an
individual, and David B. Willis, an individual, each of whose address is c/o
Texas Instruments Incorporated, 13500 North Central Expressway, P.O. Box
655474, Dallas, Texas 75265-5474 (each, an "Administrative Trustee" and,
collectively, the "Administrative Trustees" and, collectively with the Property
Trustee and Delaware Trustee, the "Trustees") and (iv) the several Holders as
hereinafter defined.
W I T N E S S E T H:
WHEREAS, the Depositor and the Trustees have heretofore duly declared
and established a business trust pursuant to the Delaware Business Trust Act by
the entering into of that certain Trust Agreement, dated as of June 28, 1996
(the "Original Trust Agreement"), and by the execution and filing by the
Trustees with the Secretary of State of the State of Delaware of the
Certificate of Trust, filed on June 28, 1996, attached as Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and restate
the Original Trust Agreement in its entirety as set forth herein to provide
for, among other things, (i) the issuance of the Common Securities by the Trust
to the Depositor, (ii) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement and (iii) the acquisition by the
Trust from the Depositor of all of the right, title and interest in the
Debentures;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other party
and for the benefit of the holders of the Preferred Securities, hereby amends
and restates the Original Trust Agreement in its entirety and agrees as
follows:
1
<PAGE> 9
ARTICLE 1.
DEFINED TERMS
SECTION 1.01. 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; and
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole and
not to any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Additional Amount" means, with respect to Trust Securities of
a given Liquidation Amount and for 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.
"Administrative Trustee" means each of John W. Pettijohn and
David B. Willis, each solely in his capacity as Administrative Trustee
of the Trust formed and continued hereunder and not in his individual
capacity, or such Administrative Trustee's successor in interest in
such capacity, or any successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person, provided, however
that an Affiliate of the Depositor shall not be deemed to include the
Trust. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
2
<PAGE> 10
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person as bankrupt
or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of any substantial part of its
property or ordering the winding-up or liquidation of its
affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days: or
(b) the institution by such Person of proceedings to
be adjudicated as bankrupt or insolvent, or the consent by it
to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under any applicable
Federal or State bankruptcy, insolvency, reorganization or
other similar law, or the consent by it to the filing of any
such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or similar official) of such
Person or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its
debts generally as they become due and its willingness to be
adjudicated a bankrupt, or the taking of corporate action by
such Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.09.
"Board of Directors" means either the board of directors of
the Depositor or any committee of that board duly authorized to act
hereunder.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Depositor to have been
duly adopted by the Depositor's Board of Directors, or such committee
of the Board of Directors or officers of the Depositor to which
authority to act on behalf of the Board of Directors has been
delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a
beneficial interest in the Preferred Securities Certificates,
ownership and transfers of which shall be made through book entries by
a Clearing Agency as described in Section 5.11.
3
<PAGE> 11
"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 principal office of the Debenture Trustee is closed for
business.
"Certificate Depository Agreement" means the agreement among
the Trust, the Depositor and The Depository Trust Company, as the
initial Clearing Agency, dated as of the Closing Date, relating to the
Trust 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 Securities Exchange
Act of 1934, as amended. The Depository Trust Company will be the
initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time
a Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.
"Closing Date" means the First Time of Delivery (as defined in
the 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 Securities Exchange
Act of 1934, as amended, or, if at any time after the execution of
this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Security" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $50 and having
the rights provided therefor in this Trust Agreement, including the
right to receive Distributions and a Liquidation Distribution as
provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as
Exhibit C.
"Conversion Agent" has the meaning specified in Section 4.03.
"Conversion Date" has the meaning specified in Section 4.03.
4
<PAGE> 12
"Conversion Expiration Date" means the date selected by the
Depositor not less than 30 days nor more than 60 days after the date
on which the Depositor issues a press release announcing its intention
to terminate the conversion rights for the Holders.
"Conversion Price" has the meaning specified in Section 4.03.
"Conversion Request" has the meaning specified in Section
4.03.
"Corporate Trust Office" means the principal office of the
Property Trustee at which at any particular time its trust business
shall be administered.
"Current Market Price", with respect to Texas Instruments
Common Stock, for any day means the last reported sale price, regular
way, on such day, or, if no sale takes place on such day, the average
of the reported closing bid and asked prices on such day, regular way,
in either case as reported on the New York Stock Exchange Composite
Transactions Tape, or, if the Texas Instruments Common Stock is not
listed or admitted to trading on the New York Stock Exchange on such
day, on the principal national securities exchange on which the Texas
Instruments Common Stock is listed or admitted to trading, if the
Texas Instruments Common Stock is listed on a national securities
exchange, or the Nasdaq National Market, or, if the Texas Instruments
Common Stock is not quoted or admitted to trading on such quotation
system, on the principal quotation system on which the Texas
Instruments Common Stock may be listed or admitted to trading or
quoted, or, if not listed or admitted to trading or quoted on any
national securities exchange or quotation system, the average of the
closing bid and asked prices of the Texas Instruments Common Stock in
the over-the-counter market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similar generally
accepted reporting service, or, if not so available in such manner, as
furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors for that purpose or, if not so
available in such manner, as otherwise determined in good faith by the
Board of Directors.
"Debenture Event of Default" means an "Event of Default" as
defined in the Indenture.
"Debenture Redemption Date" means, with respect to any
Debentures to be redeemed under the Indenture, the date fixed for
redemption under the Indenture.
5
<PAGE> 13
"Debenture Trustee" means The First National Bank of Chicago,
a national banking association organized under the laws of the United
States and any successor thereto.
"Debentures" means $__________ aggregate principal amount of
the Depositor's _____% Junior Subordinated Deferrable Interest
Debentures, Series A, issued pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means either or
both (as the context requires) of (a) Preferred Securities
Certificates issued in certificated, fully registered form as provided
in Section 5.11(a) and (b) Preferred Securities Certificates issued in
certificated, fully registered form as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. (S) 3801, et. seq., as it may be amended
from time to time.
"Delaware Trustee" means the Person identified as the
"Delaware Trustee" in the preamble to this Trust Agreement solely in
its capacity as Delaware Trustee of the Trust formed and continued
hereunder 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
4.01(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"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 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
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<PAGE> 14
(c) default by the 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, or any covenant or warranty of any of the
Trustees in this Trust Agreement (other than a covenant or
warranty a default in whose performance or breach is dealt
with 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 defaulting
Trustee or Trust by the Holders of at least 25% in Liquidation
Amount of the Outstanding Preferred Securities a written
notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect
to the Property Trustee and the failure by the Depositor to
appoint a successor Property Trustee within 60 days thereof.
"Exchange Notice" has the meaning specified in Section
4.04(b).
"Expense Agreement" means the Agreement as to expenses and
liabilities between the Depositor and the Trust, substantially in the
form attached as Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.01.
"Guarantee" means the Guarantee Agreement executed and
delivered by the Depositor and The First National Bank of Chicago, as
guarantee trustee, contemporaneously with the execution and delivery
of this Trust Agreement, for the benefit of the holders of the
Preferred Securities, as amended from time to time.
"Indenture" means the Junior Subordinated Indenture, dated as
of _________ __, 1996, between the Depositor and the Debenture
Trustee, as amended or supplemented from time to time.
"Investment Company Event" means the receipt by the Trust of
an Opinion of Counsel, rendered by a law firm having a national tax
and securities practice, to the effect that, as a result of the
occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a "Change in
1940 Act Law") to the effect that the Trust is or will be considered
an "investment company" that is required to be registered under the
1940 Act, which Change in 1940 Act Law
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<PAGE> 15
becomes effective on or after the date of original issuance of the
Preferred Securities under this Trust Agreement.
"Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation, assignment,
security interest or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever.
"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 be used to
pay the Redemption Price of such Trust Securities and (b) with respect
to a distribution of Debentures to Holders of Trust Securities in
connection with a dissolution or liquidation of the Trust, Debentures
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $50 per Trust
Security.
"Liquidation Date" means each Date on which Debentures or cash
is to be distributed to Holders of Trust Securities in connection with
a termination and liquidation of the Trust pursuant to Section 9.04(a).
"Liquidation Distribution" has the meaning specified in
Section 9.04(d).
"1940 Act" means the Investment Company Act of 1940, as
amended.
"Officers' Certificate" means a certificate signed by (i) the
Chairman, Chief Executive Officer, President or a Vice President, and
(ii) by the Treasurer, an Assistant Treasurer, the Controller, the
Secretary or an Assistant Secretary, of the Depositor, and delivered
to the appropriate Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 8.16 shall be the principal
executive, financial or accounting officer of the Depositor. Any
Officers' Certificate delivered with respect to compliance with a
condition or covenant provided 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;
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<PAGE> 16
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Trust, the Property Trustee or the Depositor,
and who may be an employee of any thereof, and who shall be acceptable
to the Property Trustee.
"Optional Redemption Price" means, with respect to any
Preferred Security, the following percentages of the Liquidation
Amounts thereof, and accumulated and unpaid Distributions, if any, to
the date fixed for redemption if redeemed during the twelve-month
period commencing ____ of the years indicated:
<TABLE>
<CAPTION>
Year Redemption Price Year Redemption Price
---- ---------------- ---- ----------------
<S> <C> <C> <C>
1999 __% 2003 __%
2000 __% 2004 __%
2001 __% 2005 __%
2002 __% 2006 and
thereafter __%
</TABLE>
"Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities
theretofore executed and delivered under this Trust Agreement, except:
(a) Preferred Securities theretofore canceled by the
Securities Registrar or delivered to the Securities Registrar
Trustee for cancellation or tendered for conversion;
(b) Preferred Securities for whose payment or
redemption money in the necessary amount has been theretofore
deposited with the Property Trustee or any Paying Agent for
the Holders of such Preferred Securities; provided that, if
such Preferred Securities are to be redeemed,
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<PAGE> 17
notice of such redemption has been duly given pursuant to this
Trust Agreement; and
(c) Preferred Securities which have been paid or in
exchange for or in lieu of which other Preferred Securities
have been executed and delivered pursuant to Section 5.05:
provided, however, that in determining whether the Holders of the
requisite Liquidation Amount of the Outstanding Preferred Securities
have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Preferred Securities owned by the
Depositor, any Trustee or any Affiliate of the Depositor or any
Trustee shall be disregarded and deemed not to be outstanding, except
that (a) in determining whether any Trustee shall be protected in
relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Preferred Securities that such Trustee
knows to be so owned shall be so disregarded and (b) the foregoing
shall not apply at any time when all of the Outstanding Preferred
Securities are owned by the Depositor, one or more of the Trustees
and/or any such Affiliate. Preferred Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Securities Registrar
the pledgee's right so to act with respect to such Preferred
Securities and that the pledgee is not the Depositor or any Affiliate
of the Depositor.
"Owner" means each Person who is the beneficial owner of a
Book-Entry Preferred Securities Certificate as reflected in the
records of the Clearing Agency or, if a Clearing Agency Participant is
not the Owner, then as reflected in the records of a Person
maintaining an account with such Clearing Agency (directly or
indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.09 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 Securityholders in
which all amounts paid in respect of the Debentures will be held and
from which the Property Trustee shall make payments to the
Securityholders in accordance with Section 4.01.
"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.
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<PAGE> 18
"Preferred Security" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $50 and having
the rights provided therefor in this Trust Agreement, including the
right to receive Distributions and a Liquidation Distribution as
provided herein.
"Preferred Securities Certificate" means a certificate
evidencing ownership of Preferred Securities, substantially in the
form attached as Exhibit E.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust
Agreement solely in its capacity as Property Trustee of the Trust
heretofore formed and continued hereunder 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 Preferred
Security, $____ per Preferred Security, plus accumulated and unpaid
Distributions to the date of redemption, 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" has the meaning specified in Section 8.10.
"Rights" has the meaning specified in Section 4.03.
"Securities Register" and Securities Registrar" have the
respective meanings specified in Section 5.04.
"Securityholder" or "Holder" means a Person in whose name a
Trust Security or Securities is registered in the Securities Register;
any such Person shall be deemed to be a beneficial owner within the
meaning of the Delaware Business Trust Act; provided, however, that in
determining whether the Holders of the requisite amount of Preferred
Securities have voted on any matter provided for in this Trust
Agreement, then for the purpose of any such determination, so long as
Definitive Preferred Securities Certificates have not been issued, the
term Securityholders or Holders as used herein shall refer to the
Owners.
"Special Event" means a Tax Event or an Investment Company
Event.
"Tax Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a national tax and securities
practice, to the effect that, as a result of any amendment to, or
change (including any announced
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<PAGE> 19
prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority
thereof or therein affecting taxation, or as a result of any official
administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is
effective or such pronouncement or decision is announced on or after
the date of issuance of the Preferred Securities under this Trust
Agreement, there is more than an insubstantial risk that (i) the Trust
is, or will be within 90 days after the date thereof, subject to
United States Federal income tax with respect to income received or
accrued on the Debentures, (ii) interest payable by the Depositor on
the Debentures is not, or within 90 days after the date hereof, will
not be, deductible, in whole or in part, for United States Federal
income tax purposes or (iii) the Trust is, or will be within 90 days
after the date thereof, subject to more than a de minimis amount of
other taxes, duties, assessments or other governmental charges.
"Texas Instruments Common Stock" means common stock, $1.00 par
value per share, of the Depositor.
"Trust" means the Delaware business trust continued hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in
accordance with the applicable provisions hereof, including all
exhibits hereto, including, for all purposes of this Trust Agreement
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 instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939
is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so
amended.
"Trust Property" means (a) the Debentures, (b) any cash on
deposit in, or owing to, the Payment Account and (c) all proceeds and
rights in respect of the foregoing 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 Security" means any one of the Common Securities or the
Preferred Securities.
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<PAGE> 20
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Underwriting Agreement,
dated as of _________ __, 1996, among the Trust, the Depositor and the
Underwriters named therein.
ARTICLE 2
ESTABLISHMENT OF THE TRUST
SECTION 2.01. Name. The Trust continued hereby shall be
known as "Texas Instruments Financial Trust," as such name may be
modified from time to time by the Administrative Trustees following
written notice to the Holders of Trust Securities and the other
Trustees, in which name the Trustees may conduct the business of the
Trust, make and execute contracts and other instruments on behalf of
the Trust and sue and be sued.
SECTION 2.02. Office of the Delaware Trustee; Principal Place
of Business. The address of the Delaware Trustee in the State of
Delaware is 300 King Street, Wilmington, Delaware 19801, or such other
address in the State of Delaware as the Delaware Trustee may designate
by written notice to the Securityholders and the Depositor. The
principal executive office of the Trust is 13500 North Central
Expressway, P.O. Box 655474, Dallas, Texas 75265-5474.
SECTION 2.03. 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
Trust as they arise or shall, upon request of any Trustee, promptly
reimburse such Trustee for any such expenses paid by such Trustee.
The Depositor shall make no claim upon the Trust Property for the
payment of such expenses.
SECTION 2.04. Issuance of the Preferred Securities. On
_________ __, 1996 the Depositor, on behalf of the Trust and pursuant
to the Original Trust Agreement, executed and delivered the
Underwriting Agreement. Contemporaneously with the execution and
delivery of this Trust Agreement, an
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<PAGE> 21
Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 5.02 and deliver to the Underwriters named
therein Preferred Securities Certificates, registered in the name of
the nominee of the initial Clearing Agency, in an aggregate amount of
_____ Preferred Securities having an aggregate Liquidation Amount of
$_____________, against receipt of the aggregate purchase price of
such Preferred Securities of $_________, which amount the
Administrative Trustees shall promptly deliver to the Property
Trustee.
SECTION 2.05. Subscription and Purchase of Debentures;
Issuance of the Common Securities. Contemporaneously with the
execution and delivery of this Trust Agreement, the Administrative
Trustees, on behalf of the Trust, shall subscribe to and purchase from
the Depositor Debentures, registered in the name of the Trust and
having an aggregate principal amount equal to $__________, and, in
satisfaction of the purchase price for such Debentures, the Property
Trustee, on behalf of the Trust, shall deliver to the Depositor the
sum of $__________. Contemporaneously therewith, an Administrative
Trustee, on behalf of the Trust, shall execute in accordance with
Section 5.02 and deliver to the Depositor Common Securities
Certificates registered in the name of the Depositor, having an
aggregate Liquidation Amount of $__________ against payment by the
Depositor of the sum of $__________.
SECTION 2.06. Declaration of Trust. The exclusive purposes
and functions of the Trust are (a) to issue and sell Trust Securities
and use the proceeds from such sale to acquire the Debentures and (b)
to engage in those activities necessary, convenient or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the
Trust, to have all the rights, powers and duties to the extent set
forth herein, and the Trustees hereby accept such appointment. The
Property Trustee hereby declares that it will hold the Trust Property
in trust upon and subject to the conditions set forth herein for the
benefit of the Trust and the Securityholders. The Administrative
Trustees shall have all rights, powers and duties set forth herein and
in accordance with applicable law with respect to accomplishing the
purposes of the Trust. The Delaware Trustee shall not be entitled to
exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities, of the Property Trustee or the
Administrative Trustees set forth herein. The Delaware Trustee shall
be one of the Trustees of the Trust for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Delaware Business
Trust Act.
SECTION 2.07. Authorization to Enter into Certain
Transactions. (a) The Trustees shall conduct the affairs of the Trust
in accordance with the terms of this Trust Agreement. Subject to the
limitations set forth in paragraph (b) of this Section, and in
accordance with the following provisions (i) and (ii), the
Trustees shall have the authority to enter into all transactions and
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<PAGE> 22
agreements determined by the Trustees to be appropriate in exercising
the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance
thereof, including without limitation, the following:
(i) As among the Trustees, each Administrative
Trustee shall have the power and authority to act on behalf of
the Trust with respect to the following matters:
(A) the issuance and sale of the Trust
Securities;
(B) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the Trust,
the Expense Agreement and the Certificate Depository
Agreement and such other agreements as may be
necessary or desirable in connection with the
purposes and function of the Trust;
(C) assisting in the registration of the
Preferred Securities under the Securities Act of
1933, as amended, and under state securities or blue
sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust
Indenture Act;
(D) assisting in the listing of the Preferred
Securities upon such securities exchange or exchanges
as shall be determined by the Depositor and the
registration of the Preferred Securities under the
Securities Exchange Act of 1934, as amended, and the
preparation and filing of all periodic and other
reports and other documents pursuant to the
foregoing;
(E) the appointment of a Paying Agent,
authenticating agent and Securities Registrar in
accordance with this Trust Agreement;
(F) to the extent provided in this Trust
Agreement, the winding-up of the affairs of and
liquidation of the Trust and the preparation,
execution and filing of the certificate of
cancellation with the Secretary of State of the State
of Delaware;
(G) unless otherwise determined by the
Depositor, the Property Trustee or the Administrative
Trustees, or as otherwise required by the Delaware
Business Trust Act or the Trust Indenture Act, to
execute on behalf of the Trust (either acting alone
or together with any other Administrative Trustees)
any documents that
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<PAGE> 23
the Administrative Trustees have the power to execute
pursuant to this Trust Agreement; and
(H) the taking of any action incidental to
the foregoing as the Trustees may from time to time
determine is necessary or advisable to give effect to
the terms of this Trust Agreement for the benefit of
the Securityholders (without consideration of the
effect of any such action on any particular
Securityholder).
(ii) As among the Trustees, the Property Trustee
shall have the power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and
any other payments made in respect of the Debentures
in the Payment Account;
(D) the distribution from the Trust Property
of amounts owed to the Securityholders in respect of
the Trust Securities;
(E) the exercise of all of the rights, powers
and privileges of a holder of the Debentures;
(F) the sending of notices of default, other
notices and other information regarding the Trust
Securities and the Debentures to the Securityholders
in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust and the preparation,
execution and filing of the certificate of
cancellation with the Secretary of State of the State
of Delaware;
(I) after an Event of Default the taking of
any action incidental to the foregoing as the
Property Trustee may from time to time determine is
necessary or advisable to give effect to the terms of
this Trust Agreement and protect and conserve the
Trust
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<PAGE> 24
Property for the benefit of the Securityholders
(without consideration of the effect of any such
action on any particular Securityholder); and
(J) subject to this Section 2.07(a)(ii), the
Property Trustee shall have none of the duties,
liabilities, powers or the authority of the
Administrative Trustees set forth in Section
2.07(a)(i).
(b) So long as this Trust Agreement remains in effect, the
Trust (or the Trustees acting on behalf of the Trust) shall not
undertake any business, activities or transaction except as expressly
provided herein or contemplated hereby. In particular, the Trustees
shall cause the Trust not to (i) acquire any investments or engage in
any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise
dispose of any of the Trust Property or interests therein, including to
Securityholders, except as expressly provided herein, (iii) take any
action that would cause the Trust to fail or cease to qualify as a
"grantor trust" for United States Federal income tax purposes, (iv)
incur any indebtedness for borrowed money or issue any other debt or
(v) take or consent to any action that would result in the placement of
a Lien on any of the Trust Property. The Administrative Trustees shall
defend all claims and demands of all Persons at any time claiming any
Lien on any of the Trust Property adverse to the interest of the Trust
or the Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred
Securities, the Depositor shall have the right and responsibility to
assist the Trust with respect to, or effect on behalf of the Trust,
the following (and any actions taken by the Depositor in furtherance
of the following prior to the date of this Trust Agreement are hereby
ratified and confirmed in all respects):
(i) to prepare for filing by the Trust with the
Commission and to execute on behalf of the Trust a
registration statement on the appropriate form in relation to
the Preferred Securities, including any amendments thereto;
(ii) to determine the States in which to take
appropriate action to qualify or register for sale all or part
of the Preferred Securities and to do any and all such acts,
other than actions which must be taken by or on
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<PAGE> 25
behalf of the Trust, and advise the Trustees of actions they
must take on behalf of the Trust, and prepare for execution
and filing any documents to be executed and filed by the Trust
or on behalf of the Trust, as the Depositor deems necessary or
advisable in order to comply with the applicable laws of any
such States;
(iii) to prepare for filing by the Trust and to
execute on behalf of the Trust 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 Preferred Securities;
(iv) to prepare for filing by the Trust with the
Commission and to execute on behalf of the Trust a
registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12(b)
or 12(g) of the Exchange Act, including any amendments
thereto;
(v) to negotiate the terms of, and execute and
deliver, the Underwriting Agreement providing for the sale of
the Preferred Securities; and
(vi) any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the
affairs of the Trust and to operate the Trust so that the Trust will
not be deemed to be an "investment company" required to be registered
under the 1940 Act, or taxed as a corporation for United States
Federal income tax purposes and so that the Debentures will be treated
as indebtedness of the Depositor for United States Federal income tax
purposes. In this connection, the Depositor and the Administrative
Trustees are authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that
each of the Depositor and the Administrative Trustees determines in
their discretion to be necessary or desirable for such purposes, so
long as such action does not adversely affect in any material respect
the interests of the Holders of the Preferred Securities.
SECTION 2.08. Assets of Trust. The assets of the Trust shall
consist of the Trust Property.
SECTION 2.09. Title to Trust Property. Legal title to all
Trust Property shall be vested at all times in the Property Trustee
(in its capacity as such) and shall be held and administered by the
Property Trustee for the benefit of the Trust and the Securityholders
in accordance with this Trust Agreement.
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<PAGE> 26
ARTICLE 3
PAYMENT ACCOUNT
SECTION 3.01. Payment Account. (a) On or prior to the
Closing Date, the Property Trustee shall establish the Payment
Account. The Property Trustee and any agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect
to the Payment Account for the purpose of making deposits in and
withdrawals from the Payment Account in accordance with this Trust
Agreement. All monies and other property deposited or held from time
to time in the Payment Account shall be held by the Property Trustee
in the Payment Account for the exclusive benefit of the
Securityholders and for distribution as herein provided, including
(and subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal 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.
ARTICLE 4
DISTRIBUTIONS; REDEMPTION; EXCHANGE; CONVERSION
SECTION 4.01. Distributions. (a) Distributions on the Trust
Securities shall be cumulative, and will accumulate whether or not
there are funds of the Trust available for the payment of
Distributions. Distributions shall accrue from __________ __, 1996,
and, except in the event that the Depositor exercises its right to
extend the interest payment period for the Debentures pursuant to the
Indenture, shall be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on _______ __,
1996. If any date on which Distributions are 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 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, 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 such date (each date on which
distributions are payable in accordance with this Section 4.01(a) a
"Distribution Date").
(b) The Trust Securities represent undivided beneficial
interests in the Trust Property, and the Distributions on the Trust
Securities shall be payable at a rate of _____% per annum of the
Liquidation Amount of the Trust Securities. The amount of
Distributions payable for any full period shall be computed on the
basis
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<PAGE> 27
of a 360-day year of twelve 30-day months. For periods less than a
30-day month, Distributions shall be computed on the basis of the
actual number of elapsed days. The amount of Distributions payable for
any period shall include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on
hand and available in the Payment Account for the Payment of such
Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they
appear on the Securities Register for the Trust Securities on the
relevant record date, which shall be one Business Day prior to such
Distribution Date; provided, however, that in the event that the
Preferred Securities do not remain registered to a Clearing Agency,
the relevant record date shall be the date 15 days prior to the
relevant Distribution Date.
SECTION 4.02. Redemption. (a) (i) Upon repayment at maturity
or redemption of the Debentures or as a result of acceleration of the
Debentures upon the occurrence of a Debenture Event of Default, the
proceeds from such repayment shall be applied to redeem the Trust
Securities, in whole but not in part, at the Redemption Price.
(ii) If at any time following the Conversion
Expiration Date, less than five percent (5%) in Liquidation
Amount of the Preferred Securities originally issued by the
Trust remain outstanding, such Preferred Securities shall be
redeemable, at the option of the Depositor, in whole but not
in part, from time to time, at the Redemption Price;
(iii) Upon any permitted redemption of the Debentures
the proceeds from such redemption shall be applied to redeem
Trust Securities having an aggregate Liquidation Amount
equal to the aggregate principal amount of the Debentures so
redeemed by the Depositor at the Optional Redemption Price; and
(iv) Except as provided in paragraphs (i) and (ii) of
this Section, the Preferred Securities may not be redeemed
prior to ____________, 1999.
(b) Notice of redemption (which notice will be irrevocable)
shall be given by the Property Trustee by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date to each Holder of Trust Securities to be redeemed, at
such Holder's address appearing in the Security Register. All notices
of redemption shall state:
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(i) the Redemption Date;
(ii) the Redemption Price or the Optional Redemption
Price, as the case may be;
(iii) the CUSIP number;
(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) if the Preferred Securities are convertible,
(A) that a Holder of Preferred Securities who desires to
convert such Preferred Securities called for redemption must
satisfy the requirements for conversion contained in herein,
(B) the Conversion Price and (C), if previously determined,
the Conversion Expiration Date;
(vi) that on the Redemption Date the Redemption Price
or the Optional Redemption Price, as the case may be, will
become due and payable upon each such Trust Security to be
redeemed and that Distributions thereon will cease to accrue
on and after said date; and
(vii) the place or places where such Trust Securities
are to be surrendered for payment of the Redemption Price or
the Optional Redemption Price, as the case may be, at which
the Trust Securities are to be redeemed.
(c) The Trust Securities redeemed on each Redemption Date
shall be redeemed at the Redemption Price or the Optional Redemption
Price, as the case may be, with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall
be made and the Redemption Price or the Optional Redemption Price, as
the case may be, shall be payable on each Redemption Date only to the
extent that the Trust has funds then on hand and available in the
Payment Account for the payment of such Redemption Price or the
Optional Redemption Price, as the case may be.
(d) If the Property Trustee gives a notice of redemption in
respect of any Preferred Securities, then, by 12:00 noon, New York
City time, on the Redemption Date, subject to Section 4.02(c), the
Property Trustee will, so long as the Preferred Securities are in
book-entry-only form, irrevocably deposit with the Clearing Agency for
the Preferred Securities funds sufficient to pay the applicable
Redemption Price or the Optional Redemption Price, as the case may be,
and will give such Clearing Agency irrevocable instructions and
authority to pay the Redemption Price or the Optional Redemption
Price, as the case may be, to the Holders thereof. If the Preferred
Securities are no longer in book-entry only form, the Property
Trustee, subject to Section 4.02(c), will irrevocably deposit with the
Paying Agent funds sufficient to pay the applicable Redemption Price
or Optional Redemption Price, as the case may be, and will give the
Paying Agent irrevocable instructions and authority to pay the
Redemption Price or the Optional
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Redemption Price, as the case may be, to the Holders thereof upon
surrender of their Preferred Securities Certificates. Notwithstanding
the foregoing, Distributions payable on or prior to the Redemption
Date for any Trust Securities called for redemption shall be payable
to the Holders of such Trust Securities as they appear on the Register
for the Trust Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and
funds deposited as required, then upon the date of such deposit, all
rights of Securityholders holding Trust Securities so called for
redemption will cease, except the right of such Securityholders to
receive the Redemption Price or the Optional Redemption Price, as the
case may be, but without interest, and such Securities will cease to
be outstanding. In the event that any date on which any Redemption
Price or the Optional Redemption Price, as the case may be, is payable
is not a Business Day, then payment of the Redemption Price or the
Optional Redemption Price, as the case may be, payable on such date
will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay),
except that, if such Business Day 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 or the Optional
Redemption Price, as the case may be, in respect of any Trust
Securities called for redemption is improperly withheld or refused and
not paid either by the Trust or by the Depositor pursuant to the
Guarantee, Distributions on such Trust Securities will continue to
accrue, at the then applicable rate, from the Redemption Date
originally established by the Trust for such Trust Securities to the
date such Redemption Price or the Optional Redemption Price, as the
case may be, is actually paid, in which case the actual payment date
will be the date fixed for redemption for purposes of calculating the
Redemption Price or the Optional Redemption Price, as the case may be.
(e) Payment of the Redemption Price or the Optional Redemption
Price, as the case may be, on the Trust Securities shall be made to
the record Holders thereof as they appear on the Securities Register
for the Trust Securities on the relevant record date, which shall be
one Business Day prior to the relevant Redemption Date; provided,
however, that in the event that the Preferred Securities do not remain
in book-entry-only form, the relevant record date shall be the
fifteenth day prior to the Redemption Date.
(f) If less than all the Outstanding Trust Securities are to
be redeemed on a Redemption Date, then the aggregate Liquidation
Amount of Trust Securities to be redeemed shall be allocated on a pro
rata basis (based on Liquidation Amounts) among the Common Securities
and the Preferred Securities. The particular Preferred Securities to
be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Property Trustee from the Outstanding Preferred
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Securities not previously called for redemption, by lot or by such
other method as the Property Trustee shall deem fair and appropriate;
it being understood that, in the case of Preferred Securities
registered in the name of and held of record by the Clearing Agency
(or any successor) or any nominee, the distribution of the proceeds of
such redemption will be made in accordance with the procedures of the
Clearing Agency or its nominee. The Property Trustee shall promptly
notify the Security Registrar in writing of the Preferred Securities
selected for redemption and, in the case of any Preferred Securities
selected for partial redemption, the Liquidation Amount thereof to be
redeemed. For all purposes of this Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption
of Preferred Securities shall relate, in the case of any Preferred
Securities redeemed or to be redeemed only in part, to the portion of
the Liquidation Amount of Preferred Securities which has been or is to
be redeemed.
SECTION 4.03. Conversion. The Holders of Preferred
Securities subject to the limitations set forth in this Section shall
have the right at any time prior to the Conversion Expiration Date, at
their option, to cause the Conversion Agent to convert Preferred
Securities, on behalf of the converting Holders, into shares of Texas
Instruments Common Stock in the manner described herein on and subject
to the following terms and conditions:
(i) The Preferred Securities will be convertible at
the office of the Conversion Agent (which office shall be the
Corporate Trust Office) into fully paid and nonassessable
shares of Texas Instruments Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such
Preferred Securities for a portion of the Debentures, and
immediately convert such amount of Debentures into fully paid
and nonassessable shares of Texas Instruments Common Stock at
an initial rate of _____ shares of Texas Instruments Common
Stock per $__ principal amount of Debentures (which is
equivalent to a conversion price of $_____ per share of Texas
Instruments Common Stock, subject to certain adjustments set
forth in the terms of the Debentures (as so adjusted,
"Conversion Price")).
(ii) In order to convert Preferred Securities into
Texas Instruments Common Stock the Holder of such Preferred
Securities shall submit to the Conversion Agent at the office
of the Conversion Agent an irrevocable request to convert
Preferred Securities on behalf of such Holder (the "Conversion
Request"), together, if the Preferred Securities are in
certificated form, with such certificates. The Conversion
Request shall (i) set forth the number of Preferred Securities
to be converted and the name or names, if other than the
Holder, in which the shares of Texas Instruments Common Stock
should be issued and (ii) direct the Conversion Agent (a) to
exchange such Preferred Securities for a portion of the
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Debentures held by the Property Trustee (at the rate of
exchange specified in the preceding paragraph) and (b) to
immediately convert such Debentures on behalf of such Holder,
into Texas Instruments Common Stock (at the conversion rate
specified in the preceding paragraph). The Conversion Agent
shall notify the Property Trustee of the Holder's election to
exchange Preferred Securities for a portion of the Debentures
held by the Property Trustee and the Property Trustee shall,
upon receipt of such notice, deliver to the Conversion Agent
the appropriate principal amount of Debentures for exchange in
accordance with this Section. The Conversion Agent shall
thereupon notify the Depositor of the Holder's election to
convert such Debentures into shares of Texas Instruments Common
Stock. Holders of Preferred Securities at the close of
business on a Distribution payment record date will be entitled
to receive the Distribution payable on such securities on the
corresponding Distribution Date notwithstanding the conversion
of such Preferred Securities following such record date but
prior to such Distribution Date. Except as provided above,
neither the Trust nor the Depositor, will make, or be required
to make, any payment allowance or adjustment upon any
conversion on account of any accumulated and unpaid
Distributions whether or not in arrears accrued on the
Preferred Securities surrendered for conversion, or on account
of any accumulated and unpaid dividends on the shares of Texas
Instruments Common Stock issued upon such conversion.
Preferred Securities shall be deemed to have been converted
immediately prior to the close of business on the day on which
a Conversion Request relating to such Preferred Securities is
received by the Conversion Agent in accordance with the
foregoing provision (the "Conversion Date"). The Person or
Persons entitled to receive the Texas Instruments Common Stock
issuable upon conversion of the Debentures shall be treated for
all purposes as the record holder or holders of such Texas
Instruments Common Stock at such time. As promptly as
practicable on or after the Conversion Date, the Depositor
shall issue and deliver at the office of the Conversion Agent a
certificate or certificate for the number of full shares of
Texas Instruments Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction
of any share to the Person or Persons entitled to receive the
same, unless otherwise directed by the Holder in the notice of
conversion and the Conversion Agent shall distribute such
certificate or certificates to such Person or Persons.
(iii) On and after __________, 1999 and provided that
the Trust is current in the payment of Distributions on the
Preferred Securities the Depositor may, at its option, cause
the conversion rights of Holders of Preferred Securities to
expire; provided, however, that the Depositor may exercise
this option only if for 20 trading days within any period of
30
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consecutive trading days, including the last trading day of
such period, the Current Market Price of Texas Instruments
Common Stock exceeds 120% of the Conversion Price of the
Preferred Securities, subject to adjustment in certain
circumstances (as described in the terms of the Debentures).
In order to exercise its option to terminate the
conversion rights of the Preferred Securities the Depositor
must issue a press release for publication on the Dow Jones
News Service announcing the Conversion Expiration Date prior
to the opening of business on the second trading day after any
period in which the condition in the preceding sentence has
been met, but in no event prior to __________, 1999. The
press release shall announce the Conversion Expiration Date
and provide the current Conversion Price and Current Market
Price of Texas Instruments Common Stock, in each case as of
the close of business on the trading day next preceding the
date of the press release. Conversion rights will terminate
at the close of business on the Conversion Expiration Date.
In addition to issuing the press release referred to
in the preceding paragraph the Depositor shall send notice of
the expiration of conversion rights by first-class mail to the
Holders of the Preferred Securities and the Property Trustee
not more than four Business Days after the Depositor issues
the press release. Such mailed notice of the expiration of
the conversion rights of the Holders shall state: (1) the
Conversion Expiration Date; (2) the Conversion Price of the
Preferred Securities and the Current Market Price of the Texas
Instruments Common Stock, in each case as of the close of
business on the Business Day next preceding the date of the
notice of expiration of the conversion rights of the Holders;
(3) the place or places at which Preferred Securities are to
be surrendered prior to the Conversion Expiration Date for
certificates representing shares of Texas Instruments Common
Stock; and (4) such other information or instructions as the
Depositor deems necessary or advisable to enable a Holder to
exercise its conversion right hereunder. No defect in the
notice of expiration of the conversion rights of the Holders
or in the mailing thereof with respect to any Preferred
Security shall affect the validity of such notice with respect
to any other Preferred Security. As of the close of business
on the Conversion Expiration Date, the Preferred Securities
shall no longer be convertible into Texas Instruments Common
Stock. In the event that the Depositor does not exercise its
option to terminate the conversion rights of the Preferred
Securities, the Conversion Expiration Date with respect to the
Preferred Securities will be the close of business two
Business Days preceding the date set for redemption of the
Preferred Securities upon the maturity or redemption of the
Debentures or upon the occurrence of a Debenture Event of
Default.
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(iv) Each Holder of a Preferred Security by his
acceptance thereof appoints The First National Bank of Chicago
not in its individual capacity but solely as conversion agent
(the "Conversion Agent") for the purpose of effecting the
conversion of Preferred Securities in accordance with this
Section. In effecting the conversion and transactions
described in this Section, the Conversion Agent shall be
acting as agent of the Holders of Securities directing it to
effect such conversion transactions. The Conversion Agent is
hereby authorized (i) to exchange Preferred Securities from
time to time for Debentures held by the Trust in connection
with the conversion of such Preferred Securities in accordance
with this Section and (ii) to convert all or a portion of the
Debentures into Texas Instruments Common Stock and thereupon
to deliver such shares of Texas Instruments Common Stock in
accordance with the provisions of this Section and to deliver
to the Trust a new Debenture or Debentures for any resulting
unconverted principal amount.
(v) No fractional shares of Texas Instruments Common
Stock will be issued as a result of conversion, but in lieu
thereof, such fractional interest will be paid in cash by the
Depositor to the Conversion Agent in an amount equal to the
Current Market Price of the fractional share of the Texas
Instruments Common Stock, which in turn will make such payment
to the Holder or Holders of Preferred Securities so converted.
(vi) The Depositor shall at all times reserve and
keep available out of its authorized and unissued Texas
Instruments Common Stock, solely for insurance upon the
conversion of the Debentures, such number of shares of Texas
Instruments Common Stock as shall from time to time be
issuable upon the conversion of all the Debentures then
outstanding. Notwithstanding the foregoing, the Depositor
shall be entitled to deliver upon conversion of Debentures,
shares of Texas Instruments Common Stock reacquired and held
in the treasury of the Depositor (in lieu of the issuance of
authorized and unissued shares of Texas Instruments Common
Stock), so long as any such treasury shares are free and clear
of all liens, charges, security interests or encumbrances.
Whenever the Depositor issues shares of Texas Instruments
Common Stock upon conversion of shares of Preferred Securities
and the Depositor has in effect at such time a share purchase
rights agreement under which holders of Texas Instruments
Common Stock are issued rights ("Rights") entitling the
holders under certain circumstances to purchase an additional
share or shares of Texas Instruments stock, the Depositor will
issue, together with each such share of Texas Instruments
Common Stock, such number of Rights (which number may be a
fraction) as shall at that time be issuable with a share of
Texas Instruments Common Stock pursuant to such share purchase
rights
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agreement (currently, half of a Right). Any shares of Texas
Instruments Common Stock issued upon conversion of the
Debentures shall be duly authorized, validly issued and fully
paid and nonassessable. The Conversion Agent shall deliver
the shares of Texas Instruments Common Stock received upon
conversion of the Debentures to the converting Holder free and
clear of all liens, charges, security interests and
encumbrances, except for United States withholding taxes.
Each of the Depositor and the Trust shall prepare and shall
use its best efforts to obtain and keep in force such
governmental or regulatory permits or other authorizations as
may be required by law, and shall comply with all applicable
requirements as to registration or qualification of the Texas
Instruments Common Stock (and all requirements to list the
Texas Instruments Common Stock issuable upon conversion of
Debentures that are at the time applicable), in order to
enable the Depositor to lawfully issue Texas Instruments
Common Stock to the Trust upon conversion of the Debentures
and the Trust to lawfully deliver the Texas Instruments Common
Stock to each Holder upon conversion of the Preferred
Securities.
(vii) The Depositor will pay any and all taxes that
may be payable in respect of the issue or delivery of shares
of Texas Instruments Common Stock on conversion of Debentures
and the delivery of the shares of Texas Instruments Common
Stock by the Trust upon conversion of the Preferred
Securities. The Depositor shall not, however, be required to
pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Texas
Instruments Common Stock in a name other than that in which
the Preferred Securities so converted were registered, and no
such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Conversion Agent
the amount of any such tax, or has established to the
satisfaction of the Conversion Agent that such tax has been
paid.
(viii) Nothing in this Section 4.03 shall limit the
requirement of the Trust to withhold taxes pursuant to the
terms of the Preferred Securities or as set forth in this
Agreement or otherwise require the Property Trustee or the
Trust to pay any amounts on account of such withholdings.
SECTION 4.04. Exchange of Preferred Securities for
Debentures. (a) If a Special Event shall occur and be continuing, the
Property Trustee shall direct the Conversion Agent to exchange all
outstanding Preferred Securities for Debentures having a principal
amount equal to the aggregate Liquidation Amount of the Preferred
Securities to be exchanged and with accrued interest in an amount
equal to any unpaid Distribution (including any Additional Amounts) on
the Preferred
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Securities; provided, however, that in the case of a Tax Event, the
Property Trustee shall direct that less than all, or none, as
appropriate, of the Preferred Securities be so exchanged if and for so
long as the Depositor shall have elected to pay any Additional Sums
and that the net amount received by Holders of Preferred Securities
not so exchanged in respect of dividends and other distributions are
not reduced as a result of such Tax Event, and shall not have revoked
any such election or failed to make such payments.
(b) Notice of any exchange pursuant to this Section 4.04 (an
"Exchange Notice") of the Preferred Securities, which Exchange Notice
shall be irrevocable, will be given by the Property Trustee by
first-class mail to each record Holder of Preferred Securities to be
exchanged not fewer than 30 nor more than 60 days prior to the date
fixed for exchange thereof. For purposes of the calculation of the
date of exchange and the dates on which notices are given pursuant to
this paragraph (b), an Exchange Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail, postage
prepaid, to each Holder. Each Exchange Notice shall be addressed to
each Holder of Preferred Securities at the address of such Holder
appearing in the books and records of the Trust. Each Exchange Notice
shall state: (A) the exchange date; (B) the aggregate Liquidation
Amount and any unpaid Distributions (including any Additional Amounts)
on the Preferred Securities to be exchanged and the aggregate
principal amount and any accrued interest on the Debentures to be
exchanged therefor; (C) that on the exchange date the Preferred
Securities to be so exchanged shall be exchanged for Debentures and
that Distributions on the Preferred Securities so exchanged will cease
to accumulate on and after said date; and (D) the identity of the
Conversion Agent, if any, and the place or places where each Preferred
Certificate to be exchanged is to be surrendered in exchange for
Debentures. No defect in the Exchange Notice or in the mailing
thereof with respect to any Preferred Security shall affect the
validity of the exchange proceedings for any other Preferred Security.
(c) In the event that fewer than all the outstanding Preferred
Securities are to be exchanged, then on the exchange date, (i) if all
of the outstanding Preferred Securities are represented by Definitive
Preferred Securities Certificates, the particular Preferred Securities
to be exchanged will be selected by the Property Trustee from the
outstanding Preferred Securities not previously called for redemption
or exchange by lot or such other method as the Property Trustee shall
deem fair and appropriate, (ii) if all of the outstanding Preferred
Securities are represented by Book-Entry Preferred Securities
Certificates, the Property Trustee may provide for the selection for
exchange of a portion of the global certificate representing the
Book-Entry Preferred Securities Certificates and (iii) if outstanding
Preferred Securities are represented by both Definitive Preferred
Securities Certificates and Book-Entry Preferred Securities
Certificates, the
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Property Trustee shall select the portion of the global certificate
representing the Book-Entry Preferred Securities Certificates and the
particular outstanding Preferred Securities represented by Definitive
Preferred Securities Certificates to be exchanged by lot or such other
method as the Property Trustee shall deem fair and appropriate. In
the case of clause (ii) or (iii) above, the particular Book-Entry
Preferred Securities Certificates to be exchanged shall be selected in
accordance with the applicable rules and procedures for the Clearing
Agency in whose name, or nominee's name, such global certificate is
then held. Any Preferred Securities Certificate that is to be
exchanged only in part shall be surrendered with due endorsement by or
a written instrument of transfer fully executed by the Holder thereof
(or his attorney duly authorized in writing) and the Trust shall
prepare and deliver to such Holder, without service charge, a new
Preferred Securities Certificate or Certificates in aggregate stated
liquidation preference equal to, and in exchange for, the unredeemed
portion of the Preferred Securities Certificate so surrendered.
(d) In the event of an exchange pursuant to this Section 4.04,
on the date fixed for any such exchange, (i) if the Preferred
Securities are represented by Book-Entry Preferred Securities
Certificates, the Clearing Agency or its nominee, as the record Holder
of the Preferred Securities, will exchange through the Conversion
Agent the global certificate representing the Preferred Securities to
be exchanged for a registered global certificate or certificates
representing the Debentures to be delivered upon such exchange, (ii)
if the Preferred Securities are represented by Definitive Preferred
Securities Certificates, the certificates representing the Preferred
Securities to be so exchanged will be deemed to represent Debentures
having a principal amount equal to the aggregate stated Liquidation
Amount of such Preferred Securities until such certificates are
presented to the Conversion Agent for exchange for definitive
certificates representing Debentures and (iii) all rights of the
Holders of the Preferred Securities so exchanged will cease, except
for the right of such Holders to receive Debentures.
(e) Each Holder, by becoming a party to this Agreement
pursuant to Section 10.11 of this Agreement, will be deemed to have
agreed to be bound by these exchange provisions in regard to the
exchange of Preferred Securities for Debentures pursuant to the terms
described above.
(f) Nothing in this Section 4.04 shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Preferred
Securities or as set forth in this Agreement or otherwise require the
Property Trustee or the Trust to pay any amounts on account of such
withholdings.
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SECTION 4.05. Subordination of Common Securities. (a) Payment
of Distributions (including Additional Amounts, if applicable) on, and
the Redemption Price of, the Trust Securities, as applicable, shall be
made pro rata based on the Liquidation Amount of the Trust Securities;
provided, however, that if on any Distribution Date or Redemption Date
a Debenture Event of Default shall have occurred and be continuing, no
payment of any Distribution (including Additional Amounts, if
applicable) on, or Redemption Price of, any Common Security, and no
other payment on account of the redemption, liquidation or other
acquisition of Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions (including
Additional Amounts, if applicable) on all Outstanding Preferred
Securities for all Distribution periods terminating on or prior
thereto, or in the case of payment of the Redemption Price the full
amount of such Redemption Price on all Outstanding Preferred
Securities, shall have been made or provided for, and all funds
immediately available to the Property Trustee shall first be applied
to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or Redemption Price of,
Preferred Securities then due and payable.
(b) In the case of the occurrence of 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 Preferred Securities have been cured, waived or
otherwise eliminated. Until any such Event of Default under this
Trust Agreement with respect to the Preferred Securities have been so
cured, waived or otherwise eliminated, the Property Trustee shall act
solely on behalf of the Holders of the Preferred Securities and not
the Holder of the Common Securities, and only the Holders of the
Preferred Securities will have the right to direct the Property
Trustee to act on their behalf.
SECTION 4.06. Payment Procedures. Payments in respect of the
Preferred Securities shall be made by check mailed to the address of
the Person entitled thereto as such address shall appear on the
Securities Register or, if the Preferred Securities are held by a
Clearing Agency, such Distributions shall be made to the Clearing
Agency in immediately available funds, in accordance with the
Certificate Depositary Agreement on the applicable Distribution Dates.
Payments in respect of the Common Securities shall be made in such
manner as shall be mutually agreed between the Property Trustee and
the Holder of the Common Securities.
SECTION 4.07. Tax Returns and Reports. The Administrative
Trustees shall prepare (or cause to be prepared), at the Depositor's
expense, and file all United States Federal, state and local tax and
information returns and reports required to be filed by or in respect
of the Trust. In this regard, the Administrative Trustee shall (a)
prepare and file (or cause to be prepared or filed) the appropriate
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Internal Revenue Service form required to be filed in respect of the
Trust in each taxable year of the Trust and (b) prepare and furnish
(or cause to be prepared and furnished) to each Securityholder the
appropriate Internal Revenue Service form required to be furnished to
such Securityholder or the information required to be provided on such
form. The Administrative Trustees shall provide the Depositor and the
Property Trustee with a copy of all such returns, reports and
schedules promptly after such filing or furnishing. The Trustees
shall comply with United States Federal withholding and backup
withholding tax laws and information reporting requirements with
respect to any payments to Securityholders under the Trust Securities.
SECTION 4.08. Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Debentures of Additional Sums (as defined in
the Indenture), the Property Trustee shall promptly pay any taxes,
duties or governmental charges of whatsoever nature (other than
withholding taxes) imposed on the Trust by the United States or any
other taxing authority.
SECTION 4.09. Payments under Indenture. Any amount payable
hereunder to any Holder of Preferred Securities (and any Owner with
respect thereto) shall be reduced by the amount of any corresponding
payment such Holder (and Owner) has directly received pursuant to
Section 5.08 of the Indenture in accordance with the terms of
Section 5.14.
ARTICLE 5
TRUST SECURITIES CERTIFICATES
SECTION 5.01. Initial Ownership. Upon the formation of the
Trust and the contribution by the Depositor pursuant to Section 2.03
and until the issuance of the Trust Securities, and at any time during
which no Trust Securities are outstanding, the Depositor shall be the
sole beneficial owner of the Trust.
SECTION 5.02. The Trust Securities Certificates. The
Preferred Securities Certificates shall be issued in minimum
denominations of $50 Liquidation Amount and integral multiples of $50
in excess thereof, and the Common Securities Certificates shall be
issued in denominations of $50 Liquidation Amount and integral
multiples thereof. The Trust Securities Certificates shall be
executed on behalf of the Trust by manual or facsimile signature of at
least one Administrative Trustee. Trust Securities Certificates
bearing the manual or facsimile signatures of individuals who were, at
the time when such signatures shall have been affixed, authorized to
sign on behalf of the Trust, shall be validly issued and entitled to
the benefit of this Trust Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior
to the delivery of such Trust Securities Certificates or did not hold
such offices at the date of delivery of such
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Trust Securities Certificates. A transferee of a Trust Securities
Certificate shall become a Securityholder, and shall be entitled to
the rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities Certificate
in such transferee's name pursuant to Section 5.04.
SECTION 5.03. Delivery of Trust Securities Certificates. On
the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as
provided in Sections 2.04 and 2.05, to be executed on behalf of the
Trust and delivered to or upon the written order of the Depositor,
signed by its chairman of the board, its president, any senior vice
president or any vice president, treasurer or assistant treasurer or
controller without further corporate action by the Depositor, in
authorized denominations.
SECTION 5.04. Registration of Transfer and Exchange of
Preferred Securities Certificates. The Securities Registrar shall
keep or cause to be kept, at the office or agency maintained pursuant
to Section 5.08, a Securities Register in which, subject to such
reasonable regulations as it may prescribe, the Securities Registrar
shall provide for the registration of Preferred Securities
Certificates and Common Securities Certificates (subject to Section
5.10 in the case of the Common Securities Certificates) and
registration of transfers and exchanges of Preferred Securities
Certificates as herein provided. The Bank shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to
Section 5.08, the Administrative Trustees or any one of them shall
execute and deliver, in the name of the designated transferee or
transferees, one or more new Preferred Securities Certificates in
authorized denominations of a like aggregate Liquidation Amount dated
the date of execution by such Administrative Trustee or Trustees. The
Securities Registrar shall not be required to register the transfer of
any Preferred Securities that have been called for redemption. At the
option of a Holder, Preferred Securities Certificates may be exchanged
for other Preferred Securities Certificates in authorized
denominations of the same class and of a like aggregate Liquidation
Amount upon surrender of the Preferred Securities Certificates to be
exchanged at the office or agency maintained pursuant to Section 5.08.
Every Preferred Securities Certificate presented or
surrendered for registration of transfer or exchanged 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 Preferred Securities
Certificate surrendered for registration of transfer or exchange shall
be canceled and subsequently disposed of by the Securities Registrar
in accordance with its customary practice.
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No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but the
Securities Registrar may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with
any transfer or exchange of Preferred Securities Certificates.
SECTION 5.05. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates. If (a) any mutilated Trust Securities
Certificate shall be surrendered to the Securities Registrar, or if the
Securities Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Trust Securities Certificate and (b)
there shall be delivered to the Securities Registrar and the
Administrative Trustees such security or indemnity as may be required
by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a
bona fide purchaser, the Administrative Trustees, or any one of them,
on behalf of the Trust shall execute and make available for 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
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 duplicative Trust Securities Certificate
issued pursuant to this Section shall constitute conclusive evidence of
an undivided beneficial interest in the assets of the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust
Securities Certificate shall be found at any time.
SECTION 5.06. Persons Deemed Securityholders. The Property
Trustee and the Securities Registrar shall treat the Person in whose
name any Trust Securities Certificate shall be registered in the
Securities Register as the owner of such Trust Securities Certificate
for the purpose of receiving Distributions and for all other purposes
whatsoever, and neither the Property Trustee nor the Securities
Registrar shall be bound by any notice to the contrary.
SECTION 5.07. Access to List of Securityholders' Name and
Addresses. The Administrative Trustees or the Depositor shall furnish
or cause to be furnished (a) to the Property Trustee, semi-annually on
or before January 15 and July 15 in each year, a list, in such form as
the Property Trustee may reasonably require, of the names and
addresses of the Securityholders as of the most recent Record Date and
(b) to the Property Trustee, promptly after receipt by the Depositor
of a request therefor from the Property Trustee in order to enable the
Property Trustee to discharge its obligations under this Trust
Agreement, in each case to the extent such information is in the
possession or control of the Administrative Trustees or the Depositor
and is not identical to a previously supplied list or has not
otherwise been received by the Property Trustee in its capacity as
Securities Registrar. The
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rights of Securityholders to communicate with other Securityholders
with respect to their rights under this Trust Agreement or under the
Trust Securities, and the corresponding rights of the Trustee shall be
as provided in the Trust Indenture Act. Each Holder, by receiving and
holding a Trust Securities Certificate, and each Owner shall be deemed
to have agreed not to hold the Depositor, the Property Trustee or the
Administrative Trustees accountable by reason of the disclosure of its
name and address, regardless of the source from which such information
was derived.
SECTION 5.08. Maintenance of Office or Agency. The
Securities Registrar shall maintain in The City of New York, an office
or offices or agency or agencies where Preferred Securities
Certificates may be surrendered for registration of transfer, exchange
or conversion and where notices and demands to or upon the Trustees in
respect of the Trust Securities Certificates may be served. The
Securities Registrar initially designates First Chicago Trust Company
of New York, 14 Wall Street, 8th Floor, Window 2, New York, York 10005,
as its principal corporate trust office for such purposes. The
Securities Registrar shall give prompt written notice to the Depositor
and to the Securityholders of any change in the location of the
Securities Register or any such office or agency.
SECTION 5.09. Appointment of Paying Agent. The Paying Agent
shall make distributions to Securityholders from the Payment Account
and shall report the amounts of such distributions to the Property
Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the
purpose of making the distributions referred to above. The
Administrative Trustees may revoke such power and remove the Paying
Agent if such Trustees determine in their sole discretion that the
Paying Agent shall have failed to perform its obligations under this
Trust Agreement in any material respect. The Paying Agent shall
initially be the Bank, and any co-paying agent chosen by the Bank, and
acceptable to the Administrative Trustees and the Depositor. Any
Person acting as Paying Agent shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Administrative Trustees, the
Property Trustee and the Depositor. In the event that the Bank shall
no longer be the Paying Agent or a successor Paying Agent shall resign
or its authority to act be revoked, the Administrative Trustees shall
appoint a successor that is acceptable to the Property Trustee and the
Depositor to act as Paying Agent (which shall be a bank or trust
company). Each successor Paying Agent or any additional Paying Agent
shall agree with the Trustees that as Paying Agent, such successor
Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securityholders in trust for the benefit
of the Securityholders entitled thereto until such sums shall be paid
to each Securityholder. The Paying Agent shall return all unclaimed
funds to the Property Trustee and upon removal of a Paying Agent such
Paying Agent shall also return all funds in its possession to the
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Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06
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
Agreement to the Paying Agent shall include any co-paying agent
unless the context requires otherwise.
SECTION 5.10. Ownership of Common Securities by Depositor.
On the Closing Date and on each other date provided for in Section
2.05, the Depositor shall acquire and retain beneficial and record
ownership of the Common Securities. To the fullest extent permitted
by law, any attempted transfer of the Common Securities shall be void.
The Administrative Trustees shall cause each Common Securities
Certificate issued to the Depositor to contain a legend stating "THIS
CERTIFICATE IS NOT TRANSFERABLE".
SECTION 5.11. Book Entry Preferred Securities Certificates;
Common Securities Certificate. (a) The Preferred Securities
Certificates, upon original issuance, will be issued in the form of a
typewritten Preferred Securities Certificate or Certificates
representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Preferred Securities
Certificate or Certificates shall initially be registered on the
Securities Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no beneficial owner will receive a
Definitive Preferred Securities Certificate representing such
beneficial owner's interest in such Preferred Securities, except as
provided in Section 5.13. Unless and until Definitive Preferred
Securities Certificates have been issued to beneficial owners pursuant
to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be
in full force and effect;
(ii) the Securities Registrar and the Trustees shall
be entitled to deal with the Clearing Agency for all purposes
of this Trust Agreement relating to the Book-Entry Preferred
Securities Certificates (including the payment of principal of
and interest on the Book-Entry Preferred Securities and the
giving of instructions or directions to Owners of Book-Entry
Preferred Securities) as the sole Holder of Book-Entry
Preferred Securities and shall have no obligations to the
Owners thereof;
(iii) to the extent that the provisions of this
Section 5.11 conflict with any other provisions of this Trust
Agreement, the provisions of this Section 5.11 shall control;
and
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(iv) the rights of the Owners of the Book-Entry
Preferred Securities Certificates shall be exercised only
through the Clearing Agency and shall be limited to those
established by law and agreements between such Owners and the
Clearing Agency and/or the Clearing Agency Participants.
Pursuant to the Certificate Depository Agreement, unless and
until Definitive Preferred Securities Certificates are issued
pursuant to Section 5.13, the initial Clearing Agency will
make book-entry transfers among the Clearing Agency
Participants and receive and transmit payments on the
Preferred Securities to such Clearing Agency Participants.
(b) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of a
definitive Common Securities Certificate.
SECTION 5.12. Notices to Clearing Agency. To the extent that
a notice or other communication to the Owners is required under this
Trust Agreement, unless and until Definitive Preferred Securities
Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications
specified herein to be given to Owners to the Clearing Agency, and
shall have no obligations to the Owners.
SECTION 5.13. Definitive Preferred Securities Certificates.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Preferred Securities
Certificates, and the Depositor is unable to locate a qualified
successor, (b) the Depositor at its option advises the Trustees in
writing that it elects to terminate the book-entry system through the
Clearing Agency, or (c) after the occurrence of a Debenture Event of
Default, Owners of Preferred Securities Certificates representing
beneficial interests aggregating at least a majority of the
Liquidation Amount advise the Clearing Agency in writing that the
continuation of a book-entry system through the Clearing Agency is no
longer in the best interest of the Owners of Preferred Securities
Certificates, then the Clearing Agency shall notify all Owners of
Preferred Securities Certificates and the Trustees of the occurrence
of any such event and of the availability of the Definitive Preferred
Securities Certificates to Owners of such class or classes, as
applicable, requesting the same. Upon surrender to the Administrative
Trustees of the typewritten Preferred Securities Certificate or
Certificates representing the Book Entry Preferred Securities
Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall
execute the Definitive Preferred Securities Certificates in accordance
with the instructions of the Clearing Agency. Neither the Securities
Registrar nor the Trustees shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon
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the issuance of Definitive Preferred Securities Certificates, the
Trustees shall recognize the Holder of the Definitive Preferred
Securities Certificates as Securityholders. The Definitive Preferred
Securities Certificates shall be printed, lithographed or engraved or
may be produced in any other manner as is reasonably acceptable to the
Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
SECTION 5.14. Rights of Securityholders. (a) The legal title
to the Trust Property is vested exclusively in the Property Trustee
(in its capacity as such) in accordance with Section 2.09, and the
Securityholders shall not have any right or title therein other than
the undivided beneficial interest in the assets of the Trust conferred
by their Trust Securities and they shall have no right to call for any
partition or division of property, profits or rights of the Trust
except as described below. The Trust Securities shall be personal
property giving only the rights specifically set forth therein and in
this Trust Agreement. The Trust Securities shall have no preemptive
or similar rights and when issued and delivered to Securityholders
against payment of the purchase price therefor will be fully paid and
nonassessable by the Trust. The Holders of the Trust Securities, in
their capacities as such, shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of
Delaware.
(b) For so long as any Preferred Securities remain Outstanding,
if, upon a Debenture Event of Default, the Debenture Trustee fails or
the holders of not less than 25% in principal amount of the outstanding
Debentures fail to declare the principal of all of the Debentures to be
immediately due and payable, the Holders of at least 25% in Liquidation
Amount of the Preferred Securities then Outstanding shall have such
right by a notice in writing to the Depositor and the Debenture
Trustee; and upon any such declaration such principal amount of and the
accrued interest on all of the Debentures shall become immediately due
and payable, provided that the payment of principal and interest on
such Debentures shall remain subordinated to the extent provided in the
Indenture.
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 a majority in Liquidation
Amount of the Preferred 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 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 a majority in Liquidation Amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
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 Preferred Securities all or part of which is represented
by Book-Entry Preferred Securities Certificates, a record date shall be
established for determining Holders of Outstanding Preferred 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 5.14(b).
(c) For so long as any Preferred 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 5.01 or 5.02 of the Indenture, any Holder of
Preferred Securities shall have the right to institute a proceeding
directly against the Depositor, pursuant to Section 5.08 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 Preferred Securities of such Holder (a
"Direct Action"). In connection with any such Direct Action, the rights
of the Holders of the Common Securities will be subrogated to the
rights of any Holder of the Preferred Securities to the extent of any
payment made by the Depositor to such Holder of Preferred Securities as
a result of such Direct Action. Except as set forth in Section 5.14(b)
and (c), the Holders of Preferred Securities shall have no right to
exercise directly any right or remedy available to the holders of, or
in respect of, the Debentures.
ARTICLE 6
ACT OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.01. Limitations on Voting Rights. (a) Except as
provided in this Section, in Sections 8.10 and 10.02 and in the
Indenture and as otherwise required by law, no Holder of Preferred
Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or
the obligations of the parties hereto, nor shall anything herein set
forth, or contained in the terms of the Trust Securities Certificates,
be construed so as to constitute the Securityholders from time to time
as partners or members of an association.
(b) So long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place
of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Debenture
Trustee with respect to such Debentures, (ii) waive any past default
which is waiveable under Section 5.13 of the Indenture, (iii) exercise
any right to rescind or annul a declaration that the
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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 Holder of at least a
majority in Liquidation Amount of all Outstanding Preferred
Securities; provided, however, that where a consent under the
Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each Holder of Preferred
Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Preferred Securities, except
by a subsequent vote of the Preferred Securities. The Property
Trustee shall notify all Holders of the Preferred Securities of any
notice of default received from the Debenture Trustee with respect to
the Debentures. In addition to obtaining the foregoing approvals of
the Holders of the Preferred Securities, prior to taking any of the
foregoing actions, the Trustees shall, at the expense of the
Depositor, obtain an Opinion of Counsel experienced in such matters to
the effect that the Trust will not be classified as an association
taxable as a corporation or partnership for United States Federal
income tax purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement provides
for, or the Trustees otherwise propose to effect, (i) any action that
would adversely affect in any material respect the powers, preferences
or special rights of the Preferred Securities, whether by way of
amendment to the Trust Agreement or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than
pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Securities as a class will be entitled to vote
on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of the Holders of at least a
majority in Liquidation Amount of the Outstanding Preferred
Securities.
SECTION 6.02. Notice of Meetings. Notice of all meetings of
the Holders of the Preferred Securities, stating the time, place and
purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.08 to each Preferred Securityholder of record,
at his registered address, at least 15 days and not more than 90 days
before the meeting. At any such meeting, any business properly before
the meeting may be so considered whether or not stated in the notice
of the meeting. Any adjourned meeting may be held as adjourned
without further notice.
SECTION 6.03. Meetings of Preferred Securityholders. No
annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of
Securityholders to vote on any matter upon the written request of the
Preferred Securityholders of record of 25% of the Preferred Securities
(based upon their Liquidation Amount) and the Administrative Trustees
or the Property Trustee may, at any time in their discretion, call a
meeting of the
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Holders of Preferred Securities to vote on any matters as to which
such Holders are entitled to vote.
Holders of record of 50% of the Preferred Securities (based
upon their Liquidation Amount), present in person or by proxy, shall
constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by
the Holders of record of Preferred Securities present, in person or by
proxy, holding more than a majority of the Preferred Securities (based
upon their Liquidation Amount) held by Holders of record of Preferred
Securities present, either in person or by proxy, at such meeting
shall constitute the action of the Securityholders, unless this Trust
Agreement requires a greater number of affirmative votes.
SECTION 6.04. Voting Rights. Securityholders shall be
entitled to one vote for each $50 of Liquidation Amount represented by
their Trust Securities in respect of any matter as to which such
Securityholders are entitled to vote.
SECTION 6.05. Proxies, Etc. At any meeting of
Securityholders, any Securityholders entitled to vote there at may vote
by proxy, provided that no proxy shall be voted at any meeting unless
it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative
Trustees may direct, for verification prior to the time at which such
vote shall be taken. Pursuant to a resolution of the Property
Trustee, proxies may be solicited in the name of the Property Trustee
or one or more officers of the Property Trustee. Only Securityholders
of record shall be entitled to vote. When Trust Securities are held
jointly by several persons, any one of them may vote at any meeting in
person or by proxy in respect of such Trust Securities, but if more
than one of them shall be present at such meeting in person or by
proxy, and such joint owners or their proxies so present disagree as
to any vote to be cast, such vote shall not be received in respect of
such Trust Securities. A proxy purporting to be executed by or on
behalf of a Securityholder shall be deemed valid unless challenged at
or prior to its exercise, and the burden of proving invalidity shall
rest on the challenger. No proxy shall be valid more than three years
after its date of execution.
SECTION 6.06. Securityholder Action by Written Consent. Any
action which may be taken by Securityholders at a meeting may be taken
without a meeting if Securityholders holding more than a majority of
all Outstanding Trust Securities (based upon their Liquidation Amount)
entitled to vote in respect of such action (or such larger proportion
thereof as shall be required by any express provision of this Trust
Agreement) shall consent to the action in writing.
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SECTION 6.07. Record Date for Voting and Other Purposes. For
the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to
participate in any Distribution on the Trust Securities in respect of
which a record date is not otherwise provided for in this Trust
Agreement, or for the purpose of any other action, the Property
Trustee may from time to time fix a date, not more than 90 days prior
to the date of any meeting of Securityholders or the payment of
Distributions or other action, as the case may be, as a record date for
the determination of the identity of the Securityholders of record for
such purposes.
SECTION 6.08. Acts of Securityholders. Any request, demand,
authorization, direction, notice, consent, waiver or other action
provided or permitted by this Trust Agreement to be given, made or
taken by Securityholders or Owners may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such
Securityholders or Owners in person or by an agent duly appointed in
writing; and, except as otherwise expressly provided herein, such
action shall become effective when such instrument or instruments are
delivered to an Administrative Trustee. Such instrument or
instruments (and the action embodied therein and evidence thereby) are
herein sometimes referred to as the "Act" of the Securityholders or
Owners signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Trust Agreement and (subject to
Section 8.01) conclusive in favor of the Trustees, if made in the
manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknow-ledgments of deeds, certifying that
the individual signing such instrument or writing acknowledged to him
the execution thereof. Where such execution is by a signer acting in
a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority.
The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems
sufficient.
The ownership of Preferred Securities shall be proved by the
Securities Register.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Securityholder of any Trust
Security shall bind every future Securityholder of the same Trust
Security and the Securityholder of every Trust Security issued upon
the registration of transfer thereof or in exchange therefor or
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in lieu thereof in respect of anything done, omitted or suffered to be
done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular
Trust Security may do so with regard to all or any part of the
Liquidation Amount of such Trust Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with
respect to the authenticity, validity or binding nature of any
request, demand, authorization, direction, consent, waiver or other
Act of such Securityholder or Trustee under this Article VI, then the
determination of such matter by the Property Trustee shall be
conclusive with respect to such matter.
A Securityholder may institute a legal proceeding directly
against the Depositor under the Guarantee to enforce its rights under
the Guarantee without first instituting a legal proceeding against the
Guarantee Trustee (as defined in the Guarantee), the Trust or any
person or entity.
SECTION 6.09. Inspection of Records. Upon reasonable notice
to the Administrative Trustees and the Property Trustee, the records
of the Trust shall be open to inspection by Securityholders during
normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Bank, the
Property Trustee and the Delaware Trustee. The Bank, the Property
Trustee and the Delaware Trustee, each severally on behalf of and as
to itself, hereby represents and warrants for the benefit of the
Depositor and the Securityholders that:
(a) the Bank is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States;
(b) the Delaware Trustee is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware;
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(c) each of the Bank and the Delaware Trustee has full
corporate power, authority and legal right to execute, deliver and
perform its obligations under this Trust Agreement and has taken all
necessary action to authorize the execution, delivery and performance
by it of this Trust Agreement;
(d) this Trust Agreement has been duly authorized, executed
and delivered by each of the Bank and the Delaware Trustee and
constitutes the valid and legally binding agreement of the Bank and
the Delaware Trustee enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(e) the execution, delivery and performance by each of the
Bank and the Delaware Trustee of this Trust Agreement has been duly
authorized by all necessary corporate or other action on the part of
the Bank, the Property Trustee and the Delaware Trustee and does not
require any approval of stockholders of the Bank or the Delaware
Trustee and such execution, delivery and performance will not (i)
violate either of the Bank's or the Delaware Trustee's charter or
by-laws, (ii) violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of, any Lien on any properties included in the Trust
Property pursuant to the provision of, any indenture, mortgage, credit
agreement, license or other agreement or instrument to which the
Property Trustee, the Bank or the Delaware Trustee is a party or by
which it is bound, or (iii) violate any law, governmental rule or
regulation of the United States or the State of Delaware, as the case
may be, governing the banking, corporate, or trust powers of the Bank,
the Property Trustee or the Delaware Trustee (as appropriate in
context) or any order, judgment or decree applicable to the Property
Trustee, the Bank or the Delaware Trustee;
(f) neither the authorization, execution or delivery by the
Bank or the Delaware Trustee of this Trust Agreement nor the
consummation of any of the transactions by the Bank, the Property
Trustee or the Delaware Trustee (as appropriate in context)
contemplated herein or therein requires the consent or approval of, the
giving of notice to, the registration with or the taking of any other
action with respect to any governmental authority or agency under any
existing Federal law governing the banking, corporate or trust powers
of the Bank, the Property Trustee or the Delaware Trustee, as the case
may be, under the laws of the United States or the State of Delaware;
(g) there are no proceedings pending or, to the best of each
of the Bank's, the Property Trustee's and the Delaware Trustee's
knowledge, threatened against or affecting the Bank, the Property
Trustee or the Delaware Trustee in any
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court or before any governmental authority, agency or arbitration
board or tribunal which, individually or in the aggregate, would
materially and adversely affect the Trust or would question the right,
power and authority of the Bank, the Property Trustee or the Delaware
Trustee, as the case may be, to enter into or perform its obligations
as one of the Trustees under this Trust Agreement.
SECTION 7.02. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued on the Closing
Date on behalf of the Trust have been duly authorized and will have
been, duly and validly executed, issued and delivered by the Trustees
pursuant to the terms and provisions of, and in accordance with the
requirements of, this Trust Agreement and the Securityholders will be,
as of such date, entitled to the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges
payable by the Trust (or the Trustees on behalf of the Trust) under
the laws of the State of Delaware or any political subdivision thereof
in connection with the execution, delivery and performance by the
Bank, the Property Trustee or the Delaware Trustee, as the case may
be, of this Trust Agreement.
ARTICLE 8
THE TRUSTEES
SECTION 8.01. Certain Duties and Responsibilities. (a) The
duties and responsibilities of the Trustees shall be as provided by
this Trust Agreement and, in the case of the Property Trustee, by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of
this Trust Agreement shall require the Trustees to expend or risk their
own funds or otherwise incur any financial liability in the performance
of any of their duties hereunder, or in the exercise of any of their
rights or powers, if they shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Trust Agreement relating
to the conduct or affecting the liability of or affording protection to
the Trustees shall be subject to the provisions of this Section.
Nothing in this Trust Agreement shall be construed to release the
Administrative Trustees from liability for their own grossly negligent
action, their own grossly negligent failure to act, or their own
willful misconduct. To the extent that, at law or in equity, an
Administrative Trustee has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to the Securityholders,
such Administrative Trustee shall not be liable to the Trust or to any
Securityholder for such Administrative Trustee's good faith reliance on
the provisions of this Trust Agreement. The provisions of this Trust
Agreement, to the extent that they
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restrict the duties and liabilities of the Administrative Trustees
otherwise existing at law or in equity, are agreed by the Depositor
and the Securityholders to replace such other duties and liabilities
of the Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from the
revenue and proceeds from the Trust Property and only to the extent
that there shall be sufficient revenue or proceeds from the Trust
Property to enable the Property Trustee or a Paying Agent to make
payments in accordance with the terms hereof. Each Securityholder, by
its acceptance of a Trust Security, agrees that it will look solely to
the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the
Trustees are not personally liable to it for any amount distributable
in respect of any Trust Security or for any other liability in respect
or any Trust Security. This Section 8.01(b) does not limit the
liability of the Trustees expressly set forth elsewhere in this Trust
Agreement or, in the case of the Property Trustee, in the Trust
Indenture Act.
(c) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) the Property Trustee shall not be liable for any
error of judgment made in good faith by an authorized officer
of the Property Trustee, unless it shall be proved that the
Property Trustee was negligent in ascertaining the pertinent
facts;
(ii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
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, safekeeping 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
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Depositor and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to
the Payment Account maintained by the Property Trustee
pursuant to Section 3.01 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.
SECTION 8.02. Notice of Defaults. Within five Business Days
after the occurrence of any Event of Default actually known to the
Property Trustee, the Property Trustee shall transmit, in the manner
and to the extent provided in Section 10.08, notice of such Event of
Default to the Securityholders, the Administrative Trustees and the
Depositor, unless such Event of Default shall have been cured or
waived.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to extend the interest payment
period for the Debentures pursuant to the Indenture, the Property
Trustee shall transmit, in the manner and to the extent provided in
Section 10.08, notice of such exercise to the Securityholders, unless
such exercise shall have been revoked.
SECTION 8.03. Certain Rights of Property Trustee. Subject to
the provisions of Section 8.01:
(a) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if, (i) in performing its duties under this Trust
Agreement the Property Trustee is required to decide between
alternative courses of action or (ii) in construing any of the
provisions in this Trust Agreement the Property Trustee finds the same
ambiguous or inconsistent with any other provisions contained herein
or (iii) the Property Trustee is unsure of the application of any
provision of this Trust Agreement, then, except as to any matter as to
which the Holders of Preferred Securities are entitled to vote under
the terms of this Trust Agreement, the Property Trustee shall deliver
a notice to the Depositor requesting written
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instructions of the Depositor as to the course of action to be taken
and the Property Trustee shall take such action, or refrain from
taking such action, as the Property Trustee shall be instructed in
writing to take, or to refrain from taking, by the Depositor;
provided, however, that if the Property Trustee does not receive such
instructions of the Depositor within ten Business Days after it has
delivered such notice, or such reasonably shorter period of time set
forth in such notice (which to the extent practicable shall not be
less than two Business Days), it may, but shall be under no duty to,
take or refrain from taking such action not inconsistent with this
Trust Agreement as it shall deem advisable and in the best interests
of the Securityholders, in which event the Property Trustee shall have
no liability except for its own bad faith, negligence or willful
misconduct;
(c) any direction or act of the Depositor or the
Administrative Trustees contemplated by this Trust Agreement shall be
sufficiently evidenced by an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement,
the Property Trustee shall deem it desirable that a matter be
established before undertaking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Depositor or the
Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or reregistration
thereof;
(f) the Property Trustee may consult with counsel and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon and in accordance with such advice, such counsel may be
counsel to the Depositor or any of its Affiliates, and may include any
of its employees; the Property Trustee shall have the right at any
time to seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any of the Securityholders
pursuant to this Trust Agreement, unless such Securityholders shall
have offered to the Property Trustee reasonable security or
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indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(h) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolutions,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, debenture, note or other evidence of
indebtedness or other paper or document, unless requested in writing
to do so by Holders of record of 25% or more of the Preferred
Securities (based upon their Liquidation Amount), 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 or an Affiliate, provided that the
Property Trustee shall be responsible for its own negligence or
recklessness with respect to selection of any agent or attorney
appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder the Property Trustee (i) may request instructions from the
Holders of the Trust Securities which instructions may only be given
by the Holders of the same proportion in Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee
under the terms of the Trust Securities in respect of such remedy,
right or action, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and
(iii) shall be protected in acting in accordance with such
instructions; and
(k) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal, or in
which the Property Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts, or to
exercise any such right, power, duty or obligation. No permissive
power or authority available to the Property Trustee shall be
construed to be a duty.
SECTION 8.04. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Trust Securities
Certificates shall be taken
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as the statements of the Trust, and the Trustees do not assume any
responsibility for their correctness. The Trustees shall not be
accountable for the use or application by the Depositor of the
proceeds of the Debentures.
SECTION 8.05. May Hold Securities. Except as provided in the
definition of the term "Outstanding" in Article I, any Trustee or any
other agent of any Trustee or the Trust, in its individual or any
other capacity, may become the owner or pledgee of Trust Securities
and, subject to Section 8.08 and 8.13, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or
such other agent.
SECTION 8.06. Compensation; Indemnity; Fees. The Depositor
agrees:
(a) to pay the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which
compensation shall be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith;
(c) to the fullest extent permitted by applicable law, to
indemnify and hold harmless (i) each Trustee, (ii) any Affiliate of any
Trustee, (iii) any officer, director, shareholder, employee,
representative or agent of any Trustee, and (iv) any employee or agent
of the Trust or its Affiliates, (referred to herein as an "Indemnified
Person") from and against any loss, damage, liability, tax, penalty,
expense or claim of any kind or nature whatsoever incurred by such
Indemnified Person by reason of the creation, operation or termination
of the Trust or any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner
such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Trust Agreement,
except that no Indemnified Person shall be entitled to be indemnified
in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or willful misconduct with respect to
such acts or omissions; and
(d) to the fullest extent permitted by applicable law, to
advance expenses (including legal fees) incurred by an Indemnified
Person in defending any claim, demand, action, suit or proceeding
shall, from time to time, prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Depositor of an
undertaking by or on behalf of the Indemnified Person to repay such
amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified as authorized in the preceding subsection.
The provisions of this Section 8.06 shall survive the
termination of this Trust Agreement.
No Trustee may claim any lien or charge on any Trust Property
as a result of any amount due pursuant to this Section 8.06.
The Depositor and any Trustee may engage in or possess an
interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of
the Trust, and the Trust and the Holders of 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 Trust,
shall not be deemed wrongful or improper. Neither the Depositor, nor
any Trustee, shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust,
and the Depositor or any 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
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 8.07. Corporate Property Trustee Required;
Eligibility of Trustees. (a) There shall at all times be a Property
Trustee hereunder with respect to the Trust Securities. The Property
Trustee shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of
at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of
its supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus
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as set forth in its most recent report of condition so published. If
at any time the Property Trustee with respect to the Trust Securities
shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each
Administrative Trustee shall be either a natural person who is at
least 21 years of age or a legal entity that shall act through one or
more persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee with
respect to the Trust Securities. The Delaware Trustee shall either be
(i) a natural person who is at least 21 years of age and a resident of
the State of Delaware or (ii) a legal entity with its principal place
of business in the State of Delaware and that otherwise meets the
requirements of applicable Delaware law that shall act through one or
more persons authorized to bind such entity.
SECTION 8.08. Conflicting Interests. If the Property Trustee
has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Property Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Trust
Agreement.
SECTION 8.09. 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 Depositor and the
Administrative Trustees, by agreed action of the majority of such
Trustees, shall have power to appoint, and upon the written request of
the Administrative Trustees, the Depositor shall for such purpose join
with the Administrative Trustees 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. If the Depositor does not
join in such appointment within 15 days after the receipt by it of a
request so to do, or in case a Debenture Event of Default has occurred
and is continuing, the Property Trustee alone shall have power to make
such appointment. Any co-trustee or separate trustee appointed
pursuant to this Section shall either be (i) a natural person who is
at least 21 years of age and a
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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.
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 and delivered and
all rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees specified
hereunder, shall be exercised, solely by such Trustees and not by such
co-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 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 an Event of Default
under the Indenture 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 resigned or removed may be
appointed in the manner provided in this Section.
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(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.
(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 Trustee (the "Relevant
Trustee") and no appointment of a successor Trustee pursuant to this
Article shall become effective until the acceptance of appointment by
the successor Trustee in accordance with the applicable requirements
of Section 8.11.
Any Trustee may resign at any time with respect to the Trust
Securities by giving written notice thereof to the Securityholders and
the Depositor. If the instrument of acceptance by the successor
Trustee required by Section 8.11 shall not have been delivered to the
Relevant Trustee within 30 days after the giving of such notice of
resignation, the Relevant Trustee may petition, at the expense of the
Trust, any court of competent jurisdiction for the appointment of a
successor Relevant Trustee with respect to Trust Securities.
Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the
Common Securityholder. If a Debenture Event of Default shall have
occurred and be continuing, the Property Trustee or the Delaware
Trustee, or both of them, may be removed at such time by Act of the
Holders of a majority in Liquidation Amount of the Preferred
Securities, delivered to the Relevant Trustee (in its individual
capacity and on behalf of the Trust). An Administrative Trustee may
be removed by the Holder of the Common Securities at any time.
If any Trustee shall resign, be removed or become incapable of
acting as Trustee, or if a vacancy shall occur in the office of any
Trustee for any cause, at a time when no Debenture Event of Default
shall have occurred and be continuing, the Common Securityholder, by
Act of the Common Securityholder delivered to the retiring Trustee,
shall promptly appoint a successor Trustee or Trustees with respect to
the Trust Securities and the Trust, and the retiring Trustee shall
comply with the applicable requirements of Section 8.11. If the
Property Trustee or the Delaware Trustee shall resign, be removed or
become incapable of continuing to act as the Property Trustee or the
Delaware Trustee, as the case may be, at a time when a Debenture Event
of Default is continuing, the Holders of Preferred
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Securities, by Act of the Securityholders of a majority in Liquidation
Amount of the Preferred Securities then Outstanding delivered to the
retiring Relevant Trustee, shall promptly appoint a successor Relevant
Trustee or Trustees with respect to the Trust Securities and the
Trust, and such successor Trustee shall comply with the applicable
requirements of Section 8.11. If an Administrative Trustee shall
resign, be removed or become incapable of acting as Administrative
Trustee, at a time when a Debenture Event of Default shall have
occurred and be continuing, the Holder of the Common Securities shall
appoint a successor Administrative Trustee or Administrative Trustees.
If no successor Relevant Trustee with respect to the Trust Securities
shall have been so appointed by the Holders of the Common Securities
or the Preferred Securities and accepted appointment in the manner
required by Section 8.11, any Securityholder who has been a
Securityholder of Trust Securities for at least six months may, on
behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor
Relevant Trustee with respect to the Trust Securities.
The Property Trustee shall give notice of each resignation and
each removal of a Trustee and each appointment of a successor Trustee
to all Securityholders in the manner provided in Section 10.08 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 or a Delaware
Trustee who is a natural person dies or becomes, in the opinion of the
Depositor, incompetent or incapacitated, the vacancy created by such
death, incompetence or incapacity may be filled by (a) the unanimous
act of remaining Administrative Trustees if there are at least two of
them of (b) otherwise by the Depositor (with the successor in each case
being a Person who satisfies the eligibility requirement for
Administrative Trustees or the Delaware Trustee, as the case may be,
set forth in Section 8.07).
SECTION 8.11. Acceptance of Appointment by Successor. In
case of the appointment hereunder of a successor Trustee, such
successor Trustee so appointed shall execute, acknowledge and deliver
to the Trust and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Depositor or the successor Trustee such retiring
Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and if the Property Trustee
is the resigning Trustee shall duly assign, transfer and deliver to
the
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successor Trustee all property and money held by such retiring
Property Trustee hereunder.
In case of the appointment hereunder of a successor Relevant
Trustee, the retiring Relevant Trustee and each successor Relevant
Trustee shall execute and deliver an amendment hereto wherein each
successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor Relevant Trust
all the rights, powers, trusts and duties of the retiring Relevant
Trustee and (b) shall add to or change any of the provisions of this
Trust Agreement as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Relevant
Trustee, it being understood that nothing herein or in such amendment
shall constitute such Relevant Trustees co-trustees and upon the
execution and delivery of such amendment the resignation or removal of
the retiring Relevant Trustee shall become effective to the extent
provided therein and each such successor Relevant Trustee, without any
further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Relevant Trustee;
but, on request of the Trust or any successor Relevant Trustee such
retiring Relevant Trustee shall duly assign, transfer and deliver to
such successor Relevant Trustee all Trust Property, all proceeds
thereof and money held by such retiring Relevant Trustee hereunder.
Upon request of any such successor Relevant Trustee, the Trust
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Relevant Trustee all such
rights, powers and trusts referred to in the first or second preceding
paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment
unless at the time of such acceptance such successor Relevant Trustee
shall be qualified and eligible under this Article.
SECTION 8.12. Merger, Conversion, Consolidation or
Succession to Business. Any corporation into which the Property
Trustee, the Delaware Trustee or any Administrative Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to
which such Relevant Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of
such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided such
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corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto.
SECTION 8.13. Property Trustee May File Proofs of Claim. In
case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or
other similar judicial proceeding relative to the Trust or any other
obligor upon the Trust Securities or the property of the 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 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 (or, if the Trust Securities are original issue
discount Securities, such portion of the liquidation amount as
may be specified in the terms of such 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
(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 for distribution 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) Within 60
days after December 31 of each year commencing with December 31, 1996
the Property Trustee shall transmit to all Securityholders in
accordance with Section 10.08, and to the Depositor, a brief report
dated as of such December 31 with respect to:
(i) its eligibility under Section 8.07 or, in lieu
thereof, if to the best of its knowledge it has continued to
be eligible under said Section, a written statement to such
effect;
(ii) a statement that the Property Trustee has
complied with all of its obligations under this Trust
Agreement during the twelve-month period (or, in the case of
the initial report, the period since the Closing Date) ending
with such December 31 or, if the Property Trustee has not
complied in any material respect with such obligations, a
description of such noncompliance; 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
Securityholders such reports concerning the Property Trustee and its
actions under this Trust Agreement as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant
thereto.
(c) A copy of such report shall, at the time of such
transmissions to Holders, be filed by the Property Trustee with each
national securities exchange or self-regulatory organization upon
which the Trust Securities are listed, with the Commission and with
the Depositor.
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SECTION 8.15. Reports to the Property Trustee. The
Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if
any) and the compliance certificate required by Section 314(a) of the
Trust Indenture Act in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act.
SECTION 8.16. Evidence of Compliance with Conditions
Precedent. Each of the Depositor and the Administrative Trustees on
behalf of the Trust shall provide to the Property Trustee such
evidence of compliance with any conditions precedent, if any, provided
for in this Trust Agreement that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
SECTION 8.17. Number of Trustees. (a) The number of
Trustees shall be four, provided that the Holder of all of the Common
Securities by written instrument may increase or decrease the number
of Administrative Trustees. The Property Trustee and the Delaware
Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the
number of Administrative Trustees is not reduced pursuant to Section
8.17(a), or if the number of Trustees is increased pursuant to Section
8.17(a), a vacancy shall occur.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by
the appointment of an Administrative Trustee in accordance with
Section 8.10, the Administrative Trustees in office, regardless of
their number (and notwithstanding any other provision of this
Agreement), shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
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 2.07(a), including any registration statement or amendment
thereof filed with the Commission, or making any other governmental
filing.
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(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number or to the Depositor the
doing of such things and the execution of such instruments either in
the name of the Trust or the names of the Administrative Trustees or
otherwise as the Administrative Trustees may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary
to the provisions of the Trust, as set forth herein.
ARTICLE 9
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.01. Termination upon Expiration Date. Unless
earlier terminated, the Trust shall automatically terminate on
______________ ___, ____ (the "Expiration Date"), following the
distribution of the Trust Property in accordance with Section 9.04.
SECTION 9.02. Early Termination. The first to occur of any
of the following events is an "Early Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or
the dissolution or liquidation of, the Depositor;
(b) the occurrence of a Special Event except in the case of a
Tax Event following which the Depositor has elected to pay any
Additional Sums (in accordance with Section 4.04) such that the net
amount received by Holders of Preferred Securities in respect of
Distributions are not reduced as a result of such Tax Event and the
Depositor has not revoked any such election or failed to make such
payments;
(c) the redemption of all of the Preferred Securities;
(d) an order for dissolution of the Trust shall have been
entered by a court of competent jurisdiction; and
(e) receipt by the Property Trustee of written notice from the
Depositor of its intention to terminate the trust.
SECTION 9.03. Termination. The respective obligations and
responsibilities of the Trustees and the Trust created and continued
hereby shall terminate upon the latest to occur of the following: (a)
the distribution by the Property Trustee to Securityholders upon the
liquidation of the Trust pursuant to
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Section 9.04, or upon the redemption of all of the Trust Securities
pursuant to Section 4.02, of all amounts required to be distributed
hereunder upon the final payment of the Trust Securities; (b) the
payment of any expenses owed by the Trust; and (c) the discharge of
all administrative duties of the Administrative Trustees, including
the performance of any tax reporting obligations with respect to the
Trust or the Securityholders.
SECTION 9.04. Liquidation. (a) If an Early Termination Event
specified in clause (a), (b), (d) or (e) of Section 9.02 occurs or
upon the Expiration Date, the Trust shall be liquidated by the
Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to each Securityholder a Like
Amount of Debentures, subject to Section 9.04(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:
(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 9.04(d) applies
receive a Liquidation Distribution, as the Administrative
Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 9.02(c) or 9.04(d) applies, in order
to effect the liquidation of the Trust and distribution of the
Debentures to Securityholders, the Property Trustee shall establish a
record date for such distribution (which shall be not more than 45
days prior to the Liquidation Date) and, either itself acting as
exchange agent or through the appointment of a separate exchange
agent, shall establish such procedures as it shall deem appropriate to
effect the distribution of Debentures in exchange for the Outstanding
Trust Securities Certificates.
(c) Except where Section 9.02(c) or 9.04(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 Securities Registrar or
its agent for exchange, (iii) the
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Depositor shall use its reasonable efforts to have the Debentures
listed on the New York Stock Exchange or on such other exchange as the
Preferred 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 Certificates until such
certificates are so surrendered (and until such certificates are so
surrendered, no payments or interest or principal will be made to
Holders of Trust Securities Certificates with respect to such
Debentures), and (v) all rights of Securityholders holding Trust
Securities will cease, except the right of such Securityholders to
receive Debentures upon surrender of Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions of
this Section 9.04, whether because of an order for dissolution entered
by a court of competent jurisdiction or otherwise, distribution of the
Debentures in the manner provided herein is determined by the Property
Trustee not to be practicable, the Trust Property shall be liquidated,
and the Trust shall be dissolved, wound-up or terminated, by the
Property Trustee in such manner as the Property Trustee determines.
In such event, on the date of the dissolution, winding up or other
termination of the Trust, Securityholders will be entitled to receive
out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, an amount equal to the
Liquidation Amount per Trust Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If, upon any such dissolution,
winding-up or termination, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then, subject to
the next succeeding sentence, the amounts payable by the Trust on the
Trust Securities shall be paid on a pro rata basis (based upon
Liquidation Amounts). The Holder of the Common Securities will be
entitled to receive Liquidation Distributions upon any such
dissolution, winding-up or termination pro rata (determined as
aforesaid) with Holders of Preferred Securities, except that, if a
Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common Securities.
SECTION 9.05. Mergers, Consolidations, Amalgamations or
Replacements of the Trust. The Trust may not merge with or into,
consolidate, amalgamate, or be replaced by, or convey, transfer or
lease its properties and assets substantially as an entirety to any
corporation or other body, except pursuant to this Section 9.05. At
the request of the Depositor, with the consent of the Administrative
Trustees and without the consent of the Property Trustee, the Delaware
Trustee or the Holders of the Preferred Securities, the Trust may merge
with or into, consolidate, amalgamate, or be replaced by a trust
organized as such under the laws of any State; provided, that (i) such
successor entity either
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(a) expressly assumes all of the obligations of the Trust with respect
to the Preferred Securities or (b) substitutes for the Preferred
Securities other securities having substantially the same terms as the
Preferred Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Preferred Securities rank in
priority with respect to Distributions and payments upon liquidation,
redemption and otherwise, (ii) the Depositor expressly appoints a
trustee of such successor entity possessing the same powers and duties
as the Property Trustee as the holder of the Debentures, (iii) the
Successor Securities are listed, or any Successor Securities will be
listed upon notification of issuance, on any national securities
exchange or other organization on which the Preferred Securities are
then listed, if any, (iv) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation,
amalgamation or replacement does not adversely affect the rights,
preferences and privileges of the Holders of the Preferred Securities
(including any Successor Securities) in any material respect, (vi)
such successor entity has a purpose identical to that of the Trust,
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Depositor has received an Opinion of Counsel to the
effect that (a) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect, and (b) following such
merger, consolidation, amalgamation or replacement, neither the Trust
nor such successor entity will be required to register as an
investment company under the 1940 Act and (viii) 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 Trust shall not, except with the
consent of Holders of 100% in Liquidation Amount of the Preferred
Securities, consolidate, amalgamate, merge with or into, or be
replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger or replacement would cause the
Trust or the successor entity to be classified as other than a grantor
trust for United States Federal income tax purposes.
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ARTICLE 10
MISCELLANEOUS PROVISIONS
SECTION 10.01. Limitation of Rights of Securityholders. The
death or incapacity 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 or heirs of
such person or any Securityholder for such person, to claim an
accounting, take any action or bring any proceeding in any court for a
partition or winding-up of the arrangements contemplated hereby, nor
otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
SECTION 10.02. Amendment. (a) This Trust Agreement may be
amended from time to time by the Trustees and the Depositor, without
the consent of any Securityholders, (i) to cure any ambiguity,
correct or supplement any provision herein or therein which may be
inconsistent with any other provision herein or therein, or to make
any other provisions with respect to matters or questions arising
under this Trust Agreement, 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 Trust will be classified for
United States Federal income tax purposes as a grantor trust at all
times that any Trust Securities are outstanding or to ensure that the
Trust will not be required to register as an "investment company"
under the 1940 Act; provided, however, that in the case of clause (i),
such action shall not adversely affect in any material respect the
interests of any Securityholder, and any amendments of this Trust
Agreement shall become effective when notice thereof is given to the
Securityholders.
(b) Except as provided in Section 10.02(c) hereof, any
provision of this Trust Agreement may be amended by the Trustees and
the Depositor with (i) the consent of Holders representing not less
than a majority (based upon Liquidation Amounts) of the Trust
Securities then Outstanding and (ii) receipt by the Trustees of an
Opinion of Counsel to the effect that such amendment or the exercise
of any power granted to the Trustees in accordance with such amendment
will not affect the Trustee's status as a grantor trust for United
States Federal income tax purposes or the Trust's exemption from
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 affected
Securityholder (such consent being obtained in accordance with Section
6.03 or 6.06 hereof), this Trust Agreement may not be amended to (i)
change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of
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any Distribution required to be made in respect of the Trust
Securities as of a specified date or (ii) restrict the right of a
Securityholder to institute suit for the enforcement of any such
payment on or after such date; notwithstanding any other provision
herein without the unanimous consent of the Securityholders (such
consent being obtained in accordance with Section 6.03 or 6.06
hereof), this paragraph (c) of this Section 10.02 may not be amended.
(d) Notwithstanding any other provisions of this Trust
Agreement, no Trustee shall enter into or consent to any amendment to
this Trust Agreement which would cause the Trust to fail or cease to
qualify for the exemption from 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
on the Depositor.
(f) In the event that any amendment to this Trust Agreement is
made, the Administrative Trustees shall promptly provide to the
Depositor a copy of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee
shall be required to enter into any amendment to this Trust Agreement
which affects its own rights, duties or immunities under this Trust
Agreement. The Property Trustee shall be entitled to receive an
Opinion of Counsel and an Officers' Certificate stating that any
amendment to this Trust Agreement is in compliance with this Trust
Agreement.
SECTION 10.03. Separability. In case any provision in this
Trust Agreement or in the Trust Securities Certificates shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 10.04. GOVERNING LAW. THIS TRUST AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND
THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST
SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF DELAWARE.
SECTION 10.05. Payments Due on Non-Business Day. If the date
fixed for any payment on any Trust Security shall be a day which is
not a Business Day, then such payment need not be made on such date
but may be made on the next succeeding day which is a Business Day
(except as otherwise provided in Section
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4.01(a)), 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 10.06. Successors. This Trust Agreement shall be
binding upon and shall inure to the benefit of any successor to the
Depositor, the Trust or the Relevant Trustee, including any successor
by operation of law. Except in connection with a 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 10.07. Headings. The Article and Section headings
are for convenience only and shall not affect the construction of this
Trust Agreement.
SECTION 10.08. Reports, Notices and Demands. Any report,
notice, demand or other communications which by any provision of this
Trust Agreement is required or permitted to be given or served to or
upon any Securityholder or the Depositor may be given or served in
writing by deposit thereof, first-class postage prepaid, in the United
States mail, hand delivery or facsimile transmission, in each case,
addressed, (a) in the case of a Holder of Preferred Securities, to such
Holder as such Holder's name and address may appear on the Securities
Register; and (b) in the case of the Holder of the Common Securities,
to Texas Instruments Incorporated 13500 North Central Expressway, P.O.
Box 655474, Dallas, Texas 75265-5474, Attention: Secretary, facsimile
no.: (214) 995-3511. Any notice to Preferred Securityholders shall also
be given to such owners as have, within two years preceding the giving
of such notice, filed their names and addresses with the Property
Trustee for that purpose. Such notice, demand or other communication
to or upon a Securityholder shall be deemed to have been sufficiently
given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given
or served to or upon the Trust, the Property Trustee, the Delaware
Trustee or the Administrative Trustees shall be given in writing
addressed (until another address is published by the Trust) as follows:
(a) with respect to the Property Trustee to The First National Bank of
Chicago, One First National Plaza, Suite 0126, Chicago, Illinois
60670-0126, Attention: Corporate Trust Services Division, (b) with
respect to the Delaware Trustee, to c/o FCC National Bank, 300 King
Street, Wilmington, Delaware 19801, with a copy of any such notice to
the Property Trustee at its address above, and (c) with respect to the
Administrative Trustees, to them at the address for notices to the
Depositor, marked "Attention: Secretary". Such notice, demand or other
communication to or upon the Trust or the Property Trustee shall be
deemed to have been sufficiently given or made only upon actual receipt
of the writing by the Trust or the Property Trustee.
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SECTION 10.09. Agreement Not to Petition. Each of the
Trustees and the Depositor agrees for the benefit of the
Securityholders that, until at least one year and one day after the
Trust has been terminated in accordance with Article IX, it shall not
file, or join in the filing of, a petition against the Trust under any
bankruptcy, insolvency, reorganization or other similar law
(including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the
commencement of any proceeding against the Trust under any Bankruptcy
Law. In the event the Depositor takes action in violation of this
Section 10.09, the Property Trustee agrees, for the benefit of
Securityholders, that at the expense of the Depositor, it shall file
an answer with the bankruptcy court or otherwise properly contest the
filing of such petition by the Depositor against the Trust or the
commencement of such action and raise the defense that the Depositor
has agreed in writing not to take such action and should be stopped
and precluded therefrom and such other defenses, if any, as counsel
for the Trustee or the Trust may assert. The provisions of this
Section 10.09 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 Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts
with another provision hereof which is required to be included in this
Trust Agreement by any of the provisions of the Trust Indenture Act,
such required provision shall control. If any provision of this Trust
Agreement modifies or excludes any provision of the Trust Indenture
Act which may be so modified or excluded, the latter provision shall
be deemed to apply to this Trust Agreement as so modified or to be
excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Securities as equity
securities representing undivided beneficial interests in the assets
of the Trust.
SECTION 10.11. ACCEPTANCE OF TERMS OF TRUST AGREEMENT,
GUARANTEE AND INDENTURE. THE RECEIPT AND ACCEPTANCE OF A TRUST
SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER
OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR FURTHER
MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE
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SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH
TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT
AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE
GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE
TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH
OTHERS.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
TEXAS INSTRUMENTS INCORPORATED
as Depositor
By:
-----------------------------------
Name:
Title:
The FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By:
-----------------------------------
Name:
Title:
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By:
-----------------------------------
Name:
Title:
--------------------------------------
JOHN W. PETTIJOHN,
as Administrative Trustee
--------------------------------------
DAVID B. WILLIS,
as Administrative Trustee
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EXHIBIT A
CERTIFICATE OF TRUST
OF
TEXAS INSTRUMENTS FINANCIAL TRUST
THIS CERTIFICATE OF TRUST OF Texas Instruments Financial Trust (the
"Trust"), dated as of June 28, 1996, 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. (S) 3801 et seq.).
1. Name. The name of the business trust being formed hereby is
Texas Instruments Financial Trust.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware is First Chicago Delaware Inc., 300 King Street, Wilmington, DE 19801.
3. Effective Date. This Certificate of Trust shall be effective
as of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, have executed this Certificate of Trust as of the date first above
written.
/s/ JOHN W. PETTIJOHN
--------------------------------
John W. Pettijohn,
as Administrative Trustee
/s/ DAVID B. WILLIS
---------------------------------
David B. Willis,
as Administrative Trustee
First Chicago Delaware Inc.,
as Delaware Trustee
By: /s/ STEVEN M. WAGNER
--------------------------------
Name: Steven M. Wagner
Title: Vice President
The First National Bank of Chicago,
as Property Trustee
By: /s/ L. DILLARD
--------------------------------
Name: L. Dillard
Title: Vice President
<PAGE> 74
EXHIBIT B
_________ __, ____
The Depository Trust Company
55 Water Street, 49th Floor
New York, New York 10041-0099
Attention:
----------------------------------
General Counsel's Office
RE: TEXAS INSTRUMENTS FINANCIAL TRUST ____%
CONVERTIBLE QUARTERLY INCOME PREFERRED SECURITIES
Ladies and Gentlemen:The purpose of this letter is to set forth
certain matters relating to the issuance and deposit with The Depository Trust
Company ("DTC") of the ___% Convertible Quarterly Income Preferred Securities,
Series A (the "Preferred Securities") of Texas Instruments Financial Trust, a
Delaware business trust (the "Issuer"), formed pursuant to a Trust Agreement
between Texas Instruments Incorporated (the "Depositor") and the trustees
named therein. The payment of distributions on the Preferred Securities to the
extent the Issuer has funds available for the payment thereof, and payments due
upon liquidation of the Issuer or redemption of the Preferred Securities are
guaranteed by the Depositor to the extent set forth in a Guarantee Agreement
dated _________ __, 1996 between the Depositor and The First National Bank of
Chicago, as guarantee trustee, with respect to the Preferred Securities. The
Depositor and the Issuer propose to sell the Preferred Securities to certain
Underwriters (the "Underwriters") pursuant to an Underwriting Agreement dated
_________ __, 1996 by and among the Underwriters, the Issuer and the Depositor,
and the Underwriters wish to take delivery of the Preferred Securities through
DTC. The First National Bank of Chicago is acting as transfer agent and
registrar with respect to the Preferred Securities (the "Transfer Agent and
Registrar").
To induce DTC to accept the Preferred Securities as eligible for
deposit at DTC, and to act in accordance with DTC's rules with respect to the
Preferred Securities, the Issuer, the Transfer Agent and Registrar and DTC
agree among each other as follows:
1
<PAGE> 75
1. Prior to the closing of the sale of the Preferred Securities to the
Underwriters, which is expected to occur on or about _________ __, 1996, there
shall be deposited with DTC one or more global certificates (individually and
collectively, the "Global Certificate") registered in the name of DTC's
Preferred Securities nominee, Cede & Co., representing an aggregate of
_________ Preferred Securities and bearing the following legend:
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
2. The Amended and Restated Trust Agreement of the Issuer provides for
the voting by holders of the Preferred Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes and
shall, to the extent possible, give DTC notice of such record date not less
than 15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation
of all or any part of the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice of such event at least 5
business days prior to the effective date of such event.
4. In the event of distribution on, or an offering or issuance of rights
with respect to, the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice specifying: (i) the amount
of and conditions, if any, applicable to the payment of any such distribution
or any such offering or issuance of rights; (ii) any applicable expiration or
deadline date, or any date by which any action on the part of the holders of
Preferred Securities is required; and (iii) the date any required notice is to
be mailed by or on behalf of the Issuer to holders of Preferred Securities or
published by or on behalf of the Issuer (whether by mail or publication, the
"Publication Date"). Such notice shall be sent to DTC by a secure means (e.g.,
legible telecopy, registered or certified mail, overnight delivery) in a timely
manner designed to assure that such notice is in DTC's possession no later than
the close of business on the business day before the Publication Date. The
Issuer or the Transfer Agent and Registrar will forward such notice either in a
separate secure transmission for each CUSIP number or in a
2
<PAGE> 76
secure transmission of multiple CUSIP numbers (if applicable) that includes a
manifest or list of each CUSIP number submitted in that transmission. (The
party sending such notice shall have a method to verify subsequently the use of
such means and the timeliness of such notice.) The Publication Date shall be
not less than 30 calendar days nor more than 60 calendar days prior to the
payment of any such distribution or any such offering or issuance of rights
with respect to the Preferred Securities. After establishing the amount of
payment to be made on the Preferred Securities, the Issuer or the Transfer
Agent and Registrar will notify DTC's Dividend Department of such payment 5
business days prior to payment date. Notices to DTC's Dividend Department by
telecopy shall be sent to (212) 709-1723. Such notices by mail or by any other
means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm DTC's receipt
of such telecopy by telephoning the Dividend Department at (212) 709-1270.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DTC not less than 30 calendar days prior to such event by a secure
means in the manner set forth in paragraph 4. Such redemption notice shall be
sent to DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190,
and receipt of such notice shall be confirmed by telephoning (516) 227-4070.
Notice by mail or by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC
by a secure means and in a timely manner as described in paragraph 4. Notices
to DTC pursuant to this paragraph and notices of other corporate actions
(including mandatory tenders, exchanges and capital changes), shall be sent,
unless
3
<PAGE> 77
notification to another department is expressly provided for herein, by
telecopy to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094
and receipt of such notice shall be confirmed by telephoning (212) 709-6884, or
by mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the CUSIP
number or numbers of the Preferred Securities and the accompanying designation
of the Preferred Securities, which, as of the date of this letter, is "Texas
Instruments Financial Trust ___% Convertible Quarterly Income Preferred
Securities".
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be received by
Cede & Co., as nominee of DTC, or its registered assigns in same day funds on
each payment date (or in accordance with existing arrangements between the
Issuer or the Transfer Agent and Registrar and DTC). Such payments shall be
made payable to the order of Cede & Co., and shall be addressed as follows:
NDFS Redemption Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
9. DTC may by prior written notice direct the Issuer and the Transfer
Agent and Registrar to use any other telecopy number or address of DTC as the
number or address to which notices or payments may be sent.
10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Transfer Agent and Registrar's invitation) necessitating a reduction in the
aggregate number of Preferred Securities outstanding evidenced by the Global
Certificate, DTC, in its discretion: (a) may request the Issuer or the
Transfer Agent and Registrar to issue and countersign a new Global Certificate;
or (b) may make an appropriate notation on the Global Certificate indicating
the date and amount of such reduction.
4
<PAGE> 78
11. DTC may discontinue its services as a securities depositary with
respect to the Preferred Securities at any time by giving at least 90 days'
prior written notice to the Issuer and the Transfer Agent and Registrar (at
which time DTC will confirm with the Issuer or the Transfer Agent and Registrar
the aggregate number of Preferred Securities deposited with it) and discharging
its responsibilities with respect thereto under applicable law. Under such
circumstances, the Issuer may determine to make alternative arrangements for
book-entry settlement for the Preferred Securities, make available one or more
separate global certificates evidencing Preferred Securities to any Participant
having Preferred Securities credited to its DTC account, or issue definitive
Preferred Securities to the beneficial holders thereof, and in any such case,
DTC agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar and to return the Global Certificate, duly endorsed for transfer as
directed by the Issuer or the Transfer Agent and Registrar, together with any
other documents of transfer reasonably requested by the Issuer or the Transfer
Agent and Registrar.
12. In the event that the Issuer determines that beneficial owners of
Preferred Securities shall be able to obtain definitive Preferred Securities,
the Issuer or the Transfer Agent and Registrar shall notify DTC of the
availability of certificates. In such event, the Issuer or the Transfer Agent
and Registrar shall issue, transfer and exchange certificates in appropriate
amounts, as required by DTC and others, and DTC agrees to cooperate fully with
the Issuer and the Transfer Agent and Registrar and to return the Global
Certificate, duly endorsed for transfer as directed by the Issuer or the
Transfer Agent and Registrar.
13. This letter may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
5
<PAGE> 79
Nothing herein shall be deemed to require the Transfer Agent and Registrar
to advance funds on behalf of Texas Instruments Financial Trust.
Very truly yours,
TEXAS INSTRUMENTS FINANCIAL TRUST
(As Issuer)
By:
--------------------------------
Name:
As Administrative Trustee
THE FIRST NATIONAL BANK OF CHICAGO,
As Transfer Agent and Registrar
By:
--------------------------------
Name:
Title:
RECEIVED AND ACCEPTED
THE DEPOSITORY TRUST
COMPANY
By:
--------------------------
Name:
Title:
6
<PAGE> 80
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
-------
Certificate Evidencing Common Securities
of
Texas Instruments Financial Trust
Common Securities
(liquidation amount $50 per Common Security)
Texas Instruments Financial Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that Texas
Instruments Incorporated (the "Holder") is the registered owner of
______________________ common securities of the Trust representing undivided
beneficial interests in the assets of the Trust (the "Common Securities"). In
accordance with Section 5.10 of the Trust Agreement (as defined below) the
Common Securities are not transferable and any attempted transfer hereof shall
be void. The designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and shall
in all respects be subject to the terms and provisions of, the Amended and
Restated Trust Agreement of the Trust dated as of __________________ __, 1996,
as the same may be amended from time to time (the "Trust Agreement") including
the designation of the terms of the Common Securities as set forth therein.
The Trust will furnish a copy of the Trust Agreement to the Holder without
charge upon written request to the Trust at its principal place of business or
registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
1
<PAGE> 81
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ____ day of 1996.
TEXAS INSTRUMENTS FINANCIAL TRUST
By:
------------------------------
Name:
As Administrative Trustee
2
<PAGE> 82
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of __________________ __, 1996, between Texas
Instruments Incorporated, a Delaware corporation ("Texas Instruments"), and
Texas Instruments Financial Trust, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from Texas Instruments and to issue and
sell _____% Convertible Quarterly Income Preferred Securities (the "Preferred
Securities") with such powers, preferences and special rights and restrictions
as are set forth in the Amended and Restated Trust Agreement of the Trust dated
as of _______ __, 1996 as the same may be amended from time to time (the "Trust
Agreement");
WHEREAS, Texas Instruments will directly or indirectly own all of the
Common Securities of Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase Texas Instruments hereby agrees shall
benefit Texas Instruments and which purchase Texas Instruments acknowledges
will be made in reliance upon the execution and delivery of this Agreement,
Texas Instruments and the Trust hereby agree as follows:
ARTICLE I
Section 1.1 Guarantee by Texas Instruments. Subject to the terms
and conditions hereof, Texas Instruments hereby irrevocably and unconditionally
guarantees to each person or entity to whom the Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries") the full payment, when and as
due, of any and all Obligations (as hereinafter defined) to such Beneficiaries.
As used herein, "Obligations" means any costs, expenses or liabilities of the
Trust, other than obligations of the Trust to pay to holders of any Preferred
Securities or other similar interests in the Trust the amounts due such holders
pursuant to the terms of the Preferred Securities or such other similar
interests, as the case may be. This Agreement is intended to be for the
benefit of, and to be enforceable by, all such Beneficiaries, whether or not
such Beneficiaries have received notice hereof.
Section 1.2 Term of Agreement. This Agreement shall terminate
and be of no further force and effect upon the later of (a) the date on which
full payment
1
<PAGE> 83
has been made of all amounts payable to all holders of all the Preferred
Securities (whether upon redemption, liquidation, conversion, 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 Preferred
Securities or any Beneficiary must restore payment of any sums paid under the
Preferred Securities, under any Obligation, under the Guarantee Agreement dated
the date hereof between Texas Instruments and The First National Bank of
Chicago, as guarantee trustee, or under this Agreement for any reason
whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
Section 1.3 Waiver of Notice. Texas Instruments hereby waives
notice of acceptance of this Agreement and of any Obligation to which it
applies or may apply, and Texas Instruments hereby waives presentment, demand
for payment, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
Section 1.4 No Impairment. The obligations, covenants,
agreements and duties of Texas Instruments under this Agreement shall in no way
be affected or impaired by reason of the happening from time to time of any of
the following:
(a) the extension of time for the payment by the Trust of all or
any portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part
of the Beneficiaries to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Beneficiaries with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any kind;
or
(c) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt or, of other similar proceedings affecting, the Trust or any of the
assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to,
or obtain the consent of, Texas Instruments with respect to the happening of
any of the foregoing.
Section 1.5. Enforcement. A Beneficiary may enforce
this Agreement directly against Texas Instruments and Texas Instruments waives
any right or remedy to require that any action be brought against the Trust or
any other person or entity before proceeding against Texas Instruments.
2
<PAGE> 84
ARTICLE II
Section 2.1. Binding Effect. All guarantees and agreements
contained in this Agreement shall bind the successors, assigns, receivers,
trustees and representatives of Texas Instruments and shall inure to the
benefit of the Beneficiaries.
Section 2.2. Amendment. So long as there remains any Beneficiary
or any Preferred Securities of any series are outstanding, this Agreement shall
not be modified or amended in any manner adverse to such Beneficiary or to the
holders of the Preferred Securities.
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):
Texas Instruments Financial Trust
c/o Texas Instrument Incorporated
13500 North Central Expressway
P.O. Box 655474
Dallas, Texas 75265-5474
Facsimile No.: (214) 995-3511
Attention: Secretary
Texas Instruments Incorporated
13500 North Central Expressway
P.O. Box 655474
Dallas, Texas 75265-5474
Facsimile No.: (214) 995-3511
Attention: Secretary
Section 2.4 This agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York.
3
<PAGE> 85
THIS AGREEMENT is executed as of the day and year first above written.
TEXAS INSTRUMENTS INCORPORATED
By:
-------------------------------
Name:
Title:
TEXAS INSTRUMENTS FINANCIAL TRUST
By:
-------------------------------
Name:
As Administrative Trustee
4
<PAGE> 86
EXHIBIT E
IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE, INSERT - This
Preferred Security is a Global Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depository or its nominee only in the
limited circumstances described in the Trust Agreement and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a whole
by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
Texas Instruments Financial Trust or its agent for registration of transfer,
exchange or payment, and any Preferred Security issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment hereon is made
to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY A PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.
Certificate Number Number of Preferred Securities
__ CUSIP NO.
Certificate Evidencing Preferred Securities
of
Texas Instruments Financial Trust
___% Convertible Quarterly Income Preferred Securities,
Series A
(liquidation amount $50 per Preferred Security)
Texas Instruments Financial Trust, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
1
<PAGE> 87
____________________ (the "Holder") is the registered owner of _______
preferred securities of the Trust representing an undivided beneficial interest
in the assets of the Trust and designated the Texas Instruments Financial Trust
____% Convertible Quarterly Income Preferred Securities, Series A (liquidation
amount $50 per Preferred Security) (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer as provided in Section 5.04 of the Trust
Agreement (as defined below). The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities are set forth in, and this certificate and the Preferred Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust dated
as of _______ __, 1996, as the same may be amended from time to time (the
"Trust Agreement") including the designation of the terms of Preferred
Securities as set forth therein. The Holder is entitled to the benefits of the
Guarantee Agreement entered into by Texas Instruments Incorporated, a Delaware
corporation, and The First National Bank of Chicago, as Guarantee Trustee,
dated as of _____ __, 1996 (the "Guarantee"), to the extent provided therein.
The Trust will furnish a copy of the Trust Agreement and the Guarantee to the
Holder without charge upon written request to the Trust at its principal place
of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this ________ day of__________________, 1996.
TEXAS INSTRUMENTS FINANCIAL TRUST
By:
-------------------------------
Name:
As Administrative Trustee
2
<PAGE> 88
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
- - - - --------------------------------------------------------------------------------
- - - - --------------------------------------------------------------------------------
- - - - --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- - - - --------------------------------------------------------------------------------
- - - - --------------------------------------------------------------------------------
- - - - --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- - - - --------------------------------------------------------------------------------
- - - - --------------------------------------------------------------------------------
- - - - --------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
-------------------------
Signature:
--------------------------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
3
<PAGE> 1
EXHIBIT 4(f)
- - - - --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
Between
Texas Instruments Incorporated
(as Guarantor)
and
The First National Bank of Chicago
(as Trustee)
dated as of
, 1996
-------- --
- - - - --------------------------------------------------------------------------------
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
<S> <C>
310(a).................................................................4.01(a)
310(b).................................................................4.01(c), 2.08
310(c).................................................................Inapplicable
311(a).................................................................2.02(b)
311(b).................................................................2.02(b)
311(c).................................................................Inapplicable
312(a).................................................................2.02(a)
312(b).................................................................2.02(b)
313....................................................................2.03
314(a).................................................................2.04
314(b).................................................................Inapplicable
314(c).................................................................2.05
314(d).................................................................Inapplicable
314(e).................................................................1.01, 2.05, 3.02
314(f).................................................................2.01, 3.02
315(a).................................................................3.01(d)
315(b).................................................................2.07
315(c).................................................................3.01
315(d).................................................................3.01(d)
316(a).................................................................1.01, 2.06, 5.04
316(b).................................................................5.03
316(c).................................................................8.02
317(a).................................................................Inapplicable
317(b).................................................................Inapplicable
318(a).................................................................2.01(b)
318(b).................................................................2.01
318(c).................................................................2.01(a)
</TABLE>
- - - - --------
* This Cross-Reference Table does not constitute part of the
Guarantee Agreement and shall not affect the interpretation of any of
its terms or provisions.
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C> <C>
TABLE OF CONTENTS
----------------------
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions......................................................................2
ARTICLE 2
TRUST INDENTURE ACT
Section 2.01. Trust Indenture Act; Application.................................................5
Section 2.02. List of Holders..................................................................6
Section 2.03. Reports by the Guarantee Trustee.................................................6
Section 2.04. Periodic Reports to Guarantee Trustee............................................6
Section 2.05. Evidence of Compliance with Conditions Precedent.................................6
Section 2.06. Events of Default; Waiver........................................................7
Section 2.07. Event of Default; Notice.........................................................7
Section 2.08. Conflicting Interests............................................................7
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.01. Powers and Duties of the Guarantee Trustee.......................................7
Section 3.02. Certain Rights of Guarantee Trustee..............................................9
Section 3.03. Indemnity.......................................................................11
ARTICLE 4
GUARANTEE TRUSTEE
Section 4.01. Guarantee Trustee; Eligibility..................................................11
Section 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee................................................................12
ARTICLE 5
GUARANTEE
Section 5.01. Guarantee.......................................................................13
Section 5.02. Waiver of Notice and Demand.....................................................13
Section 5.03. Obligations Not Affected........................................................13
Section 5.04. Rights of Holders...............................................................14
Section 5.05. Guarantee of Payment............................................................14
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 5.06. Subrogation.....................................................................14
Section 5.07. Independent Obligations.........................................................15
ARTICLE 6
COVENANTS AND SUBORDINATION
Section 6.01. Subordination...................................................................15
ARTICLE 7
TERMINATION
Section 7.01. Termination.....................................................................16
ARTICLE 8
MISCELLANEOUS
Section 8.01. Successors and Assigns..........................................................16
Section 8.02. Amendments......................................................................16
Section 8.03. Notices.........................................................................17
Section 8.04. Benefit.........................................................................18
Section 8.05. Interpretation..................................................................18
Section 8.06. Governing Law...................................................................18
</TABLE>
iii
<PAGE> 5
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of , 1996, is executed and
delivered by Texas Instruments Incorporated, a Delaware corporation (the
"Guarantor") and The First National Bank of Chicago, a national banking
association organized under the laws of the United States, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of Texas
Instruments Financial Trust, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of , 1996 among the Trustees named therein, the
Guarantor, as Depositor, and the Holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing
___________ of its _____% Convertible Quarterly Income Preferred Securities,
Series A (liquidation preference $50 per preferred security) (the "Preferred
Securities") representing preferred undivided beneficial interests in the
assets of the Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Debentures
(as defined in the Trust Agreement) of the Guarantor which will be deposited
with The First National Bank of Chicago, as Property Trustee under the Trust
Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Preferred Securities the
Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time of the Preferred Securities.
<PAGE> 6
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. As used in this Guarantee Agreement, the terms
set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct common control with
such specified Person, provided, however, that an Affiliate of the Guarantor
shall not be deemed to include the Issuer. For the Purposes of this Definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the securities representing common beneficial
interests in the assets of the Issuer.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type
2
<PAGE> 7
referred to in clauses (i) through (v) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or is responsible or liable, directly or indirectly, as obligor or otherwise.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received written notice of default and shall not have
cured such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by or on behalf of the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Preferred Securities, to the extent the Issuer shall have funds on hand
available therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemption by the Issuer to the extent
the Issuer shall have funds on hand available therefor, and (iii) upon a
voluntary or involuntary termination, winding-up or liquidation of the Issuer,
unless Debentures are distributed to the Holders, the lesser of (a) the
aggregate of the liquidation preference of $50 per Preferred Security plus
accrued and unpaid Distributions on the Preferred Securities to the date of
payment to the extent the Issuer shall have funds on hand available to make
such payment and (b) the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (in either case, the
"Liquidation Distribution").
"Guarantee Trustee" means The First National Bank of Chicago, 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, of any Preferred Securities; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee or any Affiliate of the Guarantor
or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of
________ __, 1996, as supplemented and amended between the Guarantor and The
First National Bank of Chicago, as trustee.
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"List of Holders" has the meaning specified in Section 2.02 (a).
"Majority in Liquidation Preference of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the liquidation preference of all the
outstanding Preferred Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by (i) the Chairman, Chief Executive Officer, President or a Vice
President, and by (ii) the Treasurer, an Assistant Treasurer, the Controller,
the Secretary or an Assistant Secretary of such Person, and delivered to the
Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee
Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
Executive Vice President, Senior Vice President, any First Vice President, any
Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer or
Assistant
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Trust Officer or any other officer of the Corporate Trust Services Division of
the Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of that officer's knowledge of and familiarity with the
particular subject.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Guarantee or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Guarantee or to other Debt which is pari
passu with, or subordinated to, the Guarantee; provided, however, that Senior
Debt shall not be deemed to include (a) any Debt of the Guarantor which, when
incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Reform Act of 1978, was without recourse to the Guarantor, (b) any
Debt of the Guarantor to any of its Subsidiaries, (c) Debt to any employee of
the Guarantor, (d) any liability for taxes, (e) Debt or other monetary
obligations to trade creditors created or assumed by the Guarantor or any of its
subsidiaries in the ordinary course of business in connection with the obtaining
of goods, materials or services and (f) Debt issued under the Indenture and (g)
the Guarantee. Without limiting the generality of the foregoing, the term
"Senior Debt" shall include the 2 3/4% Convertible Subordinated Debentures due
2002 of the Company.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
"Texas Instruments Common Stock" shall mean the common stock, par value
$1.00, per share, of the Guarantor.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. 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.
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(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.02. List of Holders. (a) The Guarantor shall furnish or cause to
be furnished to the Guarantee Trustee (a) semi-annually, on or before January
15 and July 15 of each year, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders ("List of
Holders") as of a date not more than 15 days prior to the delivery thereof, and
(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 2.03. Reports by the Guarantee Trustee. On or before July 15, of
each calendar year, 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.
SECTION 2.04. Periodic Reports to Guarantee Trustee. The Guarantor shall
provide to the Guarantee Trustee, the Securities and Exchange Commission and
the Holders such documents, reports and information, if any , as required by
Section 314 of the Trust Indenture Act and the compliance certificate required
by Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee
Agreement that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to section 314(c)(1) may be given in the form of an Officers'
Certificate.
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SECTION 2.06. Events of Default; Waiver. The Holders of a Majority in
Liquidation Preference of the Securities may, by vote, on behalf of the
Holders, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Guarantee Agreement, but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right consequent therefrom.
SECTION 2.07. 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 the Trust
Agreement shall have obtained written notice, of such Event of Default.
SECTION 2.08. 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 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.01. 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 5.04(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
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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 2.06), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred;
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically
set forth in this Guarantee Agreement; and
(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;
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(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in Liquidation
Preference of the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the Guarantee Trustee
shall have reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 3.02. Certain Rights of Guarantee Trustee. (a) Subject to the
provisions of Section 3.01:
(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, proxy, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(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.
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(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 3.02(a)(v) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Guarantee Agreement and use the
same degree of care and skill in the exercise thereof as a prudent person
would exercise or use under the circumstances in the conduct of his or her
own affairs.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys or any Affiliate, and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of any
such agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
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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 3.03. Indemnity. The Guarantor agrees to indemnify the Guarantee
Trustee for, and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on the part of the Guarantee Trustee,
arising out of or in connection with the acceptance or administration of this
Guarantee Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The Guarantee Trustee will not claim
or exact any lien or charge on any Guarantee Payment as a result of any amount
due to it under this Guarantee Agreement.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.01. Guarantee Trustee; Eligibility. (a) There shall at all times
be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of
Section 310(a) of the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority, then, for the
purposes of this Section and to the extent permitted by the Trust
Indenture Act, the combined capital and surplus of such corporation shall
be deemed
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to be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.01(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.02(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 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee. (a) Subject to Section 4.02(b) and, so long as an Event of Default
shall not have occurred and be continuing, the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by an instrument in writing executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 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.
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ARTICLE 5
GUARANTEE
SECTION 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by or on behalf of the Issuer), as and
when due, regardless of any defense, right of set-off or counterclaim which the
Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.02. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Guarantee Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require
a proceeding first against the Guarantee Trustee, Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.03. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following: (a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Debentures as so provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
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creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent
of this Section 5.03 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders or the Guarantee Trustee to
give notice to, or obtain the consent of, the Guarantor with respect to the
happening of any of the foregoing.
SECTION 5.04. 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 Preference of the Securities have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement or
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 or any other Person.
SECTION 5.05. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not
be discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer) or upon distribution of
Debentures to Holders as provided in the Trust Agreement.
SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement and shall have the
right to waive payment by the Issuer pursuant to Section 5.01; 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
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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 5.07. Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE 6
COVENANTS AND SUBORDINATION
SECTION 6.01. Subordination. The Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank subordinate and junior in
right of payment to all Senior Debt of the Guarantor.
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ARTICLE 7
TERMINATION
SECTION 7.01. Termination. This Guarantee Agreement shall terminate and be
of no further force and effect upon (i) full payment of the Redemption Price of
all Preferred Securities, (ii) the distribution of Debentures to the Holders in
exchange for all of the Preferred Securities or (iii) full payment of the
amounts payable in accordance with the Trust Agreement upon liquidation of the
Issuer. Notwithstanding the foregoing, this Guarantee Agreement will continue
to be effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid with respect to Preferred
Securities or this Guarantee Agreement.
ARTICLE 8
MISCELLANEOUS
SECTION 8.01. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then outstanding. Except in
connection with a consolidation, merger or sale involving the Guarantor that is
permitted under Article Eight of the Indenture and pursuant to which the
assignee agrees in writing to perform the Guarantor's obligations hereunder,
the Guarantor shall not assign its obligations hereunder.
SECTION 8.02. Amendments. Except with respect to any changes which do not
adversely affect the rights of the Holders in any material respect (in which
case no consent of the Holders will be required), this Guarantee Agreement may
only be amended with the prior approval of the Holders of not less than a
Majority in Liquidation Preference of the Securities. The provisions of Article
6 of the Trust Agreement concerning meetings of the Holders shall apply to the
giving of
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such approval. The Guarantor shall furnish the Guarantee Trustee with an
Officers' Certificate to the effect that any amendment of this Agreement is
authorized and permitted.
SECTION 8.03. Notices. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing, duly signed by the
party giving such notice, and delivered, telecopied or mailed by first class
mail as follows: (a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the Holders:
Texas Instruments Incorporated
13500 North Central Expressway
P.O. Box 655474
Dallas, Texas 75265-5474
Facsimile No.: (214) 995-3511
Attention: Secretary
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice of to
the Holders:
Texas Instruments Financial Trust
c/o Texas Instruments Incorporated
13500 North Central Expressway
P.O. Box 655474
Dallas, Texas 75265-5474
Facsimile No.: (214) 995-3511
Attention: Secretary
with a copy to:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Facsimile No.: (312) 407-1708
Attention: Corporate Trust Services Division
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage
17
<PAGE> 22
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 8.04. Benefit. This Guarantee Agreement is solely for the benefit
of the Holders and is not separately transferable from the Preferred
Securities.
SECTION 8.05. 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 1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.
SECTION 8.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
18
<PAGE> 23
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
TEXAS INSTRUMENTS INCORPORATED
By:
-----------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO, as
Guarantee Trustee
By:
-----------------------------------
Name:
Title:
19
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Texas Instruments
Incorporated for the registration of $400,000,000 of Texas Instruments Financial
Trust Preferred Securities, Texas Instruments Incorporated Guarantee of Texas
Instruments Financial Trust Preferred Securities, Texas Instruments Incorporated
Junior Subordinated Deferrable Interest Debentures, and Texas Instruments
Incorporated Common Stock, and to the incorporation by reference therein of our
report dated January 22, 1996, with respect to the consolidated financial
statements and schedule of Texas Instruments Incorporated included in its
Annual Report (Form 10-K) for the year ended December 31, 1995 as amended
by the Form 10-K/A, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
--------------------------------------------
June 27, 1996
Dallas, Texas
<PAGE> 1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints WILLIAM P. WEBER, WILLIAM A. AYLESWORTH and RICHARD J. AGNICH, and
each of them, with full power to act without the others, his true and lawful
attorneys-in-fact and agents, with full and several power of substitution, for
him and in his name, place and stead, in any and all capacities, to sign a
Registration Statement on Form S-3 in connection with the registration of
securities of Texas Instruments Incorporated from which Texas Instruments
Incorporated will receive proceeds of up to an aggregate of $400,000,000, and
any or all amendments to such Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they or he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 15th day of June, 1996.
/s/ JAMES R. ADAMS
------------------------------
James R. Adams
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints WILLIAM P. WEBER, WILLIAM A. AYLESWORTH and RICHARD J. AGNICH, and
each of them, with full power to act without the others, his true and lawful
attorneys-in-fact and agents, with full and several power of substitution, for
him and in his name, place and stead, in any and all capacities, to sign a
Registration Statement on Form S-3 in connection with the registration of
securities of Texas Instruments Incorporated from which Texas Instruments
Incorporated will receive proceeds of up to an aggregate of $400,000,000, and
any or all amendments to such Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they or he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 20th day of June, 1996.
/s/ DAVID L. BOREN
------------------------------
David L. Boren
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints WILLIAM P. WEBER, WILLIAM A. AYLESWORTH and RICHARD J. AGNICH, and
each of them, with full power to act without the others, his true and lawful
attorneys-in-fact and agents, with full and several power of substitution, for
him and in his name, place and stead, in any and all capacities, to sign a
Registration Statement on Form S-3 in connection with the registration of
securities of Texas Instruments Incorporated from which Texas Instruments
Incorporated will receive proceeds of up to an aggregate of $400,000,000, and
any or all amendments to such Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they or he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 15th day of June, 1996.
/s/ JAMES B. BUSEY IV
------------------------------
James B. Busey IV
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints WILLIAM A. AYLESWORTH and RICHARD J. AGNICH, and each of them, with
full power to act without the other, his true and lawful attorneys-in-fact and
agents, with full and several power of substitution, for him and in his name,
place and stead, in any and all capacities, to sign a Registration Statement on
Form S-3 in connection with the registration of securities of Texas Instruments
Incorporated from which Texas Instruments Incorporated will receive proceeds of
up to an aggregate of $400,000,000, and any or all amendments to such
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as they or he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 21st day of June, 1996.
/s/ THOMAS J. ENGIBOUS
------------------------------
Thomas J. Engibous
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints WILLIAM P. WEBER, WILLIAM A. AYLESWORTH and RICHARD J. AGNICH, and
each of them, with full power to act without the others, his true and lawful
attorneys-in-fact and agents, with full and several power of substitution, for
him and in his name, place and stead, in any and all capacities, to sign a
Registration Statement on Form S-3 in connection with the registration of
securities of Texas Instruments Incorporated from which Texas Instruments
Incorporated will receive proceeds of up to an aggregate of $400,000,000, and
any or all amendments to such Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they or he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 20th day of June, 1996.
/s/ GERALD W. FRONTERHOUSE
------------------------------
Gerald W. Fronterhouse
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints WILLIAM P. WEBER, WILLIAM A. AYLESWORTH and RICHARD J. AGNICH, and
each of them, with full power to act without the others, his true and lawful
attorneys-in-fact and agents, with full and several power of substitution, for
him and in his name, place and stead, in any and all capacities, to sign a
Registration Statement on Form S-3 in connection with the registration of
securities of Texas Instruments Incorporated from which Texas Instruments
Incorporated will receive proceeds of up to an aggregate of $400,000,000, and
any or all amendments to such Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they or he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 20th day of June, 1996.
/s/ DAVID R. GOODE
------------------------------
David R. Goode
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints WILLIAM P. WEBER, WILLIAM A. AYLESWORTH and RICHARD J. AGNICH, and
each of them, with full power to act without the others, his true and lawful
attorneys-in-fact and agents, with full and several power of substitution, for
him and in his name, place and stead, in any and all capacities, to sign a
Registration Statement on Form S-3 in connection with the registration of
securities of Texas Instruments Incorporated from which Texas Instruments
Incorporated will receive proceeds of up to an aggregate of $400,000,000, and
any or all amendments to such Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they or he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 16th day of June, 1996.
/s/ MARVIN M. LANE, JR.
------------------------------
Marvin M. Lane, Jr.
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints WILLIAM P. WEBER, WILLIAM A. AYLESWORTH and RICHARD J. AGNICH, and
each of them, with full power to act without the others, his true and lawful
attorneys-in-fact and agents, with full and several power of substitution, for
him and in his name, place and stead, in any and all capacities, to sign a
Registration Statement on Form S-3 in connection with the registration of
securities of Texas Instruments Incorporated from which Texas Instruments
Incorporated will receive proceeds of up to an aggregate of $400,000,000, and
any or all amendments to such Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they or he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 19th day of June, 1996.
/s/ WILLIAM S. LEE
------------------------------
William S. Lee
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints WILLIAM P. WEBER, WILLIAM A. AYLESWORTH and RICHARD J. AGNICH, and
each of them, with full power to act without the others, his true and lawful
attorneys-in-fact and agents, with full and several power of substitution, for
him and in his name, place and stead, in any and all capacities, to sign a
Registration Statement on Form S-3 in connection with the registration of
securities of Texas Instruments Incorporated from which Texas Instruments
Incorporated will receive proceeds of up to an aggregate of $400,000,000, and
any or all amendments to such Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they or he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 20th day of June, 1996.
/s/ WILLIAM B. MITCHELL
------------------------------
William B. Mitchell
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints WILLIAM P. WEBER, WILLIAM A. AYLESWORTH and RICHARD J. AGNICH, and
each of them, with full power to act without the others, her true and lawful
attorneys-in-fact and agents, with full and several power of substitution, for
her and in her name, place and stead, in any and all capacities, to sign a
Registration Statement on Form S-3 in connection with the registration of
securities of Texas Instruments Incorporated from which Texas Instruments
Incorporated will receive proceeds of up to an aggregate of $400,000,000, and
any or all amendments to such Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 20th day of June, 1996.
/s/ GLORIA M. SHATTO
------------------------------
Gloria M. Shatto
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints WILLIAM A. AYLESWORTH and RICHARD J. AGNICH, and each of them, with
full power to act without the other, his true and lawful attorneys-in-fact and
agents, with full and several power of substitution, for him and in his name,
place and stead, in any and all capacities, to sign a Registration Statement on
Form S-3 in connection with the registration of securities of Texas Instruments
Incorporated from which Texas Instruments Incorporated will receive proceeds of
up to an aggregate of $400,000,000, and any or all amendments to such
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as they or he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 20th day of June, 1996.
/s/ WILLIAM P. WEBER
------------------------------
William P. Weber
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2)_____
_______________________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
_____________________
TEXAS INSTRUMENTS INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of 75-0289970
incorporation or organization) (I.R.S. employer
identification number)
13500 North Central Expressway
P.O. Box 655474
Dallas, Texas 75265-5474
(Address of principal executive offices) (Zip Code)
Guarantee by Texas Instruments Incorporated of Preferred Securities of Texas
Instruments Financial Trust
Junior Subordinated Deferrable Interest Debentures
(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 SUPERVISION AUTHORITY TO WHICH IT IS
SUBJECT.
Comptroller of Currency, Washington, D. C., Federal Deposit Insurance
Corporation, Washington, D. C., The Board of Governors of the Federal Reserve
System, Washington, D. C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the trustee now in effect.*
2. A copy of the certificates of authority of the trustee to commence business.*
3. A copy of the authorization of the trustee to exercise corporate trust
powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published pursuant to
law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
* EXHIBITS 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS
BEARING IDENTICAL NUMBERS IN ITEM 12 OF THE FORM T-1 OF THE FIRST NATIONAL BANK
OF CHICAGO, FILED AS EXHIBIT 26 TO THE REGISTRATION STATEMENT ON FORM S-3 OF THE
CIT GROUP HOLDINGS, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
FEBRUARY 16, 1993 (REGISTRATION NO. 33-58418).
<PAGE> 3
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, The First National Bank of Chicago, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Chicago, and State
of Illinois, on the 25th day of June, 1996.
The First National Bank of Chicago,
Trustee,
By: /s/ STEVEN M. WAGNER
---------------------------------
Steven M. Wagner
Vice President and Senior Counsel
Corporate Trust Services Division
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
June 25, 1996
Securities and Exchange Commission
Washington, D. C. 20549
Gentlemen:
In connection with the qualification of an Indenturee and Gurantee Agreement of
Texas Instruments Incorporated, the undersigned, in accordance with Section
321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the
reports of examinations of the undersigned, made by Federal or State
Authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request
therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ STEVEN M. WAGNER
---------------------------------------
Steven M. Wagner
Vice President and Senior Counsel
Corporate Trust Services Division
<PAGE> 5
EXHIBIT 7
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining authority.
<PAGE> 6
EXHIBIT 7
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/96 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN ------------
THOUSANDS RCFD BIL MIL THOU <-
------------------ ---- ------------ ---------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) . . . . . . 0081 3,047,140 1.a.
b. Interest-bearing balances(2) . . . . . . . . . . . . . . . . . . . 0071 8,488,390 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 997,155 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold . . . . . . . . . . . . . . . . . . . . . . . . 0276 3,384,301 3.a.
b. Securities purchased under agreements to resell . . . . . . . . . 0277 685,531 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 2122 16,884,488 4.a.
b. LESS: Allowance for loan and lease losses . . . . . . . . . . . . RCFD 3123 358,448 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 16,526,040 4.d.
5. Assets held in trading accounts . . . . . . . . . . . . . . . . . . . 3545 10,974,841 5.
6. Premises and fixed assets (including capitalized leases) . . . . . . 2145 592,581 6.
7. Other real estate owned (from Schedule RC-M) . . . . . . . . . . . . 2150 9,952 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) . . . . . . . . . . . . . . . . . . . 2130 42,098 8.
9. Customers' liability to this bank on acceptances outstanding . . . . 2155 564,435 9.
10. Intangible assets (from Schedule RC-M) . . . . . . . . . . . . . . . 2143 96,463 10.
11. Other assets (from Schedule RC-F) . . . . . . . . . . . . . . . . . . 2160 1,703,124 11.
12. Total assets (sum of items 1 through 11) . . . . . . . . . . . . . . 2170 47,112,051 12.
</TABLE>
__________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE> 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/96 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS BIL MIL THOU
-------------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) . . . . . . . . . . . . . . . RCON 2200 14,251,874 13.a.
(1) Noninterest-bearing(1) . . . . . . . . . . . . . . . . RCON 6631 5,707,786 13.a.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . . . . RCON 6636 8,544,088 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) . . . . . . . . . . . . RCFN 2200 12,839,836 13.b.
(1) Noninterest-bearing . . . . . . . . . . . . . . . . . RCFN 6631 196,311 13.b.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . . . . RCFN 6636 12,643,525 13.b.(2)
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of
its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased . . . . . . . . . . . . . . . . . RCFD 0278 2,692,008 14.a.
b. Securities sold under agreements to repurchase . . . . . . RCFD 0279 1,165,032 14.b.
15. a. Demand notes issued to the U.S. Treasury . . . . . . . . RCON 2840 77,000 15.a.
b. Trading Liabilities . . . . . . . . . . . . . . . . . . . RCFD 3548 7,103,300 15.b.
16. Other borrowed money:
a. With original maturity of one year or less . . . . . . . . RCFD 2332 2,223,560 16.a.
b. With original maturity of more than one year . . . . . . RCFD 2333 144,665 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases . . . . . . . . . . . . . . . . . . . . . .. . . . . . RCFD 2910 283,041 17.
18. Bank's liability on acceptance executed and outstanding RCFD 2920 564,435 18.
19. Subordinated notes and debentures . . . . . . . . . . . . . . RCFD 3200 1,275,000 19.
20. Other liabilities (from Schedule RC-G) . . . . . . . . . . . RCFD 2930 1,411,087 20.
21. Total liabilities (sum of items 13 through 20) . . . . . . . RCFD 2948 44,030,838 21.
22. Limited-Life preferred stock and related surplus . . . . . . RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus . . . . . . . RCFD 3838 0 23.
24. Common stock . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,320,326 25.
26. a. Undivided profits and capital reserves . . . . . . . . . . RCFD 3632 559,707 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities . . . . . . . . . . . . . . . . . . . . . . . . RCFD 8434 730 26.b.
27. Cumulative foreign currency translation adjustments . . . . . RCFD 3284 (408) 27.
28. Total equity capital (sum of items 23 through 27) . . . . . . RCFD 3210 3,081,213 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) . . . . . . . . . . . RCFD 3300 47,112,051 29.
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 most comprehensive level of auditing work performed for the
bank by independent external
Number
auditors as of any date during 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 6724 2 M.1.
</TABLE>
<TABLE>
<S> <C> <C> <C>
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)
</TABLE>
___________________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
7
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2)_____
_______________________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
_____________________
TEXAS INSTRUMENTS FINANCIAL TRUST
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of To Be Applied For
incorporation or organization) (I.R.S. employer
identification number)
13500 North Central Expressway
P.O. Box 655474
Dallas, Texas 75265-5474
(Address of principal executive offices) (Zip Code)
Preferred 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 SUPERVISION AUTHORITY TO WHICH IT IS
SUBJECT.
Comptroller of Currency, Washington, D. C., Federal Deposit Insurance
Corporation, Washington, D. C., The Board of Governors of the Federal Reserve
System, Washington, D. C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the trustee now in effect.*
2. A copy of the certificates of authority of the trustee to commence business.*
3. A copy of the authorization of the trustee to exercise corporate trust
powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published pursuant to
law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
* EXHIBITS 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS
BEARING IDENTICAL NUMBERS IN ITEM 12 OF THE FORM T-1 OF THE FIRST NATIONAL BANK
OF CHICAGO, FILED AS EXHIBIT 26 TO THE REGISTRATION STATEMENT ON FORM S-3 OF THE
CIT GROUP HOLDINGS, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
FEBRUARY 16, 1993 (REGISTRATION NO. 33-58418).
<PAGE> 3
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, The First National Bank of Chicago, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Chicago, and State
of Illinois, on the 25th day of June, 1996.
The First National Bank of Chicago,
Trustee,
By: /s/ STEVEN M. WAGNER
---------------------------------------
Steven M. Wagner
Vice President and Senior Counsel
Corporate Trust Services Division
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
June 25, 1996
Securities and Exchange Commission
Washington, D. C. 20549
Gentlemen:
In connection with the qualification of an Amended and Restated Trust Agreement
among Texas Instruments Incorporated, as Depositor, The First National Bank of
Chicago, as Property Trustee, First Chicago Delaware Inc., as Delaware Trustee,
and the Administrative Trustees named therein, the undersigned, in accordance
with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby
consents that the reports of examinations of the undersigned, made by Federal
or State Authorities authorized to make such examinations, may be furnished by
such authorities to the Securities and Exchange Commission upon its request
therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ STEVEN M. WAGNER
-----------------------------------
Steven M. Wagner
Vice President and Senior Counsel
Corporate Trust Services Division
<PAGE> 5
EXHIBIT 7
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining authority.
<PAGE> 6
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/96 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION> C400
DOLLAR AMOUNTS IN ------------- <-
THOUSANDS RCFD BIL MIL THOU -----
------------------ ---- --------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) . . . . . . . 0081 3,047,140 1.a.
b. Interest-bearing balances(2) . . . . . . . . . . . . . . . . . . . . 0071 8,488,390 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 997,155 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold . . . . . . . . . . . . . . . . . . . . . . . . . 0276 3,384,301 3.a.
b. Securities purchased under agreements to resell . . . . . . . . . . 0277 685,531 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 2122 16,884,488 4.a.
b. LESS: Allowance for loan and lease losses . . . . . . . . . . . . . RCFD 3123 358,448 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 16,526,040 4.d.
5. Assets held in trading accounts . . . . . . . . . . . . . . . . . . . . 3545 10,974,841 5.
6. Premises and fixed assets (including capitalized leases) . . . . . . . 2145 592,581 6.
7. Other real estate owned (from Schedule RC-M) . . . . . . . . . . . . . 2150 9,952 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) . . . . . . . . . . . . . . . . . . . . 2130 42,098 8.
9. Customers' liability to this bank on acceptances outstanding . . . . . 2155 564,435 9.
10. Intangible assets (from Schedule RC-M). . . . . . . . . . . . . . . . . 2143 96,463 10.
11. Other assets (from Schedule RC-F) . . . . . . . . . . . . . . . . . . . 2160 1,703,124 11.
12. Total assets (sum of items 1 through 11) . . . . . . . . . . . . . . . 2170 47,112,051 12.
</TABLE>
__________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE> 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 05/31/96 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION> DOLLAR AMOUNTS IN
THOUSANDS BIL MIL THOU
------------------ --------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) . . . . . . . . . . . . . . . . . . RCON 2200 14,251,874 13.a.
(1) Noninterest-bearing(1) . . . . . . . . . . . . . . . . . . . RCON 6631 5,707,786 13.a.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . . . . . . . RCON 6636 8,544,088 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) . . . . . . . . . . . . . . . RCFN 2200 12,839,836 13.b.
(1) Noninterest-bearing . . . . . . . . . . . . . . . . . . . . RCFN 6631 196,311 13.b.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . . . . . . . . RCFN 6636 12,643,525 13.b.(2)
14. Federal funds purchased and securities sold under agreements to
repurchase in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
a. Federal funds purchased . . . . . . . . . . . . . . . . . . . . . RCFD 0278 2,692,008 14.a.
b. Securities sold under agreements to repurchase. . . . . . . . . . RCFD 0279 1,165,032 14.b.
15. a. Demand notes issued to the U.S. Treasury . . . . . . . . . . . . RCON 2840 77,000 15.a.
b. Trading Liabilities . . . . . . . . . . . . . . . . . . . . . . . RCFD 3548 7,103,300 15.b.
16. Other borrowed money:
a. With original maturity of one year or less. . . . . . . . . . . . RCFD 2332 2,223,560 16.a.
b. With original maturity of more than one year . . . . . . . . . . RCFD 2333 144,665 16.b.
17. Mortgage indebtedness and obligations under capitalized leases . . . RCFD 2910 283,041 17.
18. Bank's liability on acceptance executed and outstanding. . . . . . . RCFD 2920 564,435 18.
19. Subordinated notes and debentures . . . . . . . . . . . . . . . . . RCFD 3200 1,275,000 19.
20. Other liabilities (from Schedule RC-G) . . . . . . . . . . . . . . . RCFD 2930 1,411,087 20.
21. Total liabilities (sum of items 13 through 20) . . . . . . . . . . . RCFD 2948 44,030,838 21.
22. Limited-Life preferred stock and related surplus . . . . . . . . . . RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus . . . . . . . . . . . RCFD 3838 0 23.
24. Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,320,326 25.
26. a. Undivided profits and capital reserves. . . . . . . . . . . . . . RCFD 3632 559,707 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 8434 730 26.b.
27. Cumulative foreign currency translation adjustments . . . . . . . . RCFD 3284 (408) 27.
28. Total equity capital (sum of items 23 through 27) RCFD 3210 3,081,213 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28). . . . . . . . . . . . . . . . RCFD 3300 47,112,051 29.
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 most comprehensive level of auditing work performed for
the bank by independent external
Number
auditors as of any date during 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 6724 2 M.1.
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
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)
</TABLE>
___________________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
