Exhibit 99.1
EXECUTION COPY
NATIONAL CITY CORPORATION
REPLACEMENT CAPITAL COVENANT
This REPLACEMENT CAPITAL COVENANT, dated as of November 3, 2006 (this
"REPLACEMENT CAPITAL COVENANT"), by National City Corporation, a Delaware
corporation (together with its successors and assigns, the "CORPORATION"), is in
favor of and for the benefit of each Covered Debtholder (as defined below).
RECITALS
A. On the date hereof, the Corporation is issuing $751,000,000 aggregate
principal amount of its Income Capital Obligation NotesSM (the "ICONS") to
National City Capital Trust II (the "TRUST").
B. On the date hereof, the Trust is issuing $750,000,000 aggregate
liquidation amount of its trust preferred securities (the "CAPITAL SECURITIES"
and together with the ICONs, the "SECURITIES").
C. This Replacement Capital covenant is the "REPLACEMENT CAPITAL COVENANT"
referred to in the Prospectus Supplement dated October 27, 2006, relating to the
Capital Securities (the Prospectus Supplement together with the accompanying
base prospectus, dated October 25, 2006, the "PROSPECTUS").
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 are and shall 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 damages 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 A
hereto.
SECTION 2. LIMITATIONS ON REDEMPTION AND REPURCHASE OF SECURITIES. The
Corporation hereby promises and covenants to and for the benefit of each Covered
Debtholder that the Corporation shall not, and shall cause its subsidiaries and
the Trust not to, repay, redeem or repurchase all or any part of the Securities
on or before November 15, 2056 except to the extent that (a) the Corporation has
obtained the prior approval of the Board of Governors of the Federal Reserve
System or its delegee (the "FEDERAL RESERVE") if such approval is then required
under the Federal Reserve's capital guidelines or otherwise and (b) the
principal amount repaid or the applicable redemption or repurchase 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 Common Stock and rights to acquire Common
Stock (including Common Stock and rights to acquire Common Stock issued pursuant
to the Corporation's reinvestment plan or employee benefit plans) to Persons
other than the Corporation and its Subsidiaries; plus
(ii) 100% 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 Mandatorily Convertible Preferred Stock and Debt Exchangeable into
Equity to Persons other than the Corporation and its Subsidiaries; plus
(iii) 100% 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 Qualifying Capital Securities to Persons other than the Corporation
and its Subsidiaries.
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 (or combination of 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 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 next
Redesignation Date;
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(iv) if the Corporation has no outstanding series of long-term
indebtedness for money borrowed that is Eligible Debt, but National City Bank is
a Subsidiary of the Corporation and National City Bank 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 National City Bank is
a Subsidiary of the Corporation and National City Bank 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 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 next
Redesignation Date;
(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 give the notice provided for in Section 3(c)
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 (A) 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 (B) file a copy of this Replacement Capital Covenant
with the Commission as an Exhibit to a Form 8-K under the Securities Exchange
Act; (ii) so long as the Corporation is a reporting company under the Securities
Exchange Act, the Corporation will include in each annual report filed with the
Commission on Form 10-K 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 is filed with the Commission; (iii) if a series of the Corporation's or
National City Bank's long-term indebtedness for money borrowed (1) becomes
Covered Debt or (2) ceases to be Covered Debt, 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 the Corporation's next quarterly report on Form 10-Q
or annual report on Form 10-K, as applicable; (iv) if, and only if, the
Corporation ceases to be a reporting company under the Securities Exchange Act,
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 (v) promptly upon request by any Holder of Covered Debt,
provide such Holder with an executed copy of this Replacement Capital Covenant.
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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) November 15, 2056 (ii) the date, if any, on
which the Holders of a majority by 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
and (iii) the date on which neither the Corporation nor National City Bank has
any series of outstanding Eligible Senior Debt or Eligible Subordinated Debt (in
each case without giving effect to the rating requirement in clause (ii) of the
definition of each such term). 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 by 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) the effect of such amendment or supplement is
solely to impose additional restrictions on the ability of the Corporation to
repay, redeem or repurchase Securities in any circumstance or (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 any
series of Covered Debt.
(c) For purposes of Sections 4(a) and 4(b) hereof, 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 New York.
(b) This Replacement Capital Covenant shall be binding upon the Corporation
and its successors and assigns 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 is owned by such Person and 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
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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 prepaid registered 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:
National City Corporation
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Treasurer
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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.
NATIONAL CITY CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Senior Vice President and
Treasurer
SCHEDULE A
DEFINITIONS
"APPLICABLE PERCENTAGE" means one divided by (a) 75% with respect to any
repayment, redemption or repurchase on or prior to November 15, 2016, (b) 50%
with respect to any repayment, redemption or repurchase after November 15, 2016
and on or prior to November 15, 2036 and (c) 25% with respect to any repayment,
redemption or repurchase after November 15, 2036.
"BUSINESS DAY" means each day other than (a) a Saturday or Sunday or (b) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or, on or after November 15,
2036, a day that is not a London business day. A "LONDON BUSINESS DAY" is any
day on which dealings in deposits in U.S. dollars are transacted in the London
interbank market.
"CAPITAL SECURITIES" has the meaning specified in Recital B.
"COMMISSION" means the United States Securities and Exchange Commission or
its successor.
"COMMON STOCK" means common stock of the Corporation (including treasury
shares of common stock and shares of common stock sold pursuant to the
Corporation's dividend reinvestment plan and employee benefit plans).
"CORPORATION" has the meaning specified in the introduction to this
Replacement Capital Covenant.
"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 Covered Debt directly or indirectly through a participant in a
clearing agency) that buys, holds or sells long-term indebtedness for money
borrowed of the Corporation or National City Bank, during the period that such
long-term indebtedness for money borrowed is Covered Debt.
"DEBT EXCHANGEABLE FOR EQUITY" means a security (or combination of
securities) that:
(i) gives the holder a beneficial interest in (a) debt securities of
the Corporation that are Non-Cumulative and that are the most junior
subordinated debt of the Corporation (or rank pari passu with the most junior
subordinated debt of the Corporation) and (b) a fractional interest in a stock
purchase contract;
(ii) includes a remarketing feature pursuant to which the subordinated
debt of the Corporation is remarketed to new investors within five years from
the date of issuance of the
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security or earlier in the event of an early settlement event based on (a) the
capital ratios of the Corporation, (b) the capital ratios of the Corporation as
anticipated by the Federal Reserve, or (c) the dissolution of the issuer of such
Debt Exchangeable for Equity;
(iii) provides for the proceeds raised in the remarketing to be used
to purchase Qualifying Non-Cumulative Preferred Stock;
(iv) includes a replacement capital covenant substantially similar to
this Replacement Capital Covenant, provided that such replacement capital
covenant will apply to such security (or combination of securities) and to the
Qualifying Non-Cumulative Preferred Stock and will not include Debt Exchangeable
for Equity in the definition of "qualifying capital securities"; and
(v) after the issuance of such Qualifying Non-Cumulative Preferred
Stock, provides the holder of the security with a beneficial interest in such
Qualifying Non-Cumulative Preferred Stock.
"DISTRIBUTION DATE" means, as to any securities or combination of
securities, the dates on which periodic Distributions on such securities are
scheduled to be made.
"DISTRIBUTION PERIOD" means, as to any securities or combination of
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 a security or combination of securities,
dividends, interest payments 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 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
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) of this
definition that is then assigned a rating by at least one NRSRO), (c) has an
outstanding principal amount, either alone or with one or more other senior
long-term indebtedness for money borrowed by the issuer of not less than
$100,000,000, and (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. 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.
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"ELIGIBLE SUBORDINATED DEBT" means, at any time in respect of any issuer,
each series of the issuer's then-outstanding 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
indebtedness for money borrowed that ranks most senior, (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, either alone or with one or more other
subordinated long-term indebtedness for money borrowed by the issuer, of not
less than $100,000,000, and (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. 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.
"FEDERAL RESERVE" means the Board of Governors of the Federal Reserve
System and its delegees.
"HOLDER" means, as to any Covered Debt, each Person that is a holder of
such Covered Debt as reflected on the securities register maintained by or on
behalf of the Corporation with respect to such securities.
"ICONS" has the meaning specified in Recital A.
"INDENTURE" means the Junior Subordinated Indenture, dated as of November
3, 2006 between the Company and The Bank of New York, as Trustee, as
supplemented by the supplemental indentures dated as of [ ], 2006.
"INITIAL COVERED DEBT" means the Corporation's 8.12%% Junior Subordinated
Debentures due January 31, 2027.
"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 will redeem or repurchase such
securities only with the proceeds of specified 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
definition of "Qualifying Capital Securities", the requirement in 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
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issuer is a bank holding company within the meaning of the Bank Holding Company
Act of 1956, as amended.
"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 a fixed number of shares of Common Stock of the
Corporation within a range within three years from the date of its issuance.
"MANDATORY TRIGGER PROVISION" means, as to any security or combination of
securities, provisions in the terms thereof or of the related transaction
agreements or instruments that (A) require, or at its option in the case of
non-cumulative perpetual preferred stock permit, the issuer of such security or
combination of securities to make payment of Distributions on such securities
only with proceeds of the issuance and sale of, or sale of rights to purchase,
Common Stock or non-cumulative perpetual preferred stock of the Corporation,
within two years of a failure by the Corporation to satisfy one or more
financial tests set forth in the terms of such securities or related transaction
agreements, in 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 in either case require the
application of the net proceeds of such sale to pay such unpaid Distributions,
(B) in the case of securities other than non-cumulative perpetual preferred
stock, prohibit the Corporation from repurchasing any of its Common Stock prior
to the date six months after the issuer applies the net proceeds of the sales
described in clause (A) to pay such unpaid Distributions in full and (C) upon
any liquidation, dissolution, winding up, reorganization or in connection with
any insolvency, receivership, conservatorship or proceeding under any bankruptcy
law with respect to the Corporation, limit the claim of the holders of such
securities (other than non-cumulative perpetual preferred stock) for
Distributions that accumulate during a period in which the Corporation fails to
satisfy one or more financial tests set forth in the terms of such securities or
related transaction agreements to (x) 25% of the principal amount of such
securities then outstanding in the case of securities not permitting the
issuance and sale pursuant to the provisions described in clause (A) above of
securities other than Common Stock or rights to acquire Common Stock or (y) two
years of accumulated and unpaid Distributions (including compounded amounts
thereon) in all other cases. 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 securities as a result of the issuer's failure to pay
Distributions because of the Mandatory Trigger Provision or as a result of the
issuer's exercise of its right under an Optional Deferral Provision until
Distributions have been deferred for one or more Distribution Periods that total
together at least ten years. It is acknowledged that as of the date hereof, the
Federal Reserve has not permitted a Mandatory Trigger Provision in any
securities issued by a bank holding company and treated any such securities as
Tier 1 capital for the bank holding company.
"MARKET DISRUPTION EVENTS" means one or more events or circumstances
substantially similar to those listed as "MARKET DISRUPTION EVENTS" in the
Supplemental Indenture.
"MEASUREMENT DATE" means, with respect to any repayment, redemption or
repurchase of Securities, the later of (a) the date 180 days prior to delivery
of notice of such repayment or redemption or the date of such repurchase and (b)
to the extent the ICONs remain outstanding
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after November 15, 2036, the most recent date, if any, on which a notice of
repayment or redemption was delivered in respect of, or on which the Corporation
or the issuer repurchased, any Securities.
"NON-CUMULATIVE" means, with respect to any securities, that the issuer may
elect not to make any number of periodic Distributions or interest payments
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.
Securities that include provisions requiring the Corporation to issue
non-cumulative perpetual preferred stock, common stock and/or rights to purchase
Common Stock and apply the proceeds to pay unpaid Distributions on terms
substantially similar to the terms of the alternative payment mechanism
described in Section [2.1(j)] of the Supplemental Indenture or a Mandatory
Trigger Provision shall also be deemed to be "NON-CUMULATIVE" for all purposes
of this Replacement Capital Covenant other than the definition of "QUALIFYING
NON-CUMULATIVE PREFERRED STOCK".
"NRSRO" means a nationally recognized statistical rating organization
within the meaning of Rule 15c3-I(c)(2)(vi)(F) under the Securities Exchange
Act.
"OPTIONAL DEFERRAL PROVISION" means, as to any securities or combination of
securities, a provision in the terms thereof or of the related transaction
agreements or instruments to the effect that the issuer of such securities may,
in its sole discretion, defer in whole or in part payment of Distributions on
such securities for one or more consecutive Distribution Periods of up to 10
years, without any remedy other than Permitted Remedies and the obligation
described in clause (b) below.
"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 securities exchange or market 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.
"PROSPECTUS SUPPLEMENT" has the meaning specified in Recital C.
"QUALIFYING CAPITAL SECURITIES" means securities (other than Common Stock,
rights to acquire Common Stock and securities convertible into Common Stock,
such as Mandatorily Convertible Preferred Stock and Debt Exchangeable into
Equity) that (a) qualify as Tier 1 capital of the Corporation under the capital
guidelines of the Federal Reserve as then in effect and applicable to bank
holding companies and (b) in the determination of the Corporation's Board of
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Directors reasonably construing the definitions and other terms of this
Replacement Capital Covenant, meet one of the following criteria:
(i) in connection with any redemption or repurchase of ICONs or
Capital Securities on or prior to November 15, 2016:
(A) subordinated debentures and guarantees issued by the
Corporation with respect to trust preferred securities if the ICONs and
guarantees (1) rank pari passu with or junior to the ICONs upon the liquidation,
dissolution or winding-up of the Corporation, (2) have terms that are
substantially similar to the terms of the ICONs and guarantees described in the
Prospectus Supplement (3) have an Optional Deferral Provision and (4)(a) are
subject to a replacement capital covenant substantially similar to this
Replacement Capital Covenant or, (b) have Intent-Based Replacement Disclosure
and have a Mandatory Trigger Provision;
(B) securities issued by the Corporation or its Subsidiaries that
(1) rank pari passu with or junior to the ICONs upon the 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)(a) are subject to a
replacement capital covenant substantially similar to this Replacement Capital
Covenant or, (b) have Intent-Based Replacement Disclosure and, have a Mandatory
Trigger Provision; or
(C) securities issued by the Corporation or its Subsidiaries that
(1) rank pari passu or junior to other preferred stock of the issuer, (2) are
Non-Cumulative, (3) have no maturity or a maturity of at least 40 years, (4) are
subject to a replacement capital covenant substantially similar to this
Replacement Capital Covenant, and (5) have a Mandatory Trigger Provision; or
(ii) in connection with any repayment, redemption or repurchase of
ICONs or Capital Securities after November 15, 2016 and on or prior to November
15, 2036:
(A) all 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 ICONs 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 replacement capital covenant substantially
similar to this 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 ICONs upon a liquidation, dissolution
or winding up of the Corporation, (2) are Non-Cumulative and (3) have no
maturity or a maturity of at least 60 years and Intent-Based Replacement
Disclosure;
(D) securities issued by the Corporation or its Subsidiaries that
(1) rank pari passu with or junior to the ICONs 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)(a) are subject to a replacement
capital covenant substantially similar to this Replacement
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Capital Covenant or, (b) have Intent-Based Replacement Disclosure and have a
Mandatory Trigger Provision;
(E) securities issued by the Corporation or its Subsidiaries that
(1) rank pari passu with or junior to the ICONs and the guarantees thereof, (2)
have an Optional Deferral Provision, (3) have a Mandatory Trigger Provision and
(4) have no maturity or a maturity of at least 60 years;
(F) cumulative preferred stock issued by the Corporation or its
Subsidiaries that (A) has no prepayment obligation on the part of the issuer
thereof, whether at the election of the holders or otherwise, and (B) (1) has no
maturity or a maturity of at least 60 years and (2) is subject to a replacement
capital covenant substantially similar to this Replacement Capital Covenant; or
(G) other securities issued by the Corporation or its
Subsidiaries that (A) rank upon a liquidation, dissolution or winding-up of the
Corporation either (1) pari passu with or junior to the ICONs or (2) 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); and (B) are
Non-Cumulative and either (x) have no maturity or a maturity of at least 40
years and have a Mandatory Trigger Provision or (y) have no maturity or a
maturity of at least 25 years and are subject to a replacement capital covenant
substantially similar to this Replacement Capital Covenant and have a Mandatory
Trigger Provision; or
(iii) in connection with any repayment, redemption or repurchase of
ICONs or Capital Securities at any time after November 15, 2036:
(A) all securities described under clause (ii) of this
definition;
(B) preferred stock issued by the Corporation that (1) has no
maturity or a maturity of at least 60 years (2) Intent-Based Replacement
Disclosure and (3) has an Optional Deferral Provision;
(C) securities issued by the Corporation or its Subsidiaries that
(1) rank pari passu with or junior to the ICONs 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 Intent-Based Replacement Disclosure or (B) have no
maturity or a maturity at least 30 years and are subject to a replacement
capital covenant substantially similar to this 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 ICONs and the guarantees thereof, (2)
have a Mandatory Trigger Provision, (3) have an Optional Deferral Provision and
(4) have no maturity or a maturity at least 30 years and Intent-Based
Replacement Disclosure; or
(E) cumulative preferred stock issued by the Corporation or its
Subsidiaries that either (1) has no maturity or a maturity of at least 60 years
and Intent-Based
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Replacement Disclosure or (2) has a maturity of at least 40 years and is subject
to a replacement capital covenant substantially similar to this Replacement
Capital Covenant.
"QUALIFYING NON-CUMULATIVE PREFERRED STOCK" means Non-Cumulative perpetual
preferred stock of the Corporation or its Subsidiaries that ranks pari passu
with or junior to other preferred stock of the issuer.
"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 $100,000,000, the applicable redemption or repurchase
date and (c) if such Covered Debt is not Eligible Subordinated Debt, the date on
which the Corporation issues or assumes a sufficient amount of long-term
indebtedness for money borrowed that qualifies as Eligible Subordinated Debt.
"REPLACEMENT CAPITAL COVENANT" has the meaning specified in the
introduction to this instrument.
"SUPPLEMENTAL INDENTURE" means the Supplemental Indenture, dated as of
November 3, 2006, between the Corporation and The Bank of New York, as Trustee.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SECURITIES" has the meaning specified in Recital B.
"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.
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