Exhibit 4.9
FORM
OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
TORCHMARK CAPITAL TRUST /(1)/
DATED AS OF __________________, _____
(1) Insert I or II, as applicable.
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions and Interpretation.............................. 1
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application............................ 5
Section 2.2 Lists of Holders............................................ 5
Section 2.3 Reports by The Preferred Guarantee Trustee.................. 5
Section 2.4 Periodic Reports to Preferred Guarantee Trustee............. 5
Section 2.5 Evidence of Compliance With Conditions Precedent............ 6
Section 2.6 Events of Default; Waiver................................... 6
Section 2.7 Event of Default; Notice.................................... 6
Section 2.8 Conflicting Interests....................................... 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
Section 3.1 Powers And Duties of The Preferred Guarantee Trustee........ 7
Section 3.2 Certain Rights of Preferred Guarantee Trustee............... 9
Section 3.3 Not Responsible For Recitals or Issuance of
Preferred Securities Guarantee......................... 11
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
Section 4.1 Preferred Guarantee Trustee: Eligibility.................... 11
Section 4.2 Appointment, Removal And Resignation of Preferred
Guarantee Trustee...................................... 12
ARTICLE V
GUARANTEE
Section 5.1 Guarantee................................................... 13
Section 5.2 Waiver of Notice and Demand................................. 13
Section 5.3 Obligations Not Affected.................................... 13
Section 5.4 Rights of Holders........................................... 14
Section 5.5 Guarantee of Payment........................................ 14
Section 5.6 Subrogation................................................. 15
Section 5.7 Action Against Guarantor.................................... 15
i
Section 5.8 Independent Obligations..................................... 15
Section 5.9 Taxes....................................................... 15
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1 Limitation of Transactions.................................. 16
Section 6.2 Subordination............................................... 16
ARTICLE VII
TERMINATION
Section 7.1 Termination................................................. 17
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Exculpation................................................. 17
Section 8.2 Indemnification............................................. 17
ARTICLE IX
MISCELLANEOUS
Section 9.1 Successors and Assigns...................................... 18
Section 9.2 Amendments.................................................. 18
Section 9.3 Notices..................................................... 18
Section 9.4 Benefit..................................................... 19
Section 9.5 Governing Law............................................... 19
ii
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of _______________________, 1999, is executed and delivered by Torchmark
Corporation, a Delaware corporation (the "Guarantor"), and The First National
Bank of Chicago, as trustee (the "Preferred Guarantee Trustee"), for the benefit
of the Holders (as defined herein) from time to time of the Preferred Securities
(as defined herein) of Torchmark Capital Trust/(2)/, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ______________________, 1999, among the trustees of
the Issuer named therein, the Guarantor, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof up to [ ] preferred securities (the
"Preferred Securities"), having a liquidation amount of $[ ] per
Preferred Security designated the [ ] Preferred Securities.
WHEREAS, as incentive for the Holders to purchase the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined herein), except that
if an Event of Default (as defined in the Indenture) has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
(2) Insert I or II, as applicable.
1
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions and Interpretation. In this Preferred
------------------------------
Securities Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) terms defined in the Declaration as at the date of execution
of this Preferred Securities Guarantee have the same meaning when used in this
Preferred Securities Guarantee unless otherwise defined in this Preferred
Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred Securities Guarantee
as modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified; a term defined in the Trust Indenture Act
has the same meaning when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or unless the context
otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"AUTHORIZED OFFICER" of a Person means any Person that is authorized to
legally bind such Person; provided, however, that the Authorized Officer signing
-------- -------
an Officers' Certificate given pursuant to Section 314(a)(4) of the Trust
Indenture Act shall be the principal executive, financial or accounting officer
of such Person.
"COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"COMMON SECURITIES GUARANTEE" has the meaning assigned thereto in the
recitals hereto.
"CORPORATE TRUST OFFICE" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time,
2
be principally administered, which office at the date of execution of this
Agreement is located at, The First National Bank of Chicago, Xxx Xxxxx Xxxxxxxx
Xxxxx, Xxxxx 0000 Xxxxxxx, XX 00000-0000 Attention: Corporate Trust Services
Division
"COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.
"DECLARATION" has the meaning assigned thereto in the recitals hereto.
"EVENT OF DEFAULT" means (a) a failure by the Guarantor to perform any of
its payment or other obligations under this Preferred Securities Guarantee or
(b) if applicable, the failure by the Guarantor to deliver the designated
securities upon an appropriate election by a Holder of Preferred Securities to
convert or exchange the Preferred Securities into such designated security.
"GUARANTEE PAYMENTS" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by the Issuer: (i) any accumulated and unpaid Distributions (as defined in
the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price (the "Redemption Price"), and all accumulated and unpaid Distributions to
the date of redemption, to the extent the Issuer has funds available therefor,
with respect to any Preferred Securities called for redemption by the Issuer,
and (iii) upon a voluntary or involuntary dissolution, winding-up or termination
of the Issuer (other than in connection with the redemption of all of the
Preferred Securities or the distribution of the Debt Securities to the Holders
in exchange for Preferred Securities as provided in the Declaration), the lesser
of (a) the aggregate of the liquidation amount and all accumulated and unpaid
Distributions on the Preferred Securities to the date of payment, to the extent
the Issuer shall have funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders of Preferred
Securities then outstanding upon the liquidation of the Issuer (in either case,
the "Liquidation Distribution"). If an Event of Default (as defined in the
Indenture) has occurred and is continuing, the rights of holders of the Common
Securities to receive payments under the Common Securities Guarantee Agreement
are subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments.
"GUARANTOR" has the meaning assigned thereto in the recitals hereto.
"HOLDER" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
-------- -------
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"INDEMNIFIED PERSON" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee.
3
"INDENTURE" means the Indenture dated as of ______________, ____ between
the Guarantor and The First National Bank of Chicago, as trustee, or, if amended
or supplemented as provided herein, as so amended or supplemented or both, and
shall include the forms and terms of a particular series of securities
established as contemplated thereunder.
"ISSUER" has the meaning assigned thereto in the recitals hereto.
"LIST OF HOLDERS" shall have the meaning set forth in Section 2.2.
"MAJORITY IN LIQUIDATION AMOUNT OF THE PREFERRED SECURITIES" means, except
as provided in the terms of the Preferred Securities, or except as provided by
the Trust Indenture Act, a vote by Holder(s), voting separately as a class, of
more than 50% of the liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined) of
all Preferred Securities.
"PERSON" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"PREFERRED GUARANTEE TRUSTEE" means The First National Bank of Chicago,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"PREFERRED SECURITIES" has the meaning assigned thereto in the recitals
hereto.
"PREFERRED SECURITIES GUARANTEE" has the meaning assigned thereto in the
recitals hereto.
"RELEVANT JURISDICTION" means the United States and, during any period any
Intercompany Security other than the Initial Intercompany Security is
outstanding, the jurisdiction of residence of any obligor on any such
Intercompany Security.
"RELEVANT TAX" means any present or future taxes, duties, assessments or
governmental charges of whatever nature, imposed or levied by or on behalf of
any Relevant Jurisdiction or any authority therein or thereof having the power
to tax.
"RESPONSIBLE OFFICER" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers, and also
4
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"SUCCESSOR PREFERRED GUARANTEE TRUSTEE" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"TRUST SECURITIES" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
--------------------------------
(a) Upon its public offering pursuant to the registration
requirements of the Securities Act, this Preferred Securities Guarantee will be
subject to the provisions of the Trust Indenture Act that will be required to be
part of this Preferred Securities Guarantee and shall, to the extent applicable,
be governed by such provisions; and
(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
Section 2.2 Lists of Holders.
----------------
(a) The Guarantor shall provide the Preferred Guarantee Trustee
with a list, in such form as the Preferred Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") (i)
within 14 days after each record date for payment of Distributions, as of such
record date, and (ii) at any other time, within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee,
provided that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
Section 2.3 Reports by The Preferred Guarantee Trustee. Within 60 days
------------------------------------------
after May 15 of each year, the Preferred Guarantee Trustee shall provide to the
Holders such reports as are required by Section 313 of the Trust Indenture Act,
if any, in the form and in the manner provided
5
by Section 313 of the Trust Indenture Act. The Preferred Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
Section 2.4 Periodic Reports to Preferred Guarantee Trustee. The
-----------------------------------------------
Guarantor shall provide to the Preferred Guarantee Trustee such documents,
reports and information (if any) as are required by Section 314 and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, the manner and at the times required by Section 314 of the Trust Indenture
Act.
Delivery of such reports, information and documents to the Preferred
Guarantee Trustee is for informational purposes only and the Preferred Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Preferred Guarantee Trustee is entitled
to rely exclusively on Officers' Certificates).
Section 2.5 Evidence of Compliance with Conditions Precedent. The
------------------------------------------------
Guarantor shall provide to the Preferred Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Preferred
Securities Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
Section 2.6 Events of Default; Waiver. The Holders of a Majority in
-------------------------
liquidation amount of Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred Securities, waive any past Event of Default and
its consequences except an Event of Default in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of each
Holder of Preferred Securities. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Preferred Securities Guarantee,
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
Section 2.7 Event of Default; Notice.
------------------------
(a) The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default actually known to a Responsible Officer of
the Preferred Guarantee Trustee, transmit by mail, first class postage prepaid,
to the Holders of the Preferred Securities, notices of all such Events of
Default unless such defaults have been cured before the giving of such notice,
provided that the Preferred Guarantee Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Preferred Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of this Preferred Securities
Guarantee shall have obtained actual knowledge, of such Event of Default..
6
Section 2.8 Conflicting Interests. The Declaration shall be deemed to
---------------------
be specifically described in this Preferred Securities Guarantee for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the Preferred Guarantee Trustee.
----------------------------------------------------
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders and the Preferred
Guarantee Trustee shall not transfer this Preferred Securities Guarantee to any
Person except a Holder exercising his or her rights pursuant to Section 5.4(b)
or to a Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee
Trustee shall automatically vest in any Successor Preferred Guarantee Trustee,
and such vesting and succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Preferred Guarantee Trustee has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of the Holders.
(c) The Preferred Guarantee Trustee, before the occurrence of
any Event of Default and after the curing or waiver of all Events of Default
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Preferred Securities Guarantee, and no implied
covenants shall be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) and is actually known to a
Responsible Officer of the Preferred Guarantee Trustee, the Preferred Guarantee
Trustee shall exercise such of the rights and powers vested in it by this
Preferred Securities Guarantee, and shall use the same degree of care and skill
in its exercise thereof as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of
Default that may have occurred:
7
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express
provisions of this Preferred Securities Guarantee, and
the Preferred Guarantee Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in this
Preferred Securities Guarantee, and no implied covenants
or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may
conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Preferred
Guarantee Trustee and conforming to the requirements of
this Preferred Securities Guarantee; but in the case of
any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Preferred Guarantee Trustee, the Preferred Guarantee
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer of the Preferred Guarantee Trustee, unless it shall
be proved that the Preferred Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders
of not less than a Majority in Liquidation Amount of the
Preferred Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or
power conferred upon the Preferred Guarantee Trustee under
this Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk
its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Preferred
Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is
not reasonably
8
assured to it under the terms of this Preferred Securities
Guarantee or indemnity, reasonably satisfactory to the
Preferred Guarantee Trustee, against such risk or liability
is not reasonably assured to it.
Section 3.2 Certain Rights of Preferred Guarantee Trustee.
---------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from
acting upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to
be genuine and to have been signed, sent or presented by
the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently
evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall
deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder,
the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad
faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument
(or any rerecording, refiling or re-registration thereof).
(v) The Preferred Guarantee Trustee may at the expense of the
Guarantor consult with counsel of its selection, and the
advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and
protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance
with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any
of its employees. The Preferred Guarantee Trustee shall
have the right at any time to seek instructions concerning
the administration of this Preferred Securities Guarantee
from any court of competent jurisdiction.
9
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested
in it by this Preferred Securities Guarantee at the request
or direction of any Holder, unless such Holder shall have
provided to the Preferred Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Preferred
Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the
Preferred Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Preferred
Guarantee Trustee; PROVIDED that nothing contained in this
Section 3.2(a)(vi) shall be taken to relieve the Preferred
Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and
powers vested in it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Preferred Guarantee Trustee, in
its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit
but shall incur no liability of any kind by reason of such
inquiry or investigation.
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees,
custodians or attorneys, and the Preferred Guarantee
Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred
Securities and the signature of the Preferred Guarantee
Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall
be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with
any of the terms and provisions of this Preferred
Securities Guarantee, both of which shall be conclusively
evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
10
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall
deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action
hereunder, the Preferred Guarantee Trustee (i) may request
instructions from the Holders of a Majority in Liquidation
Amount of the Preferred Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action
until such written instructions are received and (iii)
shall be protected in conclusively relying on or acting in
accordance with such instructions.
(xi) The Preferred Securities Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it
in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers
conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
Section 3.3 Not Responsible for Recitals or Issuance of Preferred
-----------------------------------------------------
Securities Guarantee. The recitals contained in this Preferred Securities
--------------------
Guarantee shall be taken as the statements of the Guarantor, and the Preferred
Guarantee Trustee does not assume any responsibility for their correctness. The
Preferred Guarantee Trustee makes no representation as to the validity or
sufficiency of this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
Section 4.1 Preferred Guarantee Trustee: Eligibility.
----------------------------------------
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the
11
Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by federal, state, territorial
or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or
examining authority referred to above, then, for the
purposes of this Section 4.1(a)(ii), the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
Section 4.2 Appointment, Removal and Resignation of Preferred Guarantee
-----------------------------------------------------------
Trustee.
-------
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor except during
an Event of Default.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery of an instrument of resignation or removal, the Preferred
Guarantee Trustee resigning or being removed may petition,
12
at the expense of the Guarantor, any court of competent jurisdiction for
appointment of a Successor Preferred Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts to which it is entitled to the date of such termination, removal or
resignation.
ARTICLE V
GUARANTEE
Section 5.1 Guarantee. The Guarantor irrevocably and unconditionally
---------
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders. The Guarantor will honor
all obligations, if any, relating to the conversion or exchange of the Preferred
Securities into the designated security as set forth in the Declaration and the
Indenture.
Section 5.2 Waiver of Notice and Demand. The Guarantor hereby waives notice
---------------------------
of acceptance of this Preferred Securities Guarantee and of any liability to
which it applies or may apply, presentment, demand for payment, any right or
remedy to require a proceeding first against the Issuer or any other Person
before proceeding directly against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
Section 5.3 Obligations Not Affected. The obligations, covenants,
------------------------
agreements and duties of the Guarantor under this Preferred Securities Guarantee
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities (other than an extension of
time for
13
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debt Securities);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
Section 5.4 Rights of Holders.
-----------------
(a) The Holders of a Majority in Liquidation Amount of the
Preferred Securities then outstanding have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred Securities Guarantee or to direct
the exercise of any trust or power conferred upon the Preferred Guarantee
Trustee under this Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this
Preferred Securities Guarantee, any Holder of Preferred Securities may institute
a legal proceeding directly against the Guarantor to enforce the Preferred
Guarantee Trustee's rights under this Preferred Securities Guarantee, without
first instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. The Guarantor waives any right or remedy
to require that any action be brought first against the Issuer or any other
person or entity before proceeding directly against the Guarantor.
Notwithstanding the foregoing, if the Guarantor has failed to make a guarantee
payment, a Holder of Preferred Securities may directly institute a proceeding
against the Guarantor for enforcement of this Preferred Securities Guarantee for
such payment.
14
Section 5.5 Guarantee of Payment. This Preferred Securities Guarantee
--------------------
creates a guarantee of payment and not of collection.
Section 5.6 Subrogation. The Guarantor shall be subrogated to all (if any)
-----------
rights of the Holders of Preferred Securities against the Issuer in respect of
any amounts paid to such Holders by the Guarantor under this Preferred
Securities Guarantee; provided, however, that the Guarantor shall not (except to
-------- -------
the extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Preferred Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Preferred Securities Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.
Section 5.7 Action Against Guarantor. The Guarantor waives any right or
------------------------
remedy to require that any action be brought first against the Issuer or any
other person or entity before proceeding directly against the Guarantor.
Section 5.8 Independent Obligations. The Guarantor acknowledges that its
-----------------------
obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Preferred Securities Guarantee notwithstanding the occurrence of
any event referred to in subsections (a) through (g), inclusive, of Section 5.3
hereof.
Section 5.9 Taxes. All payments in respect of the Guarantee Payments
-----
(including interest accrued thereon, if any) by the Guarantor shall be made
without withholding or deduction for or on account of any Relevant Tax, unless
the withholding or deduction of such Relevant Tax is required by law. In that
event, the Guarantor shall pay, as further Guarantee Payments, such additional
amounts as may be necessary in order that the net amounts received by a Holder
(or a third party on its behalf) after such withholding or deduction will equal
the amount which would have been received in respect of the Guarantee Payments
(including interest accrued thereon, if any) in the absence of such withholding
or deduction ("Guarantee Additional Amounts"), except that no such Guarantee
Additional Amounts shall be payable to a Holder (or a third party on its behalf)
with respect to any Guarantee Payments (including interest accrued thereon, if
any (i) to the extent that such Relevant Tax is imposed or levied by virtue of
such Holder (or the beneficial owner of Preferred Securities to which such
Guarantee Payments relate) having some connection with the Relevant
Jurisdiction, other than being a Holder (or beneficial owner Preferred
Securities) or (ii) to the extent that such the Relevant Tax is imposed or
levied by virtue of such Holder (or beneficial owner) not having made a
declaration of non-residence in, or other lack of connection with, the Relevant
Jurisdiction of any similar claim for exemption, if the Guarantor or its agent
has provided the beneficial owner of such Preferred Securities or its nominee
with at least 60 days' prior written notice of any opportunity to make such a
declaration or claim.
ARTICLE VI
15
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1 Limitation of Transactions. So long as any Preferred Securities
--------------------------
remain outstanding, if (i) the Guarantor has exercised its option to defer
interest payments on the Debt Securities by extending the interest payment
period and such extension period, or any extension thereof, shall be continuing,
(ii) the Guarantor shall be in default with respect to its payment or other
obligations under this Preferred Securities Guarantee or (iii) there shall have
occurred and be continuing an Event of Default under the Declaration or any
event that, with the giving of notice or lapse of time or both, would constitute
an Event of Default under the Declaration, then the Guarantor shall not (a)
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire, or make any liquidation payment with respect to, any
of its capital stock or (b) make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities of the Guarantor
that rank PARI PASSU with or junior in interest to the Debt Securities or make
any guarantee payment with respect to any guarantee by the Guarantor of the debt
securities of any subsidiary of the Guarantor if such guarantee ranks PARI PASSU
with or junior in interest to the Debt Securities (other than (i) as a result of
a reclassification of the capital stock of the Guarantor or the exchange or
conversion of one class or series of the capital stock of the Guarantor for
another class or series of the capital stock of the Guarantor, (ii) the purchase
of fractional interests in shares of the capital stock of the Guarantor pursuant
to the conversion or exchange provisions of such capital stock or the security
being converted into or exchanged for such capital stock, (iii) dividends or
distributions in common stock of the Guarantor, (iv) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (v) payments under the Guarantee
and Common Securities Guarantee, (vi) purchases of common stock of the Guarantor
related to the issuance of common stock of the Guarantor or rights under any of
the Guarantor's benefit plans for its directors, officers or employees and (vii)
obligations under any dividend reinvestment and stock purchase plans).
Section 6.2 Subordination. This Preferred Securities Guarantee will
-------------
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor (except any liabilities that may be PARI PASSU expressly by their
terms), (ii) PARI PASSU with the most senior preferred or preference stock now
or hereafter issued by the Guarantor and with any guaranty now or hereafter
entered into by the Guarantor in respect of any preferred or preference stock of
any Affiliate of the Guarantor and (iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Preferred Securities Guarantee shall
-----------
terminate as to each Holder upon, and be of no force and effect from the earlier
of (i) full payment of the Redemption
16
Price and accumulated and unpaid distributions with respect to all Preferred
Securities, (ii) the distribution of the underlying securities to such Holder
upon the conversion or exchange of such Holder's Preferred Securities into the
designated security, (iii) the distribution of the Debt Securities to the
Holders of the Preferred Securities or (iv) full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Issuer. This
Preferred Securities Guarantee shall terminate completely upon full payment of
the amounts payable in accordance with the Declaration. Notwithstanding the
foregoing, this Preferred Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder must restore
payment of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage, liability, expense or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Preferred Securities Guarantee or
by law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Preferred Securities
might properly be paid.
Section 8.2 Indemnification. The Guarantor agrees to indemnify each
---------------
Indemnified Person for, and to hold each Indemnified Person harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The provisions of this
Section 8.2 shall survive the termination of this Preferred Securities Guarantee
or the resignation or removal of the Preferred Guarantee Trustee.
17
When the Preferred Guarantee Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(d) or Section
5.1(e) of the Indenture, the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Successors and Assigns. All guarantees and agreements contained
----------------------
in this Preferred Securities Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then outstanding. Except in
connection with any merger or consolidation of the Guarantor with or into
another entity permitted by Section 9.1 of the Indenture or any sale, transfer
or lease of the Guarantor's assets to another entity permitted by Section 9.1 of
the Indenture, the Guarantor may not assign its rights or delegate its
obligations under this Preferred Securities Guarantee without the prior approval
of the holders of at least a Majority in Liquidation Amount of the Preferred
Securities then outstanding.
Section 9.2 Amendments. Except with respect to any changes that do not
----------
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in Liquidation Amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of the Preferred Securities then outstanding.
The provisions of the Declaration with respect to meetings of Holders apply to
the giving of such approval.
Section 9.3 Notices. All notices provided for in this Preferred Securities
-------
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Corporate Trust Services Division
18
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders of the Preferred Securities):
Torchmark Corporation
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed, or mailed by first class mail, postage
prepaid, except that if a notice or other document is refused delivery or cannot
be delivered because of a changed address of which no notice was given, such
notice or other document shall be deemed to have been delivered on the date of
such refusal or inability to deliver.
Section 9.4 Benefit. This Preferred Securities Guarantee is solely for the
-------
benefit of the Holders of the Preferred Securities and, subject to Section
3.1(a), is not separately transferable from the Preferred Securities.
Section 9.5 Governing Law. THIS PREFERRED SECURITIES GUARANTEE SHALL BE
-------------
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK
INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
19
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
TORCHMARK CORPORATION,
as Guarantor
By:____________________________________
Name:_____________________________
Title:____________________________
THE FIRST NATIONAL BANK OF CHICAGO,
As Preferred Guarantee Trustee
By:____________________________________
Name:_____________________________
Title:____________________________
20
