Recitals
EXHIBIT
99.1
Replacement Capital Covenant,
dated as of May [__], 2008 (this “Replacement Capital Covenant”), by
PrivateBancorp, Inc., a Delaware corporation (together with its successors and
assigns, the “Corporation”), in favor of and for the benefit of each Covered
Debtholder (as defined below).
Recitals
A. On
the date hereof, the Corporation is issuing $75,000,000 aggregate principal
amount of its [__]% Junior Subordinated Debentures due 2068 (the “Debentures”)
to PrivateBancorp Capital Trust IV, a Delaware statutory trust (the
“Trust”).
B. On
the date hereof, the Trust is issuing $75,000,000 aggregate liquidation amount
of its [__]% Preferred Securities (the “Trust Preferred Securities” and,
together with the Debentures, the “Securities”).
C. This
Replacement Capital Covenant is the “Replacement Capital Covenant” referred to
in the Prospectus Supplement, dated May [__], 2008 (the “Prospectus
Supplement”), relating to, among other securities, the Securities.
D. The
Corporation is entering into and disclosing the content of this Replacement
Capital Covenant in the manner provided below with the intent that the covenants
provided for in this Replacement Capital Covenant be enforceable by each Covered
Debtholder and that the Corporation be estopped from disregarding the covenants
in this Replacement Capital Covenant, in each case to the fullest extent
permitted by applicable law.
E. The
Corporation acknowledges that reliance by each Covered Debtholder upon the
covenants in this Replacement Capital Covenant is reasonable and foreseeable by
the Corporation and that, were the Corporation to disregard its covenants in
this Replacement Capital Covenant, each Covered Debtholder would have sustained
an injury as a result of its reliance on such covenants.
NOW, THEREFORE, the
Corporation hereby covenants and agrees as follows in favor of and for the
benefit of each Covered Debtholder.
SECTION 1 Definitions. Capitalized
terms used in this Replacement Capital Covenant (including the Recitals) have
the meanings set forth in Schedule I hereto.
SECTION 2 Limitations on Repayment,
Redemption and Purchase of Securities. The Corporation hereby
promises and covenants to and for the benefit of each Covered Debtholder that
neither the Corporation nor any Subsidiary of the Corporation (including the
Trust) shall repay, redeem or purchase any of the Securities prior to the
Termination Date except to the extent that (a) the Corporation has obtained
the prior approval of the Federal Reserve if such approval is then required
under the Federal Reserve’s capital guidelines applicable to bank holding
companies and (b) the principal amount repaid or the applicable redemption
or purchase price does not exceed the sum of the following amounts:
(i) the
Applicable Percentage of the aggregate amount of net cash proceeds received by
the Corporation and its Subsidiaries since the most recent Measurement Date from
the sale of Replacement Capital Securities to Persons other than the Corporation
and Subsidiaries; plus
(ii) the
Applicable Percentage of the Market Value of any Common Stock that the
Corporation or its Subsidiaries have (x) delivered as consideration for
property or assets in an arm’s-length transaction or (y) issued in
connection with the conversion or exchange of any convertible or exchangeable
securities, other than securities for which the Corporation or any
of
its
Subsidiaries has received equity credit from any NRSRO; in each case to Persons
other than the Corporation and its Subsidiaries within the applicable
Measurement Period (without double counting proceeds received in any prior
Measurement Period; plus
(iii) 100%
of the aggregate amount of net cash proceeds received by Subsidiaries of the
Corporation since the most recent Measurement Date from the sale of REIT
Preferred Securities to Persons other than the Corporation and its
Subsidiaries;
in each
case within the applicable Measurement Period (without double counting proceeds
received in any prior Measurement Period); provided, however, that the
provisions of this Section 2 shall not apply to (i) the purchase of
the Securities or any portion thereof by Subsidiaries of the Corporation in
connection with the distribution thereof or market-making or other
secondary-market activities or (ii) any distribution of the Debentures to
holders of the Trust Preferred Securities upon a dissolution of the
Trust. For purposes of this Replacement Capital Covenant, the term
“repay” includes the defeasance by the Corporation of the Debentures as well as
the satisfaction and discharge of its obligations under the Indenture with
respect to the Debentures.
SECTION 3 Covered
Debt.
(a) The
Corporation represents and warrants that the Initial Covered Debt is Eligible
Debt.
(b) On
or during the 30-day period immediately preceding any Redesignation Date with
respect to the Covered Debt then in effect, the Corporation shall identify the
series of Eligible Debt that will become the Covered Debt on and after such
Redesignation Date in accordance with the following procedures:
(i) the
Corporation shall identify each series of its and its Depository Institution
Subsidiaries’ then outstanding long-term indebtedness for money borrowed that is
Eligible Debt;
(ii) if
only one series of the Corporation’s then outstanding long-term indebtedness for
money borrowed is Eligible Debt, such series shall become the Covered Debt
commencing on the related Redesignation Date;
(iii) if
the Corporation has more than one outstanding series of long-term indebtedness
for money borrowed that is Eligible Debt, then the Corporation shall identify
the series that has the latest occurring final maturity date as of the date the
Corporation is applying the procedures in this Section 3(b) and such series
shall become the Covered Debt on the related Redesignation Date;
(iv) if
the Corporation has no outstanding series of long-term indebtedness for money
borrowed that is Eligible Debt, and its Largest Depository Institution
Subsidiary has only one outstanding series of long-term indebtedness for money
borrowed that is Eligible Debt, such series shall become the Covered Debt
commencing on the related Redesignation Date;
(v) if
the Corporation has no outstanding series of long-term indebtedness for money
borrowed that is Eligible Debt, but its Largest Depository Institution
Subsidiary has more than one outstanding series of long-term indebtedness for
money borrowed that is Eligible Debt, then the Corporation shall identify the
series that has the latest occurring final maturity date as of the date the
Corporation is applying the procedures in this Section 3(b) and such series
shall become the Covered Debt on the related Redesignation Date;
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(vi) the
series of outstanding long-term indebtedness for money borrowed that is
determined to be Covered Debt pursuant to clause (ii), (iii), (iv) or (v)
above shall be the Covered Debt for purposes of this Replacement Capital
Covenant for the period commencing on the related Redesignation Date and
continuing to but not including the Redesignation Date as of which a new series
of outstanding long-term indebtedness is next determined to be the Covered Debt
pursuant to the procedures set forth in this Section 3(b); and
(vii) in
connection with such identification of a new series of Covered Debt, the
Corporation shall, as provided for in Section 3(c), give a notice and file
with the Commission a current report on Form 8-K (or any successor form)
including or incorporating by reference this Replacement Capital Covenant as an
exhibit within the time frame provided for in such section.
(c) Notice. In
order to give effect to the intent of the Corporation described in Recital D,
the Corporation covenants that:
(i) simultaneously
with the execution of this Replacement Capital Covenant or as soon as
practicable after the date hereof, it shall (x) give notice to the Holders
of the Initial Covered Debt, in the manner provided in the indenture relating to
the Initial Covered Debt, of this Replacement Capital Covenant and the rights
granted to such Holders hereunder and (y) file a copy of this Replacement
Capital Covenant with the Commission as an exhibit to a Form 8-K (or any
successor form) under the Securities Exchange Act;
(ii) so
long as the Corporation is a reporting company under the Securities Exchange
Act, the Corporation shall include in each annual report filed with the
Commission on Form 10-K (or any successor form) under the Securities Exchange
Act a description of the covenant set forth in Section 2 and identify the
series of long-term indebtedness for borrowed money that is Covered Debt as of
the date such Form 10-K (or any successor form) is filed with the
Commission;
(iii) if
a series of the Corporation’s or one of its Depository Institution Subsidiary’s
long-term indebtedness for money borrowed (1) becomes Covered Debt or
(2) ceases to be Covered Debt, the Corporation shall give notice of such
occurrence within 30 days to the holders of such long-term indebtedness for
money borrowed in the manner provided for in the indenture, fiscal agency
agreement or other instrument under which such long-term indebtedness for money
borrowed was issued and report such change in a current report on Form 8-K (or
any successor form) including or incorporating by reference this Replacement
Capital Covenant, and in the Corporation’s next quarterly report on Form 10-Q
(or any successor form) or annual report on Form 10-K (or any successor form),
as applicable; (iv) if, and only if, the Corporation ceases to be a
reporting company under the Securities Exchange Act, the Corporation shall
(1) post on its website the information otherwise required to be included
in Securities Exchange Act filings pursuant to clauses (ii) and (iii) of this
Section 3(c) and (2), to the extent permitted by Bloomberg and any other
similar third-party vendor that makes available to the marketplace information
with respect to securities that are Covered Debt by posting such information on
an electronically accessible screen (each an “Investor Screen”), cause a
notation to be included on each such Investor Screen identifying the relevant
series of indebtedness of the Corporation or a Subsidiary that is Covered Debt
from time to time as Covered Debt for purposes of this Replacement Capital
Covenant and cause a hyperlink to a definitive copy of this Replacement Capital
Covenant to be included on each such Investor Screen for each series of Covered
Debt (but only so long as such series is Covered Debt); and
(iv) promptly
upon request by any Holder of Covered Debt, the Corporation shall provide such
Holder with an executed copy of this Replacement Capital Covenant.
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(d) The
Corporation agrees that, if at any time the Covered Debt is held by a trust (for
example, where the Covered Debt is part of an issuance of trust preferred
securities), a holder of the securities issued by such trust may enforce
(including by instituting legal proceedings) this Replacement Capital Covenant
directly against the Corporation as though such holder owned Covered Debt
directly, and such trust securities shall be deemed to be “Covered Debt” for
purposes of this Replacement Capital Covenant for so long as the indebtedness
held by such trust remains Covered Debt hereunder.
SECTION 4
Termination, Amendment
and Waiver.
(a) The
obligations of the Corporation pursuant to this Replacement Capital Covenant
shall remain in full force and effect until the earliest date (the “Termination
Date”) to occur of (i) the date, if any, on which the Holders of a majority
in principal amount of the then-effective series of Covered Debt consent or
agree in writing to the termination of this Replacement Capital Covenant and the
obligations of the Corporation hereunder, (ii) the date on which neither
the Corporation nor any of its Depository Institution Subsidiaries has any
series of outstanding Eligible Senior Debt or Eligible Subordinated Debt (in
each case without giving effect to the rating requirement in clause (b) of
the definition of each such term), (iii) June 15, 2048 or (iv) the
occurrence of an event of default and acceleration of the Debentures under the
Indenture and the First Supplemental Indenture. From and after the
Termination Date, the obligations of the Corporation pursuant to this
Replacement Capital Covenant shall be of no further force and
effect.
(b) This
Replacement Capital Covenant may be amended or supplemented from time to time by
a written instrument signed by the Corporation with the consent of the Holders
of at least a majority in principal amount of the then-effective series of
Covered Debt, provided that this Replacement Capital Covenant may be amended or
supplemented from time to time by a written instrument signed only by the
Corporation (and without the consent of the Holders of the then-effective series
of Covered Debt) if (i) such amendment or supplement eliminates Common
Stock, Debt Exchangeable for Common Stock, rights to acquire Common Stock and/or
Mandatorily Convertible Preferred Stock as a Replacement Capital Security, if
after the date of this Replacement Capital Covenant, an accounting standard or
interpretive guidance of an existing accounting standard issued by an
organization or regulator that has responsibility for establishing or
interpreting accounting standards in the United States becomes effective such
that there is more than an insubstantial risk that failure to eliminate Common
Stock, Debt Exchangeable for Common Stock, rights to acquire Common Stock and/or
Mandatorily Convertible Preferred Stock as a Replacement Capital Security would
result in a reduction in the Corporation’s earnings per share as calculated in
accordance with generally accepted accounting principles in the United States;
(ii) such amendment or supplement is not adverse to the Holders of the
then-effective series of Covered Debt and an officer of the Corporation has
delivered to the Holders of the then-effective series of Covered Debt in the
manner provided for in the indenture, fiscal agency agreement or other
instrument with respect to such Covered Debt a written certificate stating that,
in his or her determination, such amendment or supplement is not adverse to the
Holders of the then-effective series of Covered Debt; or (ii) the effect of such
amendment or supplement is solely to impose additional restrictions on, or
eliminate certain of, the types of securities qualifying as Replacement Capital
Securities, and an officer of the Corporation has delivered to the Holders of
the then effective series of Covered Debt in the manner provided for in the
indenture, fiscal agency agreement or other instrument with respect to such
Covered Debt a written certificate to that effect. For the avoidance
of doubt, an amendment or supplement that adds new types of securities
qualifying as Replacement Capital Securities or modifies the requirements of
securities qualifying as Replacement Capital Securities would not be adverse to
the Holders of the then effective series of Covered Debt if, following such
amendment or supplement, this Replacement Capital Covenant would satisfy clause
(ii) of the definition of “Qualifying Replacement Capital
Covenant.” The foregoing sentence shall not be deemed to mean that
any other amendment or supplement would be adverse to the Holders of the then
effective series of Covered Debt.
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(c) For
purposes of Sections 4(a) and 4(b), the Holders whose consent or agreement
is required to terminate, amend or supplement the obligations of the Corporation
under this Replacement Capital Covenant shall be the Holders of the
then-effective Covered Debt as of a record date established by the Corporation
that is not more than 30 days prior to the date on which the Corporation
proposes that such termination, amendment or supplement becomes
effective.
SECTION 5 Miscellaneous.
(a) This
Replacement Capital Covenant shall be governed by and construed in accordance
with the laws of the State of Illinois.
(b) This
Replacement Capital Covenant shall be binding upon the Corporation and its
successors and assigns (provided that, in the event the Corporation sells,
conveys, transfers or otherwise disposes of all or substantially all its assets
to any person and (i) such person assumes all the obligations of the
Corporation under the indenture governing the then applicable Covered Debt and
the Indenture, (ii) such person assumes all the obligations of the
Corporation under the Replacement Capital Covenant and (iii) the
Corporation is released from its obligations under the indenture governing the
then applicable Covered Debt and the Indenture, the Corporation shall be
released from all its obligations hereunder) and shall inure to the benefit of
the Covered Debtholders as they exist from time-to-time (it being understood and
agreed by the Corporation that any Person who is a Covered Debtholder at the
time such Person acquires, holds or sells Covered Debt shall retain its status
as a Covered Debtholder for so long as the series of long-term indebtedness for
borrowed money owned by such Person is Covered Debt and, if such Person
initiates a claim or proceeding to enforce its rights under this Replacement
Capital Covenant after the Corporation has violated its covenants in
Section 2 and before the series of long-term indebtedness for money
borrowed held by such Person is no longer Covered Debt, such Person’s rights
under this Replacement Capital Covenant shall not terminate by reason of such
series of long-term indebtedness for money borrowed no longer being Covered
Debt).
(c) All
demands, notices, requests and other communications to the Corporation under
this Replacement Capital Covenant shall be deemed to have been duly given and
made if in writing and (i) if served by personal delivery upon the
Corporation, on the day so delivered (or, if such day is not a Business Day, the
next succeeding Business Day), (ii) if delivered by registered post or
certified mail, return receipt requested, or sent to the Corporation by a
national or international courier service, on the date of receipt by the
Corporation (or, if such date of receipt is not a Business Day, the next
succeeding Business Day), or (iii) if sent by telecopier, on the day
telecopied, or if not a Business Day, the next succeeding Business Day, provided
that the telecopy is promptly confirmed by telephone confirmation thereof, and
in each case to the Corporation at the address set forth below, or at such other
address as the Corporation may thereafter notify to Covered Debtholders or post
on its website as the address for notices under this Replacement Capital
Covenant:
00 Xxxx
Xxxxxxx, Xxxxx 000,
Xxxxxxx,
Xxxxxxxx 00000
Attention:
[______________]
Facsimile: [______________]
(d) Each
reference in this Replacement Capital Covenant to a Commission form includes any
successor form that may be adopted by the Commission.
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IN WITNESS WHEREOF, the
Corporation has caused this Replacement Capital Covenant to be executed by its
duly authorized officer, as of the day and year first above
written.
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Schedule 1
Definitions
“Alternative
Payment Mechanism” means, with respect to any Qualifying Capital Securities,
provisions in the related transaction documents requiring the Corporation to
issue (or use Commercially Reasonable Efforts to issue) one or more types of APM
Qualifying Securities raising eligible proceeds at least equal to the deferred
Distributions on such Qualifying Capital Securities and apply the proceeds to
pay unpaid Distributions on such Qualifying Capital Securities, commencing on
the earlier of (x) the first Distribution Date after commencement of a
deferral period on which the Corporation pays current Distributions on such
Qualifying Capital Securities and (y) the fifth anniversary of the
commencement of such deferral period, and that:
(a) define
“eligible proceeds” to mean, for purposes of such Alternative Payment Mechanism,
the net proceeds (after underwriters’ or placement agents’ fees, commissions or
discounts and other expenses relating to the issuance or sale of the relevant
securities, where applicable, and including the fair market value of property
received by the Corporation or any of its Subsidiaries as consideration for such
APM Qualifying Securities) that the Corporation has received during the 180 days
prior to the related Distribution Date from the issuance of APM Qualifying
Securities, up to the Preferred Cap (as defined in paragraph (f), below) in the
case of APM Qualifying Securities that are Qualifying Preferred Stock or
Mandatorily Convertible Preferred Stock;
(b) permit
the Corporation to pay current Distributions on any Distribution Date out of any
source of funds but (x) require the Corporation to pay deferred
Distributions only out of eligible proceeds and (y) prohibit the
Corporation from paying deferred Distributions out of any source of funds other
than eligible proceeds, unless (if the Corporation elects to so provide in the
terms of such securities) the Federal Reserve directs otherwise;
(c) if
deferral of Distributions continues for more than one year, require the
Corporation not to redeem or repurchase any securities of the Corporation that
on a bankruptcy or liquidation of the Corporation rank pari passu with or junior
to APM Qualifying Securities until at least one year after all deferred
Distributions have been paid (a “Repurchase Restriction”);
(d) notwithstanding
the foregoing provisions of this definition, if the Federal Reserve disapproves
the Corporation’s sale of APM Qualifying Securities, may (if the Corporation
elects to so provide in the terms of such securities) permit the Corporation to
pay deferred Distributions from any source without a breach of its obligations
under the transaction documents;
(e) if
the Federal Reserve does not disapprove the Corporation’s issuance and sale of
APM Qualifying Securities but disapproves the use of the proceeds thereof to pay
deferred Distributions, may (if the Corporation elects to so provide in the
terms of such Qualifying Capital Securities) permit the Corporation to use such
proceeds for other purposes and to continue to defer Distributions without a
breach of its obligations under the transaction documents; and
(f) limit
the obligation of the Corporation to issue (or use Commercially Reasonable
Efforts to issue) APM Qualifying Securities that are Common Stock and Qualifying
Warrants to settle deferred Distributions pursuant to the Alternative Payment
Mechanism either (A) during the first five years of any deferral period or
(B) before an anniversary of the commencement of any deferral period that
is not earlier than the fifth such anniversary and not later than the ninth such
anniversary (as designated in the terms of such Qualifying Capital Securities)
with respect to deferred Distributions attributable to the first five years of
such deferral period, either:
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(i) to
an aggregate amount of such securities, the net proceeds from the issuance of
which is equal to 2% of the product of the average of the current Market Value
of the Common Stock on the ten consecutive trading days ending on the fourth
trading day immediately preceding the date of issuance multiplied by the total
number of issued and outstanding shares of Common Stock as of the date of the
Corporation’s most recent publicly available consolidated financial statements;
or
(ii) to
a number of shares of Common Stock and shares purchasable upon exercise of
Qualifying Warrants, in the aggregate, not in excess of 2% of the outstanding
number of shares of Common Stock (the “Common Cap”);
(g) limit
the right of the Corporation to issue APM Qualifying Securities that are
Qualifying Preferred Stock and Mandatorily Convertible Preferred Stock to settle
deferred Distributions pursuant to the Alternative Payment Mechanism to an
aggregate amount of Qualifying Preferred Stock and still-outstanding Mandatorily
Convertible Preferred Stock, the net proceeds from the issuance of which with
respect to all deferral periods is equal to 25% of the liquidation or principal
amount of such Qualifying Capital Securities (the “Preferred Cap”);
(h) in
the case of Qualifying Capital Securities other than non-cumulative perpetual
preferred stock, include a Bankruptcy Claim Limitation Provision;
and
(i) permit
the Corporation, at its option, to provide that if it is involved in a merger,
consolidation, amalgamation, binding share exchange or conveyance, transfer or
lease of assets substantially as an entirety to any other person or a similar
transaction (a “Business Combination”) where immediately after the consummation
of the Business Combination more than 50% of the surviving or resulting entity’s
voting stock is owned by the shareholders of the other party to the Business
Combination, then clauses (a) through (c) of this definition will not
apply to any deferral period that is terminated on the next Distribution Date
following the date of consummation of the Business Combination (or if later, at
any time within 90 days following the date of consummation of the Business
Combination); provided (and it being understood) that:
(a) the
Corporation shall not be obligated to issue (or use Commercially Reasonable
Efforts to issue) APM Qualifying Securities for so long as a Market Disruption
Event has occurred and is continuing;
(b) if,
due to a Market Disruption Event or otherwise, the Corporation is able to raise
and apply some, but not all, of the eligible proceeds necessary to pay all
deferred Distributions on any Distribution Date, the Corporation will apply any
available eligible proceeds to pay accrued and unpaid Distributions on the
applicable Distribution Date in chronological order subject to the Common Cap
and Preferred Cap, as applicable; and
(c) if
the Corporation has outstanding more than one class or series of securities
under which it is obligated to sell a type of APM Qualifying Securities and
apply some part of the proceeds to the payment of deferred Distributions, then
on any date and for any period the amount of net proceeds received by the
Corporation from those sales and available for payment of deferred Distributions
on such securities shall be applied to such securities on a pro rata basis in
proportion to the total amounts that are due on such securities, or on such
other basis as the Federal Reserve may approve.
“APM
Qualifying Securities” means, with respect to an Alternative Payment Mechanism
or any Mandatory Trigger Provision, one or more of the following (as designated
in the transaction documents
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for any
Qualifying Capital Securities that include an Alternative Payment Mechanism or a
Mandatory Trigger Provision, as applicable):
(a) Common
Stock;
(b) Qualifying
Warrants;
(c) Mandatorily
Convertible Preferred Stock; or
(d) Qualifying
Preferred Stock;
provided
(and it being understood) that (i) if the APM Qualifying Securities for any
Alternative Payment Mechanism or Mandatory Trigger Provision include both Common
Stock and Qualifying Warrants, such Alternative Payment Mechanism or Mandatory
Trigger Provision may permit, but need not require, the Corporation to issue
Qualifying Warrants and (ii) such Alternative Payment Mechanism or
Mandatory Trigger Provision may permit, but need not require, the Corporation to
issue Mandatorily Convertible Preferred Stock.
“Applicable
Percentage” means:
(a) 133.33%
with respect to any repayment, redemption or purchase on or prior to
June 15, 2018; and
(b) 200.00%
with respect to any repayment, redemption or purchase thereafter.
“Appropriate
Federal Banking Agency” means, as to a Depository Institution Subsidiary, the
Federal bank regulatory agency or authority that is the “appropriate Federal
banking agency” (within the meaning of 12 U.S.C. § 1813(q)) with respect to
such Depository Institution Subsidiary.
“Bankruptcy
Claim Limitation Provision” means, with respect to any Qualifying Capital
Securities that have an Alternative Payment Mechanism or a Mandatory Trigger
Provision, provisions that, upon any liquidation, dissolution, winding up or
reorganization or in connection with any insolvency, receivership or proceeding
under any bankruptcy law with respect to the issuer, limit the claim of the
holders of such securities to Distributions that accumulate during (A) any
deferral period, in the case of securities that have an Alternative Payment
Mechanism or (B) any period in which the issuer fails to satisfy one or
more financial tests set forth in the terms of such securities or related
transaction agreements, in the case of securities that have a Mandatory Trigger
Provision, to:
(i) in
the case of Qualifying Capital Securities that have an Alternative Payment
Mechanism or Mandatory Trigger Provision with respect to which the APM
Qualifying Securities do not include Qualifying Preferred Stock or Mandatorily
Convertible Preferred Stock, 25% of the stated or principal amount of such
Qualifying Capital Securities then outstanding; and
(ii) in
the case of any other Qualifying Capital Securities, an amount not in excess of
the sum of (x) the first two years of accumulated and unpaid Distributions
and (y) an amount equal to the excess, if any, of the Preferred Cap over
the aggregate amount of net proceeds from the sale of Qualifying Preferred Stock
and Mandatorily Convertible Preferred Stock that is still outstanding that the
issuer has applied to pay such Distributions pursuant to the Alternative Payment
Mechanism or the Mandatory Trigger Provision; provided that the holders of such
Qualifying Capital Securities are deemed to agree that, to the extent the
remaining claim exceeds the amount set forth in clause (x), the amount they
receive in respect of such excess shall
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not
exceed the amount they would have received the claim for such excess ranked pari
passu with the interests of the holders, if any, of Qualifying Preferred
Stock.
“Business
Day” means each day other than (a) a Saturday or Sunday or (b) a day
on which banking institutions in New York, New York, Chicago, Illinois, or
Wilmington, Delaware are authorized or required by law or executive order to
remain closed.
“Commercially
Reasonable Efforts” means, for purposes of selling APM Qualifying Securities,
commercially reasonable efforts to complete the offer and sale of APM Qualifying
Securities to third parties that are not Subsidiaries of the Corporation in
public offerings or private placements. The Corporation shall not be
considered to have made Commercially Reasonable Efforts to effect a sale of APM
Qualifying Securities if it determines not to pursue or complete such sale due
to pricing, coupon, dividend rate or dilution considerations.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Cap” has the meaning specified in clause (f)(ii) of the definition of
Alternative Payment Mechanism.
“Common
Stock” means common stock of the Corporation (including common stock issued
pursuant to the Corporation’s dividend reinvestment plan and employee benefit
plans).
“Corporation”
has the meaning specified in the introduction to this instrument.
“Covered
Debt” means (a) at the date of this Replacement Capital Covenant and
continuing to but not including the first Redesignation Date, the Initial
Covered Debt and (b) thereafter, commencing with each Redesignation Date
and continuing to but not including the next succeeding Redesignation Date, the
Eligible Debt identified pursuant to Section 3(b) as the Covered Debt for
such period.
“Covered
Debtholder” means each Person (whether a Holder or a beneficial owner holding
through a participant in a clearing agency) that buys, holds or sells long-term
indebtedness for money borrowed of the Corporation or its Depository Institution
Subsidiary during the period that such long-term indebtedness for money borrowed
is Covered Debt.
“Debentures”
has the meaning specified in Recital A.
“Debt
Exchangeable for Common Equity” means a security or combination of securities
(together in this definition, “such securities”) that:
(i) gives
the holder a beneficial interest in (a) a fractional interest in a stock
purchase contract for a share of Common Stock that will be settled in three
years or less, with the number of shares of Common Stock purchasable pursuant to
such stock purchase contract to be within a range established at the time of
issuance of such subordinated debt securities, subject to customary
anti-dilution adjustments and (b) subordinated debt securities of the
Corporation that are non-callable prior to the settlement date of the stock
purchase contract;
(ii) provides
that the holders directly or indirectly grant the Corporation a security
interest in such subordinated debt securities and their proceeds (including any
substitute collateral permitted under the transaction documents) to secure the
holders’ direct or indirect obligation to purchase Common Stock pursuant to such
stock purchase contracts;
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(iii) includes
a remarketing feature pursuant to which the subordinated debt securities are
remarketed to new investors commencing not later than the last Distribution Date
that is at least one month prior to the settlement date of the stock purchase
contract; and
(iv) provides
for the proceeds raised in the remarketing to be used to purchase Common Stock
under the stock purchase contracts and, if there has not been a successful
remarketing by the settlement date of the stock purchase contract, provides that
the stock purchase contracts will be settled by the Corporation exercising its
remedies as a secured party with respect to the subordinated debt securities or
other collateral directly or indirectly pledged by holders in the Debt
Exchangeable for Common Equity.
“Debt
Exchangeable for Preferred Equity” means a security or combination of securities
(together in this definition, “such securities”) that:
(i) gives
the holder a beneficial interest in (a) subordinated debt securities of the
Corporation (in this definition, the “issuer”) that include a provision
permitting the issuer to defer Distributions in whole or in part on such
securities for one or more Distribution Periods of up to at least seven years
without any remedies other than Permitted Remedies and that are the most junior
subordinated debt of the issuer (or rank pari passu with the most junior
subordinated debt of the issuer) and (b) an interest in a stock purchase
contract that obligates the holder to acquire a beneficial interest in
Qualifying Preferred Stock;
(ii) provides
that the holders directly or indirectly grant to the Corporation a security
interest in such subordinated debt securities and their proceeds (including any
substitute collateral permitted under the transaction documents) to secure the
investors’ direct or indirect obligation to purchase Qualifying Preferred Stock
pursuant to such stock purchase contracts;
(iii) includes
a remarketing feature pursuant to which the subordinated debt of the issuer is
remarketed to new investors commencing not later than the first Distribution
Date that is at least five years after the date of issuance of such securities
or earlier in the event of an early settlement event based on (a) one or
more financial tests set forth in the terms of the instrument governing the
terms of such Debt Exchangeable for Preferred Equity or (b) the dissolution
of the issuer of such Debt Exchangeable for Preferred Equity;
(iv) provides
for the proceeds raised in the remarketing to be used to purchase Qualifying
Preferred Stock under the share purchase contracts and, if there has not been a
successful remarketing by the first Distribution Date that is six years after
the date of issuance of such securities, provides that the share purchase
contracts will be settled by the Company exercising its rights as a secured
creditor with respect to the subordinated debt securities or other collateral
directly or indirectly pledged by investors in the Debt Exchangeable for
Preferred Equity;
(v) includes
a Qualifying Replacement Capital Covenant that will apply to such securities and
to any Qualifying Preferred Stock issued pursuant to the share purchase
contracts; provided that such Qualifying Replacement Capital Covenant may not
include Debt Exchangeable for Common Equity or Debt Exchangeable for Preferred
Equity as “Replacement Capital Securities”; and
(vi) after
the issuance of such Qualifying Preferred Stock, provides the holder with a
beneficial interest in such Qualifying Preferred Stock.
I-5
“Depository
Institution Subsidiary” means any Subsidiary of the Corporation that is a
depository institution within the meaning of 12 C.F.R.
§ 204.2(m).
“Distribution
Date” means, as to any Qualifying Capital Securities or Debt Exchangeable for
Preferred Equity, the dates on which Distributions on such securities are
scheduled to be made.
“Distribution
Period” means, as to any Qualifying Capital Securities, each period from and
including a Distribution Date for such securities to but not including the next
succeeding Distribution Date for such securities.
“Distributions”
means, as to any Qualifying Capital Securities or Debt Exchangeable for
Preferred Equity, dividends, interest or other income distributions to the
holders thereof that are not Subsidiaries of the Corporation.
“Eligible
Debt” means, at any time, Eligible Subordinated Debt or, if no Eligible
Subordinated Debt is then outstanding, Eligible Senior Debt.
“Eligible
Senior Debt” means, at any time in respect of any issuer, each series of
outstanding unsecured long-term indebtedness for money borrowed of such issuer
that (a) upon a bankruptcy, liquidation, dissolution or winding up of the
issuer, ranks most senior among the issuer’s then outstanding classes of
unsecured indebtedness for money borrowed, (b) is then assigned a rating by
at least one NRSRO (provided that this clause (b) shall apply on a
Redesignation Date only if on such date the issuer has outstanding senior
long-term indebtedness for money borrowed that satisfies the requirements of
clauses (a), (c) and (d) that is then assigned a rating by at least one NRSRO),
(c) has an outstanding principal amount of not less than $[50,000,000],
(d) was issued through or with the assistance of a commercial or investment
banking firm or firms acting as underwriters, initial purchasers or placement or
distribution agents, and (e) if issued by a Depository Institution
Subsidiary, is fully and unconditionally guaranteed by the Corporation on
(I) a subordinated basis or (II) if on the relevant Redesignation Date
there is no outstanding debt of a Depository Institution Subsidiary meeting the
other requirements set forth above and guaranteed by the Corporation on a
subordinated basis but there is outstanding debt of a Depository Institution
Subsidiary meeting such requirements and guaranteed on a senior basis, a senior
basis. For purposes of this definition as applied to securities with a CUSIP
number, each issuance of long-term indebtedness for money borrowed that has (or,
if such indebtedness is held by a trust or other intermediate entity established
directly or indirectly by the issuer, the securities of such intermediate entity
that have) a separate CUSIP number shall be deemed to be a series of the
issuer’s long-term indebtedness for money borrowed that is separate from each
other series of such indebtedness.
“Eligible
Subordinated Debt” means, at any time in respect of any issuer, each series of
the issuer’s then-outstanding unsecured long-term indebtedness for money
borrowed that (a) upon a bankruptcy, liquidation, dissolution or winding up
of the issuer, ranks subordinate to the issuer’s then outstanding series of
unsecured indebtedness for money borrowed that ranks most senior and ranks
senior to the Debentures, (b) is then assigned a rating by at least one
NRSRO (provided that this clause (b) shall apply on a Redesignation Date
only if on such date the issuer has outstanding subordinated long-term
indebtedness for money borrowed that satisfies the requirements in clauses (a),
(c) and (d) that is then assigned a rating by at least one NRSRO), (c) has
an outstanding principal amount of not less than $[50,000,000], (d) was
issued through or with the assistance of a commercial or investment banking firm
or firms acting as underwriters, initial purchasers or placement or distribution
agents, and (e) if issued by a Depository Institution Subsidiary, is fully
and unconditionally guaranteed by the Corporation on (I) a subordinated
basis or (II) if on the relevant Redesignation Date there is no outstanding
debt of a Depository Institution Subsidiary meeting the other requirements set
forth above and guaranteed by the Corporation on a subordinated basis but there
is outstanding debt of a Depository Institution Subsidiary meeting such
requirements and guaranteed on a senior basis, a senior basis. For
purposes of this
I-6
definition
as applied to securities with a CUSIP number, each issuance of long-term
indebtedness for money borrowed that has (or, if such indebtedness is held by a
trust or other intermediate entity established directly or indirectly by the
issuer, the securities of such intermediate entity that have) a separate CUSIP
number shall be deemed to be a series of the issuer’s long-term indebtedness for
money borrowed that is separate from each other series of such
indebtedness.
“Federal
Reserve” means the Board of Governors of the Federal Reserve System, and any
regional Federal Reserve Bank in which the Corporation owns stock.
“Holder”
means, as to the Covered Debt then in effect, each holder of such Covered Debt
as reflected on the securities register maintained by or on behalf of the
Corporation with respect to such Covered Debt.
“Indenture”
means (i) the Junior Subordinated Indenture, dated October 25, 2006
(the “Base Indenture”), between the Corporation and Wilmington Trust Company, as
Trustee, (ii) the First Supplemental indenture, dated May [__], 2008
(the “First Supplemental Indenture”), thereto, taken together, under which the
Debentures are being issued.
“Initial
Covered Debt” means the Corporation’s [__], which have CUSIP number
[__].
“Intent-Based
Replacement Disclosure” means, as to any security or combination of securities,
that the issuer has publicly stated its intention, either in the prospectus or
other offering document under which such securities were initially offered for
sale or in filings with the Commission made by the issuer under the Securities
Exchange Act prior to or contemporaneously with the issuance of such securities,
that the issuer or its subsidiaries will redeem or repurchase such securities
only with the proceeds of Replacement Capital Securities that have terms and
provisions at the time of redemption or repurchase that are as or more
equity-like than the securities then being redeemed or repurchased, raised
within 180 days prior to the applicable redemption or repurchase
date. Notwithstanding the use of the term “Intent-Based Replacement
Disclosure” in the definitions of “Qualifying Capital Securities” and
“Qualifying Preferred Stock”, the requirement in each such definition that a
particular security or the related transaction documents include Intent-Based
Replacement Disclosure shall be disregarded and given no force or effect for so
long as the Corporation is a bank holding company within the meaning of the Bank
Holding Company Act of 1956, as amended.
“Largest
Depository Institution Subsidiary” means, from time to time, the Depository
Institution Subsidiary of the Corporation with the greatest total assets that
also has outstanding at least one series of Eligible Subordinated Debt;
provided, however, that if no Depository Institution Subsidiary of the
Corporation has outstanding a series of Eligible Subordinated Debt, this term
shall mean the Depository Institution Subsidiary of the Corporation with the
greatest total assets that also has outstanding at least one series of Eligible
Senior Debt.
“Mandatorily
Convertible Preferred Stock” means cumulative preferred stock with (a) no
prepayment obligation on the part of the issuer thereof, whether at the election
of the holders or otherwise, and (b) a requirement that the preferred stock
convert into Common Stock of the Corporation within three years from the date of
its issuance at a conversion ratio within a range established at the time of
issuance of the preferred stock, subject to customary anti-dilution
adjustments.
“Mandatory
Trigger Provision” means as to any Qualifying Capital Securities, provisions in
the terms thereof or of the related transaction agreements that:
(a) require
the issuer of such securities to make payment of Distributions on such
securities only pursuant to the issue and sale of APM Qualifying Securities
within two years of a failure
I-7
of the
issuer to satisfy one or more financial tests set forth in the terms of such
securities or related transaction agreements, in an amount such that the net
proceeds of such sale are at least equal to the amount of unpaid Distributions
on such securities (including without limitation all deferred and accumulated
amounts) and require the application of the net proceeds of such sale to pay
such unpaid Distributions, provided that (i) if the Mandatory Trigger
Provision does not require the issuance and sale within one year of such
failure, the amount of Common Stock and/or Qualifying Warrants the net proceeds
of which the issuer must apply to pay such Distributions pursuant to such
provision may not exceed the Common Cap and (ii) the amount of Qualifying
Preferred Stock and still outstanding Mandatorily Convertible Preferred Stock
the net proceeds of which the issuer may apply to pay such Distributions
pursuant to such provision may not exceed the Preferred Cap;
(b) if
the provisions described in clause (a) do not require such issuance and sale
within one year of such failure, include a Repurchase Restriction;
(c) include
a Bankruptcy Claim Limitation Provision; and
(d) prohibit
the issuer of such securities from redeeming or purchasing any of its securities
ranking upon the liquidation, dissolution or winding up of the Corporation
junior to or pari passu with any APM Qualifying Securities the proceeds of which
were used to settle deferred interest during the relevant deferral period prior
to the date six months after the issuer applies the net proceeds of the sales
described in clause (a) above to pay such deferred Distributions in full;
provided (and it being understood) that:
(i) the
issuer will not be obligated to issue (or use Commercially Reasonable Efforts to
issue) APM Qualifying Securities for so long as a Market Disruption Event has
occurred and is continuing;
(ii) if,
due to a Market Disruption Event or otherwise, the issuer is able to raise and
apply some, but not all, of the eligible proceeds necessary to pay all deferred
Distributions on any Distribution Date, the issuer will apply any available
eligible proceeds to pay accrued and unpaid Distributions on the applicable
Distribution Date in chronological order subject to the Common Cap and Preferred
Cap, as applicable; and
(iii) if
the issuer has outstanding more than one class or series of securities under
which it is obligated to sell a type of APM Qualifying Securities and applies
some part of the proceeds to the payment of deferred Distributions, then on any
date and for any period the amount of net proceeds received by the issuer from
those sales and available for payment of deferred Distributions on such
securities shall be applied to such securities on a pro rata basis up to the
Common Cap and the Preferred Cap, as applicable, in proportion to the total
amounts that are due on such securities.
No remedy
other than Permitted Remedies will arise by the terms of such securities or
related transaction agreements in favor of the holders of such Qualifying
Capital Securities as a result of the issuer’s failure to pay Distributions
because of the Mandatory Trigger Provision until Distributions have been
deferred for one or more Distribution Periods that total together at least ten
years.
“Market
Disruption Event” means the occurrence or existence of any of the following
events or sets of circumstances:
(a) the
Corporation would be required to obtain the consent or approval of its
shareholders or a regulatory body (including, without limitation, any securities
exchange) or governmental authority to issue or sell APM Qualifying Securities
and such consent or approval has not
I-8
yet been
obtained notwithstanding the Corporation’s Commercially Reasonable Efforts to
obtain such consent or approval or the Federal Reserve instructs the Corporation
not to sell or offer for sale APM Qualifying Securities at such
time;
(b) trading
in securities generally (or in the Corporation’s Common Stock or preferred stock
specifically) on the Nasdaq Stock Exchange or any other national securities
exchange or over-the-counter market on which the Common Stock and/or the
Corporation’s preferred stock is then listed or traded shall have been suspended
or the settlement of such trading generally shall have been materially disrupted
or minimum prices shall have been established on any such exchange or market by
the Commission, by the relevant exchange or market or by any other regulatory
body or governmental body having jurisdiction, and the establishment of such
minimum prices materially disrupts or otherwise has a material adverse effect on
trading in, or the issuance and sale of, Common Stock and/or the Corporation’s
preferred stock;
(c) a
banking moratorium shall have been declared by the federal or state authorities
of the United States such that market trading in the APM Qualifying Securities
or Qualifying Capital Securities has been materially disrupted;
(d) a
material disruption shall have occurred in commercial banking or securities
settlement or clearance services in the United States such that market trading
in APM Qualifying Securities or Qualifying Capital Securities stock has been
materially disrupted;
(e) the
United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States, there shall have been a
declaration of a national emergency or war by the United States or there shall
have occurred any other national or international calamity or crisis such that
market trading in APM Qualifying Securities or Qualifying Capital Securities has
been materially disrupted;
(f) there
shall have occurred such a material adverse change in general domestic or
international economic, political or financial conditions, including without
limitation as a result of terrorist activities, such that market trading in the
Common Stock and/or the Corporation’s preferred stock has been materially
disrupted;
(g) an
event occurs and is continuing as a result of which the offering document for
such offer and sale of APM Qualifying Securities would, in the reasonable
judgment of the Corporation, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading and either (a) the disclosure of that
event at such time, in the reasonable judgment of the Corporation, is not
otherwise required by law and would have a material adverse effect on the
business of the Corporation or (b) the disclosure relates to a previously
undisclosed proposed or pending material business transaction, the disclosure of
which would impede the ability of the Corporation to consummate such
transaction, provided that no single suspension period contemplated by this
paragraph (g) shall exceed 90 consecutive days and multiple suspension
periods contemplated by this paragraph (g) shall not exceed an aggregate of
180 days in any 360-day period; or
(h) the
Corporation reasonably believes, for reasons other than those referred to in
paragraph (g) above, that the offering document for such offer and sale of
APM Qualifying Securities would not be in compliance with a rule or regulation
of the Commission and the Corporation is unable to comply with such rule or
regulation or such compliance is unduly burdensome, provided that no single
suspension period contemplated by this paragraph (h) shall exceed 90
consecutive days and multiple suspension periods contemplated by this paragraph
(h) shall not exceed an aggregate of 180 days in any 360-day
period.
I-9
The
definition of “Market Disruption Event” as used in any securities or combination
of securities that constitute APM Qualifying Securities or Qualifying Capital
Securities may include less than all of the paragraphs outlined above, as
determined by the Corporation at the time of issuance of such securities, and in
the case of clauses (a), (b), (c) and (d), as applicable to a circumstance where
the Corporation would otherwise endeavor to issue preferred stock, shall be
limited to circumstances affecting markets where the Corporation’s preferred
stock trades or where a listing for its trading is being sought.
“Market
Value” means, on any date, the closing sale price per share of Common Stock (or
if no closing sale price is reported, the average of the bid and ask prices or,
if more than one in either case, the average of the average bid and the average
ask prices) on that date as reported in composite transactions by the Nasdaq
Stock Exchange or, if the Common Stock is not then listed on the Nasdaq Stock
Exchange, as reported by the principal U.S. securities exchange on which the
Common Stock is traded or quoted; if the Common Stock is not either listed or
quoted on any U.S. securities exchange on the relevant date, the market price
will be the average of the mid-point of the bid and ask prices for the Common
Stock on the relevant date submitted by at least three nationally recognized
independent investment banking firms selected for this purpose by the Board of
Directors of the Corporation or a committee thereof.
“Measurement
Date” means (a) with respect to any repayment, redemption or purchase of
Securities on or prior to the Scheduled Maturity Date, the date that is 180 days
prior to delivery of notice of such repayment or redemption or the date of such
purchase; and (b) with respect to any repayment, redemption or purchase of the
Securities after the Scheduled Maturity Date, the date that is 90 days prior to
the date of such repayment, redemption or purchase, except that, if during the
90 day (or any shorter) period preceding the date that is 90 days prior to the
date of such repayment, redemption or purchase, the Company and its Subsidiaries
issued Replacement Capital Securities to Persons other than the Company and its
Subsidiaries but no repayment, redemption or purchase was made pursuant to
clause (b) of Section 2 in connection therewith, the date upon which such 90 day
(or shorter) period prior to the date of such repayment, redemption or
repurchase began.
“Measurement
Period” means, with respect to any date on which notice of repayment or
redemption is delivered with respect to the Securities or on which the
Corporation repurchases, or any Subsidiary purchases, any Securities, the period
beginning on the Measurement Date with respect to such notice or purchase date
and ending on such notice or purchase date, as the case may
be. Measurement Periods cannot run concurrently.
“Non-Cumulative”
means, with respect to any securities, that the issuer thereof may elect not to
make any number of periodic Distributions without any remedy arising under the
terms of the securities or related agreements in favor of the holders, other
than one or more Permitted Remedies.
“No
Payment Provision” means a provision or provisions in the transaction documents
for securities (referred to in this definition as “such securities”) that
include the following:
(a) an
Alternative Payment Mechanism; and
(b) an
Optional Deferral Provision modified and supplemented from the general
definition of that term to provide that the issuer of such securities may, in
its sole discretion, or (if the issuer elects to so provide in the terms of such
securities) shall in response to a directive or order from the Federal Reserve,
defer in whole or in part payment of Distributions on such securities for one or
more consecutive Distribution Periods of up to five years or, if a Market
Disruption Event has occurred and is continuing, ten years, without any remedy
other than Permitted Remedies and the obligations (and limitations on
obligations) described in the definition of “Alternative Payment Mechanism”
applying.
I-10
“NRSRO”
means a nationally recognized statistical rating organization within the meaning
of Section 3(a)(62) of the Securities Exchange Act.
“Optional
Deferral Provision” means, as to any securities or combination of securities
(together, in this definition, “securities”), a provision in the terms thereof
or of the related transaction agreements to the effect that the issuer of such
securities may in its sole discretion, or shall in response to a directive or
order from, or memorandum of understanding with, the Federal Reserve, defer or
skip in whole or in part payment of Distributions on such securities for one or
more consecutive Distribution Periods of up to ten years without any remedy
other than Permitted Remedies.
“Permitted
Remedies” means, with respect to any securities, one or more of the following
remedies:
(a) rights
in favor of the holders of such securities permitting such holders to elect one
or more directors of the issuer (including any such rights required by the
listing requirements of any stock or securities exchange on which such
securities may be listed or traded); and
(b) complete
or partial prohibitions on the issuer paying Distributions on or repurchasing
common stock or other securities that rank pari passu with or junior as to
Distributions to such securities for so long as distributions on such
securities, including unpaid distributions, remain unpaid.
“Person”
means any individual, corporation, partnership, joint venture, trust, limited
liability company or corporation, unincorporated organization or government or
any agency or political subdivision thereof.
“Preferred
Cap” has the meaning specified in clause (f) of the definition of Alternative
Payment Mechanism.
“Prospectus
Supplement” has the meaning specified in Recital C.
“Qualifying
Capital Securities” means securities or combination of securities (other than
securities covered by paragraph (iii) of Section 2 and Common Stock and
rights to acquire Common Stock to Persons other than the Corporation and its
Subsidiaries) that, in the determination of the Corporation’s Board of Directors
reasonably construing the definitions and other terms of this Replacement
Capital Covenant, meet one of the following criteria:
(i) in
connection with any repayment, redemption or purchase of Securities on or prior
to June 15, 2018:
(A) securities
issued by the Corporation or its Subsidiaries that (1) rank pari passu with
or junior to the Debentures upon the liquidation, dissolution or winding up of
the Corporation, (2) have a No Payment Provision, (3) have no maturity
or a maturity of at least 60 years and (4) either (x) are subject to a
Qualifying Replacement Capital Covenant or (y) have a Mandatory Trigger
Provision and are subject to Intent-Based Replacement Disclosure;
or
(B) securities
issued by the Corporation or its Subsidiaries that (1) rank pari passu or
junior to other preferred stock of the issuer, (2) have no maturity or a
maturity of at least 40 years, (3) are subject to a Qualifying Replacement
Capital Covenant, (4) have an Optional Deferral Provision and (5) have
a Mandatory Trigger Provision; or
I-11
(ii) in
connection with any repayment, redemption or purchase Securities at any time
after June 15, 2018 but on or prior to June 15, 2038:
(A) securities
described under clause (i) of this definition;
(B) securities
issued by the Corporation or its Subsidiaries that (1) rank pari passu with
or junior to the Debentures upon a liquidation, dissolution or winding up of the
Corporation, (2) have no maturity or a maturity of at least 60 years,
(3) are subject to a Qualifying Replacement Capital Covenant and
(4) have an Optional Deferral Provision;
(C) securities
issued by the Corporation or its Subsidiaries that (1) rank pari passu with
or junior to the Debentures upon a liquidation, dissolution or winding up of the
Corporation, (2) are Non-Cumulative, (3) have no maturity or a
maturity of at least 60 years and (4) are subject to Intent-Based
Replacement Disclosure;
(D) securities
issued by the Corporation or its Subsidiaries that (1) rank pari passu with
or junior to the Debentures upon a liquidation, dissolution or winding up of the
Corporation, (2) are Non-Cumulative, (3) have no maturity or a
maturity of at least 40 years and (4) either (x) are subject to a
Qualifying Replacement Capital Covenant or (y) have a Mandatory Trigger
Provision and are subject to Intent-Based Replacement Disclosure;
(E) securities
issued by the Corporation or its Subsidiaries that (1) rank pari passu with
or junior to the Debentures upon a liquidation, dissolution or winding up of the
Corporation, (2) have an Optional Deferral Provision, (3) have a
Mandatory Trigger Provision, (4) are subject to Intent-Based Replacement
Disclosure and (5) have no maturity or a maturity of at least 40
years;
(F) cumulative
preferred stock issued by the Corporation or its Subsidiaries that (1) has
no prepayment obligation on the part of the issuer thereof, whether at the
election of the holders or otherwise, and (2) has no maturity or a maturity
of at least 60 years and (3) is subject to a Qualifying Replacement Capital
Covenant; or
(G) other
securities issued by the Corporation or its Subsidiaries that (1) rank upon
a liquidation, dissolution or winding-up of the Corporation either (x) pari
passu with or junior to the Debentures or (y) pari passu with the claims of
the Corporation’s trade creditors and junior to all of the Corporation’s
long-term indebtedness for money borrowed (other than the Corporation’s
long-term indebtedness for money borrowed from time to time outstanding that by
its terms ranks pari passu with such securities on a liquidation, dissolution or
winding-up of the Corporation), (2) have an Optional Deferral Provision and
(3) either (x) have no maturity or a maturity of at least 40 years and
a Mandatory Trigger Provision and are subject to Intent-Based Replacement
Disclosure or (y) have no maturity or a maturity of at least 25 years and
are subject to a Qualifying Replacement Capital Covenant and have a Mandatory
Trigger Provision; or
(iii) in
connection with any repayment, redemption or purchase of Securities at any time
after June 15, 2038:
(A) securities
described under clause (ii) of this definition;
I-12
(B) preferred
stock issued by the Corporation that (1) has no maturity or a maturity of
at least 50 years, (2) is subject to Intent-Based Replacement Disclosure
and (3) is Non-Cumulative;
(C) securities
issued by the Corporation or its Subsidiaries that (1) rank pari passu with
or junior to the Debentures upon a liquidation, dissolution or winding up of the
Corporation, (2) either (A) have no maturity or a maturity of at least
60 years and are subject to Intent-Based Replacement Disclosure or (B) have
no maturity or a maturity at least 30 years and are subject to a Qualifying
Replacement Capital Covenant and (3) are Non-Cumulative;
(D) securities
issued by the Corporation or its Subsidiaries that (1) rank pari passu with
or junior to the Debentures upon a liquidation, dissolution or winding up of the
Corporation, (2) have an Optional Deferral Provision, (3) have a
Mandatory Trigger Provision, (4) have no maturity or a maturity at least 30
years and (5) are subject to Intent-Based Replacement Disclosure;
or
(E) cumulative
preferred stock issued by the Corporation or its Subsidiaries that either
(1) (x) has no maturity or a maturity of at least 60 years and
(y) are subject to Intent-Based Replacement Disclosure or (2) has a
maturity of at least 40 years and is subject to a Qualifying Replacement Capital
Covenant.
“Qualifying
Preferred Stock” means non-cumulative perpetual preferred stock of the
Corporation that (a) ranks pari passu with or junior to all other preferred
stock of the Corporation, and (b) either (x) is subject to a
Qualifying Replacement Capital Covenant or (y) is subject to Intent-Based
Replacement Disclosure and has a provision that prohibits the Corporation from
paying any dividends thereon upon its failure to satisfy one or more financial
tests set forth therein, and (c) as to which the transaction documents
provide for no remedies as a consequence of non-payment of dividends other than
Permitted Remedies.
“Qualifying
Replacement Capital Covenant” means a replacement capital covenant that is
substantially similar to this Replacement Capital Covenant or a replacement
capital covenant, as identified by the Corporation’s Board of Directors acting
in good faith and in its reasonable discretion and reasonably construing the
definitions and other terms of this Replacement Capital Covenant,
(i) entered into by a company that at the time it enters into such
replacement capital covenant is a reporting company under the Securities
Exchange Act and (ii) that restricts the related issuer from redeeming,
repaying or purchasing identified securities except to the extent of the
applicable percentage of the net proceeds from the issuance of specified
replacement capital securities that have terms and provisions at the time of
redemption, repayment or purchase that are as or more equity-like than the
securities then being redeemed, repaid or purchased within the 180-day period
prior to the applicable redemption, repayment or purchase date.
“Qualifying
Warrants” means net share settled warrants to purchase Common Stock that
(1) have an exercise price greater than the current stock market price (as
defined below) of the Common Stock as of the date the Corporation agrees to
issue the warrants, and (2) the Corporation is not entitled to redeem for
cash and the holders of which are not entitled to require it to repurchase for
cash in any circumstances. The “current stock market price” means,
with respect to Common Stock on any date, (i) the closing sale price per
share (or if no closing sale price is reported, the average of the bid and ask
prices or, if more than one in either case, the average of the average bid and
the average ask prices) on that date as reported in composite transactions by
the Nasdaq Stock Exchange or if Common Stock is not then listed on the Nasdaq
Stock Exchange, as reported by the principal U.S. securities exchange on which
Common Stock is traded or quoted on the relevant date, (ii) if Common Stock
is not listed on any U.S. securities
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exchange
on the relevant date the last quoted bid price for Common Stock in the
over-the-counter market on the relevant date as reported by the National
Quotation Bureau or similar organization, or (iii) if Common Stock is not
so quoted the average of the mid-point of the last bid and ask prices for Common
Stock on the relevant date from each of at least three nationally recognized
independent investment banking firms selected by the Corporation for this
purpose.
“Redesignation
Date” means, as to the Covered Debt in effect at any time, the earliest of
(a) the date that is two years prior to the final maturity date of such
Covered Debt, (b) if the Corporation elects to redeem, or the Corporation
or a Subsidiary of the Corporation elects to repurchase, such Covered Debt
either in whole or in part with the consequence that after giving effect to such
redemption or repurchase the outstanding principal amount of such Covered Debt
is less than $[50,000,000], the applicable redemption or repurchase date and
(c) if such Covered Debt is not Eligible Subordinated Debt of the
Corporation, the date on which the Corporation issues long-term indebtedness for
money borrowed that is Eligible Subordinated Debt.
“REIT
Preferred Securities” means non-cumulative perpetual preferred stock of a
Subsidiary of a Depository Institution Subsidiary, which issuer Subsidiary may
or may not be a “real estate investment trust” (“REIT”) within the meaning of
Section 856 of the Internal Revenue Code of 1986, as amended, that is
exchangeable for non-cumulative perpetual preferred stock of the Corporation and
satisfies the following requirements:
(a) such
non-cumulative perpetual preferred stock of a Subsidiary of the Depository
Institution Subsidiary and the related non-cumulative perpetual preferred stock
of the Corporation for which it may be exchanged qualifies as Tier 1 capital of
a Depository Institution Subsidiary under the risk-based capital guidelines of
the Appropriate Federal Banking Agency and related interpretive guidance of such
Agency (for example, in the case of the Office of the Comptroller of the
Currency, Corporate Decision 97-109);
(b) such
non-cumulative perpetual preferred stock of a Subsidiary of the Depository
Institution Subsidiary must be exchangeable automatically into non-cumulative
perpetual preferred stock of the Corporation in the event that the Appropriate
Federal Banking Agency directs such Depository Institution Subsidiary in writing
to make a conversion because such Depository Institution Subsidiary is (i)
undercapitalized under the applicable prompt corrective actions regulations
(which, for example, in the case of the Office of the Comptroller of the
Currency and applicable to national banks, are at 12 C.F.R. 6.4(b)), (ii) placed
into conservatorship or receivership, or (iii) expected to become
undercapitalized in the near term;
(c) if
such Subsidiary of the Depository Institution Subsidiary is a REIT, the
transaction documents include provisions that would enable the REIT to stop
paying Distributions on its non-cumulative perpetual preferred stock without
causing the REIT to fail to comply with the income distribution and other
requirements of the Internal Revenue Code of 1986, as amended, applicable to
REITS;
(d) such
non-cumulative perpetual preferred stock of the Corporation issued upon exchange
for the non-cumulative perpetual preferred stock of a Subsidiary of a Depository
Institution Subsidiary issued as part of such transaction ranks pari passu with
or junior to other preferred stock of the Corporation; and
(e) such
REIT preferred Securities and non-cumulative perpetual preferred stock of the
Corporation for which it may be exchanged are subject to a Qualifying
Replacement Capital Covenant.
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“Replacement
Capital Covenant” has the meaning specified in the introduction to this
instrument.
“Replacement
Capital Securities” means Common Stock, rights to acquire Common Stock, Debt
Exchangeable for Common Equity, Debt Exchangeable for Preferred Equity,
Mandatorily Convertible Preferred Stock, REIT Preferred Securities or Qualifying
Capital Securities.
“Repurchase
Restriction” has the meaning specified in clause (c) of the definition of
“Alternative Payment Mechanism.”
“Scheduled
Maturity Date” has the meaning specified in the Indenture.
“Securities”
has the meaning specified in Recital B.
“Securities
Exchange Act” means the Securities Exchange Act of 1934, as
amended.
“Subsidiary”
means, at any time, any Person the shares of stock or other ownership interests
of which having ordinary voting power to elect a majority of the board of
directors or other managers of such Person are at the time owned, or the
management or policies of which are otherwise at the time controlled, directly
or indirectly through one or more intermediaries (including other Subsidiaries)
or both, by another Person.
“Termination
Date” has the meaning specified in Section 4(a).
“Trust”
has the meaning specified in Recital A.
“Trust
Preferred Securities” has the meaning specified in Recital B.
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